Nigeria draws global interest with promise of growth

LAGOS, Nigeria/TOKYO -- Nigeria is shaping up as the next hot growth market, pulling in service providers and manufacturers eager to secure access to Africa's largest economy and profit from a surging population.

French telecommunications leader Orange opened a Nigerian office in May, offering corporate clients both devices and such services as data management. Orange is expanding its reach on the continent, recently taking on cybersecurity and cloud services for South African mining company AngloGold Ashanti.

The growing presence of global companies sets up the Nigerian office to serve as a key base for Orange's operations across the continent, said Giorgio Heiman, vice president for Africa at the telecom's business services unit.

Foreign direct investment in Nigeria fell 30% on the year to $3.1 billion in 2015 as slipping oil prices blunted activity in the petroleum sector. But major European and American companies in the service, food and other industries continue to flood in. Axa leapt into Nigeria at the end of 2014 with the acquisition of Mansard Insurance. The French insurer partnered with the operator of a Nigerian online retailer in February.

Coca-Cola paid $240 million in January for a 40% stake in beverage maker Chi. Fellow American company Kellogg, meanwhile, took a 50% interest in food distributor Multipro last September in a $450 million deal.

Growing opportunity

Nigeria's allure stems primarily from its population of around 180 million people, the largest in Africa. The figure is rising fast, spelling sharp market growth. Some predict that Nigeria could eventually become the world's third-most-populous country.

Efforts have begun to outfit rapidly growing cities with transportation infrastructure. China Railway Construction is nearing completion on a light-rail project in Lagos, Nigeria's biggest metropolitan area. Opening of the flagship Blue Line, stretching 27km from east to west, could be pushed back to next year from the current target of December. But all tracks have been laid, and stations are mostly complete.

The Lagos state government has six rail lines and 14 bus routes planned to alleviate chronic traffic congestion in the city. Building them all would cost an estimated $20 billion.

A consortium led by the Japan International Cooperation Agency is pushing the government to consider automated monorails. Yoshihiro Akiyama, director of Japan International Consultants for Transportation, touted the technology as low-maintenance and easy to build in a July 26 pitch.