The Nigerian business landscape is faced with a myriad of economic challenges including reductions in capital importation and foreign direct investment – in the last quarter of 2022, capital importation was reduced by more than 50%, and foreign direct investment was reduced by 33% as compared to the corresponding period in 2021; the multiplicity of exchange rates as well as the volatile foreign exchange regime – the Central Bank of Nigeria (CBN) continues to defend the Nigerian Naira, an act described by many analysts as hurting the economy through its failure to reflect the true value of the Naira in comparison to other currencies; high levels of insecurity – the increasing crime rate is discouraging new investments as well as current ones; power and infrastructural challenges leading to increasing costs of doing business; high level of food insecurity and rising production costs; high rates of unemployment and underemployment projected to rise to 37% among others. Virtually every sector of the economy is in limbo.
The most recent among these challenges within the Nigerian economy is the debilitating effect of the fuel subsidy removal regime. Fuel queues surfaced at filling stations a few days before the scheduled May 29, 2023, inauguration of the President-elect, Bola Ahmed Tinubu. The most logical reason for these queues was panic buying amidst the uncertainty over what would become of the fuel subsidy regime beyond June 2023. As was feared by many Nigerians, the inauguration day has ushered in the announcement by the incumbent President on the removal of the fuel subsidy and the resultant fuel scarcity.
Additionally, according to a market analysis conducted by the International Monetary Fund (IMF), Nigeria’s 2022 Debt-to-GDP ratio was estimated at 37.4%.
The Debt Management Office, in its January 2023 press release, projected Nigeria’s external and domestic debt to reach N77 trillion by May 2023. Economic analysts have also reckoned that Nigeria’s debt-service-to-revenue ratio is hovering around 83%.
However, with Nigeria’s existing and rising business opportunities, all is not gloom. For instance, with a population estimated at over 200 million people with projections to grow to become the fourth largest population by the year 2030, Nigeria has a large consumer market readily accessible to interested investors; Nigeria has a large amount of untapped agricultural and mineral resources – the push for diversification from its economic mainstay of crude oil into other promising sectors, particularly agriculture and its sector-based incentives is available for interested investors to capitalise on; Nigerian businesses, especially in the tech sector, continue to attract funding – between 2017 and 2022 383 tech startups in Nigeria raised over $2 billion. Overall, there are great investments and business opportunities which can unlock the economic potential in Nigeria.
While it may appear that the challenges of doing business in Nigeria do outweigh the opportunities, government policies and investment-friendly laws, policies, and regulations are instrumental to ensuring a thriving economic environment. This is the focus of the 17th Annual Business Law Conference of the Nigerian Bar Association Section on Business Law (NBA-SBL) scheduled to hold from Wednesday, July 5 to Friday, July 7, 2023, at the Eko Hotels and Suites, Victoria Island, Lagos State with the theme centred on “The Nigerian Business Landscape: Priorities for Law, Policy, and Regulation.”
The 17th Annual Business Law Conference of the NBA-SBL is a platform for lawyers, non-lawyers, business operators, regulators, and investors, among others with business interests, especially in Nigeria to have focus-based discussions towards progressive and stakeholder-inclusive change.
This year’s Conference is no exception and is a must-attend. Registration is currently ongoing – lawyers and other professionals are invited to register by visiting www.nbasbl.org and following the guidelines.