The rise of African economies has been a much talked about subject in the last few years as brands, construction companies and telecommunications companies from around the globe have streamed in. The race is on to see which African countries will be the first to join the next cohort of BRIC-type markets (Brazil, Russia, India and China).
No stranger to this race is Nigeria. With a vision to be one of the top 20 economies by 2020, it has committed itself to a series of financial, oil industry and telecommunication reforms and developments that are working to both ensure Nigeria fully rebounds from the global financial crisis and diversifies away from its traditional dependence on oil. There is no doubt that this is an uphill battle. But there is equally no doubt that transformations are taking place.
According to the World Bank, Nigeria is rapidly becoming an easier place to work. The Bank recently ranked Nigeria as a leader in improving its business standards, scoring in the global top 20 (18) in terms of the percentage improvement in the easing business transactions, and sixth of all the African countries behind Rwanda, Burkina Faso, Mali, Ghana and Mozambique, respectively. As a testimony to the ongoing financial reforms the World Bank also ranked nine of Nigeria’s banks in the top 1000 banks across the globe, and most recently, with the passage of the Freedom of Information Act, Nigeria has joined the ranks countries committed to more open and transparent business.
Indicators aside, the growth of the economy itself is clearly painting an optimistic picture. At the end of June, Morgan Stanley announced that Nigeria’s economy may overcome South Africa’s and assume its rightful place as not just the largest country in Africa but also the largest economy by 2025. Nigeria’s economy is currently valued at $268 billion but is predicted to climb to $400 billion by 2016 accounting for an increase of 50% as compared to South Africa’s predicted increase of 31% from $383 billion now to $500 billion by 2016.
The growth will be supported by numerous investments on both national and international levels. According to a study conducted by the leading business newspaper, Business Day, 92% of CEOs plan to make new investments in 2011 while 62% of CEOs said they will be taking on new loans in 2011 to execute new business plans. On an international level a number of global giants like P&G and Bharti (Airtel) have actively expanded their investments into Nigeria and across the continent this year.
Indeed the brands are streaming in and the markets are eagerly awaiting the ever-increasing diversity of products from around the globe, but as the crowd of brands grows denser so too does the noise. A major test of success in the coming years will not be who launches in Africa but who is able to stand out from the crowd. That task starts with a deep understanding of the new markets combined with critical insight into the new target audiences and ends with effective communication.
This is the first in a series exploring the importance of strategic communication in growth areas across different industries in Nigeria and Africa more broadly.