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WORD COUNT: 751
Countries go through different phases in their quest for
development across different indices – social, economic,
political etc. The fact that no country was “born”
developed suggests that these developmental phases
cannot be short-circuited. Off all the developmental
indices, economic development sits at the heart of them
all. In the developmental process, counties and endowed
with certain opportunities and face definite challenges.
However, economic challenges and economic
opportunities are not necessarily opposed to each other.
The countries that have achieved greatness today are
the ones that saw challenges as opportunities. Different
schools of thoughts have posited that the government
must, from time to time; intervene in economic
dynamics and act as a market stabilizing force
particularly during crisis. Others think that the
government has no business doing business or to
interfere in the markets. Keegan (2012) cited John
Maynard Keynes and Friedrich August von Hayek as
being at the forefronts of these schools of thought
By the definition in Keegan (2013), Nigeria is clearly a
lower-middle-income country with a GDP of USD262
billion divided among its USD168 million population
and per capita GNI of USD1, 555. Schwab (2012)
equally categorized Nigeria as a “Factor-driven, stage 1”
economy. He equally ranked it 115
competitiveness index among 144 countries. However,
it is also important to note that unlike quite a number
of other countries particularly the high income ones,
Nigeria has a very large “shadow economy” – which is
the part of Nigerian economy that is difficulty to capture
or account for because it is informal, unregulated,
unreported or under-reported. Schneider et al (2010)
puts Nigeria’s shadow economy at close to 60% as of
2007. For this reasons, I will want to categorize Nigeria
as an upper-middle-income country because this
reflects the on-the-ground reality of things. The
attractiveness of the market is partly responsible for the
large influx of several multinationals into Nigeria as well
as increasing FDI. Transformationwatch (2013) puts FDI
into Nigeria at USD7 billion in 2012, topping FDI into
Following the entry of most multinationals into Nigeria,
we have also seen in creasing cases of profitability and
break-even that is earlier than anticipated. The
consumption rate of luxury goods in Nigeria reflects a
classification that is higher than that which the books
say and comparable to that of upper-middle-income
countries like Malaysia, Brazil etc. There are a lot of
investments in the Nigeria oil industry. Oil is the single
largest foreign exchange earner for Nigeria.
In terms of its leadership, Nigeria has spent more than
half (28+ years) of its 54 post-independence years under
military dictatorship. This has not gone without
attendant consequences on freedom and human rights,
ballooning corruption and broken down infrastructure
among others. While all these have negatively impacted
per capital GNI, the Nigerian economy remains so strong
on account of its macro and micro economic indicators.
With 3 key tribes (Hausa, Yoruba and Ibos) and more
than 400 ethic groups and languages, Nigeria is among
the most diverse countries of the world. As a multi-
ethnic, multi-religious society, the diversity of
orientation found in Nigeria is not unexpected. This
diversity has partly contributed to the current instability
both in government policies as well as the security of
lives and property. Gourley (2012) has linked the Boko
Haram terrorists group with headquarters in Nigeria to
the dreaded Al-Qaeda. The activities of Boko Haram
have nearly paralyzed all economic activities in Northern
Nigeria in the last 18 to 36 months.
Maplecroft (2012) ranked Nigeria 11
on its list of
countries with the highest political risks as of 2012.
There have also been reports that Nigeria will
disintegrate by 2015
This is not unconnected how the 2015 presidential
election is playing out with the masses.
Lewis (2011) identifies 3 stress points that could
destabilize Nigeria as (i) economic inequality and
corruption (ii) social tensions and (iii) poor governance.
The Niger-Delta militants are also
STRATEGIC MARKET IMPLICATIONS AND
Companies and multinational as well as global
corporations weigh their risks before considering entry
into any country. While it is true that the chances of a
good reward and high ROI increases with increasing
risks, sudden and unexpected reversal of fortunes could
result in huge, unbearable losses for the companies.
Should the worst happens, all the positive economic
predictions for Nigeria will crumble. The best case
scenario will be for Nigeria to still remain stagnant in
terms of development or even retrogress.
Schneider, F.; Buehn, A. and Montenegro, C.E. (2010)
Shadow Economies All over the World, New Estimates
for 162 Countries from 1999 to 2007. Policy Research
Working Paper 5356. Available Online:
9450-5356. Accessed 28th March 2014
Transformationwatch (2013) UNCTAD REPORT: Nigeria
Tops List of Foreign Direct Investments in Africa despite
21% drop. Available Online:
atch/. Accessed 28th March 2014
Salawu, B. (2010) Ethno-Religious Conflicts in Nigeria:
Causal Analysis and Proposals for New Management
Strategies. European Journal of Social Sciences –
Volume 13, Number 3 (2010) 345. Available Online:
df. Accessed 28th March 2014
Gourley, S.M. (2012) Linkages Between Boko Haram
and al Qaeda: A Potential Deadly. Global Security
Studies, Summer 2012, Volume 3, Issue 3. Available
ram.pdf. Accessed 28th March 2014
Keegan, W.J. & Green, M.C. (2013) Global marketing.
7th ed. Upper Saddle River: Prentice Hall.
Political Risk 2012. Available Online: .
Risk_2012_Poster_MARSH.pdf. Accessed 28th March
Lewis, P.M (2012) Nigeria: Assessing Risks to Stability.
Centre for Strategic and International Studies.
ia_Web.pdf. Accessed 28th March 2014
Schwab, K. (2012) The Global Competitiveness Report
2012–2013. World Economic Forum. Available Online
ivenessReport_2012-13.pdf. Accessed 28th March