PESTEL Analysis of Nigeria

Political System
Governmental laws and legal concerns impact the ability of a corporation to be profitable and
successful, and this element examines how that can happen.
Zomato should also consider the local and national power structures and discuss how
potential changes can affect the industry.

2023 holds presidential elections for the country, and it is said that only the south will produce
the next president of Nigeria. We think switching parties will result in several policies or legal
changes, which will undoubtedly cause problems for the other side. Political tension resulted
from fights and talks from both sides. Finding a standard, the workable answer will be given
less importance in the battle to achieve and win the presidency. If a law is passed, one side will
undoubtedly oppose it without knowing the actual pros and cons, which would lead to
significant political unrest and ultimately hurt economic growth.

Nigeria has received the full support of developed nations like China. It will foster harmony,
boost trade, and enable Nigeria to continue to develop its infrastructure and roads under a
more liberal policy. In a nutshell, solid political ties with other countries will positively affect
Nigeria's development and long-term relationships.

Nigeria's citizens have been operating peacefully for more than fifteen years.
With almost a dozen political parties, Nigeria has a multi-party system. However, only two
political parties are in power, with one serving as the opposition. Currently, the ruling party
controls the upper and lower chambers of the state legal department. In this era of
democracy, there have been political changes. The most recent change in government that
occurred last year coincided with a shift in the dominant political party.
We wish to highlight that lavish expenditure frequently mark this country's elections.

In the absence of terrorist strikes in the northern half of the country, Nigeria's political
situation seems to be stable. All the oil-rich cities in Nigeria have seen several oil pipelines
demolished.

According to a 2015 survey, Nigeria scored 26 out of 100 on Transparency International's

Corruption Perception Index. According to this, Nigeria is the 136th most corrupt nation out of
at least 175 countries.

Economic System
The economic element looks at external factors that may affect a company's success. We
examine interest rates, exchange inflation, unemployment, GDP, credit availability, and the
emergence and collapse of the middle class for this analysis.

The IMF stated that in 2021 and 2022, Africa's economic recovery from pandemic-induced
decline would be less robust than that of the rest of the globe. After COVID, emerging
countries found it more challenging to contain growing inflation. Despite a slight slowdown in
headline inflation, inflationary pressures continue to be a significant issue for businesses and
residents in Nigeria.
The drivers of inflation include exchange rate depreciation, liquidity issues in the foreign
exchange market that harms manufacturing output, security concerns that affect agricultural
work, climate change, an increase in cases of flooding and desertification in many parts of the
country, and structural constraints that have an impact on productivity in the agricultural
value chain.

The unemployment rate in Nigeria is another economic element that might need to be
considered.
21.5% is the current youth unemployment rate. This can result in crime and other social evils,
which has economic consequences. An idle hand is a devilish workshop, as we all know. On the
other hand, business owners can find less expensive employment. Any labor-intensive
enterprise in Nigeria will pay a high price. If not, it will be advantageous for foreign nations to
transfer any devoted portion of their business to Nigeria.

Social Factors
Compared to economic and political issues, these variables are more unpredictable. However,
every country and business needs customers. A variety of circumstances influence their
purchases.

As of July 2015, the population of Nigeria was predicted to be 181.56 million. It is rated
seventh in the world and has the most significant people in Africa. Nigeria is known as the
"giant of Africa" for this reason. Market dominance in this area is enormous. Foreign
investment has increased throughout the years despite the nation's volatility. For instance,
there has been tremendous investment in the telecom sector. The Nigerian Communications
Commission reported 147.57 million active numbers as of April 2016. The country's population
is large enough to draw investment.

Nigeria, which has a significant investment in the domestic industry and a high level of
imports, is ranked by the World Trade Organization as having the largest food market in Africa.
According to estimates, the food and beverage industry accounts for 4.6% of the nation's GDP
and 22.5% of the manufacturing sector's value.

The typical Nigerian is a fashion enthusiast. Sometimes, we enjoy splurging on pointless items.
Nigerians from the central region will spend money on anything that piques their attention.
For instance, although most people in Nigeria live in poverty, the country continues to be one
of the top markets for smartphones worldwide. One may be sure your product will be sold in
Nigeria if it is in demand. However, you might need to spend a little more on advertising to
raise awareness.

Technological Factors
The first nation in Africa to introduce digital currency was Nigeria. Technology use in the
fintech sector has consistently shown to be the most innovative for that particular economy.
Only with the aid of innovation can one grow. Any nation without innovation is like a
wasteland. It offers numerous ways to enhance how we work in each profession.

An initiative of one of the country's top marketing communications firms, "Innovention

Series," was held on November 2. It was a forum created to bring together public and private
interest owners to discuss issues affecting the nation's economies and development to set a
plan for moving it forward.
Nigerians are fast picking up computer skills, unlike in the past. Many young people in Nigeria
are literate. Although some individuals still consider laptops and desktop computers a luxury,
the adoption of smartphones seems to close this gap.

Due to smartphones, most individuals today actively use the internet and have social media
profiles. An estimated 86.22 million people utilize the internet, giving 46.10% of the
population access. Therefore, online advertisements have emerged as a preferred method of
reaching specific consumers for anyone looking to do business in Nigeria.

Legal Factors
The Company and Allied Matters Act is the principal piece of legislation in Nigeria that
regulates businesses and companies (CAMA). This act is in charge of regulating, or explicitly
deals with, matters that have to do with corporation structure, the registration procedure,
eligibility, and operating regulations.

Environment Factors
This is one of the most crucial areas of the Nigerian market to analyse because Nigeria is a
nation with enormous environmental problems that contribute to the escalating pace of
environmental deterioration.
Some of the most disturbing issues are:
 Deforestation
 Biodiversity damage
 Air pollution
 Oil spillage
 Noise pollution

One of the main risks afflicting Lagos is air pollution, which has plagued Nigeria's most
populous city and one of Africa's business hubs for a very long time.