The Interpreneur survey: Understanding mid-market business trends in Nigeria
Nigeria, Africa’s most populous nation, is a prime destination for investment. With over 200 million residents, a strategic location in West Africa, and abundant natural resources, Nigeria offers diverse investment opportunities in energy, agriculture, and technology sectors. Recent economic reforms and infrastructure development initiatives further enhance its attractiveness to foreign investors, positioning Nigeria as a promising business growth and development hub.
To understand how this landscape is affecting mid-market businesses, we recently surveyed 1,400 C-suite business leaders in 14 countries, in private sector companies earning up to £300m a year that have expanded internationally. We call these CEOs ‘interpreneurs’.
We have analysed the Nigeria-based data to better understand what drives Nigerian business owners to expand abroad.
Global business trends: Do Nigerian business leaders believe more business will expand overseas in the next 12 months?
| Significantly increase | 72% |
| Moderately increase | 26% |
| Moderately decrease | 2% |
Nigerian business leaders the most positive about overseas business expansion
At 98%, Nigeria is the most optimistic country in the world when predicting a significant increase in global expansion.
Which markets do Nigerian businesses prefer to expand into?
| Which, if any, of the following regions or countries would you / your business considering expanding to? (Select all that apply) | |
|---|---|
| Western Europe (e.g. Germany, France, UK, etc) | 78% |
| North America (e.g. USA, Canada, Mexico, etc) | 63% |
| Africa | 51% |
| North Asia (e.g. China, Japan, Korea, etc) | 45% |
| Australia/New Zealand | 21% |
| South America (e.g. Brazil, Chile, Colombia, etc) | 18% |
| Eastern Europe (e.g. Poland, Hungary, Romania, etc) | 14% |
| South Asia (e.g. Thailand, Vietnam, Singapore, etc) | 13% |
| Middle East | 6% |
| Other | 1% |
Western Europe is Nigeria’s number-one choice for global expansion
78% of Nigerian respondents strongly expressed interest in expanding their business operations to Western Europe. This enthusiasm surpassed that of their global counterparts, highlighting Nigeria’s particularly keen interest in international growth within this region. North America was the second top option from Nigeria at 63%, again making Nigeria one of the most enthusiastic to do so out of the global respondents.
Additionally, 51% of Nigerian respondents showed interest in expanding within Africa, reflecting the commitment to regional growth. This diverse interest in international and continental expansion underscores Nigeria’s dynamic business outlook and strategic positioning in the global market.
What makes a country more attractive to Nigerian businesses looking to expand globally?
| Which, if any, of the following would make a country most attractive for international expansion? [Select up to five] | |
|---|---|
| Future economic growth prospects | 60% |
| Favorable trade agreements (e.g. free trade zones, diplomatic partnerships, or preferential tariff treatment) | 58% |
| Favorable tax policies | 50% |
| Tech infrastructure and digitalisation | 49% |
| Skills and talent (e.g. availability of local talent and openness to skilled talent immigration) | 47% |
| Transparent regulatory environment | 46% |
| Alignment with long-term growth strategy (e.g. regional investment into specific industries) | 41% |
| Government support (e.g. grants, incubators, and mentorship programs) | 38% |
| Cultural and language similarity to existing operations | 26% |
| Geographic proximity to existing operations | 21% |
Economic growth prospects primary attractor for Nigerian interpreneurs
60% of Nigerian respondents prioritised future economic growth prospects, highlighting their strong optimism and forward-thinking mindset. Interestingly, geographic proximity to existing operations was considered the least important factor. This is evident in Nigeria’s strong interest in expanding into North America and Western Europe—regions that, while geographically distant, offer significant economic opportunities. This trend underscores Nigeria’s strategic and ambitious approach, focusing on potential growth over logistical convenience in their expansion plans.
60% of Nigerian participants said they are motivated to expand internationally because of new market growth opportunities. Additionally, 48% of respondents mentioned that access to digital technologies and innovation is crucial for expanding abroad. This indicates that Nigeria is committed to using technology to stay competitive globally. With a focus on market potential and digital innovation, Nigeria positions itself as an essential and dynamic player in the global business world.
What motivates Nigerian interpreneurs to expand internationally?
64% of respondents said increased profitability was one of the most significant benefits their business has found following international expansion. Expanding internationally often boosts profitability by accessing new markets, reducing costs through economies of scale, and fostering innovation. However, it requires careful planning, adaptation to diverse market conditions, and managing various risks to sustain long-term success.
What are the biggest international expansion challenges in 2024 according to Nigerian interpreneurs?
| Adapting logistics and supply chain issues (e.g. managing international shipping, distribution, and communication) | 51% |
| Managing economic volatility (e.g. currency fluctuations, inflation and or low growth) | 45% |
| Navigating global tax regulation (e.g. transfer pricing, double taxation, VAT) | 39% |
Adapting logistics a challenge to doing business internationally, say Nigerian CEOs
Over half (51%) identified adapting logistics and supply chain processes as one of the significant challenges for businesses during international expansion. This includes managing international shipping, distribution, and communication. Despite recognising these logistical hurdles, Nigerian respondents displayed considerable interest in expanding their business operations to Western Europe.
Risk: What do Nigerian CEOs think are the biggest risks to global business expansion in 2024?
How much of a risk do the following pose to your business’s international expansion or planned international expansion?
| Escalating geopolitical tensions and instability | Disruptive risk | 7% |
| Significant risk | 23% | |
| Moderate risk | 30% | |
| Minimal risk | 29% | |
| No risk | 10% | |
| Not Sure / Not applicable | 1% | |
| Economic slowdown or recession | Disruptive risk | 9% |
| Significant risk | 27% | |
| Moderate risk | 29% | |
| Minimal risk | 24% | |
| No risk | 11% | |
| Not Sure / Not applicable | 0% | |
| Financial market and foreign exchange volatility | Disruptive risk | 6% |
| Significant risk | 22% | |
| Moderate risk | 30% | |
| Minimal risk | 24% | |
| No risk | 17% | |
| Not Sure / Not applicable | 1% | |
| Cybersecurity threats and data breaches | Disruptive risk | 5% |
| Significant risk | 28% | |
| Moderate risk | 22% | |
| Minimal risk | 24% | |
| No risk | 21% | |
| Not Sure / Not applicable | 0% | |
| Talent shortages and skilled labour gaps | Disruptive risk | 4% |
| Significant risk | 17% | |
| Moderate risk | 28% | |
| Minimal risk | 29% | |
| No risk | 22% | |
| Not Sure / Not applicable | 0% | |
| Technological disruption from AI and new technologies | Disruptive risk | 4% |
| Significant risk | 17% | |
| Moderate risk | 19% | |
| Minimum risk | 29% | |
| No risk | 30% | |
| Not Sure / Not applicable | 1% | |
| Environmental disruption and extreme weather | Disruptive risk | 5% |
| Significant risk | 20% | |
| Moderate risk | 27% | |
| Minimal risk | 41% | |
| No risk | 7% | |
| Not Sure / Not applicable | 0% |
Recession biggest risk for Nigerian businesses leaders expanding internationally
36% of respondents felt that economic slowdown or recession poses a disruptive or significant risk to their business’s international expansion or planned expansion, a view shared with global respondents.
Nigerian business leaders appear less concerned about AI-driven technological disruption, talent shortages, and skilled labour gaps, reflecting a potentially unique strategic perspective or confidence in their workforce’s adaptability. This stance highlights a distinct approach within the Nigerian business landscape, prompting consideration of its implications for innovation and talent management strategies.
HNWIs vs Capital Markets: Which is the preferred international expansion funding source for Nigerian businesses?
| Private investors (including HNWIs) | 72% |
| Capital markets (i.e. IPO) | 68% |
| Venture capital or private equity | 56% |
| Government funding | 39% |
| Employee equity schemes | 39% |
| Management buyout | 30% |
| Crowdfunding | 20% |
| Debt | 13% |
| None of the above | 1% |
Private investors number one choice to fund international expansion for Nigerian companies
Among the fast-growing new economies surveyed, Nigeria stands out as one of the most enthusiastic choices for private investors. It offers young and expanding businesses a flexible path to rapid growth, as evidenced by 72% of respondents selecting it.
Understanding global tax: Is the C-suite ready for a worldwide tax threshold?
| How confident are you in your understanding of the global international tax rules (for example, transfer pricing, VAT) that govern multinational businesses? | |
|---|---|
| Extremely confident: I have a deep understanding of global tax rules and their implications for multinational businesses | 49% |
| Confident: I have a good grasp of critical principles and can navigate common scenarios, but may seek external guidance for complex situations | 44% |
| Not very confident: My understanding of global tax rules is limited, and I rely heavily on external advisors for guidance and analysis | 7% |
Nigerian interpreneurs confident to tackle international tax rules
Nigerian respondents were 93% confident in understanding global international tax rules that govern international business. Nearly half (49%) of respondents were extremely confident, which indicates a robust grasp of the complex regulatory landscape surrounding international taxation among Nigerian professionals and stakeholders.
The growing importance of ESG for Nigerian investors and interpreneurs
| We do / would prioritise ESG | 62% |
| We do / would value ESG, but it wouldn’t be our top priority | 13% |
| We do / would consider ESG practices, but if only if they don’t interfere with our other priorities | 23% |
| We don’t / wouldn’t strongly consider ESG practices | 1% |
| We don’t / wouldn’t consider ESG practices at all | 1% |
Nigeria and China lead the way placing ESG as a priority
The significant emphasis on ESG practices among Nigerian respondents mirrors the principles of sustainable development outlined in Agenda 2063. This strategic framework, adopted by the African Union, delineates a roadmap for the socio-economic transformation of Africa over the next fifty years. It strongly emphasises sustainable development, inclusive growth, and good governance, aligning with the commitment demonstrated by Nigerian respondents. Only China scored higher than Nigeria in prioritising ESG in international operations.
The Benefits of AI in Nigerian international business operations
| To what extent do you agree or disagree with the following statement: ‘I feel prepared to harness the benefits of AI in global business operations within the next two years? | |
|---|---|
| Strongly agree | 75% |
| Somewhat agree | 24% |
| Neither agree nor disagree | 1% |
Nigeria’s businesses extremely confident about the use of AI in global operations
Nigeria was one of the most optimistic countries, with a 99% readiness to harness AI’s benefits in global business operations within the next two years. No respondents from Nigeria, the US, Brazil, China, or Mexico said they felt unprepared.
