Nigeria is considered the ‘Giant of Africa’ – albeit a sleeping one – for good reason. Yes, we are a top global oil producer, Africa’s largest economy, and its most populous nation. Yet, these are not the qualities that truly make us the giant of the continent.
This country’s true gigantic might lies in its latent and untapped strengths which, for decades, have suffered from waste, neglect and a total lack of will to change the status quo of oil dependence.
With roughly 1.5 million tons harvested annually, Nigeria is sub-Saharan Africa’s largest producer of tomatoes and the 14th largest producer worldwide. Sadly, we are also Africa’s biggest importer of tomato paste. Due to poor storage and limited processing options, about 50 percent of Nigeria’s yearly tomato harvests go to waste. To make up for the supply deficit, the country spends over $300 million on tomato product imports.
Nigeria is also by far the world’s largest producer of cassava, a key raw material in the production of industrial-grade starch – which is a heavily traded commodity on international markets. Despite our dominance in global cassava production, Nigeria exports less than 5 percent of cassava starch traded internationally. Thailand, Indonesia and Vietnam, which have a fraction of Nigeria’s cassava production capacity, dominate the global export market for cassava starch.
And then there is yam. We produce over 70 percent of the world’s yams and maintain a very strong lead in global yam production. Despite this significant advantage, Nigeria earns very little foreign exchange from its annual yam harvests, save for a small proportion that is processed into flour and exported to West African diaspora communities in Europe, Asia and North America.
The situation is the same for several other products for which Nigeria has a strong comparative advantage – tropical fruits, plantains, cocoa, oil palm and several others.
Actually, Nigeria’s latent strengths are not exclusive to agricultural commodities. The country also has a significant but untapped potential in the services sector. Developing Anglophone countries in Asia, especially India, Pakistan, Malaysia and the Philippines, have built multi-billion-dollar export-oriented services industries in Information Technology, Customer Support and Virtual Assistance that serve companies in North America and Europe. Nigeria too, like these countries, has a significant pool of young IT talent and English speakers who can be cultivated to build a formidable tertiary sector. Better still, Nigeria has a stronger geographical advantage because it sits within a more favourable time zone that could serve the European market better.
In light of Nigeria’s current oil-induced economic challenges, it appears the tranquilising effects of petrodollars – which have kept the giant slumbering for several decades – are starting to wear off. With the new-found determination by government to diversify the economy, and the clamour by ordinary Nigerians to ‘grow the Naira’, there is some hope the giant could see the sunrise in our lifetime.
But beyond idle hope and wishful thinking, there is unravelling evidence on the ground that gives me strong reasons to believe that Nigeria’s present economic adversity provides the perfect breeding ground for innovation, creativity and enterprise that will rumble the earth and awaken the giant within this nation.
I’ll share with you a few interesting examples…
Tomato Jos is a venture started by two Harvard MBAs in 2014. Based in Keffi, Nassarawa State, this business is on a mission to process locally-grown tomatoes into tomato paste for the domestic and export markets. It is working with a network of over 100 local tomato farmers to create a tomato value chain that cuts across farming, logistics (transport and storage), and processing. By buying tomatoes directly from local farmers, Tomato Jos will be reducing waste and increasing the farmers’ access to market – two major problems in Nigeria’s tomato supply chain. The business has successfully concluded its pilot phase and is currently raising $2 million in Series A investment.
Andela is another promising business that is setting the foundations for a lucrative services export industry in Nigeria. Through its free and highly rigorous training program, Andela develops promising Nigerian talent into top-class software developers who are hired out to the likes of Microsoft and other tech giants in the USA and Europe. This globally emerging model of identifying, nurturing and exporting highly qualified talent is known as ‘talent-as-a-service’. Andela has a goal of training 100,000 world-class software developers over the next ten years. The impact of this growing industry will have significant effects on youth unemployment and foreign exchange earnings for Nigeria.
These are just two examples. There are several more like them, led by ambitious entrepreneurs and private sector interests, who are thriving in these harsh economic times and ‘quietly’ shaking up the belly of the sleeping giant. With a sustained wave of more innovation, creativity and enterprise like these ones, there is good reason to hope that the giant could be in the throes of an awakening.
But we must be careful to discontinue actions that could reverse the progress that has been achieved so far by these ‘transformers’. Government must tear down the obstacles that frustrate and stifle young enterprise in this country – bureaucracy, non-enabling policies, limited access to ‘patient’ capital, low awareness and poor access to information, and the serious infrastructure deficit (especially access roads and power).
Our young people must know that the essence of entrepreneurship is often to prevail in the face of challenges and damning odds. While the conditions to start and grow a business in Nigeria are not the most favourable, they should not be used as an excuse. So, if you have a compelling reason to start a business, now is the time.
John-Paul Iwuoha
