What do we know about Nigerian consumers?
Nigeria is Africa’s most populous and among the world’s most crowded countries. Its 201 million population base consists of 250 diverse ethnic groups. These groups include Hausa and the Fulani, Yoruba, Igbo (Ibo), Ijaw, Kanuri, Ibibio and Tiv.
More than 50% of these people reside in urban areas putting immense pressure on the infrastructure and other amenities. Due to rapid urbanisation, development of urban Nigeria has been unplanned and random. This nation is characterised by highly irregular income distribution with developmental changes only affecting the richer percentage of the people.
What kind of goods that people import to Nigeria?
Nigeria mainly imports from China, U.S, and India. The nation’s main imports are:
- Transport equipment
- Manufactured goods
- Food and live animals
Apart from these commodities Nigeria is also a good market for health and hygiene products because of poor infrastructure development and equally ill waste management.
What are the major ports of Nigeria?
As Nigeria is largely an oil economy, it relies heavily on ports. The Lagos Port Complex is one of their main ports and is managed by the Nigerian Port Authority.
What are the tariff and tax structures in Nigeria?
The standard rate of VAT is 5% of the invoiced amounts for taxable goods and services including imported goods.
Certain goods and services are zero-rated or exempt from tax. Examples of goods and services taxable at 0%:
- Non-oil exports
- Goods and services purchased by diplomats
- Goods purchased for humanitarian donor-funded projects
- Imports of commercial aircraft, aircraft spare parts and machinery and equipment used in the solid minerals sector
Examples of exempt supplies of goods and services:
- All exported goods and services
- Medical goods and services and pharmaceutical products
- Basic food items
- Books and educational materials
- Plant, machinery and goods imported for use in free-trade zones
- Tractors, plows and agricultural implements purchased for agricultural purposes
- Services rendered by community banks and mortgage institutions
- Plays and performances by educational institutions as part of learning
- Proceeds from the disposal of short-term federal government of Nigeria securities and bonds
- Proceeds from the disposal of short-term state, local government and corporate bonds. This exemption will only last ten years from a commencement date of 2 January 2012
- Fees or commissions earned on traded shares. This shall apply for five years effective 25 July 2014
- Fees or commissions due to Securities and Exchange Commission, the Nigerian Stock Exchange and the Central Securities Clearing System. This shall apply for five years effective from 25 July 2014
But entry into Nigerian market is not very easy and requires thorough market research. There are bans on import and export of certain products mainly to protect its manufacturing industry. The procedure for imports is time-consuming and it is therefore advisable to take the help of a consultant for imports.
What is the distribution structure in Nigeria?
Many international brands depend on third party distribution networks. These networks are segmented by geographical location, and customers’ characteristics. The structure includes wholesalers and key account outlets.