Getting Down to Business in Nigeria
Nigeria is about more than e-mail scams, explains Larry Farris, the Department of Commerce’s senior commercial officer in Lagos, Nigeria. But there are challenges in doing business in Africa’s most populous nation, with its 140 million people and more than 200 ethnic groups.
Larry Farris is the senior commercial officer in the U.S. and Foreign Commercial Service’s post in Lagos, Nigeria, a position he has held since 2007. His responsibilities include looking after U.S. business interests in this populous West African nation, which recently underwent a return to democracy and civilian rule.
Farris has been with the Commercial Service since 1993 and has been posted to a number of countries, including Brazil, the Dominican Republic, and South Africa. He recently spoke with Doug Barry of the Commerce Department’s Trade Information Center about Nigeria and about how U.S. companies can best prepare themselves for doing business there.
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Larry Farris, the U.S. and Foreign Commercial Service’s senior commercial officer in Lagos, Nigeria. (U.S. Department of Commerce photo)
Barry: What’s it like in Lagos today?
Farris: There’s a lot of business here and a lot of opportunities for U.S. companies.
Barry: Here in the United States, the early—and sometimes only—impression of Nigeria is formed after getting an e-mail, purportedly from a retired general or minister of finance, saying they’ve come into an unexpected $25 million and that if we would only give them our bank account number, they’d be happy to share the money with us.
Farris: I get those e-mails even here, and they’re probably coming from an Internet café right around the corner. Fortunately, those are only a small fraction of the number of the business inquiries that come out of here. Most are legitimate, but it is an unfortunate fact of doing business in Nigeria.
Barry: So what are the legitimate opportunities for U.S. businesses in Nigeria?
Farris: The oil industry dominates Nigeria’s exports and foreign exchange earnings. But the rest of the economy is also growing and offers significant opportunities for U.S. companies. One area is transportation infrastructure. The current government has been starting projects to address decades of neglect. This creates a lot of opportunity for U.S. companies in road building, port modernization, airport building, revitalizing railway lines, and all of the equipment and technology. Other areas include telecommunications. Wireless, for example, is developing very rapidly and offers a lot of opportunity. Another sector is electrical energy. Nigeria had not invested sufficiently in this sector over the last several decades. We believe there’s going to be some really good opportunities for U.S. companies.
Barry: If you were a small or medium-sized U.S. enterprise, what are some of the first things you would do to assess the opportunities and risks in entering the market in Nigeria?
Farris: I would counsel people to look at our Web site (www.buyusa.gov/nigeria) and to look at Export.gov. Read through the resources posted there, such as the Country Commercial Guide for Nigeria. Beyond that, we counsel everyone to really do their homework. Take a careful look at who you’re going to be doing business with. To help U.S. companies, we maintain a database of between 3,000 and 4,000 Nigerian companies that we have vetted. We go back and look at them again about every 18 months or so.
Barry: What is the transaction cycle in Nigeria? Is there a certain timeframe that U.S. companies should plan for or does it vary?
Farris: I’m not sure that there is a consistent pattern. Things in Nigeria generally move very fast. Nigerians like to do things tomorrow. We counsel U.S. companies to be aware of that and to do their due diligence. And one thing that we especially counsel them to do is not to ship anything until they’ve been paid.
Barry: Where do you think the Nigerian economy is headed in the near term? What are the long-term prospects?
Farris: In general, they are good. Nigeria has, besides the oil and gas sector, good reserves of other minerals. It has the capability to develop a good agricultural sector. So all of those things add up to look at a fairly favorable environment for continuing growth. Having said that, it all depends on politics. And in that regard, the message is mostly positive. In 2008, there were national elections and the first peaceful transfer of power at the presidential level from one elected civilian president to another in Nigeria since independence in 1958.
Barry: There are more than 200 different ethnic or tribal groups in Nigeria. What would a U.S. business need to know in order to make a good impression on their potential business partners?
Farris: The ethnic groups here break up into two very large groups. In the north, it’s mostly Muslim, so you would be a little bit more conservative in the way you dress and in the way you present yourself there. The south is much more diverse. It’s not quite so conservative. You can be a little bit more American in the way you deal with people there.
Barry: It’s important to note that U.S. companies contemplating doing business in Nigeria don’t need to feel alone, because you and your colleagues are there.
Farris: That’s right. We encourage people to use our services here, perhaps more than in some of the developed markets, because they really offer a tremendous amount of value. Participating in the Commercial Service’s Gold Key program, for instance, and having your agenda set up and having your logistics worked out for you are of tremendous value.
Barry: Can your office also help plan the itinerary for U.S. businesses who are contemplating jumping on an airplane and flying over?
Farris: No, we’re not travel agents making arrangements, so we’re not going to book tickets for them, but we can certainly help them, once they’ve arrived, to get transportation, especially if they’re going to parts of the country where they need additional security. And we can certainly recommend reliable, quality hotels and help them in ways like that.
For More Information
A longer version of this interview is posted on Export.gov. To learn more about commercial opportunities in Nigeria, contact the Trade Information Center at www.export.gov; tel.: 800-872-8723.