A good businessman must always understand the business climate, and be able to make predictions in order to remain relevant. Business climate can change rapidly, and as a result you need to constantly change your business strategies and plan to adapt effectively to the changing clime.
Several macro-economic changes in the world at large and in Nigeria in particular, will definitely have a huge impact on the economic landscape. We have done a survey to identify the changes we should expect in 2017 and especially the businesses that are expected to boom this year.
First, let us look at the major economic, political and social changes in 2016, so we can easily extrapolate and identify the consequences of these changes moving forward.
Fall and rise in oil price:
In January 2016, Oil crashed to its lowest price in 14 years. It sold for $29.01 per barrel. The only time it was lower in the past two decades was in November 1998, when it fell to a 50-year low of $16.74 per barrel. The effect of the crash of oil price last year was immediate and crushing on the Nigerian economy and quickly drove the nation into a recession, since over 90% of our GDP is based on oil export. Thankfully, Oil price is recovering gradually and now stands at above $50 per barrel with a tendency to move up to $60 per barrel if OPEC and other oil producing countries moves forward on their emergency policies.
Global political disruptions:
A lot of unforeseen disruptions happened in the political space both globally and locally. In Nigeria, APC managed to dislodge a sitting government. In the United States, Brash Donald trump against all odds won over the combined political machinery of the Clinton clan, Obama clan and even Republican elites. The reverberations from this victory are still felt in far-away China and all over the world. Brexit also caught the entire Europe and the world unawares.
Crash in oil price and consequent free fall of the naira, swiftly drove the Nation into a recession followed by serious cash crunch by the end of the year. This prepared the ground for the rise of unknown money making schemes, the biggest of which is MMM. The early success of MMM gave birth to numerous money doubling schemes, which will cost the nation hundreds of millions in loss.
Terrorism and insurgency played several negative roles in the Nigerian economy in 2016, The current government managed the situation, but attacks continue to rear up from time to time. The three major headache in this area are, Boko haram, Niger Delta Militants and Biafran Agitators. Boko Haram led to the displacement of many indigenes, which wrecked untold hardship on the displaced persons. Thankfully the Army is doing a fine job, however the recession seems to often disrupt the welfare of these gallant soldiers. Niger Delta Militants worsened the already bad oil crisis, by occasionally disrupting oil exports and thus hampering the ability of the government to raise sorely needed cash. Again, the intervention of Elders in the Niger delta and subsequent dialogues seem to be working . Biafran Agitators presented some headache for the government and nearly plunged the nation into another bloodletting. The charisma and media reach of the leaders of this group galvanized the already suffering youths and unfortunately created serious hate and division, which hopefully will heal with time.
These are the major economic, political and social changes that took place in Nigeria in 2016. Now, how will they affect businesses in 2017, and what businesses will do well this year?
The rise of oil in Nigeria, shifted the nation’s attention from agriculture, which is a strong pillar of any economy, and a mass employer of labour. The recession exposed this weaknesses, and at the same time made agriculture more attractive. In 2017 agric-related businesses is going to boom. Scarcity of dollar, will force many people to patronize our local produce. Besides, poultry eggs imported from South Africa, are not better than poultry eggs produced in Nigeria. Some species of local rice are now competing in quality with foreign rice especially after processing. The introduction of the deadly plastic rice should encourage more people to try premium local rice. However, local rice farmers should add value to their rice, by cleaning it and processing it further, to improve the quality. Agricultural research centers in Nigeria should also improve the breed of rice seedlings so we can produce similar quality of rice like Thailand.
Anyone who desires to go into farming, should identify products that are previously imported and delve into such sectors on a big scale. Rice, Tomato, Poultry, Fish etc.
Another lucrative area in agric-business for 2017, is food processing. Despite recession, Nigerians have taste. Top supermarkets like shoprite are now looking to source most of their groceries locally.
However, they will never display it, the way it is seen in local open markets. Smart entrepreneurs should seize this opportunity to package local foods properly and seek for partnership with both international and local supermarket chains.
The third aspect of agric-business that will do very well in 2017 is exportation. Some farmers have been exporting their produce for our brothers and sisters in diaspora and for the international market. However with the increase in dollar price, any export based business will be swimming in cash this year.
The recession hit hard on big manufactures that needed imported raw materials to produce their goods. This led to the closure of several big manufacturing firms in 2016 due to scarcity of dollar to import their essential raw materials. In 2017, this area presents a great opportunity for smart entrepreneurs. This is because the scarcity of dollars also made every imported product very expensive. Local manufactures who do not need require foreign raw materials are swimming in cash and 2017 will be a bigger year for them. Eva wine originally made in spain, is now produced in Aba. The good thing is that previously, many people will not buy drinks made in Aba, but today Aba manufacturers are proudly displaying their names on wine bottles! There are so many small things you can manufacture in this sector that will boom this year. Look around you and apply critical thinking.
We love Italian furniture, but the price tag today, is driving even the big cats to the local market. Smart entrepreneurs, will have a windfall this year, if they invest in local furniture. Packaging is everything. Some of our highly talented carpenters, can effectively duplicate Italian furniture. Smart entrepreneurs will package it and sell in high urban areas for greater margin. Remember, the current chairman Mrs Ibukun Awosika, made her wealth on furniture, through her company SOKOA Chair centre Ltd.
2017 will see the rise of many local fashion designers. A friend of mine, who usually buys all his shirt from USA, completely abandoned the habit in 2016, because the current cost of such foreign shirts, really makes little sense, when you discover that local fashion designers can make something similar, at a fraction of the cost.
The truth is that 2017 is the best year for anyone to launch into entrepreneurship. The market is now ready to accept local services and products, more out of necessity than patriotism. Before the year is over, the market will be convinced that Nigerian are not lazy nor dumb, and can produce similar or even better quality of goods and services to china.
Millionaires Academy is poised to encourage this trend and help push Nigeria into its golden era of industrialization and robust economic growth. You can learn how to do most of these businesses in Millionaires Academy. You will be tutored and mentored to launch into any lucrative market you like. We invite all aspiring and practicing entrepreneurs to as a matter of urgency, join Millionaires Academy. Alone we may achieve little, but TOGETHER, we can do the impossible. Don’t strike out alone, Join Millionaires Academy today and prepare yourself in every aspect of business and entrepreneurship.
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