Background: Nigeria is one of the largest economies in Africa with a GDP of over $405 billion and a sizable population of 196 million people. The country is very rich in commodities with 2.2% of global oil reserves and 2.7% of global natural gas reserves. Oil and gas accounts for 90% of export revenue which reflects Nigeria’s exposure to movements in commodity prices. The table below reflects the percentage of trade in Nigeria in respect of trade partners as well as products (source: UNCTAD):
Geo-Economic structure: Nigeria is currently not a diversified economy due its reliance in commodity exports for the larger part of its GDP. However, there are several initiatives in progress to diversify the economy. Growth potential has also been hampered by poor governance and the risk related to tribunal and terrorist conflicts within the country. The decline in oil prices has had a negative impact on growth figures and have made the need to diversify the economy more imperative for the future. Nigeria is a very difficult region to enter for investors due to its competitive environment and poor governance but the large population provides several opportunities.
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