Growing the economy: Attracting investment to Nigeria through franchising
Nigeria is one of the most prosperous African nations on the continent. Boasting a population of over 200 million people it is by far the most populous nation in Africa, its economy is growing and it has a Foreign Direct Investment capacity of over 8.92 billion dollars, Nigeria has the potential to create an economic boom if franchising is adopted in the region.
According to a US report on Nigerian franchisors, industry sectors where franchising can grow exponentially is fast food, quick service, restaurants, telecommunications, hotel services, professional and service training, transportation services, telecommunications services and distributive trade.
In the FBDS 2018 Franchise Report, UK based franchise consultancy and publishing group FDS, which had studied the opportunities in Nigeria Franchise Industry, postulated that Nigeria's economy is ready for benefiting from franchise intensification, especially as many UK based franchise brands have already confirmed their interest in granting master franchise rights to operators in Nigeria. One example of such brands is Boots, operating beauty and health based retail and service out-lets in several countries.
Also, according to the 2012 World Investment Report by the United Nations Conference on Trade and Development, (UNCTAD), Nigeria is Africa's most important destination for Foreign Direct Investment with USD 8.92 billion and until recently, recorded over 20% of total foreign direct investment into Africa.
The future of franchising in Nigeria is bountiful and coupled with its teeming population made primarily of youths with spending power who also have an inherent enterprise and entrepreneurial spirit, many youths and individuals' will adopt franchising and grow into small and medium businesses with multiple branches across the country and beyond.
Franchising has also proven itself as a great mechanism for job creation as the nature of most franchise categories are labor intensive and require a lot of staff.
Franchising has also become a globally accepted and emulated business model for small and medium enterprises, which in turn boosts the economy because franchising not only allows expansion but it can also serve as an empowerment tool, which can benefit Nigeria's SME's.
At present, certain hindrances that have repelled more foreign direct investments are-
- The absence of legal framework that makes it easier to thrive in Nigeria.
- There is very limited awareness, as people don't know what franchising is about and how they are able to grow better with franchising than with start-ups.
- Stifling policies
- Undeveloped markets lacking support structures
- Franchising is not considered to be significant by business enterprise owners and potential investors just to mention a few.
As a way to strategically remove the encumbrances to franchise development in Nigeria, the Franchise Development Report 2018, highlights key points and actions to be undertaken to ensure franchises can grow and ultimately thrive in Nigeria.
The Nigerian government in collaboration with key organizations such as the Franchise Business Development Services Nigeria (FBDS) can work together to -
- Encourage and promotion of franchise brokerage and match making expo services.
- Make a regulatory frame work available
- Create and develop non-stringent polices and Well- developed market with support structure.
- Create support structure that can help.
The data compiled from the Nigeria International Franchise Association showing how franchising operated in Nigeria comparison to its contemporaries in USA, South Africa, UAE, India and South Africa shows that even if the short falls to Franchising in Nigeria, there are solutions to be had and create a more wholesome environment for attracting franchising into Nigeria and ultimately growing the economy.
For more information on the Franchise Report 2018 go here