Loving Africa’s ‘chaos on a stick’
Success Story | Local businesses are flocking to share in Nigeria’s boom. But it is not easy, writes Adele Shevel
WHEN Ina Venter moved to Lagos, it was because her husband, Hercules, had been transferred there by the telecoms company he worked for. The plan was to stay for his threemonth contract. Twelve years later, Lagos is their home.
Although the city has a reputation for hellish traffic jams, mindless bureaucracy and security problems, Venter loves it.
“It’s a place that grows on you. People are friendly and welcoming, there’s opportunity for business, it’s vibrant and there are things to do,” she says.
Lagos is a world away from where Venter — who has a strong Afrikaans accent — grew up: Bethlehem in the Free State. Now her company, Sure Platform, operates in logistics and travel, ferrying visitors around and helping others settle in Nigeria’s most populous city.
She says Lagos has mutated radically in recent years: infrastructure has improved and malls have popped up. Her children’s education speaks volumes about the city: her young daughter, she says, has a posh British accent, but her son sounds Nigerian and speaks the local slang fluently.
“People must come with an open mind. Don’t come and expect South Africa. But you’ll be amazed at what it can offer.”
Her friends — ranging from Lebanese to Syrian, Nigerian to South African — have become like family, she says.
Security isn’t a particular threat where she lives on Victoria Island, says Venter.
Venter is one of a growing number of South Africans working in Nigeria, eager to take advantage of business opportunities in a country that recently took the title of Africa’s biggest economy from South Africa. ($510-billion versus South Africa’s $350-billion).
Whereas South Africa is struggling to grow its GDP more than 2% annually, Nigeria’s is expected to come in at more than 7% this year. Part of the reason companies like Shoprite have moved in is that the country has a population of about 170 million, compared with South Africa’s 50 million.
These statistics have helped woo South African blue-chip companies, such as MTN, Shoprite, Pep, Mr Price and Game.
Food company Famous Brands has Steers in Nigeria, and recently bought 49% of the Mr Bigg’s fast-food chain. In finance there are RMB and Stanbic and in property Broll and Liberty, with Tsogo Sun, the Protea Hotel Group and Sun International in hotels.
The airport offers a taste of what is to come. At customs, it is not immediately clear where to stand. Still, officials bark orders and seem to know what is going on — demonstrating the notion of “organised chaos”.
Soldiers also pepper the airport, which is to be expected, because it has been only a few weeks since Boko Haram’s kidnapping of more than 200 girls and its attacks in the north.
The Lonely Planet travel guides refer to Lagos as “chaos on a stick”, locals refer to it as the “wild west”, and the phrase “Moscow on crack” is now used to describe the fast pace of change in the city.
Paris or Rome accentuate art and lifestyle, but in Nigeria it is all about business.
It is also, like South Africa, one of the planet’s most unequal societies. The poor, 63% of the population, live on less than $1 a day (about R10.70), while the rich buy their clothes in London, Paris and New York.
Nigerians are the fourth biggest-spending tourists in the UK, dropping an average of £500 (about R8 970) in each shop. That is roughly four times what the average British consumer spends, and reflects the speed at which wealth is being created in Nigeria.
Visit the Yellow Chilli restaurant on Victoria Island and you will see snappy dressers — one customer who runs a fashion store announced that he bought clothes only from Milan, Paris and London — and expensive cars.
Thobekile Duma, the country manager for SAA in Nigeria, says that, in inverse proportion to South Africa, more traders had Voyager platinum cards than corporates.
At the Balogun market on Lagos Island, shoppers jostle to buy fabric, food and plastics. But you can also get a manicure at the side of the road.
One of the fundamentals of Nigeria is that formal retailers occupy only about 5% of the market. The rest are informal traders, which makes it tricky for new brands to gain a foothold.
It is clear that there is far more trade from South Africa into Nigeria than the other way round.
Osayaba Giwa-Osagie, the director of the Nigeria-South Africa Chamber of Commerce, says this is partly because South Africa is pretty restrictive for foreigners, with curbs on equity ownership and moving money.
Still, more Nigerians are visiting South Africa than ever before. Tourist numbers rose 13% to about 73 000 in 2012, and early this year South Africa set up tourism offices in Lagos.
One part of Nigeria’s reputation that is deserved, however, is that it is difficult to do business there. The electricity supply is sporadic, when it exists at all. Land and buildings are expensive, skills in some industries can be poor, it is difficult to get a bank loan, venture capital is non-existent and corruption endemic. The World Bank ranks Nigeria as 147th in the world in its “ease of doing business” survey, largely because of high costs owing to poor infrastructure and a dependence on imported goods.
There is a culture of poor maintenance — drive it until it breaks, then leave it on the side of the road. But around the corner is a state-of-the-art electronic billboard.
This underscores Nigeria’s paradox: Lagos is dynamic and growing quickly, as well as chaotic with variable support.
But it is predicted to become the third-largest city in the world by 2015 — so business is willing to cling on for the ride.