Even among seasoned travellers, mention of a visit to Lagos prompts the question: “Why?” One colleague, an old hand when it comes to Africa, described Ghana as “Africa for beginners” and Nigeria as “Africa for experts”. If that holds true for the country as a whole then it certainly describes its largest city.
The challenges come thick and fast – a population of somewhere between 15 million and 20 million, most of whom are living in varying degrees of poverty; a journey from the airport where not only a prearranged taxi but an armed police guard is considered wise for a visiting western businessman; and traffic problems that make Sao Paulo or Mexico City seem like models of urbanisation. Throw in power cuts so frequent that diesel generators run for 20 hours a day for most businesses, and an unenviable reputation of widespread corruption, and you soon start to ask yourself: “Why indeed?”
Well, let the figures speak for themselves. According to UK Trade and Investment (www.ukti.gov.uk),
the country’s GDP growth is increasing year on year and is forecast at 7 per cent for 2011. Its population of 158 million is set to double over the next 40 years, there is an expanding middle class, and rich reserves of natural resources – most notably in oil and gas, which has created a huge surplus in the country’s coffers.
Oil and gas is by far the largest sector, but Nigeria is also the most lucrative telecoms market in Africa, growing at twice the African average. The country’s education and training market continues to grow, with Nigerians seeking UK standards, though in agriculture both investment and technical expertise are needed. An anti-corruption bill has recently been signed into law and last year marked 50 years since Nigeria declared independence.
The country also took over the presidency of the UN Security Council last year for the first time in 15 years. The latest elections were the most trouble-free in memory. Time for a visit, then.
First impressions are positive. Arriving at 4:30am on Arik Air (www.arikair.com) – one of the country’s two international airlines (Air Nigeria, www.myairnigeria.com being the other) – I find Lagos airport is the opposite of what I expected – peaceful, with only a few unofficial money lenders keen to do business. In fact, when I had trouble contacting my driver using my UK mobile, one of them offered to dial the number for me, then handed me his phone while I made the call. No request for reimbursement, just a smile and a handshake.
At that time of the morning, the ride from the airport is through darkness, with only the flashing lights of my police escort to enliven the scene. Wasn’t this overkill? Even in Karachi, when visiting with a large US company a few years ago, I felt that the comfort blanket provided by armed cars was probably outweighed by the attention we were bringing on ourselves, but after a few days in the city, it became the normal way of doing things. For most of the time, a local driver is used, and for airport runs, an armed escort. For organised gangs, cars travelling to and from the airport represent potentially lucrative prey, but the arrangement hardly instils confidence in the first-time visitor.
The sense of uncertainty that even those well-versed in travelling through Africa feel in Lagos isn’t unusual, according to David Kliegel, general manager of the Federal Palace hotel. “We help a lot of our guests through their initial difficulties in the city,” he says. “There’s the traffic, of course, and the unexpected delays, but we can also give a little guidance on how things work here, or don’t. The unexpected public holidays when things shut down catch people out, for instance.”
Having previously worked in both China and the Middle East, Kliegel says he was used to working in challenging environments, and he advises talking with local expats to get an idea of the country before entering into a new business venture. Nevertheless, he is keen to emphasise the friendliness of Nigerians. “It’s not superficial,” he says. “They are helpful and amenable to suggestions.”
As for the security aspect, in the bright sun of a Lagos morning, he dispels a few fears, telling me that although you need to take care, it is perfectly possible to get around, and even recommends a couple of good Italian restaurants nearby.
There’s no doubt that things have improved in recent years. Babatunde Fashola, governor of Lagos since 2007, was re-elected in May with a large majority, and his effect on the city is palpable. The streets are safer – and cleaner as well. Drive anywhere early in the day – and that’s about the only time you’ll get anywhere here – and you’ll see hundreds of litter-pickers clad in fluorescent vests, while roads previously clogged with street vendors have been cleared. Nevertheless, much of this is restricted to Victoria Island, Lekki, Lagos Island and Ikoyi, where the rich and expats live – or what my driver called “the Big Man” places. There have been improvements elsewhere, but from a very low base.
And the challenges for the city are huge. According to The Economist, Lagos alone has a GDP of US$43 billion, which makes it the fifth-largest economy in Sub-Saharan Africa. The population is growing at twice the rate of Cairo and half are under the age of 20, yet only 10 per cent of the city has proper sewerage. Things are getting better – GDP rose by 70 per cent between 2000 and 2009, and there is advertising for everything from mobile phones and beer to bank accounts. But you will still see the ubiquitous sign of “This house is not for sale” painted on walls, to try to stop people buying properties from people not entitled to sell them.
For Matthew Lamb, country manager of Control Risks, the country as a whole presents huge opportunities. “Things are getting better but we still rate Nigeria as high risk compared with many business destinations.” The company advises on risk mitigation and has a network of information gained from being stationed here for a decade.
“We can advise our clients on the current situation – everything from any political rallies that might make scheduling appointments difficult, to travel advice and regional or country-wide information, whether that’s a country report, political report or economic forecast. We’re not a market research company but we can answer clients’ queries about how bureaucratic a country is, and we can conduct corporate investigations of business partners if a joint venture is being considered.”
This form of commercial assurance, or “Am I getting what I am paying for?”, is essential in Nigeria, which even has its own form of fraud – the phishing email, known locally as a “419 scam” after a largely ineffectual law passed to try to prevent it. It also helps to guard against reputational risk.
“It’s not just looking after the asset – the factory, for instance, or the office,” Lamb explains. “You have to look at the whole value chain. Our specialist advisers assess a client’s vulnerability across a broad range of business risks and provide practical solutions.”
Precautions for more serious matters may be necessary, however. In the Control Risks “Risk Map 2011”, Nigeria has the unenviable distinction of being the number one country worldwide for kidnapping, “accounting for the majority of abductions recorded in Africa”. Still, this hasn’t discouraged large companies from setting up – not only oil and gas firms such as Chevron and Shell, but Unilever, Guinness and Standard Chartered.
And the recent stability has led to a boom in hotel openings. In 2007 there were 3,000 hotel rooms, with only three or four of those properties of international standard. Now there are 10,000 and more opening – recent additions include the Four Points by Sheraton and the Radisson Blu (see below), the refurbished and transformed historical Federal Palace (see next page) and the yet to open InterContinental – with the added competition raising standards across the city. For the likes of Eric Houot, general manager of the long-established Moorhouse hotel, the changes in the country are all positive.
“Some 90 per cent of the hotel business is oil and gas but what is interesting is that this creates other sorts of business that are not directly connected. We can see that there is a middle class forming. Sales of wine are increasing, and I heard that one million bottles of champagne were imported into Nigeria last year.
These are businesses not for expats but for Nigerians.
“The people are very nice, very polite, English-style. They aren’t aggressive at all in their business relations. The security aspect is sometimes a little difficult, but the image people have of the country is wrong. In part, it is because it is so huge – more than 1,000km from here to the north of the country, and there are huge differences between the north and the south. So if there is trouble in one part, people assume the whole place is suffering, which is not true. Some also mix it up with neighbouring countries – Niger, for instance.” He adds: “Businesswomen never used to come here alone three years ago, but they do now. I know Brazil and Mexico, and I don’t feel any less safe here.”
Lagos airport is one of the most important aviation hubs in Africa, and most major carriers fly from it, yet it is in desperate need of investment. Its domestic terminal is separate from the international one, with no airside passage between the two. My own flight was severely delayed, and rolling power cuts lasting up to 90 minutes when the emergency generators had run out of diesel, and a lack of aviation fuel for aircraft caused major disruptions (www.businesstraveller.com/tried-and-tested for a flight review).
This lack of power is a major cost to businesses and stops manufacturing relocating here. In this, it is easy to blame the discovery of oil, which has resulted in a lack of investment in other sectors. Nigeria was well known for textiles but this couldn’t be sustained without power and it moved to China and India. In agriculture, the Nigerians gave the technology to Malaysia, while coca is also a minor industry compared with the past.
Stand in the Federal Palace hotel looking at the tankers moving in and out of the port and it’s dispiriting to think they are arriving full of imported goods and leaving empty, but it’s close to the truth. At present, Nigeria makes little, and exports less. That’s the legacy of oil and gas at the moment, and it’s one that needs addressing.
Nevertheless, Control Risks’ Lamb is optimistic. “It’s easy to write the bad-luck story of Nigeria,” he says, “but the president and government have a strong mandate.” The last word goes to Houot: “Nigerian people don’t like trouble because it stops them making money.” Now that’s a place in which it’s possible to do business.
WHERE TO STAY
Radisson Blu anchorage
Opened in May, the Radisson Blu Anchorage is on Victoria Island’s northern coast looking across Lagos Lagoon – which is more like a river at this point. Its 170 smart rooms have views either across the stretch of water, or of the car park and busy road. All are a good size (32 sqm for a standard room), and have free wifi. There’s a business lounge available, and the whole hotel is built around a large four-storey atrium with a waterfall and modern African art. Dining options include the Voyage restaurant, the View bar and lounge, and the Surface Bar and Grill for alfresco dining. There is a gym in the basement, a good-sized lap pool, a few meeting rooms (some with floor-to-ceiling windows) and even a small marina.
www.radissonblu.com/hotel-lagos
Rooms from US$360
THE MOORHOUSE IKOYI LAGOS
The Moorhouse may have altered its name from Sofitel, but it remains well known and well liked by visitors. It is undergoing a renovation at present but is still popular with international travellers, particularly Europeans, as a result of it still being within the Accor family. It is well located in the affluent district of Ikoyi, close to many businesses and embassies. The 94 rooms and suites are arranged around a swimming pool, and there’s a recently refurbished fine-dining restaurant, a comfortable wine bar and temporary exhibitions of African art.
Rooms from US$310
Trade with Asia
As a trade partner, Nigeria is becoming increasingly important to Asian businesses. Lagos is considered the economic and financial capital, so much of the available figures for import and export trade between Nigeria and China, Hong Kong, Singapore and South Korea will translate to increasing trade between these Asian countries and this fast-growing city.
China: In 2010 China was Nigeria’s number two import partner, accounting for 15.9 per cent of imports, worth over US$7 billion. In the same year China was in the top 10 list of export partners with a total value of more than US$950 million. As a result China was considered Nigeria’s fourth major trading partner.
Source: IMF
Hong Kong: For the first ten months of 2011 Hong Kong imports from Nigeria were valued at US$50 million, while exports for the same period were valued at approximately US$261 million. Both figures are higher than the previous year.
Source: Hong Kong Trade Development Council
Singapore: Imports to Singapore from Nigeria for the first ten months of 2011 were valued at US$61 million and exports for the same period over US$254 million. Top imports include cocoa and civil engineering parts, while top exports include heating and cooling equipment.
Source: International Enterprise Singapore
South Korea: The value of imports in October 2011 was over US$46 million, while exports for the same month exceeded US$2.3 billion.
Source: Korea International Trade Association
Tried and Tested: The Federal Palace Lagos
What’s it like? Famous in Lagos and dating back to the 1950s, the Federal Palace relaunched in 2008 under the management and ownership of Sun International. Next door to the six-storey hotel is the much larger 16-storey “Towers”, shut in 2008, though there were plans for that to be renovated from October 2011. The hotel’s website emphasises the casino but if you’re not a gambler don’t let that put you off – this is an excellent property with friendly service, clean, decently sized rooms and some well manicured grounds on the south side of Victoria Island.
Room facilities The number of rooms has been reduced from more than 200 to 146, giving it a slightly boutique feel. The whole hotel is smart and modern, while retaining the feel of a previous age in the overall design – the size of the public areas, for instance. The
in-room technology, including flatscreen TVs and free wifi, worked impeccably. Rooms have either city or sea views, and it’s better to go for a sea one (though the city is fascinating), since you can watch the large ships moving in and out of the harbour. Each room also offers air conditioning, 24-hour room service, international direct-dial telephones, minibars, laptop safes and tea and coffee-making facilities.
Restaurants and bars The Explorer’s restaurant is on the lower level with a terrace outside where you can drink local Star lager from chilled glasses and watch the evening draw in (assuming you’ve taken your malaria tablets). It has several buffet options in the evening, including grilled meats, salads and some delicious langoustines. The Ancestors bar is up a few steps from the lobby and has views across the grounds to the coast. Snacks are also available on the pool deck.
Business and meeting facilities There is a good-sized business centre and several meeting rooms – Nigeria’s declaration of independence was signed in one of them in 1960. To one side of the hotel opposite the car park is a 700 sqm, 500-seat permanent marquee for conferences.
Leisure facilities This is a notable strength since the new US$2.5 million pool club opened in September last year, refurbishing the existing Olympic-sized pool and adding
water-park slides, tennis courts, an outside exercise park, jogging track, miniature golf, a children’s play area, a food and beverage outlet and a merchandising stall.
Verdict: A good hotel that’s well known by everyone in Lagos – a plus, as this means local clients won’t mind coming to meet you there for meetings.
Fact File:
How many rooms? There are 146, including 116 Kings,
12 Junior suites, and eight one-bed apartments.
Room highlights The superb view of the tankers just off Lagos harbour from sea view rooms, and free internet.
Price Internet rates for a midweek stay in February start from US$610 for a King room.
Contact 6-8 Ahmadu Bello Way, Victoria Island; tel +23 412 779 000;
