At the invitation of the President of the Federal Republic of Nigeria, H.E. Mr. Bola Ahmed Tinubu, Indian Prime Minister Narendra Modi visited Nigeria from 16-17 November 2024. It was part of PM Modi’s three-nation tour to Nigeria, Brazil, and Guyana. This was the first visit by an Indian Prime Minister in 17 years. He became the fourth Prime Minister after Jawaharlal Nehru (September 1962), Atal Bihari Vajpayee (December 2003), and Manmohan Singh (October 2007) to visit the most populous African country. During the visit, the Prime Minister held talks to review the strategic partnership between India and Nigeria and discussed further avenues to enhance the bilateral relationship. He also addressed a gathering of the Indian community in Nigeria.
India and Nigeria have been strategic partners since 2007 with growing economic, energy, and defence collaboration. More than 200 Indian companies have invested over $27 billion in important sectors in Nigeria. Nigerian President Shehu Shagari was the Chief Guest at the Republic Day celebrations in January 1983. President Bola Ahmed Tinubu visited India in September 2023 for the G20 Leaders’ Summit in New Delhi.
Nigeria the Country
Nigeria, in West Africa, has an area of 923,769 square kilometres and, with a population of more than 230 million, is the most populous country in Africa and the world’s sixth-most populous country. The British colonised it in the 19th century. Nigeria became an independent federation on 1 October 1960. It experienced a civil war from 1967 to 1970, followed by a succession of military dictatorships and democratically elected civilian governments until achieving a stable government in 1999. Nigeria is divided roughly in half between Muslims, who live mostly in the northern part of the country, and Christians, who live mostly in the south. Nigeria‘s economy is the fourth-largest in Africa, the 53rd-largest in the world by nominal GDP, and the 27th-largest by Purchasing Power Parity (PPP).
Economic Cooperation
Both India and Nigeria possess diverse natural and economic resources and are the largest economies in their respective regions. Nigeria’s 2022 Gross Domestic Product (GDP) was $477 billion. India is the largest trading partner of Nigeria, and Nigeria is India’s largest trading partner in Africa. India is Nigeria‘s leading investor, with an investment base of about $20 billion. The bilateral trade volume between Nigeria and India touched $15 billion for the financial period 2021-2022, which represents an increase of 69.80 percent from the previous year. India’s exports to Nigeria in 2022 were $5.43 billion, with refined petroleum products being the main commodity. India’s imports were $8.2 billion, with crude oil forming nearly 90 percent of them. In fact, India is the largest importer of Nigerian petroleum. India‘s other exports to Nigeria are pharmaceuticals, automobiles, cars, iron and steel, rice, plastics, clothes and fabrics, engineering equipment, and power sector components such as transformers, insulators, and circuit breakers.
India is the fifth largest investor in Africa with a cumulative investment of over $75 billion. The Confederation of Indian Industry (CII) aims to increase this to $150 billion by 2030. India is also the third largest trading partner of Africa after China and the USA, and accounts for 6.4 percent of total African trade. During Nigerian President Tinubu‘s visit to New Delhi in September 2023, Indian investors pledged another investment amounting to nearly $14 billion into the Nigerian economy. In Africa, Nigeria is the third biggest trading partner of India in the year 2024 after South Africa and Tanzania.
Despite the ever-present threat of the Nigerian ‘Boko Haram’ terrorist organisation and the ‘Black Axe’ mafia, Indian firms are the second biggest employers in Nigeria after the Nigerian Federal Government. More than 135 Indian firms operate in Nigeria. Indian firms in Nigeria are in greatly diverse fields, e.g., pharmaceuticals, engineering goods, electrical machinery and equipment, plastics, chemicals, etc. Some of the major companies include Bharti Airtel, Tata, Bajaj Auto, Aditya Birla Group, Kirloskar, Mahindra, Ashok Leyland, Skipper, Godrej, Simba Group, NIIT, Aptech, New India Assurance, Bhushan Steel, KEC International, and Dabur.
Social Connect
An entire generation of Nigerians in Northern Nigeria and Eastern Nigeria was taught by Indian teachers, treated by Indian doctors, and grew up wearing Indian clothing and watching Indian movies in the 1970s to 1990s. The enormous goodwill earned by Indians can invariably be felt in interactions with the government and civil society.
Historically, both countries have been at the forefront of the international anti-colonial struggles and anti-apartheid struggles and have closely collaborated in various international fora. The presence of a large Indian expatriate community of about 50,000, the largest in West Africa, adds value to the importance of our long-standing relationship.
Institutional Framework and Company Support
There are many institutional framework mechanisms between the two. A Joint Trade Committee (JTC) at the level of the Commerce Secretary, the Nigeria-India Business Council (NIBC), and the Nigerian Chapter of ASSOCHAM in Abuja. Many Indian companies have partnered with Nigerian companies or support them.
Lack of infrastructure, uncertainties in regulations, and security concerns have led Nigeria to underutilize its refining capacities, thereby pushing the country to become a net importer of refined petroleum products. Engineers India Limited (EIL) is the project management company for the Dangote Group of Nigeria’s largest Petrochemical and Fertilizer Complex worth $2.5 billion, which is currently the second largest in the world. Other Indian companies working or having worked in the Dangote Oil Refinery Project are Fabtech, Indcon Projects, Skipper, Patels Airtemp, Temasme, PhilsEngg, Techno, Larsen & Toubro, Godrej, Vijay Tanks, ISGEC, Altech, Diamond Engineering, Bharat Bijlee, Thermax, and Emerson.
Nigeria is a natural location for a variety of industrial activities due to the availability of natural resources, affordable labour costs, and a large market. There are many companies in Nigeria owned by Persons of Indian Origin (PIO): the Chanrai family (agribusiness and automobiles), Dana Group (pharma, steel, electronics, consumer goods, domestic airline), Chellarams (consumer goods, foodstuff, financial services, art), Keshwanis (retailing and construction) and Mehtani’s Churchgate Group (construction), DUFIL Prime Foods Ltd., Indorama (headquarters in Indonesia), Olam Nigeria Ltd (promoted by Indians with the Singapore Government having a majority stake), etc. India is also trying to support Nigeria’s digital sector, including information, communication, and technology (ICT).
Investment Opportunities in Nigeria
Due to high inflation, Nigerians will spend more of their income on food commodities, and food investment is the number one priority of households in Nigeria. Agriculture and agri-products are one of the four key sectors with fantastic promises for Indian investment and investors.
Nigeria’s Energy Transition Plan (ETP), launched by the Federal Government on 24 August 2022 to establish the country’s strategy to reach a net-zero emissions energy system by 2060, would require funding of about $1.9 trillion up to 2060. Nigeria’s energy sector accounts for about 65 percent of the country’s total greenhouse gas emissions. The huge energy market is another vital sector where Indian entrepreneurs can contribute to the economic transformation in Nigeria. There is an ongoing Letter of Credit (LOC) of $100 million for energy projects in Kaduna, Nigeria. Huge opportunities for Indian investors are in areas such as hydropower and enormous solar energy potential and photovoltaic generation. The daily production of animal waste in Nigeria is about 227,500 tons, which could lead to about 6.8 million cubic metres of biogas.
The ICT sector sees a huge technology gap, know-how, and experience in Nigeria. India is a front-runner in the global ICT industry, and there is so much Nigeria can learn from India, where its expertise is institutionalised. Expertise in the development of the pharmaceutical industry is another vital sector where Nigeria can gain considerable experience from its Indian counterpart. Globally, India is recognised as a utility player in the pharma sector. Nigeria has launched the National Drug Policy 2021, which seeks to promote the local pharmaceutical sector by encouraging local production. India can support this. With the steady expansion of the real estate market and state support in the infrastructure and energy sectors, there is a great opportunity for Indian investors.
Airtel Nigeria has signed a memorandum of understanding (MoU) with Konga, an e-commerce company, to deepen the digital retail landscape in the country. The transportation, logistics, and supply chain sub-sector is one of the fastest-growing industries in Nigeria, attracting local and foreign investments. The rapid industrialisation of Nigeria has seen a sharp increase in demand for skilled labour and education, offering great opportunities.
India’s Support for Nigerian Military
India strongly supported the independence of African countries from colonial rule and established its diplomatic mission in 1958 – two years before Nigeria officially gained independence from British rule. Soon after Nigerian independence, India helped establish a military and several other projects in Nigeria. India aided Nigeria in building military establishments like the Nigerian Defence Academy (NDA) at Kaduna and the Naval College at Port Harcourt, along with other military training facilities. Many Nigerian Presidents attended the Defence Services Staff College in India. Since 1964, India has been supporting Nigeria’s efforts in capacity building under the Indian Technical and Economic Cooperation (ITEC) Programme. India offers about 250 civilian and 250 defence training slots under ITEC/e-ITEC to Nigeria. Indian businesses also set up shop in Nigeria.
Further Defence Cooperation
Pakistan and China jointly managed to sell three JF-17 ‘Thunder’ aircraft to Nigeria. Nigeria became the second customer after Pakistan. The aircraft were deployed to combat insurgency, particularly in the northeast where groups like Boko Haram and the Islamic State affiliate operate. While expectations were high for further procurement of JF-17 aircraft, the same did not happen due to difficulties that Nigeria was facing with its JF-17 fleet, like the challenges faced by Myanmar’s Air Force, of wing cracks and maintainability issues that had rendered a significant portion of the fleet unfit for operations. Nigeria needs to replace its aging Chengdu F-7NI fleet. India could be a potential supplier, offering its indigenous Tejas fighter jet. There is a significant opportunity for India to supply the Light Combat Helicopter (LCH) ‘Prachand’, rockets, and missiles, small and medium arms, and radars, among many others.
Hindustan Aeronautics Limited (HAL) and the Nigerian Air Force signed a contract in April 2022 to foster bilateral cooperation in the areas of capacity building and helicopter pilot training.
Way Ahead
There is a proposal to establish a trading desk and the appointment of a designated Senior Trade Officer that will coordinate specific trade and investment activities. There is a need to reduce barriers at ports to hasten trade, fine-tune export regulations, and seek additional incentives for the Indian business community. Both nations must increase capacity building and skills exchange, and provide concessional finance and risk mitigation. The establishment of an Africa-India economic area with easy and free movement of labour, capital goods, and services would be desirable.
India must invest more in Nigeria’s infrastructural development in areas of security, agriculture, health, education, transportation, renewable energy, and capacity building. There is a need to increase participation in each other’s trade fairs.
Bharat Earth Movers Limited (BEML) can see opportunities in the mining, defence, and railways sectors in Nigeria. There is great scope for cooperation in the liquefied petroleum gas (LPG), compressed natural gas (CNG), and liquefied natural gas (LNG) sectors. Power transmission, power generation, power distribution, electrical and electronics, and allied products can see more action.
The Nigerian power sector requires support, especially in solar energy and renewable energy, as Nigeria mostly uses thermal energy and bioenergy sources. India-made electric vehicles (EVs) and other allied infrastructure can be exported to Nigeria.
Nigeria needs support for digital innovation and entrepreneurship, the digital economy, and 5G technology. There is a much greater scope for agricultural exports from India, especially wheat. There are opportunities for the paper and plastic industry. The Department of Traditional, Complementary, and Alternative Medicine (TCAM) under the Nigerian Ministry of Health has been showing interest in Ayurveda.
About 35,000 Indians live in Nigeria. Starting weekly direct flights between Nigeria and India, to begin with, will be desirable. Getting a visa should be made more convenient. The cultural exchange between India and Africa is promising, and there is potential for India’s Bollywood to engage more rigorously with Nigeria’s Nollywood. Indian handicrafts are very popular and have a solid market.
China has made significant investments in Nigeria’s oil and infrastructure sectors. It has helped Nigeria with military equipment and also launched communication satellites. But all this has come with strings attached and ownership conditions. Nigerians prefer Indian investment over Chinese investment.
India is conscious of China’s forays in Africa and the petroleum-rich Nigeria. Africa remains a partially explored continent. India has the advantage of the shared English language. Nigeria is an important destination for Indian business, and there is great potential to explore. PM Modi’s visit was aimed at raising relations to a new level.
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