Monday, 20 October 2008


One of my good friends and colleagues at work is a brilliant engineer from Nigeria. He used to be a mechanical engineer, then had a career change and joined the software realm....
Anyway, I hang alot with him, and we talk alot about technology (and women when we are not geeking) and I also got to meet a number of his friends a co-patriots. There is a large number of Nigerian ex-pats here in London. In fact, the UK has the largest Nigerian community in the world, with an estimated 3 million immigrants.

One advice to the bankers: invest in Nigeria.

Nigeria is projected to become the third most populous nation on the planet by 2050, and it has some very interesting demographics. It is also very similar to the United States in many ways. It is a federal state, with 36 states in addition to the federal capital territory of Abuja, with Lagos, the former capital, being the most populated , with 11.5 million. They have 389 different ethnic groups, with many different languages and dialects. It is also a huge country, 1 million Square kilometers , and was projected by Goldman Sachs as on of the Next-11 economies of the world. It's also one of the biggest exporters to the United States, and an oil and natural resources rich country......

But this is all.....marginal.

If Adam Smith was still alive, he'd tell you that the real wealth of a nation, is its people, and the ability of the people to create wealth.

A bit of recap first, as I like to use an example put forward by Howard Baetjer Jr. in his book, Software As Capital . In the old days, a country's gross national product, relied on its labour force, and it's ability to produce. For example, in the mid 1800s, almost 45% of the United States worked in agriculture, in order to feed the nation. Today, with all the technology and advancement in science, it only takes 3% of the people to work in agriculture to feed the nation. So where did the other 42% go? They surely didn't move t Hawaii, but they had to seek employment in other places. Well, they simply "moved up a notch", and that technology, that is making the life of a farmer so easy became the biggest employer, and we had the industrial revolution. Cars , trucks, pipes, TVs, factories, big buildings, picked up the 42% and empoyed them. As we move towards a more "knowledge based economy" , manual labour is needed less, and mental ability is needed more. But, likewise, these sectors became over-teched, and fewer people were needed to operate the factories, and again, the United Kingdom, which was the first country to fully industrialize, is leading the way in "de-industrialization". It seems people have moved to banking, but well.... we all know how that is going.

Moving on, the point is, that all this poduction, needs consumption. Someone needs to buy the TVs and the cars and the hamburgers. So far, the Yankees are leading the way in mass consumerism, and well, that is why they have the biggest economy in the world? Why? Simple, because well, they are their biggest clients. The biggest client to all those US multinationals, are the Americans themselves, and it is a positive loop- the US firms don't need to worry about what is going on in the rest of the world, as long as there biggest market is in-house. (I work in a multinational, US-based company, and our biggest market is in the US of A).

And here is the biggest similarity for Nigeria.

I have observed closely, and so far from what I have seen, Nigerians enjoy life. (Why shouldn't they?!) . They like nice cars, nice things, and are even better than the yanks when it comes to knowing there taste in food. Ok I am biased because my friend is Nigerian, but, well, think of it this way, one Nigerian will be a bigger consumer than 2 indians, and 3 Chinese. Today, the wealth of a nation, is it's people, and Nigerians are up and coming.

Bigger, better, stronger, and, they are not short of brains either. One of them sits 3 feet away from me.

Invest now, coz sooner than later, they'll be up there. I am banking on it.

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