From the first batch of Chinese entrepreneurs set foot on this hot land in the 1950s, to the traditional enterprises taking root here in the 1990s, and to the swarming Chinese Internet enterprises in 2018, Chinese and Chinese enterprises have been deeply cultivated in Nigeria for decades. Nowadays, Chinese enterprises have penetrated into every aspect of Nigeria's economy, from infrastructure to logistics, from daily necessities to catering and hotels. Giants represented by Transsion and Huawei have become the cornerstone of Nigeria's economy, profoundly influencing the local development trajectory.
Different from the poor and backward "Black Africa" in many people's impression, Nigeria is showing a strong temperament of scientific and technological Internet. Lagos, its economic center with a population of over 20 million, has gathered various financial and technology enterprises, becoming the start-up market with the highest number and largest investment scale of various capital in Africa. It is known as both the "Silicon Valley" of Africa and the "City of Entrepreneurship".
In Xu Qiang's eyes, the temperament of Lagos is very similar to that of New York. Xu Qiang has been in Nigeria for 3 years and currently serves as the head of a leading Chinese technology company in Nigeria.
Nigeria is currently in a stage of rapid development, full of many possibilities, "Xu Qiang told Zhixiang about going abroad.
On the one hand, this "possibility" is that the infrastructure is not perfect and people's livelihood supplies are lacking, on the other hand, the development of mobile Internet is in the window of opportunity. These two contrasting "possibilities" have converged into an era opportunity for Nigeria, the largest economy on the African continent.
There is a saying that can describe Nigeria: on one hand, it is impoverished, and on the other hand, it is ambitious.
With the development of mobile Internet, Nigeria's digital ambition has become increasingly prominent. Recently, the National Information Technology Development Agency (NITDA) of Nigeria announced an important policy to be implemented in Nigeria: all companies providing cloud services in Nigeria must have their critical data stored within Nigeria.
In the new stage, if Chinese companies want to continue mining in Nigeria, they need to understand the characteristics of this country and master its development code.
01
Anchor of Africa: From 200000 Chinese 'iron rice bowl' to 'gold mine dream'
In 1997, a young man named Shen Yanchang quit his iron rice bowl and, with 50000 yuan, caught up with the earliest trend of gold mining in Africa and went to a Hong Kong funded manufacturing enterprise in Nigeria to do procurement. Two years later, he rented a private house in Guangzhou and opened a foreign trade company, which was the starting point of Senda Group. Morita became a representative of traditional Chinese enterprises entering Nigeria during that period, while Shen Yanchang became a microcosm of Chinese entrepreneurs who went abroad to Africa during that era.
As the largest economy in Africa, Nigeria has a huge population of over 220 million, making it the most populous country in Africa, and its population is still growing rapidly at a rate of 2.6% per year. The population structure of Nigeria is extremely youthful, with about 60% of the population under the age of 25. The population size and young population are undoubtedly attractive to Chinese overseas enterprises. But 40% of Nigeria's population still lives below the poverty line.
Infrastructure is an important industry for China's investment in Nigeria. For example, the Akka Railway, Lagos Ibadan Railway, Zamfara State Solar Power Station Project, Lagos Light Rail Blue Line, etc. all have the presence of Chinese enterprises.
But the greater opportunity for Nigeria's private economy lies in the significant scarcity of household goods due to its demographic characteristics. This scarcity has become the gold mining code for the first group of Chinese traditional enterprises like Senda to root in Nigeria.
When Shen Yanchang first arrived in Nigeria, the country even needed to import toilet paper. Nowadays, Senda's ceramic bathroom products occupy 70% of the market share in Nigeria. After starting to produce fast-moving consumer goods in 2009, Senda's diaper and sanitary pad brands have become leading brands in the Nigerian market.
The large population size means a high ceiling. A Chinese company that sells mosquito coils can sell 120 million plates of mosquito coils in a year. Chinese brands such as Golden Diamond Sanitary Ware and Wangkang Ceramics have achieved industry leaders in Nigeria, and Chinese products in the fields of clothing, daily necessities, and home furnishings have high market share. "Xu Qiang told Zhixiang to go global," This is what makes Nigeria attractive. Most Chinese companies that have rooted themselves here and made good products have become industry leaders
Over the past two decades, Nigeria has continuously attracted Chinese companies to engage in fields such as furniture manufacturing, clothing production, trade logistics, and engineering construction services.
In 2006, a mobile phone salesperson from Transsion used a truck to pull functional phones to the countryside, while farmers exchanged food for mobile phones. Transsion started with feature phones and promoted the popularity of smartphones in Nigeria. Nowadays, Transsion has a market share of 55% in Nigerian cities, and every village has a Tecno blue sign repair point. Huawei, which entered Nigeria in 1999, helped Nigeria build its first 3G, 4G, and 5G projects, providing communication and network connectivity services to over half of the Nigerian population.
It can be said that Median and Huawei have built Nigeria's Internet foundation and helped Nigeria directly cross the PC Internet into the mobile Internet era. This has formed a miracle: in this country where power is cut 180 times a year, Internet users are growing at the rate of 12000 per day. By 2023, the Internet penetration rate in Nigeria has reached 55.4%.
With the advent of the mobile Internet era, Nugget Nigeria has emerged a new password.
Xu Qiang told Zhixiang that around 2018, the first batch of Chinese Internet companies began to enter Nigeria, and such leading enterprises as OPay and PalmPay were born in the field of Internet finance. Nowadays, OPay has over 60 million users and an average daily transaction volume of 8 million.
In addition to fintech, Chinese companies have also begun to expand into industries such as e-commerce, logistics, social tools, new media, and gaming.
In November 2024, Temu entered Nigeria and became the most popular app on the local Google and Apple app stores in less than two days. A local programmer told Zhixiang that within 48 hours of going online, Temu's server was overwhelmed. You can even see young people holding power banks to browse low-priced products on Temu in shopping malls with power outages.
Due to product scarcity, an offline data cable in Nigeria can be sold for 40-50 RMB. And Temu's entry has brought high-quality and affordable products, quickly gaining recognition from 70% -80% of online shoppers in Nigeria. According to relevant personnel, Temu's daily order volume is about 40000 to 50000.
Moreover, prior to Temu's entry, Nigeria's logistics were relatively backward. However, Temu collaborated with Suda Africa, which is deeply involved in Africa. Suda Africa has set up front warehouses in 100 towns and cracked the "last mile" with a motorcycle fleet, reducing the delivery time from 30 days to 7 days.
Similar to Median and Huawei that laid the Internet foundation for Nigeria, Temu's entry is also contributing to the infrastructure construction of Nigerian e-commerce.
According to Statista's prediction, the e-commerce penetration rate in Nigeria is expected to reach 13.25% by 2025, only behind South Africa and Kenya on the African continent.
This may also mean new opportunities for Chinese companies.
02
President Chen Ying recently resigned and left the company
The 'digital leap' of power outage countries: a new continent for Chinese enterprises
There is a saying among Chinese people in Nigeria to describe the difficulty of doing business in Nigeria: "Being able to do business in Nigeria is not a problem worldwide
In 1965, there were only about 200 Chinese people in Nigeria, but now, according to data provided by Xu Qiang, there are 200000 Chinese people in Nigeria and thousands of Chinese companies.
Hualiu has been deeply rooted in Nigeria for decades, but Nigeria's gold mining code is not static. While Nigeria is attractive, it is also full of challenges.
In Nigeria, companies need to pay special attention to compliance issues, including employment compliance, tax compliance, data compliance, privacy protection compliance, etc. Only by strengthening compliance can Chinese enterprises sustainably develop in Nigeria. Especially in recent years, data compliance and data localization have been put on the agenda in Nigeria, becoming the main focus of the Nigerian government.
Recently, the National Information Technology Development Agency (NITDA) of Nigeria announced an important policy to be implemented: all companies providing cloud services in Nigeria must have their critical data stored within Nigeria, especially data from finance, healthcare, and government departments, which must be stored within Nigeria.
In recent years, with the rapid development of the Internet and technology enterprises in Nigeria, data localization and data security have gradually become the core issues of concern to the government. Although Nigeria has proposed data security related bills in the past, these bills have not been effectively implemented due to weak local data center infrastructure and insufficient power supply. Nowadays, with the improvement of local data center power supply and the increase of cloud service providers, the government has begun to strengthen data security supervision and gradually introduce relevant policies to ensure data sovereignty and national information security.
Behind this change is the rapid development of mobile Internet in Nigeria. Since 2017, the Internet penetration rate in Nigeria has increased rapidly, and the number of technology enterprises has soared. In the first quarter of 2024, Nigerian startups attracted 35% of investment from the African continent, totaling $160 million.
However, with the vigorous development of the Internet economy, a large number of enterprises' transaction data are processed overseas, which makes it impossible for the government to effectively supervise and levy taxes. This not only affects the national fiscal revenue, but also weakens the government's control over the digital economy.
This is also the reason why Nigeria has introduced new policies.
On a global scale, countries such as India and Algeria have also implemented similar policies, and data localization has become a global trend.
For Nigeria, this is also part of its' digital ambitions'. The digital economy is a key focus of Nigeria's development, and cloud is the cornerstone of the country's digitalization. Industries such as government, fintech, and e-commerce are all bringing new vitality to Nigeria's digital economy.
Nigeria hopes to position itself as a key participant in Africa's digital economy. By implementing local data hosting, the government seeks to create a thriving cloud ecosystem that benefits local businesses and consumers. In addition to data sovereignty, NITDA's policies also aim to accelerate Nigeria's artificial intelligence and digital transformation.
Nigeria is currently in a critical stage of digital transformation, and its development trend is quite similar to that of China from 2015 to 2016- although the digital wave has not fully erupted, the trend has emerged and the potential is enormous. There are challenges involved, but the opportunities hidden within are also infinite.
At the moment of Nigeria's digital transformation and the booming development of mobile Internet, the password of Nigeria's gold rush has changed again. The era is opening a window of opportunity to Chinese enterprises going to Nigeria. For Chinese enterprises, the current period is the golden window for layout, and pioneers may become the biggest beneficiaries of this transformation. If they can seize this historical opportunity, they are expected to open up new growth poles in the emerging market of Africa and become the "big forest" of the new stage.
03
Survival Battle under the Data Encirclement: Cloud Decision of Chinese Enterprises
Nigeria, as a leader in Africa's digital economy, has shifted its data governance policy from "loose regulation" to "strengthened sovereignty". Regarding digital sovereignty, Nigeria has enacted multiple national policies such as the Nigeria Data Protection Act (NDPA) and the National Digital Economy Policy and Strategy 2020-2030, aiming to embed data sovereignty into the core of national development.
For Chinese companies, the new policy of Nigeria's National Information Technology Development Authority (NITDA) is like a tight spell.
According to Nigerian regulations, companies that violate NDPA may face a fine of up to 10 million naira (approximately 23500 euros) or a penalty of 2% of their previous year's revenue, with severe cases subject to criminal liability. Cross border data transmission requires the submission of a Data Protection Impact Assessment Report, with an approval period of up to 45 days. According to relevant sources, a certain fintech company was fined 8 million naira for cross-border data transmission.
If we build our own data center, electricity alone accounts for 45% of the operating costs, which is 40% higher than in Europe, and we also need to deal with the problem of an average of 180 power outages per year. In terms of technological adaptation, there are also great challenges. A certain fintech company suffered a daily loss of $500000 due to a surge in payment delays caused by not adopting local cloud services.
Chinese enterprises are caught in the urgent need for digital transformation.
In Nigeria, how to choose cloud providers that can meet localization requirements and provide stable and efficient services to support the development of AI, fintech and other businesses has become a major challenge. According to regulations, if the issue of data security is not resolved, it will eventually backfire.
Under Nigeria's data localization policy, the primary competitiveness of Chinese enterprises has undergone a subtle shift - risk avoidance and data compliance are the necessary paths for Chinese enterprises to continue developing and seize the market in Nigeria.
For Chinese enterprises, the digital wave in Nigeria brings not only challenges but also opportunities, such as the explosion of cloud service demand, digital penetration in vertical fields, and e-commerce logistics relying on localized data to optimize warehousing networks. If they can seize these opportunities, Chinese enterprises have the chance to eat Nigeria's digital dividend after the "infrastructure dividend".
But the premise of all of this is to find a suitable 'cloud partner'.
International cloud companies such as Google Cloud and Microsoft Azure have not yet established local cloud data centers or local teams in Nigeria. In order to continue operating in Nigeria, international cloud companies must ensure compliance with the Nigerian Data Protection Act (NDPA) by establishing local data centers or partnering with Nigerian cloud providers. However, this may result in increased infrastructure investment and compliance costs.
Local cloud service providers such as Rack Centre, MainOne, etc. also face enormous challenges. They not only need to expand their operations to meet the growing demand, enhance their infrastructure capabilities and network security measures, but also need to maintain the ability to respond to constantly changing regulatory requirements.
Looking at the current cloud service market in Nigeria, only Amazon Web Services (AWS) and Huawei Cloud have local cloud data centers.
On December 10, 2024, Huawei launched Nigeria's first ultra large scale local cloud, becoming a pioneer international cloud provider in providing local cloud services in Nigeria.
Huawei Cloud provides Nigerian customers with the fastest and most reliable cloud services by building local Tier 3+data centers, with network latency as low as 15 milliseconds, supporting high-frequency transactions of billions of yuan per day for enterprises such as OPay. It also collaborates with local e-commerce platform Konga to increase payment success rates from 70% to 99.3%. These data centers provide tailored data storage and computing resources for local businesses and departments, ensuring that all data is retained within Nigeria. Based on this local cloud, Huawei Cloud can also provide Nigeria with the latest digital technologies, covering industry-leading cloud services such as databases, big data, hybrid cloud, and AI, helping Nigerian enterprises focus on business innovation.
In addition, what is even more important is that Huawei Cloud provides localized operational support for Chinese enterprises to go global in Nigeria, combining technology, compliance, and ecology, which is a unique capability that other manufacturers cannot match.
Huawei, which has been deeply rooted in Nigeria for 26 years, is actually a local enterprise: Huawei has a team of over a thousand people in Nigeria, covering various fields such as technology research and development, pre-sales, after-sales, and operation and maintenance. It has been dealing with local governments, industry institutions, and enterprises for many years, and undoubtedly has a deeper understanding of local commercial and financial tax laws.
As a core builder of Nigeria's ICT infrastructure, Huawei actively responds to and implements Nigeria's National Digital Economy Policy and Strategy 2020-2030. As early as 2019, it launched the "Future Seed" program to help train Nigerian university students, build a local digital talent reserve pool, and establish two training centers in Lagos and Abuja. It has also partnered with more than 190 universities to establish ICT colleges. Currently, over 70000 students have benefited from these trainings and grown into technical personnel in different ICT fields. In addition, Huawei Cloud also provides entrepreneurial support for Nigerian startups, aiming to provide cloud resources worth $10 million and support the development of 100 local enterprises.
In fact, whether for cloud companies or other Chinese enterprises, integrating into Nigeria's national development process is the most fundamental gold mining password. Huawei, on the other hand, provides a development sample for Chinese enterprises to go global in Nigeria - always keeping up with the development pulse of this African country, adhering to long-term principles, and deeply participating in the local economic development.
Nowadays, Nigeria is in the process of digital transformation and has the ambition to become a leader in Africa's digital economy. Data localization is just the first step in this historical process. Under such a national strategic framework, international cloud enterprises, local enterprises, Chinese enterprises, etc. should jointly build Nigeria's digital economy ecosystem in order to participate in the future development of Africa's largest economy for a longer period of time.