The glory and pitfalls of the Nigerian entrepreneurial spirit

The streets of Nigeria’s business capital, Lagos, buzz with activity. Vendors making their way through cars stuck in traffic sell everything from newspapers to chewing gum to light bulbs. Shop owners are lovingly displaying products in front of their little stalls. In the city’s vast markets, one could walk for hours among the different sections dedicated to pharmaceutical products, cosmetics, alcoholic beverages, or fabrics. When visiting the city’s various business districts, Nigerians in sharp suits are busy closing the next deal. Everyone is selling something. Or as my driver put it, they are “chasing the money.”

Market in Lagos, Nigeria
Market in Lagos, Nigeria | Wikimedia Commons

The dynamic commercial activity is living evidence of the country’s vast consumer opportunity. It seems that for every person who is selling, there are several others buying. Rarely in any western country would one see 20 to 30 Mercedes Benz trucks, newly purchased by a local business, driving in line to reach their final destination.

At the heart of all this lies Nigerians’ desire for upward social mobility, the driving force of Nigeria’s entrepreneurial spirit.

Never Satisfied

Never Satisfied

The “Never Satisfied” docked on Victoria Island, Nigeria

From what I have learned and seen on the ground, Nigerians are tremendously positive about the future. Many strive to become the country’s next Aliko Dangote – Africa’s richest man. Dangote’s wealth is visible when passing his large yacht docking on Victoria Island. A slightly smaller, but still considerably sized, boat in close proximity is called Never Satisfied. The name, in my opinion, summarizes the Nigerian desire for success.

This eagerness for more is reflected in the priorities of Nigerian workers – be they employees or entrepreneurs. Generating as much money as possible is a top priority.

“Contrary to other African countries, employees are less motivated by non-financial incentives such as private healthcare. They will always much rather opt for a higher salary,” a local recruiter explains. “This comes down to the fact that people are used to fending for themselves. They don’t expect social services from the government. Because, even when social services are provided, they are frequently insufficient and of low quality.”

For example, most Nigerians with which I spoke agree that since the government introduced free education, the educational system has deteriorated dramatically.

Social Responsibility

The Nigerian search for money is not only about increasing individual wealth, but it also stems from a broader sense of responsibility to the wider family and community.

“I have to provide for about 30–40 people,” the CEO of one of the country’s largest investment firms points out.

When Dangote sets up a new cement plant in a small town, the company will make sure that those living there will be employed at the factory or receive training. Other companies have given ownership shares to local leaders, not only to engage the community, but also as a way to protect their investment.

Displaying Success

The fact that a few strong members of society take responsibility for others also means they are proud of their achievements and eager to share them – something that is both socially accepted and expected of them. This tendency can be observed, for example, in the offices of successful local business people. Pictures of a company’s leader shaking hands with influential politicians from around the world typically decorate waiting rooms. Magazine covers featuring the leader, whether male or female, are prominently displayed, as are entire books containing tribute after tribute to the person.

“When I first walked into the office of a local official, I was greeted by a life-sized photograph of him sporting a full uniform and a pair of very cool sunglasses,” a European diplomat told me.

The Importance of Vision

As eager as Nigerians are to succeed here and now, they also understand that their labour could take years to bear fruit as the country’s development accelerates.

“The opportunity is long term. Often western businesses don’t understand that. Yes, we have many opportunities, but they will only be materialized once we solve our problems with power supply or invest in the entire agricultural supply chain, for example. But these things will take decades to evolve,” a business owner in the industrial sector explains.

As Nigeria’s entrepreneurs build their business empires, their lack of satisfaction with the current state of the country will be a driving force for Nigeria’s development. What Nigeria needs is not merely an entrepreneurial spirit. It needs leaders with a long-term vision that reflects the country’s development requirements. And most importantly, it needs leaders who will never be satisfied with less, not just in terms of the size of their boats, but in relation to upward social mobility for their communities and their country.

In the meantime, western brands catering to the expensive tastes of Nigeria’s elite will be the main benefactors of the country’s desire for more.


Anna Rosenberg is Head of Sub-Saharan Africa Research at Frontier Strategy Group. Anna is currently on a research trip to Nigeria and Ghana, meeting representatives from local and international businesses, journalists and government officials. Follow Anna on twitter @anna_rosenberg

Nigeria: Insecurity and its impact on business

Despite ongoing violence in Nigeria, opinions about the country’s security challenges and what they mean for investors differ widely among local entrepreneurs and international business leaders.

Some executives, whether in Lagos or other commercial centers like Abuja or Port Harcourt, say they aren’t concerned. They believe business will continue as usual and that the threat from militant group Boko Haram will subside after the elections in February next year.

Boko Haram is generally believed to be sponsored by a few political forces who are keen on influencing election results. The group’s terrorist activity has increased dramatically since the election of President Goodluck Jonathan, the country’s first Southern and Christian president, and some believe that Boko Haram was able to emerge because traditional power structures were disrupted in many of the northern states when the central power shifted to the South.

Other business leaders are deeply troubled, not only by the rising violence but by its underlying dynamics.

“We don’t understand why Nigerians are blowing themselves up for a cause. It simply isn’t part of the Nigerian psyche,” a senior manager of a consumer goods company told me.

The head of marketing at a Nigerian bank echoed these sentiments, before adding: “The dynamics here are changing. Everything is getting more expensive because most of our food comes from the north, prices have been going up and what the average Nigerian earns is simply not enough anymore. I fear this may impact the balance here in Lagos, particularly as we get more refugees from the north. Our infrastructure can’t cope with it.”

Business Impact

The volatile state of Nigerian security has also lead to varied experiences among business leaders. As the owner of a distribution company explained: “In our annual sales meetings, one of our local representatives stood up and pronounced huge losses due to the instability in the North. In response, another representative exclaimed that his major customer sits in Borno state!”

Consumer goods companies tend to be the businesses that suffer most, selling low value, high volume products in the populous yet poor northern states. State-imposed curfews mean less people are going out to buy things, and many traders in neighboring Niger, Chad and Cameroon have ceased buying their products in bulk from Northern Nigeria.

Still, businesses operating in affected areas are developing creative ways to address the challenges.

We just had to adapt to the environment. When Boko Haram destroyed the mobile phone masts, we couldn’t call our local representatives anymore. So we just invested in VoIP (Voice Over Internet Protocoll) technology, which is a little more expensive, but now we can communicate frequently with our local representatives, and business is flourishing,” the CEO of an FMCG distribution company told me.

A Common Enemy

While the threat resulting from Boko Haram is still geographically contained around the Northern and central states, the country’s commercial capital has been spared. It is believed that those funding Boko Haram have business interests in Lagos they do not want to be undermined.

Many business have refocused their attention to safer and more prosperous parts of the country to capture the abundant commercial opportunities Nigeria has to offer, but there is till concern that what led to the rise of Boko Haram is not just political maneuverings but real socioeconomic grievances which if left unaddressed could incite insecurity in more stable places.

Some business leaders stress the need for the government to take action. But as Nigeria enters what is only its fourth electoral cycle, others are more patient. They believe that more time is needed for democratic processes to mature and for the disrupted traditional structures to be corrected, calming the power struggles that lie at the heart of the Boko Haram threat.

And still a few try to look at the situation with a typically positive Nigerian attitude:

“In history, the unifying factors of nation states have often been the existence of a common enemy. We have that now, and it could help us focus less on what divides us as tribes and regions, but what unites us as a country.”


Anna Rosenberg is Head of Sub-Saharan Africa Research at Frontier Strategy Group, a Washington headquartered information services provider advising multinationals on doing business in emerging markets. Anna is currently on a research trip to Nigeria and Ghana, meeting representatives from local and international businesses, journalists and government officials. Follow Anna on twitter @anna_rosenberg

*This article is Part 1 of an ongoing series, originally published in conjunction with How We Made it in Africa.

What Nigeria’s deteriorating business environment means for business

Anna Rosenberg, Associate Practice Leader for Sub-Saharan Africa research, speaks with CNBC on what Nigeria’s deteriorating business environment means for business.

Need more insight on Africa’s business environment?  Follow Anna on Twitter for frequent updates, commentary, and insight on the business environment in Africa.

What Nigeria’s GDP Rebase means for your business

 

After Nigeria finally announced its rebased GDP calculations, the economy grew by 89% to US$ 509 billion, far more than expected. Nigeria is now the largest economy in Africa as it has overtaken South Africa’s US$ 345 billion economy.

Nigeria’s GDP rebase enhances Africa’s attractiveness as a place that holds significant opportunity because of its size, not just because of its growth rate. There are 24 other African markets planning to recalculate their GDP by 2016. As a result, we expect the overall economy of Sub-Saharan Africa to soon be much larger than currently assumed.

FSG’s report on what the GDP rebase means for your business remains relevant:

  • Brace for increasing competition: Nigeria is now more attractive in every financial and economic model worldwide, luring companies to invest locally. The size of Nigeria’s economy is now larger than that of Poland, Thailand, and the UAE.
  • Recalculate your targets: As the composition of the Nigerian economy has changed, some sectors are now much larger or smaller than previously assumed, altering the addressable opportunity for different industries. Efforts to make the case for additional resources will become easier in sectors that are larger than previously estimated, such as business services.
  • Prepare for rising government spending: The Nigerian government is expected to increase spending as the GDP rebase improved its ability to borrow on global financial markets. Public spending will focus on education, healthcare, transportation, housing, and infrastructure.

The operating environment will be negatively affected this year by heightened volatility in light of upcoming elections in 2015. However, the GDP rebase highlights why it’s important to stay focused on the country’s long-term opportunity.

Businesses Need to Prepare for a Tough Year in Nigeria

Despite a positive medium-term economic outlook, Nigeria is struggling with various challenges that undermine its economic potential: These challenges are coming to the forefront as the country prepares for presidential and national assembly elections on February 14, 2015. Executives should expect political volatility to hinder policy-making, fuel inflation, and currency depreciation. Business customers, partners, and government agencies will be in a wait-and-see mode up to elections. This could have implications for demand, investment plans, and the speed of moving through regulatory processes.

Power struggles ahead of the 2015 elections hinder the passage of important legislation and weaken investor confidence: Political infighting is undermining the current administration’s ability to pass policies. After various high-profile defections from the ruling People’s Democratic Party (PDP) to the newly formed All Progressive Congress (APC), the APC now forms a strong opposition. It is blocking all legislations including the 2014/2015 budget. President Goodluck Jonathan’s politically motivated decision to oust widely respected Central Bank Governor Lamido Sanusi weakened investor confidence significantly. In past months, the president also fired various ministers, including the ministers for information, environment, and foreign affairs. 

Inflation is expected to rise, and the naira is expected to depreciate in 2014. Both trends will put downward pressure on consumer and business demand: Inflation will likely rise to double digits because wealthy individuals are flooding the economy with cash to back candidates and the government is increasing spending. In past elections, an influx of cash into the economy led to currency depreciation and inflationary pressure. Capital outflows as a result of the US Federal Reserve’s quantitative easing program, losses in government revenue because of oil theft and corruption, uncertainty over monetary policy, and weakening investor confidence have led the naira to depreciate. The power sector is undergoing major reforms that also increase prices. Electricity is now more expensive as the state-owned power company privatizes its distribution operations and hikes prices. Moreover, the worsening security situation in parts of the country is leading to higher distribution costs of consumer goods. Businesses producing locally will pass on rising production costs to consumers, who will, in turn, prioritize non-discretionary purchases.

The security situation is worsening ahead of the elections: Nigeria’s security challenges include bombings by Boko Haram and ethno-religious clashes in the northern and central areas, oil theft and piracy in the Niger Delta, and kidnappings in the Southeast. Election-related violence has hit Rivers State as skirmishes erupted between APC’s Governor Rotimi Amaechi’s supporters and his opponents. Boko Haram’s attacks have increased in recent months despite heightened military response.

Unemployment, poverty and corruption remain high and are the real drivers of criminal activity: Although Nigeria’s economy expanded an average of 7.2% per year between 2004 and 2010, the proportion of Nigerians living in poverty is still 62.6%, down only slightly from 64.2% in 2004. Social inequality and theft by powerful elites aggravate the dissatisfaction of ordinary Nigerians, who are then easily drawn into criminal activities because of lack of perspective. Oil theft by criminal gangs costs Nigeria US$ 8 billion per year. Corruption within the state oil company led to the loss of between US$ 10 to 50 billion of oil revenue from January 2012 to July 2013.

Companies should monitor developments closely to get ahead of risks and opportunities: Executives should monitor the pre-election period closely and manage corporate expectations regarding demand. Less risk-averse executives should consider strategic investments now as their competitors are in a wait-and-see mode. Details for what to monitor and which strategies to implement to protect and grow your business despite the worsening environment can be found in our latest report ‘Market Spotlight: Nigeria’.

Despite the tough environment this year, Nigeria’s solid growth will prevail: Nigeria’s medium-term macroeconomic outlook remains positive because of rising private consumption by the country’s 170-million-strong population, the economy’s diversification away from oil, and its attractiveness for investors. The GDP rebasement will also have a positive economic impact. A significant boost to total GDP figures will make Nigeria more attractive in every financial and economic model worldwide, luring more companies to invest locally.

Nigeria poised to be largest economy in Africa following GDP rebase

Nigeria Currency Picture

The Nigerian government is adjusting the way it measures GDP to account for the true size of the economy. Expected to be completed at the end of 2013, Nigeria will become the largest economy in Africa, surpassing South Africa.  This will undoubtedly have an impact on the opportunity for MNCs and foreign investors seeking high growth rates in Africa.  I cover the rebase and its implications for MNCs in my latest podcast with FSG’s CEO, Richard Leggett, following the publication of our recent Quarterly Market Review of Nigeria (Q3 2013).

As it currently stands, Nigeria’s GDP is based on figures from the 1990s which excludes the emergence of new industries  such as the booming film industry, Nollywood, and the emergence of the telecommunications and services sectors. Nigeria’s economy is heavily driven by private consumption, and the GDP rebase will not affect this, but the rebase will fundamentally change the makeup of industries. The services sector is expected to comprise a much larger share of GDP as current figures indicate, as will wholesale and retail trade. The natural resource sector instead will decrease in terms of its share in GDP. Once the GDP is adjusted to reflect new realities, FSG expects the size of the economy to increase anywhere from 40% to 60%.   Though the exact timing for the rebase remains unknown, Nigeria is expected to release preliminary numbers by the end of November 2013.  Skeptics can rest assured; the fickle timeline for the rebase is likely caused by the complexity of collecting statistics and not an indication of the data’s reliability.  Ghana’s GDP rebase in 2010, an exercise that increased the size of the economy by 60% overnight, took 8 years to be completed.

The imminent rebase is expected to also lead to an increase in government spending as improved debt ratios are likely to make Nigeria one of the least leveraged countries in the world.  The spending is expected to go into the government’s priority sectors including infrastructure, housing, education, and healthcare.  MNCs should monitor where new funds will be allocated to and take advantage of Nigeria’s improving economic indicators to make the case for resources and stay ahead of the competition as Nigeria becomes too large for companies around the world to ignore.

Download the podcast or access the entire FSG iTunes library here

Adapt to Nigeria’s Changing Business Environment

Nigeria is changing rapidly. The size of the economy may expand 40-60% overnight, new online sales channels are booming, and the security situation is deteriorating:

  • Rebased GDP figures, to be released later this year, are likely to make Nigeria the largest economy in Sub-Saharan Africa, surpassing South Africa. While the increased size of the economy makes the country more attractive on paper, performance targets may become harder to reach as growth rates slow because the economy is expanding from a larger base
  • Ecommerce is booming on the back of Nigeria’s large consumer base increasingly shopping online. MNCs should tap into this fast growing channel to reach consumers
  • A new militant Islamist group emerged in the North of Nigeria, changing the security situation for MNCs, as foreigners are now being targeted. Companies operating in the North have to implement strategies to mitigate risks. Companies operating in Lagos and the South are not in danger from this group

Trend #1: GDP Rebase to Impact MNCs Performance Targets

Nigeria will surpass South Africa as the continent’s largest economy when GDP is revised upwards between 40-60% in October 2013. If GDP increases by 40%, Nigeria’s economy would swell from US$275bn to US$385bn. South Africa’s economic output is US$378.9bn. New GDP figures will be calculated by using prices of goods and services from a 2008 base year. Currently, Nigeria’s GDP is calculated by using 1990 figures, which do not account for the rapid development of the services, telecoms, and entertainment industries. While the increased size of the economy makes the country more attractive on paper, performance targets may become harder to reach if they are calculated on a GDP multiplier basis. Executives must communicate changes in GDP forecasts to corporate to set expectations about performance in the Nigerian market. Companies should consider revising growth targets down to reflect revised GDP growth rates. Targets should be revised down using a new GDP growth multiplier, but not in real dollar terms.

Trend #2: Ecommerce Is Growing – Get Ahead of the Curve

Nigeria’s Ecommerce market is expanding rapidly: Online sales grew 25% in 2011 to N62.4bn, up an additional N12.5bn from N49.9bn in 2010. Total investment in the sector is estimated at N2.4bn, but this figure is expected to double by 2014 as Nigerian consumers shop more online. The trend is fueled by deepening internet penetration and an uptick in purchases made with mobile phones. In Mastercard’s 2012 online shopping behavior survey, the share of purchases made with mobile phones increased to 30.3% up from 8.0% in 2011.

Ecommerce allows companies to reach a wide consumer base, even without having a local presence in the market. It also makes buying global brands more accessible for consumers in tier 1 but also in lower tier cities.

MNCs can capitalize on growing online sales by partnering with local Ecommerce providers and by offering internet shoppers exclusive deals and differentiated products.

What you need to know when building an Ecommerce platform for Nigeria

  • Payment methods and cash-on-delivery: Despite attempts to reduce Nigeria’s reliance on cash, the economy is still very much cash-based as credit card penetration remains limited. Allow customers to pay cash on delivery alongside other payment methods
  • Human contact: Nigerians value human interaction when shopping. They like to touch, feel, and speak about the product. Have customer relations managers call customers after the item has been reserved online to make sure the customer really wants the product. Allow customers to touch and see the product on delivery
  • Online deals: Offer good online deals to highlight the appeal of online shopping and build recurring customers as Nigerians are very price sensitive and will compare prices
  • Trust: Nigerians are very suspicious of buying online considering high levels of cybercrime. Once trust is established through the steps outlined above, customers will shop online for your products with fewer reservations
  • Challenges: Nigeria’s Ecommerce industry faces various challenges including poor infrastructure, road congestions, power blackouts, the high cost of internet, and cybercrime

Trend #3: The Security Situation in the North Is a Threat to MNCs

A new militant Islamist group called Ansaru emerged in the North of Nigeria, changing the security situation for MNCs in the region for the worse. Companies operating in Nigeria’s commercial centers including Lagos and the South are not in danger from this group.

Ansaru, a more radical breakaway group of Boko Haram, came to the forefront in 2012. The movement is heavily influenced by Al-Qaeda in the Islamic Maghreb (AQIM) and motivated to fight French and Nigerian military intervention in Mali. Ansaru’s agenda is far more international than Boko Haram’s. It is being manifested for the first time with the systematic kidnapping of foreigners. Boko Haram’s grievances are primarily local and come down to skyrocketing unemployment and poverty in the North of the country (60-70+%). It primarily aims to weaken the government which it blames for the precarious economic situation. But as security forces vehemently cracked down on Boko Haram militants, weakening its leadership, the movement fractionalized, creating a more radical offshoot. Companies should monitor closely whether attacks against foreigners are increasing and prepare for insecurity in hot spot regions.

 

The Key Trends that will shape Nigeria in 2013

Nigeria in 2013 will provide a mixed picture for investors. While the government’s 2013 budget promises to open new investment opportunities, challenges lie ahead. Renewed fuel subsidy reductions will impact consumer purchasing power while the security situation in Nigeria’s hot spot regions is likely to deteriorate.

Trend #1: The Proposed 2013 Budget Creates Investment Opportunities
The Federal Government submitted the budget proposal to the National Assembly for approval. An increase in spending means opportunities in sectors that have received budget allocations or investment incentives. Focus areas for the economy in 2013 are security, education, infrastructure and healthcare. The 2013 budget aims to create long-term macroeconomic stability through continued investment in capital expenditures, deficit reduction, and the development of non-oil revenue sources.

Trend#2: New Fuel Subsidy Reductions will Impact Consumer Purchasing Power
The government launched a new campaign to remove the fuel subsidy in the medium-term, a year after the attempted removal caused widespread protests. New plans will see the fuel subsidy gradually reduced through 2015. Consumers will be hit hardest by the fuel subsidy reduction as purchasing power for non-essential goods is likely to decrease. This comes after consumers were strained in 2012 when fuel subsidies were reduced for the first time. The initial impact of the subsidy reduction will be felt in early 2013. As a result, renewed protests are likely to hit the country once the new reductions are announced. Companies have to reach new customers to compensate for any potential decrease in consumer purchasing power.

Nigeria

Trend #3: The Security Situation is Likely to Worsen
The government allocated the lion’s share of the budget (668.51 billion Naira) to security, indicating that tackling Nigeria’s many security challenges is a key priority. However, companies should prepare for increasing insecurity in hot spot regions as violence is likely to increase if the budget is spent on recruiting more personnel into badly managed security forces that crack down brutally on dissent rather than on investing in better management and training.

Nigeria’s security challenges include bombings by Boko Haram and ethno-religious clashes in the northern and central areas, kidnapping, oil theft and piracy in the Niger Delta, and kidnappings in the Southeast. But the violence is about Nigeria’s acute social disadvantages and widening wealth gap.

  • Boko Haram: The group’s frequent attacks cannot simply be attributed to Islamist militancy, but rather longstanding socio-economic grievances and skyrocketing unemployment. The group is fighting the government which it blames for the precarious economic situation. As a result, the group wants to install Sharia law because it believes secular law is too corrupt and only religious law can establish order. The security forces’ vehement crackdowns and resulting civilian casualties contribute to an expanding base for recruitment.
  • Niger Delta: Similar to the situation with Boko Haram, unemployment and poverty is driving crime in Nigeria’s main oil producing region. In 2009 the government issued an amnesty to all militants with the failed promise to create employment. Instead, criminal activity has increased, specializing in oil theft (150,000 b/d, worth US$7bn annually) and kidnappings.

Having a contingency plan allows companies operating in these regions to manage risks and seize opportunities as they materialize.

*Editors Note: Don’t miss Anna Rosenberg’s latest article on managing distributors in sub-Saharan Africa

Nigeria: Higher Electricity and Fuel Prices Increase Operational Costs

Nigeria

Getting electricity in Nigeria can be very difficult. The World Bank ranks the country 176 out of 183 as one of the worst places in the world to get electricity. Electricity supply is unreliable and power outages are frequent numbering more than 320 days per year.

As a result, businesses largely generate their own power from diesel generators which run on fuel. Both the outages and the generators increase operational costs as blackouts harm machinery while the cost of generators, including maintenance, fuel, and its transport, is high.

Already in January, with the reduction of fuel subsidies, the cost of fuel increased 50%. But now, businesses will again be hit by higher operational costs as the government increased electricity tariffs on June 1. Large businesses will see their electricity bills increase up to 50%, depending on geographic location.

Consumers are also impacted by the new tariffs as they will face higher prices as increased production costs are passed down. Coupled with the reduction of the fuel subsidy in January, this will cause consumer purchasing power to decline further, forcing consumers to be more cautious with discretionary purchases.

Electricity prices will continue to rise, with new price increases planned for early 2013. The prices of both, electricity and fuel, are distorted by government subsidies. The subsidies are likely to be further reduced in the short-term and removed altogether in the medium-to-long term.

The reductions of subsidies are part of the government’s plans to attract private investors to the power sector. If successful, this could benefit businesses operating in Nigeria as market-rate prices will allow private competition to enter, ultimately increasing the consistency of energy supply and bringing down prices as the market matures.

Regional Insecurity in Northern and Central Nigeria Impacts Local Operations

Africa

While Nigeria remains one of the most attractive long-term investment destinations in Sub-Saharan Africa, companies operating in the northern and central regions are facing operational risks resulting from increasing insecurity and revenue losses as consumers are staying at home.

Contrary to mainstream media coverage; the frequent attacks in northern and central Nigeria cannot only be linked to Islamist Group Boko Haram. The escalation of violence is born out of socio-economic grievances and longstanding tribal, ethnic, and religious animosities.

While the south is experiencing an economic boom, the northern and central areas are not. Instead they are struggling with staggering poverty levels of 60-70+%. Attacks have so far mainly targeted government officials and churches – both representatives of the wealthy south.

As violence increases, businesses divert investments southwards contributing to economic decline in northern and central Nigeria. However, companies that maintain a presence in affected regions can increase customer loyalty and gain market share by highlighting their commitment through tough times. Having a contingency plan allows companies operating in the area to manage risks and seize any opportunities as they materialize.

Some companies already see investment opportunities in affected areas. Considering the risk level relatively low compared to other dangerous areas such as the Niger Delta, Dufil Prima Foods, part of the Singapore-based Tolaram Group, recently opened a manufacturing site in the northern city of Kanu to save on transportation and distribution costs. South African telecoms provider MTN is also making major investments in radio and transmission to increase its capacity and offer improved services to customers.