From The Economist
In 2001 MTN, a fledgling telecoms company from South Africa, paid $285m for one of four mobile licenses sold at auction by the government of Nigeria. Observers thought its board was bonkers. Nigeria had spent most of the previous four decades under military rule. The country was rich in oil reserves but otherwise desperately poor. Its infrastructure was crumbling. The state phone company had taken a century to amass a few hundred thousand customers from a population of 120m. The business climate was scarcely stable.
MTN took a punt anyway. The firm’s boss called up colleagues from his old days in pay-television and found they had 10m Nigerian customers. He reasoned that if they could afford pay-TV they could stump up for a mobile phone. Within five years MTN had 32m customers. The company now operates across Africa and the Middle East. But Nigeria was its making and remains its biggest single source of profits.
Tales of rich rewards have many firms scrambling to invest in Nigeria. Africa contains some of the world’s fastest-growing economies. Nigeria is the largest. In April its official GDP figures were revised up by 90 percent after hopelessly dated numbers were rebased. Roughly one in five of Sub-Saharan Africa’s 930m people lives there. Its population is growing at a rate of 2-3 percent a year (see charts). Its people are young, ambitious and increasingly well educated.
Read more at The Economist