Market Research Logo

Future of the Nigeria Defense Industry - Market Attractiveness, Competitive Landscape and Forecasts to 2022

Future of the Nigeria Defense Industry - Market Attractiveness, Competitive Landscape and Forecasts to 2022

Summary

Nigerian defense budget, valued at around US$1.5 Billion in 2017, registered a negative CAGR of over 10% during the historic period. The country has a long history of internal conflicts negatively affecting its economic growth and stability. The recent emergence of radical Islamic group Boko Haram intensified the rebellion in northeast Nigeria and led to a state of emergency announcement by the President regarding the affected states. Nigeria is expected to spend a total of close to US$9.5 Billion on its defense over 2018-2022, and the country’s military expenditure is expected to increase at a CAGR of close to 9% to reach over US$2 Billion by 2022.

Capital expenditure’s share of the total defense budget increased from over 16 in 2013 to about 30% in 2017, and is expected to increase to an average of about 26% over the forecast period. Allocations towards the army are expected to marginally decrease from an average of about 36% over the historic period to over 35% over the forecast period. Similarly, allocations towards the navy are expected to decrease from just over 20% during the historic period to about 20% over the forecast period. Allocations towards the Nigerian Air Force are expected to decrease from over 21% during the historic period to about 21% over the forecast period.

Nigerian homeland security expenditure increased from almost US$1 Billion in 2013 to about US$1.5 Billion in 2017, registering a CAGR of over 11% during the historic period. Threats from Boko Haram and increased drug trafficking are expected to drive the country’s focus on defense spending. In order to counter these threats, the country is expected to invest in surveillance and intelligence technologies such as electronic identification documents, e-passports, automated border crossing systems, bio-metric identification, and CCTV (closed circuit television) systems, which are expected to be covered under defense spending. As a result, the Nigerian homeland security budget is expected to increase at a CAGR of almost 14% over the forecast period, from around US$1.7 Billion in 2018 to close to US$3 Billion by 2022.

Traditionally, the country has been an importer of weapon systems as domestic military production is small-scale and technologically inferior. During the historic period, Russia was the largest supplier of military hardware to Nigeria with over 30% share of imports, followed by China with around 22%, the US with about 15%, and Ukraine, the Czech Republic, and South Africa accounting for around 9%, 6% and 5% respectively. Most of the country’s imports consist of ships, aircraft and armored vehicles.

The report “Future of the Nigeria Defense Industry - Market Attractiveness, Competitive Landscape and Forecasts to 2022” provides readers with detailed analysis of both historic and forecast defense industry values, factors influencing demand, the challenges faced by industry participants, analysis of industry leading companies, and key news.

In depth, this report provides the following -
- The Nigeria defense industry market size and drivers: detailed analysis of the Nigeria defense industry during 2018–2022, including highlights of the demand drivers and growth stimulators for the industry. It also provides a snapshot of the country’s expenditure and modernization patterns.
- Budget allocation and key challenges: insights into procurement schedules formulated within the country and a breakdown of the defense budget with respect to capital expenditure and revenue expenditure. It also details the key challenges faced by defense market participants within the country.
- Porter’s Five Force analysis of the Nigeria defense industry: analysis of the market characteristics by determining the bargaining power of suppliers, bargaining power of buyers, threat of substitution, intensity of rivalry, and barriers to entry.
- Import and Export Dynamics: analysis of prevalent trends in the country’s imports and exports over the last five years.
- Market opportunities: details of the top five defense investment opportunities over the next 10 years.
- Competitive landscape and strategic insights: analysis of the competitive landscape of the Nigeria defense industry. It provides an overview of key players, together with insights such as key alliances, strategic initiatives, and a brief financial analysis.

Companies mentioned in this report: Defence Industries Corporation of Nigeria (DICON), Dornier Aviation Nigeria AIEP Limited (DANA).

Scope

- The defense budget of Nigeria for the year 2017 is US$1.4 billion. For the historic period, 2013-2017, the defense budget of the country registered a CAGR of -11.09%. The defense budget is currently being driven by efforts to modernize the army and threats from terrorist organizations.
- During the historic period, the Nigeria MoD allocated an average of 19.5% of the total defense budget to capital expenditure, while an average of 80.5% was reserved for revenue expenditure. Over the forecast period, allocation towards capital expenditure is expected to increase at an average of 26.9%.
- The MoD is expected to invest in multirole aircraft, infantry fighting vehicles (IFV) and attack helicopters.

Reasons to buy

- This report will give the user confidence to make the correct business decisions based on a detailed analysis of the Nigeria defense industry market trends for the coming five years
- The market opportunity section will inform the user about the various military requirements that are expected to generate revenues during the forecast period. The description includes technical specifications, recent orders, and the expected investment pattern by the country during the forecast period
- Detailed profiles of the top domestic and foreign defense manufacturers with information about their products, alliances, recent contract wins, and financial analysis wherever available. This will provide the user with a total competitive landscape of the sector
- A deep qualitative analysis of the Nigeria defense industry covering sections including demand drivers, Porter’s Five Forces Analysis, Key Trends and Growth Stimulators, and latest industry contracts


1. Introduction
1.1. What is this Report About?
1.2. Definitions
1.3. Summary Methodology
1.4. About Strategic Defence Intelligence
2. Executive Summary
3. Market Attractiveness and Emerging Opportunities
3.1. Current Market Scenario
3.1.1. Primary Threat Perception
3.1.2. Military Doctrine & Strategy
3.1.3. Military Fleet Size
3.1.4. Procurement Programs
3.1.5. Social, Political and Economic Environment and Support for Defense Projects
3.1.6. Political and Strategic Alliances
3.2. Defense Market Size Historical and Forecast
3.2.1. Nigerian defense expenditure is projected to grow at a CAGR of 8.72% during the forecast period
3.2.2. Insurgency, piracy, oil smuggling, and peacekeeping operations are expected to drive defense expenditure
3.2.3. Defense budget as a percentage of GDP expected to average 0.3% over the forecast period
3.3. Analysis of Defense Budget Allocation
3.3.1. Capital expenditure allocation expected to increase at an average of 26.9% over the forecast period
3.3.2. Capital expenditure budget expected to grow at a CAGR of 4.84% over the forecast period
3.3.3. Defense budget allocation towards the army accounts for the majority out of the armed forces
3.3.4. Army expenditure to grow at a CAGR of 7.89% over the forecast period
3.3.5. Per capita defense expenditure expected to increase during the forecast period
3.4. Homeland Security Market Size and Forecast
3.4.1. Homeland security budget projected to increase during the forecast period
3.4.2. The threat from Boko Haram, drug trafficking, cybercrime, and money laundering are expected to drive the homeland security budget
3.4.3. Nigeria falls under the ‘worst affected category’ by terrorist attacks
3.4.4. Nigeria faces a very high level of threat from foreign and domestic terrorist organizations
3.4.5. Nigeria has a Terrorism Index Score of 9.3
3.5. Benchmarking with Key Global Markets
3.5.1. The country’s defense budget is expected to increase during the forecast period
3.5.2. Nigerian military expenditure is limited compared to the countries with the highest global defense expenditure
3.5.3. The country allocates a lower percentage of GDP to defense than other African counties
3.6. Market Opportunities: Key Trends and Growth Stimulators
3.6.1. Multirole Aircraft
3.6.2. Infantry Fighting Vehicles (IFV)
3.6.3. Attack Helicopters
4. Defense Procurement Market Dynamics
4.1. Import Market Dynamics
4.1.1. Limited capability of the domestic defense market drives imports
4.1.2. Defense imports expected to increase during the forecast period
4.1.3. China, the US, and Russia account for the majority of the country’s defense imports
4.1.4. Aircraft and ships are the highest imported military hardware
4.2. Export Market Dynamics
4.2.1. Nigeria does not export arms due to its underdeveloped domestic arms industry
5. Industry Dynamics
5.1. Five Forces Analysis
5.1.1. Bargaining Power of Supplier: Low to Medium
5.1.2. Bargaining Power of Buyer: Medium to High
5.1.3. Barrier to Entry: Medium
5.1.4. Intensity of Rivalry: Low
5.1.5. Threat of Substitution: Low
6. Market Entry Strategy
6.1. Market Regulation
6.1.1. Nigeria does not disclose any offset obligations imposed by the country
6.1.2. FDI in the defense sector is prohibited by the Nigerian government
6.2. Market Entry Route
6.2.1. Budgeting Process
6.2.2. Defense procurement process
6.2.3. Direct selling is the preferred market entry route for foreign OEMs
6.3. Key Challenges
6.3.1. Corruption acts as an obstacle for market entry
6.3.2. Small defense budget discourages major suppliers
6.3.3. Unorganized, mismanaged industry jeopardizes the development of the domestic industry
7. Competitive Landscape and Strategic Insights
7.1. Competitive Landscape Overview
7.2. Key Domestic Companies
7.2.1. Defence Industries Corporation of Nigeria: Overview
7.2.2. Defence Industries Corporation of Nigeria: Products and Services
7.2.3. Defence Industries Corporation of Nigeria: Recent announcements and Strategic Initiatives
7.2.4. Defence Industries Corporation of Nigeria: Alliances
7.2.5. Defence Industries Corporation of Nigeria: Recent Contract Awards
7.2.6. Dornier Aviation Nigeria AIEP Limited: Overview
7.2.7. Dornier Aviation Nigeria AIEP Limited: Products and Services
8. Business Environment and Country Risk
8.1. Economic Performance
8.1.1. Gross Domestic per Capita
8.1.2. Gross Domestic Product, current US$
8.1.3. Exports of Goods and Services
8.1.4. Imports of Goods and Services
8.1.5. Gross National Disposable Income (US$ Bn)
8.1.6. Local Currency Unit per US$
8.1.7. Market Capitalization of Listed Companies (US$ Bn)
8.1.8. Market capitalization of Listed Companies (% GDP)
8.1.9. Government Cash Surplus/Deficit as a % of GDP (LCU)
8.1.10. Goods Exports as a % of GDP
8.1.11. Goods Imports as a % of GDP
8.1.12. Services Imports as a % of GDP
8.1.13. Services Exports as a % of GDP
8.1.14. Net Foreign Direct Investment
8.1.15. Net FDI as a Percentage of GDP
8.1.16. Mining, Manufacturing, Utilities Output (LCU Bn)
9. Appendix
9.1. About SDI
9.2. Disclaimer
List of Tables
Table 1: Nigeria Ground Forces Strength
Table 2: Nigeria Air Force Strength
Table 3: Nigeria Navy Strength
Table 4: Nigeria - Ongoing Development and Procurement Programs
Table 5: Nigeria - Future Procurement Programs
Table 6: Nigerian Defense Expenditure (NGN billion & US$ billion), 2013-2022
Table 7: Nigerian GDP Growth vs. Defense Expenditure as Percentage of GDP Growth, 2013-2022
Table 8: Nigerian Defense Budget Split between Capital and Revenue Expenditure (%), 2013-2022
Table 9: Nigerian Defense Capital Expenditure (NGN Billion & US$ Billion), 2013-2022
Table 10: Nigerian Defense Budget Split Between the Army, Air Force, Navy, and Others, 2013-2022
Table 11: Nigeria Defense Budget Split Between Military Services (Army, Air Force, Navy and Others), 2013-2022
Table 12: Nigeria Defense Budget Split Between Military Services (Army, Air Force, Navy and Others), 2013-2022
Table 13: Nigerian Per Capita Defense Expenditure (US$), 2013-2022
Table 14: Nigerian Homeland Security Expenditure (NGN Billion & US$ billion), 2013-2022
Table 15: Terrorism Index, 2016
Table 16: Benchmarking with Key Markets - 2013-2017 vs. 2018-2022
Table 17: Nigeria Budget Formation Timetable
Table 18: Competitive Landscape of the Nigeria Defense Industry
Table 19: Defence Industries Corporation of Nigeria - Main Products
Table 20: Defence Industries Corporation of Nigeria: Alliances
Table 21: Defence Industries Corporation of Nigeria: Recent Contract Awards
Table 22: Defence Industries Corporation of Nigeria - Main Products
List of Figures
Figure 1: Nigerian Defense Expenditure (in NGN Billion), 2013-2022
Figure 2: Nigerian Defense Expenditure (in US$ Billion), 2013-2022
Figure 3: Nigerian GDP Growth vs. Defense Expenditure as Percentage of GDP Growth, 2013-2022
Figure 4: Nigerian Defense Budget Split Between Capital and Revenue Expenditure (%), 2013-2022
Figure 5: Nigerian Capital Budget Allocation (NGN Billion),2013-2022
Figure 6: Nigerian Capital Budget Allocation (US$ billion), 2013-2022
Figure 7: Nigerian Defense Budget Split Between the Army, Air Force, Navy, and Others, 2013-2022
Figure 8: Nigerian Defense Budget in NGN Billion - Breakdown by Services (Army, Navy, Air Force and Others) 2013-2022
Figure 9: Nigerian Defense Budget in US$ Billion - Breakdown by Services (Army, Navy, Air Force and Others) 2013-2022
Figure 10: Nigerian Per Capita Defense Expenditure (US$), 2013-2022
Figure 11: Nigerian Homeland Security Budget (NGN billion), 2013-2022
Figure 12: Nigerian Homeland Security Budget (US$ billion), 2013-2022
Figure 13: Terrorism Heat Map, 2017
Figure 14: Terrorism Index, 2017
Figure 15: Benchmarking with Key Markets - 2011-2015 vs. 2016-2020
Figure 16: Defense Expenditure of the World’s Largest Military Spenders (US$ Billion), 2017 and 2022
Figure 17: Defense Expenditure as a Percentage of GDP of Largest Military Spenders (%), 2017
Figure 18: Multirole Aircraft Market Size (US$ Million), 2016-2027
Figure 19: Infantry Fighting Vehicles (IFV) Helicopters Market Size (US$ Million), 2017-2026
Figure 20: Attack Helicopters Market Size (US$ Million), 2017-2027
Figure 21: Nigerian Defense Import Trend, 2012-2016 (US$ Million)
Figure 22: Nigerian Defense Imports by Country (%), 2012-2016
Figure 23: Nigerian Defense Imports by Category (%), 2012-2016
Figure 24: Industry Dynamics - Porter’s Five Forces Analysis
Figure 25: Nigeria’s GDP per Capita (US$), 2015-2025
Figure 26: Nigeria’s Gross Domestic Product (current US$ Billion), 2015-2025
Figure 27: Nigeria’s Exports of Goods and Services (LCU Billion), 2005-2014
Figure 28: Nigeria’s Imports of Goods and Services (LCU Billion), 2005-2014
Figure 29: Nigeria’s Gross National Disposable Income (US$ Bn), 2005-2013
Figure 30: Nigeria’s LCU per US$, 2015-2024
Figure 31: Nigeria’s Market Capitalization of Listed Companies (US$ Bn), 2005-2012
Figure 32: Nigeria’s Market Capitalization of Listed Companies (% GDP), 2005-2012
Figure 33: Nigerian Government Cash Surplus/Deficit as a % of GDP (LCU), 2005-2012
Figure 34: Nigeria’s Goods Exports as a % of GDP, 2005-2012
Figure 35: Nigeria’s Goods Imports as a % of GDP, 2005-2012
Figure 36: Nigeria’s Services Imports as a % of GDP, 2005-2012
Figure 37: Nigeria’s Services Exports as a % of GDP, 2002-2012
Figure 38: Nigeria’s Net Foreign Direct Investment (BoP, current US$ Billion), 2005-2012
Figure 39: Nigeria’s Net FDI as a Percentage of GDP, 2005-2012
Figure 40: Nigeria’s Mining, Manufacturing, Utilities Output (LCU Bn) 2005-2014

Download our eBook: How to Succeed Using Market Research

Learn how to effectively navigate the market research process to help guide your organization on the journey to success.

Download eBook

Share this report