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

The Future of the Nigeria Defense Industry - Market Attractiveness, Competitive Landscape and Forecasts to 2022, published by Strategic Defence Intelligence, 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.

Synopsis

This report offers detailed analysis of the Nigeria defense industry with market size forecasts covering the next five years. This report will also analyze factors that influence demand for the industry, key market trends, and challenges faced by industry participants.

In particular, it provides an in-depth analysis of 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 countrys 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
- Porters 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 countrys 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

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, Porters Five Forces Analysis, Key Trends and Growth Stimulators, and latest industry contracts

1. Introduction 7
1.1. What is this Report About? 7
1.2. Definitions 7
1.3. Summary Methodology 9
1.4. About Strategic Defence Intelligence 10
2. Executive Summary 11
3. Market Attractiveness and Emerging Opportunities 13
3.1. Current Market Scenario 14
3.1.1. Primary Threat Perception 14
3.1.2. Military Doctrine & Strategy 16
3.1.3. Military Fleet Size 17
3.1.4. Procurement Programs 21
3.1.5. Social, Political and Economic Environment and Support for Defense Projects 22
3.1.6. Political and Strategic Alliances 22
3.2. Defense Market Size Historical and Forecast 23
3.2.1. Nigerian defense expenditure is projected to grow at a CAGR of 8.72% during the forecast period 23
3.2.2. Insurgency, piracy, oil smuggling, and peacekeeping operations are expected to drive defense expenditure 25
3.2.3. Defense budget as a percentage of GDP expected to average 0.3% over the forecast period 26
3.3. Analysis of Defense Budget Allocation 28
3.3.1. Capital expenditure allocation expected to increase at an average of 26.9% over the forecast period 28
3.3.2. Capital expenditure budget expected to grow at a CAGR of 4.84% over the forecast period 30
3.3.3. Defense budget allocation towards the army accounts for the majority out of the armed forces 32
3.3.4. Army expenditure to grow at a CAGR of 7.89% over the forecast period 34
3.3.5. Per capita defense expenditure expected to increase during the forecast period 38
3.4. Homeland Security Market Size and Forecast 40
3.4.1. Homeland security budget projected to increase during the forecast period 40
3.4.2. The threat from Boko Haram, drug trafficking, cybercrime, and money laundering are expected to drive the homeland security budget 42
3.4.3. Nigeria falls under the worst affected category by terrorist attacks 43
3.4.4. Nigeria faces a very high level of threat from foreign and domestic terrorist organizations 44
3.4.5. Nigeria has a Terrorism Index Score of 9.3 46
3.5. Benchmarking with Key Global Markets 47
3.5.1. The countrys defense budget is expected to increase during the forecast period 47
3.5.2. Nigerian military expenditure is limited compared to the countries with the highest global defense expenditure 49
3.5.3. The country allocates a lower percentage of GDP to defense than other African counties 50
3.6. Market Opportunities: Key Trends and Growth Stimulators 51
3.6.1. Multirole Aircraft 51
3.6.2. Infantry Fighting Vehicles (IFV) 52
3.6.3. Attack Helicopters 53
4. Defense Procurement Market Dynamics 54
4.1. Import Market Dynamics 55
4.1.1. Limited capability of the domestic defense market drives imports 55
4.1.2. Defense imports expected to increase during the forecast period 56
4.1.3. China, the US, and Russia account for the majority of the countrys defense imports 57
4.1.4. Aircraft and ships are the highest imported military hardware 58
4.2. Export Market Dynamics 59
4.2.1. Nigeria does not export arms due to its underdeveloped domestic arms industry 59
5. Industry Dynamics 60
5.1. Five Forces Analysis 60
5.1.1. Bargaining Power of Supplier: Low to Medium 61
5.1.2. Bargaining Power of Buyer: Medium to High 61
5.1.3. Barrier to Entry: Medium 61
5.1.4. Intensity of Rivalry: Low 61
5.1.5. Threat of Substitution: Low 61
6. Market Entry Strategy 62
6.1. Market Regulation 62
6.1.1. Nigeria does not disclose any offset obligations imposed by the country 62
6.1.2. FDI in the defense sector is prohibited by the Nigerian government 62
6.2. Market Entry Route 62
6.2.1. Budgeting Process 62
6.2.2. Defense procurement process 63
6.2.3. Direct selling is the preferred market entry route for foreign OEMs 64
6.3. Key Challenges 65
6.3.1. Corruption acts as an obstacle for market entry 65
6.3.2. Small defense budget discourages major suppliers 66
6.3.3. Unorganized, mismanaged industry jeopardizes the development of the domestic industry 66
7. Competitive Landscape and Strategic Insights 67
7.1. Competitive Landscape Overview 67
7.2. Key Domestic Companies 68
7.2.1. Defence Industries Corporation of Nigeria: Overview 68
7.2.2. Defence Industries Corporation of Nigeria: Products and Services 68
7.2.3. Defence Industries Corporation of Nigeria: Recent announcements and Strategic Initiatives 69
7.2.4. Defence Industries Corporation of Nigeria: Alliances 69
7.2.5. Defence Industries Corporation of Nigeria: Recent Contract Awards 70
7.2.6. Dornier Aviation Nigeria AIEP Limited: Overview 71
7.2.7. Dornier Aviation Nigeria AIEP Limited: Products and Services 71
8. Business Environment and Country Risk 72
8.1. Economic Performance 72
8.1.1. Gross Domestic per Capita 72
8.1.2. Gross Domestic Product, current US$ 73
8.1.3. Exports of Goods and Services 74
8.1.4. Imports of Goods and Services 75
8.1.5. Gross National Disposable Income (US$ Bn) 76
8.1.6. Local Currency Unit per US$ 77
8.1.7. Market Capitalization of Listed Companies (US$ Bn) 78
8.1.8. Market capitalization of Listed Companies (% GDP) 79
8.1.9. Government Cash Surplus/Deficit as a % of GDP (LCU) 80
8.1.10. Goods Exports as a % of GDP 81
8.1.11. Goods Imports as a % of GDP 82
8.1.12. Services Imports as a % of GDP 83
8.1.13. Services Exports as a % of GDP 84
8.1.14. Net Foreign Direct Investment 85
8.1.15. Net FDI as a Percentage of GDP 86
8.1.16. Mining, Manufacturing, Utilities Output (LCU Bn) 87
9. Appendix 88
9.1. About SDI 88
9.2. Disclaimer 88

List Of Tables


Table 1: Nigeria Ground Forces Strength 17
Table 2: Nigeria Air Force Strength 19
Table 3: Nigeria Navy Strength 20
Table 4: Nigeria - Ongoing Development and Procurement Programs 21
Table 5: Nigeria - Future Procurement Programs 21
Table 6: Nigerian Defense Expenditure (NGN billion & US$ billion), 2013-2022 23
Table 7: Nigerian GDP Growth vs. Defense Expenditure as Percentage of GDP Growth, 2013-2022 26
Table 8: Nigerian Defense Budget Split between Capital and Revenue Expenditure (%), 2013-2022 28
Table 9: Nigerian Defense Capital Expenditure (NGN Billion & US$ Billion), 2013-2022 30
Table 10: Nigerian Defense Budget Split Between the Army, Air Force, Navy, and Others, 2013-2022 32
Table 11: Nigeria Defense Budget Split Between Military Services (Army, Air Force, Navy and Others), 2013-2022 34
Table 12: Nigeria Defense Budget Split Between Military Services (Army, Air Force, Navy and Others), 2013-2022 36
Table 13: Nigerian Per Capita Defense Expenditure (US$), 2013-2022 38
Table 14: Nigerian Homeland Security Expenditure (NGN Billion & US$ billion), 2013-2022 40
Table 15: Terrorism Index, 2016 44
Table 16: Benchmarking with Key Markets - 2013-2017 vs. 2018-2022 47
Table 17: Nigeria Budget Formation Timetable 62
Table 18: Competitive Landscape of the Nigeria Defense Industry 67
Table 19: Defence Industries Corporation of Nigeria - Main Products 68
Table 20: Defence Industries Corporation of Nigeria: Alliances 69
Table 21: Defence Industries Corporation of Nigeria: Recent Contract Awards 70
Table 22: Defence Industries Corporation of Nigeria - Main Products 71

List Of Figures


Figure 1: Nigerian Defense Expenditure (in NGN Billion), 2013-2022 24
Figure 2: Nigerian Defense Expenditure (in US$ Billion), 2013-2022 24
Figure 3: Nigerian GDP Growth vs. Defense Expenditure as Percentage of GDP Growth, 2013-2022 27
Figure 4: Nigerian Defense Budget Split Between Capital and Revenue Expenditure (%), 2013-2022 29
Figure 5: Nigerian Capital Budget Allocation (NGN Billion),2013-2022 31
Figure 6: Nigerian Capital Budget Allocation (US$ billion), 2013-2022 31
Figure 7: Nigerian Defense Budget Split Between the Army, Air Force, Navy, and Others, 2013-2022 33
Figure 8: Nigerian Defense Budget in NGN Billion - Breakdown by Services (Army, Navy, Air Force and Others) 2013-2022 35
Figure 9: Nigerian Defense Budget in US$ Billion - Breakdown by Services (Army, Navy, Air Force and Others) 2013-2022 37
Figure 10: Nigerian Per Capita Defense Expenditure (US$), 2013-2022 39
Figure 11: Nigerian Homeland Security Budget (NGN billion), 2013-2022 41
Figure 12: Nigerian Homeland Security Budget (US$ billion), 2013-2022 41
Figure 13: Terrorism Heat Map, 2017 43
Figure 14: Terrorism Index, 2017 46
Figure 15: Benchmarking with Key Markets - 2011-2015 vs. 2016-2020 48
Figure 16: Defense Expenditure of the Worlds Largest Military Spenders (US$ Billion), 2017 and 2022 49
Figure 17: Defense Expenditure as a Percentage of GDP of Largest Military Spenders (%), 2017 50
Figure 18: Multirole Aircraft Market Size (US$ Million), 2016-2027 51
Figure 19: Infantry Fighting Vehicles (IFV) Helicopters Market Size (US$ Million), 2017-2026 52
Figure 20: Attack Helicopters Market Size (US$ Million), 2017-2027 53
Figure 21: Nigerian Defense Import Trend, 2012-2016 (US$ Million) 56
Figure 22: Nigerian Defense Imports by Country (%), 2012-2016 57
Figure 23: Nigerian Defense Imports by Category (%), 2012-2016 58
Figure 24: Industry Dynamics - Porters Five Forces Analysis 60
Figure 25: Nigerias GDP per Capita (US$), 2015-2025 72
Figure 26: Nigerias Gross Domestic Product (current US$ Billion), 2015-2025 73
Figure 27: Nigerias Exports of Goods and Services (LCU Billion), 2005-2014 74
Figure 28: Nigerias Imports of Goods and Services (LCU Billion), 2005-2014 75
Figure 29: Nigerias Gross National Disposable Income (US$ Bn), 2005-2013 76
Figure 30: Nigerias LCU per US$, 2015-2024 77
Figure 31: Nigerias Market Capitalization of Listed Companies (US$ Bn), 2005-2012 78
Figure 32: Nigerias Market Capitalization of Listed Companies (% GDP), 2005-2012 79
Figure 33: Nigerian Government Cash Surplus/Deficit as a % of GDP (LCU), 2005-2012 80
Figure 34: Nigerias Goods Exports as a % of GDP, 2005-2012 81
Figure 35: Nigerias Goods Imports as a % of GDP, 2005-2012 82
Figure 36: Nigerias Services Imports as a % of GDP, 2005-2012 83
Figure 37: Nigerias Services Exports as a % of GDP, 2002-2012 84
Figure 38: Nigerias Net Foreign Direct Investment (BoP, current US$ Billion), 2005-2012 85
Figure 39: Nigerias Net FDI as a Percentage of GDP, 2005-2012 86
Figure 40: Nigerias Mining, Manufacturing, Utilities Output (LCU Bn) 2005-2014 87

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