Nigeria - Pricing Nigeria - Pricing
Pricing is a key determinant of success in Nigeria and a major challenge for U.S. firms doing business in Nigeria due to two critical factors: low purchasing power of Nigerians and the availability of often more inexpensive alternate choices from Asian and North African suppliers. Please note the Nigerian federal government charges a 5 percent VAT, while state governments also impose an additional 5 percent VAT.
Since the summer of 2015 (when the currency controls were implemented), distributors were forced to raise prices for imported commodities (especially food items like rice, spaghetti and cooking oil) significantly (in some instances up to 30%) due to higher exchange rates at the parallel market. As a result of the increase in prices, there is a shift in patronage on most foreign goods from Algeria and Libya.