B. DATA ON BEST PROSPECTS 1 - A) Rank of Sector 1 B) Name of Sector Oil and Gasfield Machinery C) 3 Letter ITA Industry Sector Code OGM 1993 1994 1995 D) Total Market Size (in USD millions) 600 400 400 E) Total Local Production -0- -0- -0- F) Total Exports -0- -0- -0- G) Total Imports 600 400 400 H) Imports from U.S. 310 200 200 I) Exchange Rates USD 1 = Naira 22 22 50 COMMENTS: The oil and gasfield machinery sector is ranked number one because petroleum production is the primary activity of the Nigerian economy. Therefore, in spite of overall deteriorating economic conditions, trade and industry observers believe the oil and gasfield sector offers the most consistent opportunities for marketing essential production equipment through the near term until the economy recovers. As in the past, drilling equipment appears to hold the most promise for U.S. exporters with total sales in this subsector projected to exceed USD 150 million in 1995. It should be noted that in 1994, the exchange rate for the Nigerian currency, the Naira, was set by the Government at 22 Naira to one U.S. dollar, while the exchange rate on the informal market was 50 Naira to one U.S. dollar. In anticipation that the Government's exchange rate policy cannot be maintained, the exchange rate for 1995 is conservatively projected to rise to 50 Naira to one U.S. dollar, and some analysts predict the rate may go even higher. B. DATA ON BEST PROSPECTS 2 - A) Rank of Sector 2 B) Name of Sector Computers, Software and Peripherals C) 3 Letter ITA Industry Sector Code CPT 1993 1994 1995 D) Total Market Size (in USD millions) 60 60 65 E) Total Local Production -0- -0- -0- F) Total Exports -0- -0- -0- G) Total Imports 60 60 65 H) Imports from U.S. 30 30 30 I) Exchange Rates USD 1 = Naira 22 22 50 COMMENTS: Computers, software and peripherals is ranked number two since it is viewed as one of the sectors most likely to enjoy sustained market activity, although not experience growth, during the current economic downtown, and until the foreign exchange regime has been reformed. The lack of foreign exchange is the primary obstacle to growth in this sector of the Nigerian market. Micro- and mini-computers and state-of-the-art printers represent the best sales opportunities and are projected to account for the bulk of the imports in this, a sector which is entirely dependent on imports. U.S. suppliers will continue to face aggressive competition from European and Asian manufacturers, but U.S.-origin equipment is generally regarded to be superior. B. DATA ON BEST PROSPECTS 3 - A) Rank of Sector 3 B) Name of Sector Telecommunications Equipment C) 3 Letter ITA Industry Sector Code TEL 1993 1994 1995 D) Total Market Size (in USD millions) 100 80 100 E) Total Local Production: -0- -0- -0- F) Total Exports: -0- -0- -0- G) Total Imports: 100 80 100 H) Imports from U.S. 30 20 35 I) Exchange Rates USD 1 = Naira 22 22 50 COMMENTS: The telecommunications sector is ranked third because essential trade and industry contacts believe that Nigeria's petroleum dominated economy will force economic policies which will favor the country's telecommunications infrastructure which is essential to sustaining petroleum production. Thus, after some expected contraction due to the country's currently poor economy, the telecommunications sector is expected to recover and, upon institution of economic reforms, offer excellent long term market potential. The sector is largely dominated by U.S. suppliers. One of the subsectors achieving impressive sales in 1993 was cellular equipment, which could realize sales in excess of USD 20 million in 1995. B. DATA ON BEST PROSPECTS 4 - A) Rank of Sector 4 B) Name of Sector Automotive Parts and Accessories C) 3 Letter ITA Industry Sector Code APS 1993 1994 1995 D) Total Market Size (in USD millions) 250 200 280 E) Total Local Production 10 12 20 F) Total Exports 2 4 6 G) Total Imports 240 188 260 H) Imports from U.S. 40 36 50 I) Exchange Rates USD 1 = Naira 22 22 50 COMMENTS: Nigeria's transportation sector is heavily dependent upon imported spare parts and accessories, in spite of some limited domestic manufacturing, which is not likely to expand rapidly in any event. The principal obstacle to imports, and certainly to expanded growth in imports in this sector is the Government's current foreign exchange regime which greatly limits an importers ability to purchase. However, in view of the fact that maintaining the country's transportation infrastructure is essential to it's economy, policies favoring foreign exchange reforms for this key sector are expected to slowly emerge. Therefore, the automotive parts and accessories sector is ranked fourth. By 1995, U.S. suppliers could realize sales of USD 50 million in all parts and accessories categories, including lubricants. B. DATA ON BEST PROSPECTS 5 - A) Rank of Sector 5 B) Name of Sector Construction Equipment C) 3 Letter ITA Industry Sector Code: CON 1993 1994 1995 D) Total Market Size (in USD millions) 85 70 75 E) Total Local Production: 15 12 15 F) Total Exports: 6 4 6 G) Total Imports: 70 58 60 H) Imports from U.S. 45 40 45 I) Exchange Rates USD 1 = Naira 22 22 50 COMMENTS: Construction equipment is another sector which is essential to Nigeria's economy and therefore, is likely to sustain less contraction than is being experienced, and which is expected to continue in a number of other categories. This is likely to especially true of earth moving machinery and road building equipment which are projected to account for over half of the imports by 1995 in this sector which is dominated by imports. Therefore, the sector is ranked fifth. However, U.S. exporters face stiff competition from European suppliers who are likely to step up marketing efforts to maintain market share in the wake of deteriorating over-all economic conditions. B. DATA ON BEST PROSPECTS 6 - A) Rank of Sector N/A B) Name of Sector DAIRY C) PS&D - NI 3028 1993 1994 1995 D) Total Market Size (in Volume MT) E) Total Local Production 66,468 66,799 67,130 F) Total Exports NIL NIL NIL G) Total Imports 265,872 267,196 268,520 H) Imports from U.S. 6,274 12,524 13,295 I) Exchange Rates USD 1 = Naira 22 22 50 COMMENTS: About 75% of total dairy products consumption in Nigeria is imported. The dairy products market in Nigeria is dominated by products from the EEC, and the U.S. share of the market remains insignificant. Freight costs from the U.S. are about $300 a ton more than from the EEC. However, U.S. Dairy products exporters should be able to compete quite effectively in the Nigerian market with the help of USDA's Dairy Export Incentive Program. B. DATA ON BEST PROSPECTS 7 - A) Rank of Sector: N/A B) Name of Sector: WHEAT C) PS&D Commodity Heading - NT 1931102 1993 1994 1995 D) Total Market Size (in 1,000 MT) E) Total Local Production: 30 30 25 F) Total Exports: 30 30 30 G) Total Imports: 1,800 1,200 1,200 H) Imports from U.S. 1,800 1,200 1,200 I) Exchange Rates USD 1 = Naira 22 22 50 COMMENTS: After seven years, the ban on the importation of wheat was lifted in the 1994 budget. The U.S. dominates Nigerian wheat importation. However, wheat importers are having difficulty obtaining necessary foreign exchange under the newly introduced allocation system. B. DATA ON BEST PROSPECTS 8 - A) Rank of Sector N/A B) Name of Sector Wines and Spirits C) PS&D Commodity Heading - N/A 1993 1994 1995 D) Total Market Size (in 1,000 cases of 12x70 cl) E) Total Local Production 2500 3,000 3,000 F) Total Exports 400 300 300 G) Total Imports 750 700 700 H) Imports from U.S. 250 110 110 I) Exchange Rates USD 1 = Naira 22 22 50 COMMENTS: Unofficial estimates show that wines comprise one-third of U.S. consumer oriented export values to Nigeria. Importers complain of higher landing cost of wine imports from the U.S. Imports of wines and spirits are declining because of foreign exchange shortage, resulting in massive product adulteration. The importation of sparkling wines is prohibited.