Nigeria's challenges

Cries of "welcome, welcome!" greet visitors to the Kantin Kwari market in the northern Nigerian city of Kano. The greeting is meant in earnest. Not so long ago, traders from all over Nigiera and neighboring countries would come here to buy textiles, but since the terror attacks in January, the market isn't as busy as it used to be. The militant Islamist sect Boko Haram detonated several bombs simultaneously in the city killing almost 200 people.

29-year-old Biljaminu Ahamad has a small shop at the market where he sells colorful fabrics from all over West Africa. But since the blasts, sales have dropped by a half. "The security situation has got to improve," he says. "Otherwise the customers will simply stay away."

It is not only the Kantin Kwari market which is suffering, the whole of northern Nigeria is affected by the precarious security situation. That's the view of businessman Ahmad Rabiu, chairman of the Chamber of Industry and Commerce of the northern Nigerian states.

Poor infrastructure

It is now very difficult for entrepreneurs to get loans, Rabiu says, because of the heightened security risk. He told DW that, as far as the economy was concerned, the government's crisis management was worse than the attacks themselves.

Curfews, closed borders and transport difficulties have brought commerce to a standstill, Rabiu says. The chief problem, however, isn't security but the road network. The roads simply aren't being repaired, he complains. "The same also goes for our electricity grid and railways. The railways are supposed to be the ideal means of transport for heavy goods." The government has made many promises, but the last time the rail network was expanded was in 1968. Since then not a centimeter of extra track has been built.

Rabiu accuses Nigeria's political elite of having failed to make any serious efforts to boost the economy since independence. While the economy has been expanding for years, mostly because of oil exports, it lacks diversification. The once flourishing cotton and peanut industry in the north collapsed at the start of the oil boom in the 1960s. Since then the political elites have been getting richer and richer, while two thirds of the population has to survive on less than a dollar a day, according to figures for last year from the African Development Bank. Government ministers estimate that unemployment is running at more than 50 percent.

North South divide

Nigeria is bigger than Germany and France put together and the regional differences inside the huge West African country reflect this. Ahmad Muhammad Tsauni, an economist at Bayero University in Kano, says the divide between north and south has deepened over time. The south profited from a long period of investment in industry and education, whereas the north did not, which explains why it suffers from high unemployment and poverty. But now the Islamist terror has driven thousands of northern jobless to the south in search of work.

In addition, Boko Haram's attacks have dented Nigeria's reputation with investors, Tsauni told DW. The Chinese and the Libyans used to invest heavily in Nigeria. "Because of the crisis many have scaled backed their holdings, some have left the country. The impact of this is felt more acutely in the north, which is more exposed to the poor security situation," he said.

However, areas in the south, such as Lagos, have also been affected. In Tsauni's words, "no Nigerian federal state is an island."

In 2011, Nigeria attracted nine billion dollars (seven billion euros) in foreign investment, according to the latest report from UNCTAD, the United Nations Conference on Trade and Development. That was a record for Africa.

Luxury German cars

In Lagos, there are still places where Boko Haram is almost unknown. In his new car showroom, Julian Hardy is proudly showing prospective customers his best-selling model, the Porsche Cayenne S. They cost more than 100,000 euros apiece and the German motor manufacturer started selling them in Lagos in March. Julian Hardy says Boko Haram hasn't had any impact on business. "I plan to sell 55 Porsches this year, double that number next year, and between 200 and 300 the year after and beyond," he said.

Hardy says the Nigerian market, the second biggest in Africa, is very dynamic with a number of challenges but also enormous potential.

That's a point on which almost all analysts would agree. Nigeria is Africa's most populous country with 150 million inhabitants. President Goodluck Jonathan wants to try and close the north-south divide with a plan to boost agriculture and improve training and education for young people in the north.