Table of Contents 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. Top Procurement Programs by Value (US$ Million) 2018-2023 23 3.1.6. Social, Political and Economic Environment and Support for Defense Projects 24 3.1.7. Political and Strategic Alliances 24 3.2. Defense Market Size Historical and Forecast 25 3.2.1. Nigerian defense expenditure is projected to grow at a CAGR of 15.22% over the forecast period 25 3.2.2. Insurgency, piracy, oil smuggling, and peacekeeping operations are expected to drive defense expenditure 27 3.2.3. Defense budget as a percentage of GDP expected to average 0.38% over the forecast period 28 3.3. Analysis of Defense Budget Allocation 30 3.3.1. Capital expenditure allocation expected to increase at an average of 19.4% over the forecast period 30 3.3.2. Capital expenditure budget expected to grow at a CAGR of 3.72% over the forecast period 32 3.3.3. Defense budget allocation towards the army accounts for the majority out of the armed forces 34 3.3.4. Army expenditure to grow at a CAGR of 15.56% over the forecast period 36 3.3.5. Per capita defense expenditure expected to increase over the forecast period 40 3.4. Homeland Security Market Size and Forecast 42 3.4.1. Homeland security budget projected to increase over the forecast period 42 3.4.2. The threat from Boko Haram, drug trafficking, cybercrime, and money laundering are expected to drive the homeland security budget 44 3.4.3. Nigeria falls under the ‘worst affected category’ by terrorist attacks 45 3.4.4. Nigeria faces worst effect of threat from foreign and domestic terrorist organizations 46 3.4.5. Nigeria has a Terrorism Index Score of 9.0 48 3.5. Benchmarking with Key Global Markets 49 3.5.1. The country’s defense budget is expected to increase over the forecast period 49 3.5.2. Nigerian military expenditure is limited compared to the countries with the highest global defense expenditure 51 3.5.3. The country allocates a lower percentage of GDP to defense than other African counties 52 3.6. Market Opportunities: Key Trends and Growth Stimulators 53 3.6.1. Top 10 Defense Market Sectors by Value (US$ Million) - Projections over period 2018-2023 53 3.6.2. Multirole Aircraft 54 3.6.3. Land Based C4ISR 55 3.6.4. Airborne C4ISR 56 4. Defense Procurement Market Dynamics 57 4.1. Import Market Dynamics 58 4.1.1. Limited capability of the domestic defense market drives imports 58 4.1.2. Defense imports expected to increase during the forecast period 59 4.1.3. Russia, China and the US accounts for the majority of the country’s defense imports 60 4.1.4. Aircraft and ships are the highest imported military hardware 61 4.2. Export Market Dynamics 62 4.2.1. Nigeria does not export arms due to its underdeveloped domestic arms industry 62 5. Industry Dynamics 63 5.1. Five Forces Analysis 63 5.1.1. Bargaining Power of Supplier: Low to Medium 64 5.1.2. Bargaining Power of Buyer: Medium to High 64 5.1.3. Barrier to Entry: Medium 64 5.1.4. Intensity of Rivalry: Low 64 5.1.5. Threat of Substitution: Low 64 6. Market Entry Strategy 65 6.1. Market Regulation 65 6.1.1. Nigeria does not disclose any offset obligations imposed by the country 65 6.1.2. FDI in the defense sector is prohibited by the Nigerian government 65 6.2. Market Entry Route 65 6.2.1. Budgeting Process 65 6.2.2. Defense procurement process 66 6.2.3. Direct selling is the preferred market entry route for foreign OEMs 67 6.3. Key Challenges 68 6.3.1. Corruption acts as an obstacle for market entry 68 6.3.2. Small defense budget discourages major suppliers 69 6.3.3. Unorganized, mismanaged industry jeopardizes the development of the domestic industry 69 7. Competitive Landscape and Strategic Insights 70 7.1. Competitive Landscape Overview 70 7.2. Key Domestic Companies 72 7.2.1. Defense Industries Corporation of Nigeria: Overview 72 7.2.2. Defense Industries Corporation of Nigeria: Products and Services 72 7.2.3. Defense Industries Corporation of Nigeria: Recent announcements and Strategic Initiatives 73 7.2.4. Defence Industries Corporation of Nigeria: Alliances 73 7.2.5. Defence Industries Corporation of Nigeria: Recent Contract Awards 74 7.2.6. Dornier Aviation Nigeria AIEP Limited: Overview 75 7.2.7. Dornier Aviation Nigeria AIEP Limited: Products and Services 75 8. Business Environment and Country Risk 76 8.1. Economic Performance 76 8.1.1. Gross Domestic per Capita 76 8.1.2. Gross Domestic Product, current US$ 77 8.1.3. Exports of Goods and Services 78 8.1.4. Imports of Goods and Services 79 8.1.5. Gross National Disposable Income (US$ Billion) 80 8.1.6. Local Currency Unit per US$ 81 8.1.7. Market Capitalization of Listed Companies (US$ Billion) 82 8.1.8. Market capitalization of Listed Companies (% GDP) 83 8.1.9. Government Cash Surplus/Deficit as a % of GDP (LCU) 84 8.1.10. Goods Exports as a % of GDP 85 8.1.11. Goods Imports as a % of GDP 86 8.1.12. Services Imports as a % of GDP 87 8.1.13. Services Exports as a % of GDP 88 8.1.14. Net Foreign Direct Investment 89 8.1.15. Net FDI as a Percentage of GDP 90 8.1.16. Mining, Manufacturing, Utilities Output (LCU Billion) 91 9. Appendix 92 9.1. About SDI 92 9.2. Disclaimer 92

List of Tables Table 1: Nigerian Army Strength 17 Table 2: Nigerian Air Force Strength 19 Table 3: Nigerian Navy Strength 20 Table 4: Nigerian - Ongoing Development and Procurement Programs 21 Table 5: Nigerian - Future Procurement Programs 21 Table 6: Top Nigerian Defense Procurement Programs by Value (US$ Million) 2018-2023 23 Table 7: Nigerian Defense Expenditure (NGN billion & US$ billion), 2014-2023 25 Table 8: Nigerian GDP Growth vs. Defense Expenditure as Percentage of GDP Growth, 2014-2023 28 Table 9: Nigerian Defense Budget Split between Capital and Revenue Expenditure (%), 2014-2023 30 Table 10: Nigerian Defense Capital Expenditure (NGN Billion & US$ Billion), 2014-2023 32 Table 11: Nigerian Defense Budget Split Between the Army, Air Force, Navy, and Others, 2014-2023 34 Table 12: Nigeria Defense Budget Split Between Military Services (Army, Air Force, Navy and Others), 2014-2023 36 Table 13: Nigeria Defense Budget Split Between Military Services (Army, Air Force, Navy and Others), 2014-2023 38 Table 14: Nigerian Per Capita Defense Expenditure (US$), 2014-2023 40 Table 15: Nigerian Homeland Security Expenditure (NGN Billion & US$ billion), 2014-2023 42 Table 16: Terrorism Index, 2018 46 Table 17: Benchmarking with Key Markets - 2014-2018 vs. 2019-2023 49 Table 18: Top 10 Nigerian Defense Market Sectors by Value (US$ Million) - 2018-2023 53 Table 19: Nigeria Budget Formation Timetable 65 Table 20: Top 10 Defense Suppliers in The Nigerian Defense Industry - By Value (US$ Million) 2018-2023 70 Table 21: Competitive Landscape of the Nigeria Defense Industry 71 Table 22: Defence Industries Corporation of Nigeria - Main Products 72 Table 23: Defence Industries Corporation of Nigeria: Alliances 73 Table 24: Defence Industries Corporation of Nigeria: Recent Contract Awards 74 Table 25: Defence Industries Corporation of Nigeria - Main Products 75 List of Figures Figure 1: Nigerian Defense Expenditure (in NGN Billion), 2014-2023 26 Figure 2: Nigerian Defense Expenditure (in US$ Billion), 2014-2023 26 Figure 3: Nigerian GDP Growth vs. Defense Expenditure as Percentage of GDP Growth, 2014-2023 29 Figure 4: Nigerian Defense Budget Split Between Capital and Revenue Expenditure (%), 2014-2023 31 Figure 5: Nigerian Capital Budget Allocation (NGN Billion),2014-2023 33 Figure 6: Nigerian Capital Budget Allocation (US$ Billion), 2014-2023 33 Figure 7: Nigerian Defense Budget Split Between the Army, Air Force, Navy and Others, 2014-2023 35 Figure 8: Nigerian Defense Budget in NGN Billion - Breakdown by Services (Army, Air Force, Navy and Others) 2014-2023 37 Figure 9: Nigerian Defense Budget in US$ Billion - Breakdown by Services (Army, Air Force, Navy and Others) 2014-2023 39 Figure 10: Nigerian Per Capita Defense Expenditure (US$), 2014-2023 41 Figure 11: Nigerian Homeland Security Budget (NGN billion), 2014-2023 43 Figure 12: Nigerian Homeland Security Budget (US$ billion), 2014-2023 43 Figure 13: Terrorism Heat Map, 2018 45 Figure 14: Terrorism Index, 2018 48 Figure 15: Benchmarking with Key Markets - 2014-2018 vs. 2019-2023 50 Figure 16: Defense Expenditure of the World’s Largest Military Spenders (US$ Billion), 2018 and 2023 51 Figure 17: Defense Expenditure as a Percentage of GDP of Largest Military Spenders (%), 2018 52 Figure 18: Multirole Aircraft Market Size (US$ Million), 2018-2023 54 Figure 19: Land Based C4ISR Market Size (US$ Million), 2018-2023 55 Figure 20: Airborne C4ISR Market Size (US$ Million), 2018-2023 56 Figure 21: Nigeria’s Defense Procurements in Terms Of Their Supplier Relationships 57 Figure 22: Nigerian Defense Import Trend, 2013-2017 (US$ Million) 59 Figure 23: Nigerian Defense Imports by Country (%), 2013-2017 60 Figure 24: Nigerian Defense Imports by Category (%), 2013-2017 61 Figure 25: Industry Dynamics - Porter’s Five Forces Analysis 63 Figure 26: Nigeria’s GDP per Capita (US$), 2015-2025 76 Figure 27: Nigeria’s Gross Domestic Product (current US$ Billion), 2015-2025 77 Figure 28: Nigeria’s Exports of Goods and Services (LCU Billion), 2005-2014 78 Figure 29: Nigeria’s Imports of Goods and Services (LCU Billion), 2005-2014 79 Figure 30: Nigeria’s Gross National Disposable Income (US$ Billion), 2005-2013 80 Figure 31: Nigeria’s LCU per US$, 2015-2024 81 Figure 32: Nigeria’s Market Capitalization of Listed Companies (US$ Billion), 2005-2012 82 Figure 33: Nigeria’s Market Capitalization of Listed Companies (% GDP), 2005-2012 83 Figure 34: Nigerian Government Cash Surplus/Deficit as a % of GDP (LCU), 2005-2012 84 Figure 35: Nigeria’s Goods Exports as a % of GDP, 2005-2012 85 Figure 36: Nigeria’s Goods Imports as a % of GDP, 2005-2012 86 Figure 37: Nigeria’s Services Imports as a % of GDP, 2005-2012 87 Figure 38: Nigeria’s Services Exports as a % of GDP, 2002-2012 88 Figure 39: Nigeria’s Net Foreign Direct Investment (BoP, current US$ Billion), 2005-2012 89 Figure 40: Nigeria’s Net FDI as a Percentage of GDP, 2005-2012 90 Figure 41: Nigeria’s Mining, Manufacturing, Utilities Output (LCU Billion) 2005-2014 91

Defence Industries Corporation of Nigeria (DICON) Dornier Aviation Nigeria AIEP Limited (DANA).