-- Unemployment remains high (hovering around 7.6 percent) in the 15-34 median age range, where youth and female populations clock-in at around 60 million and 80 million respectively;
-- Devaluation pressures remain high on the country's currency (naira); raising cost for the private sector and daily living needs.
The private sector from China, United States, India, Brazil, and Europe still see Nigeria as a premier investment destination. What makes Nigeria attractive for these foreign businesses? Answer…return on investment (ROI). The average ROI, (despite risks noted below), can average 28-36 percent -- matched with Nigeria's largely untapped consumer market for good and services. There are specific sectors which provide the greatest returns and/or are growth areas for goods and services. There are seven sectors (not in priority order), from FEEEDS' perspectives that are the most notable for foreign investors:
Despite the opportunities and high potential for ROI, what are the basics you should know, particularly regarding ease of doing business, and the lack of consistent (and by some accounts unclear and unfriendly) monetary policies. Recently the World Bank 2015 Ease of Doing Business Report rated Nigeria low, 170 out of 189 countries reviewed on their transparent and friendly business practices. In 2014 Nigeria was ranked 175, so it has improved a bit. Nigeria’s Central Bank (CBN), in its efforts to support the country’s floundering currency -- the naira, under devaluation pressure -- has made it increasingly difficult for both foreign and Nigerian businesses to do transactions in convertible currencies such as dollars or euros. That being said, the positives on this action are: Nigerian companies have to provide the CBN with foreign company business information and contract payment amounts in order to obtain foreign exchange to pay partners or clients. This is an important transparency element in the anti-corruption tool box for both the country and foreign partners.
President Buhari’s Anti-Corruption Efforts; Economic Team:
FEEEDS also gives Buhari high marks for his unwavering commitment to address endemic corruption. In addition to his above actions, he has publicized his personal wealth (good first tone-setting step); appointed new leadership to the problematic National Petroleum Company (NNPC); worked to carefully vet senior appointments; and, asked foreign governments, including the U.S. to help return $150 billion in stolen state wealth. He is famously known for saying “I belong to everyone; I belong to no one,” underscoring his intolerance for the two forces of evil behind stolen state wealth – corruption and influence peddling.*
Either way, FEEEDS gives him high credit for taking his time. As deep as the two evils of corruption and influence peddling run, it is prudent to carefully vet. Buhari never put himself on the artificial, but politically-expected “first 100 days” clock. Okay, 8-9 months from now, we might take a different view. Let’s get good, unencumbered folks (from past or present questionable deeds) on board, and go from there.
A FEEEDS Blog Spot