By Eromosele Abiodun

Following plans by United States retail giant, Walmart to enter Nigeria’s retail market, increasing greenfield investment from China, India and South Africa, foreign investments in Nigeria and other African countries are expected to reach $73.5 billion by the end of this year.

A report by the African Economic Outlook (AEO) revealed that official remittances have increased six-fold since 2000 and are projected to reach $64.6 billion in 2015 with Egypt and Nigeria receiving the bulk of flows.

The AEO is a product of collaborative work by three international partners: the African Development Bank (AFDB), the OECD Development Centre and the United Nations Development Programme (UNDP).

Official remittances, the report added, remained the largest source of international financial flows to Africa, accounting for about 33 per cent of the total since 2010.

Conversely, the report predicted that Overseas Development Assistance (ODA) will decline in 2015 to 54.9 billion, “and is projected to diminish further”.

“More than two-thirds of states in sub-Saharan Africa, the majority of which are low-income countries, will receive less aid in 2017 than in 2014. FDI is diversifying away from mineral resources into consumer goods and services and is increasingly targeting large urban centres in response to the needs of a rising middle class.

“African sovereign borrowing is increasing. Private external flows in the form of investment and remittances are driving growth in external finance. Despite significant improvements in tax revenue collection over the last decade, domestic resource mobilisation remains low. Public domestic finance in Africa has increased more than threefold in a decade from $157 billion in 2003 to $507 billion in 2013. Compared to 2012, total tax revenue in 2013 registered a slight decrease of about 1.5 per cent mainly on account of lower resource rents, “the report revealed.

According to the report, “The report added that recent trends in African total trade flows – exports and imports – highlight a shift in trade dynamics and increasing competition from China for the African market. Although Europe remains Africa’s largest trading partner, Africa’s trade with Asia rose by 22 per cent between 2012 and 2013, while trade with Europe grew by just 15 per cent.

Manufactured exports from Europe to Africa fell from 32 per cent of the total in 2002 to 23 per cent in 2011. On the other hand, Asia’s share in Africa’s trade rose from 13 per cent of the total to 22 per cent during the same period. In 2009, China overtook the United States as Africa’s largest single trading partner.”

Source: Thisday, 12th August, 2015

15 Jun 2015

By Obinna Chima

The Managing Director and Chief Investment Officer of FBN Capital Asset Management Limited, Mr. Michael Oyebola, has highlighted Nigeria’s position as the top foreign institutional funds destination in West Africa.

He made this known in a presentation titled: “Nigeria: West Africa’s most viable destination for US institutional funds,” during the 2015 edition of the Africa Institutional Funds and Managers’ Series (AIFMS), held in New York recently.

Oyebola stated that Nigeria has a compelling investment business case, despite the socio-economic challenges she is contending with.  He noted that Nigeria continues to show great potential in core areas of interest to traditional institutional fund managers, while her burgeoning middle-class and status as Africa’s largest economy following her Gross Domestic Product (GDP) rebasing, establishes her as the sub-region’s most viable investment destination.

He also highlighted the country’s ongoing revival in agriculture, its vast and untapped power resources, a progressive financial services sector, the untold potential which remains in oil and gas, as well as a vibrant telecoms and ICT industry, among other investment-stimulating factors.  According to him, “in agriculture the investment opportunities which exist in food processing and storage facilities, crop production, and animal husbandry due to a huge domestic demand are many, while in the power sector, the nation’s gas agenda facilitates a potential for aggressive gas-based industrial growth.”

Furthermore, he noted that crucial to the successful performance of institutional fund investment from the US and other continents to Nigeria, was partnership with leading investment and asset management firms in the sub-region to ensure knowledge and expertise of the local operating environment.