Nigeria to host US$95B worth of FDI projects

Roads and bridges, power plants as well as oil and gas pipelines make the bulk of investments, as the populous nation expands its infrastructure.

"With its large population and a generally improving business environment, Nigeria is considered by many investors to offer the most attractive consumer market in Africa," said EY in its latest report on the continent.
Foreign direct investment (FDI) in Nigeria has been growing at an annual rate of 23.4% over the past six years. The country secured 6% of Africa's total FDI for new projects and 11% of capital invested since 2007.

Nigeria has seen strong compound growth of 23% since 2007. Even as capital declined over threefold since 2010, project growth almost doubled, EY noted. The large bulk (72%) of all capital invested is allocated toward resources, which also attracts 15% of all projects.

"Although some potential investors may have some concerns about the quality of infrastructure in Nigeria, our analysis shows that there are active infrastructure projects with a combined value of USD 95 billion," EY said. "A large proportion of these are in the logistics and power sectors."

With a literacy rate of 61.3%, population of more than 170 million and mobile penetration of 59%, Nigeria presents itself as a strong consumer market, with strong possibilities of expanding the non-oil sector.
But while the country's economic prospects look promising, a whole host of political issues, including corruption, continues to tarnish the country's business environment.


POLITICAL DIMENSIONS

Indeed, the world may be eyeing Nigeria as one of the most promising frontier countries in the world, but local assessment of Nigeria is quite different.

"Nigeria is in a crisis," said Clement Nwankwo of the Civil Society Election Situation Room, at an event at Chatham House in London on January 30.

"There has been a failure of leadership; Nigerians feel isolated within the current electoral process because elected leaders have failed to deliver on the promises they made to win votes.

Issues of corruption and incompetence in government are an everyday occurrence, and it is important to address these concerns in the run-up to the February 14, 2015 elections before general dissatisfaction in Nigerian society worsens, Nwankwo said.

The Valentine day elections in the country next year will be crucial as it will be the first time in living memory that Nigerians will not be able to predict the results - as both the ruling party, led by Goodluck Jonathan, and the All Progressive Congress opposition party are equally strong.

ECONOMIC CONCERNS
Nigeria's economy is expected to grow by 6.7% this year, identical to its growth last year, although the World Bank worries that the country's economy could suffer as the emerging markets' currency rout continues.

The non-oil economy continues to drive GDP growth in Nigeria. The latest third quarter economic report from the National Bureau of Statistics shows that the non-oil sector grew by 7.95% in real terms, versus the oil sector's 0.53% contraction.

"Ongoing conflicts in Northern Nigeria are also emerging as an important security problem that might adversely affect economic activity," the bank said.

The country has also been rocked by allegations that billions in oil wealth may have been misappropriated. Last year, the Central Bank said as much as USD 50 billion was missing - highlighting the scale of corruption undeAir Jordan