Download  Dr. Olumide Ijose, AssociateProfessor, Governors State University (to speak on Nigeria)

Nigeria:Opportunities,Challenges,
andBusinessEnvironment
Olumide(Olu)Ijose,PhD
AssociateProfessorofManagement
(InternationalBusinessandStrategic
Management)
CollegeofBusiness
GovernorsStateUniversity
InvestmentIntoTopSectors(2007-2013)By
MostCapitalInvested(Total=$55bn)
MostoftheFDIInflowsareintoOilandGas
Break-upofInwardFDIStockbySector
FDIInflows:2007-2013
Crudeoil&naturalgas
$55bn
8%
4%
3%
25%
Technology,media&telecoms
7%
52%
Realestate,hospitality&
construction
Retail&consumerproducts
Chemicals
Othersectors
Ø TheUnitedStates,SouthAfrica&UnitedKingdomarethetop3investorsintoNigeria
Ø Chineseinvestmentstocktotaled$2.1billionbetween2005and2013
Ø Thereisastrongbiastowardstheoilsector
Ø InvestorsfromSouthAfrica,UnitedKingdomandIndiaareleadingthewayininvestingin
othersectorsespecially telecoms,consumerproducts,retailandautomotive
Source:fDiMarkets
CountryOverview
OpportunityandRiskIndicators
OpportunityIndicators
RiskIndicators
GDP(Current)2014
$510bn
Easeofdoingbusinessoverallrankoutof184
countries(17thinAfrica)
131
RealGDPgrowth(compoundaverage
growthrate):
5-yearforecast(2018)
5.38%
TransparencyInternationalCorruptionPerceptions
Index(0=highlycorrupt,100=veryclean;ranked38th
inAfrica)
27
RealGDPgrowth (2016forecast)
6.0
Strength ofinvestorprotection(0=unfavorable,10=
favorable;ranked12th inAfrica)
5.7
GDPpercapita(US$):5-yearforecast
(2018)
$2,652
LogisticsPerformanceIndex:overallrankoutof155
countries(25th inAfrica)
121
Householdconsumption
45%of
$360bn
inSSA
Democracyscore(0=lowest, 10=highest)
4
Populationgrowth(annual)
2.56
MoIbrahimIndexofAfricanGovernance(rankoutof52
countries)
43
Population
171.3m
Perceptionofgovernance– ruleoflaw:percentile rank
(0=lowest,100=highest)
25.82
Source: TheWorld Bank; OECD National Accounts, United Nations Population Division & World Urbanization Prospects; Oxford Economics; ITU International, Transparency International; PolityIVProject;
Mo Ibrahim Index of African Governance; Worldwide Governance Indicators; WEFGlobal Competitive Report; Worldwide Corporate Tax Guide; Nigeria Bureau of Statistics; Standard Bank
CountryOverview
OpportunityandRiskIndicators
OpportunityIndicators
RiskIndicators
GDP(Current)2014
$510bn
Easeofdoingbusinessoverallrankoutof 131
184countries(17th inAfrica)
Urbanpopulation(%oftotal)
49.62%
Perceptionofgovernance– regulatory
quality:percentilerank(0=lowest,100=
highest)
20
LiteracyRate(totalpopulation%)
61.3%
Qualityofoverallinfrastructure(1=
extremely underdeveloped,7=extensive
&efficientbyinternationalstandards)
3.2
Middleclass(2014)
Multiplied
6fold
(20002014)
Corporatemaximum taxrate
30%
Internetuseper100 inhabitants(2014)
42.68%
CorruptionPerceptionoutof 168
countries(35th inAfrica)
136
Mobile penetration(subscriptionper100
inhabitants,2014access
77.84%
Institutionalprofile
Source: TheWorld Bank; OECD National Accounts, United Nations Population Division & World Urbanization Prospects; Oxford Economics; ITU International, Transparency International; PolityIVProject;
Mo Ibrahim Index of African Governance; Worldwide Governance Indicators; WEFGlobal Competitive Report; Worldwide Corporate Tax Guide; Nigeria Bureau of Statistics; Standard Bank
InfrastructureSpendingPlans– Next30Years
InfrastructuregapstodriveFDIinflowsandPPPopportunities
Energy
11%
5%
33%
11%
Transport
Agriculture,waterand
mining
13%
25%
Housing
ICT
Energy
$1trillion
Transport(road&rail)
$775billion
Agriculture,water&mining
$400billion
Housing&urbandevelopment
$350billion
ICT
$325billion
SocialInfrastructure
$150billion
VitalRegistration
$50billion
Source:NationalIntegratedInfrastructureMasterplan
UpcomingandOngoingEnergyandWater
Projects
CoalFired
GasFired
HydroElectric
Renewables
KogiPowerStation
Azura-EdoPower
Project
ZungeruHydro
ElectricProject
DeltaSolarPower
Plant
KashimbillaMultipurposeDam
EnuguCoalPower
Plant
AbiaPowerPlant
MambillaHydro
PowerPlant
NGP-Motir
SeaspireSolar
PowerPlant
MultipurposeGuraraWater
TransferProject
$2.13bn
EgbinPower
Project
KainjiandJebba
HydroPowerPlant
KogiSolarPower
Plant
Lafarge-Wartsila
PowerProject
$8.75bn
Abiba SolarPower
Project
AlaoijiPowerPlant
(Phase1&2)
KatsinaWind
Project
OmotoshoPower
Project
$7.02bn
PapalantoPower
Project
$2.13bn
OtherProjects:Oil&GasProjects,TransmissionLines&Substations:$47.09bn
WaterProjects
Nigeria Erosion&Watershed
ManagementProject
IroMultipurpose DamProject
Ogwashi-UkuDamProject
$2.25bn
SomeActiveProjects
ProjectName
Capacity&TimeFrame
Contractor(s)andSponsor
Financing
Notes
LagosRailMass
TransitPPP)
• Phaseone:27.5km
BlueLine
• Completion
expectedbyendof
2016
• TheChinaCivil
Engineering
ConstructionCorp.
• LagosState
Government
Abuja-KadunaRail
Modernization
Project(PPP)
186km rail
modernization
Inprogress
• ChinaExim Bank
FederalGovernment
ofNigeria
• ChinaExim Bank
Totalcost$874m
($500m)
• FederalGovernment
ofNigeria($374m
AzuraEdo
(Greenfield Project)
450MW
• Siemens
• NigerDeltaPower
HoldingCompany
• DFIsdebt$262.5m
Totalcost$890m
• DFImezzanine$30m
• Commercialdebt
$390m
• Developmentbank
debt$60m
EkoAtlanticProject
10millionsquare
metersofreclaimed
landprotectedbyan
8.5kmlongseawall
• LagosState
Government
KeyTakeaways
Adetailed understandingofNigeriaiscritical
Tariffsincentiveshavebeen
implementedtoincreasefor
localassemblyofvehicles
Logisticsservicesandheavy
truckdemandtoincrease
Energyisanattractiveareafor
investors
Attractiveopportunitiesare
availableinagricultureand
agro-processing
Significantinvestmentopportunitiesinoilandgas,
especiallyrefiningandpetrochemicals
KeyTakeaways
AdetailedunderstandingofNigeriaiscritical
NigeriaisthegatewaytotheECOWAS
region
Withagrowingpopulation,housing
isakeyinvestmentarea.
Significantopportunitiesin
ecommerceandlastmile
broadband
Retailisemergingasa
growtharea
TheNigeriagovernmentisemphasizing
railtransportation