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Nigeria among Top Global Investment Destinations for 2018

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  • Nigeria among Top Global Investment Destinations for 2018

Nigeria has been identified as one of the top five countries for growth acceleration for 2018. Other countries in the group include Kuwait, Oman, Kazakhstan and Tunisia.

The Global Chief Economist at Renaissance Capital, Charles Robertson, who made this forecast in a report titled: “Africa 2017,” urged investors to take advantage of the opportunities in these countries.

“These are some of the markets I think investors should be considering because of the growth acceleration story,” he explained.

According to Robertson, Nigeria still has a very positive demography, pointing out that the country’s working age population has been growing at 15 per cent over the past five years.

The global analysts observed: “Nigeria’s Ease of Doing Business is presently at 169th in the world. But I am promising you that it is going to get considerably better in the next 12 months. This government has actually started to reform.

“They have slashed the time to register a new business from 10 days to two days. I think as you get the Ease of Doing Business better, you should also see some improvement in corruption ranking. It is never going to be dramatic. We do know President Buhari has tried to make some difference.”

He also noted that there has been improvement in Nigeria’s legal system.

Robertson also argued that at its present rate, the naira exchange rate is expensive as the official rate. He called for a currency reform in Nigeria, arguing that, “currency pegs don’t work in countries with low per capita income. The naira is either too weak or too strong.”

Nigeria’s budget and forex reserves depend on the performance of crude oil. Oil has been on an upward trend in the last 12 months.

“But my view is that shale would keep it down. What I think drives oil is China. When China’s Gross Domestic Product (GDP) was booming, we had oil price shooting up, but when China’s GDP stopped rising last year, the oil price was down. There should be some recovery, I would argue, in the next few years. If there is one thing which worries me today, it is Chinese loan growth.

“I still think there is a story here which is working. The story is that the last time oil fell, which was in the 80s, GDP in Nigeria fell by over 10 per cent, not just once, but multiple times throughout the decade.

“But in the 90s, when oil prices were low, Nigeria was not even in recession. But this time, it fell by 1.5 per cent last year, which was a much better performance than in the past. The human capital has changed, not just in,” he said.

CBN Governor, Mr. Godwin Emefiele recently predicted that with economic policies put in place by the Nigerian government, the country should be out of recession by the third quarter of the year. Emefiele who assured that the CBN would continue with its intervention in the foreign exchange market, noted that interventions of the apex bank so far had been yielding positive results.

The legislature last week passed the 2017 Appropriation Bill for the year, with an increment of N143 billion to N7.441 trillion, from the executive’s proposal of N7.298, five months after President Muhammadu Buhari submitted the federal government’s spending bill. Faced with pressure from the public, which remained unrelenting for years, and in keeping with its promise this year to do so, the National Assembly, on Thursday, finally released a 33-page document detailing the line-by-line expenditure of its budget for 2017. The National Assembly’s budget was increased by N10 billion to N125 billion, from the N115 billion proposed by the executive.

Under its budget, N85.8 billion was assigned to total overhead costs, N23.7 billion for personnel costs and N14.9 billion for capital projects.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

Investment

Afreximbank, AAAM to Drive Automotive Investment

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Afreximbank

Afreximbank, AAAM to Drive Automotive Investment

The African Export-Import Bank (Afreximbank) and the African Association of Automotive Manufacturers (AAAM) have entered into a Memorandum of Understanding (MoU) for the financing and promotion of the automotive industry in Africa.

President of Afreximbank, Prof. Benedict Oramah and President of AAAM/Managing Director of Nissan Africa, Mike Whitfield, signed the MoU in early February, according to a statement yesterday.

The deal formalised the basis for a partnership aimed at boosting regional automotive value chains and financing for the automotive industry while supporting the development of enabling policies, technical assistance, and capacity building initiatives.

Oramah, said, “the strategic partnership with AAAM will facilitate the implementation of the Bank’s Automotive programme which aims to catalyze the development of the automotive industry in Africa as the continent commences trade under the African Continental Free Trade Area (AfCFTA).”

Under the terms of the MoU, Afreximbank and AAAM will work together to foster the emergence of regional value chains with a focus on value-added manufacturing created through partnerships between global Original Equipment Manufacturers (OEM), suppliers, and local partners.

The two organisations plan to undertake comprehensive studies to map potential regional automotive value chains on the continent in regional economic clusters, in order to enable the manufacture of automotive components for supply to hub assemblers.

“To support the emergence of the African automotive industry, they will collaborate to provide financing to industry players along the whole automotive value chain. The potential interventions include lines of credit, direct financing, project financing, supply chain financing, guarantees, and equity financing, amongst others.

“The MoU also provides for them to support, in conjunction with the African Union Commission and the AfCFTA Secretariat, the development of coherent national, regional and continental automotive policies, and strategies.

“With an integrated market under the AfCFTA, abundant and cheap labour, natural resource wealth, and a growing middle class, African countries are increasingly turning their attention to support the emergence of their automotive industries.

“Therefore, the collaboration between Afreximbank and AAAM will be an opportunity to empower the aspirations of African countries towards re-focusing their economies on industrialisation and export manufacturing and fostering the emergence of regional value chains,” the statement added.

“The signing of the MoU with Afreximbank is an exciting milestone for the development of the automotive industry in Africa. At the 2020 digital Africa Auto Forum, the lack of affordable financing available for the automotive sector was identified as one of the key inhibiters for the growth and development of the automotive industry in Africa and having Afreximbank on board is a game changer and a hugely positive development,” CEO of AAAM, David Coffey said.

“It is wonderful to have a partner that is as committed as the AAAM to driving the development and growth of our sector on the continent; this collaboration will ensure genuine progress for our industry in Africa,” Coffey added.

Other areas covered by the MoU include working with the African Union and the African Organisation for Standardisation to harmonise automotive standards across the continent and developing an automotive focused training program for both the public and private sector.

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Investment

FG Warns Foreign Investors Against Enslaving Nigerians

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Immigration

FG Warns Foreign Investors Against Enslaving Nigerians

The Federal Government on Monday warned foreign investors against subjecting Nigerians working in their companies to industrial slavery.

The government said the warning became necessary following several complaints against foreign companies maltreating some of their staff.

The Chief Commissioner, Public Complaints Commission, Chile Igbawua, issued the warning during a courtesy call on him by a delegation of Pan Africa United Youth Developments Network who came to lay complaint against some foreign companies allegedly maltreating Nigerians working under them.

The PCC said that it would not allow only its state commissioners to handle the issues due to their magnitude as there had been so many complaints about the ways some of the foreign companies were treating their staff.

At the event, the leader of the delegation, Habib Muhammed, expressed concern over alleged injustice and irregularities perpetrated by some company on Nigeria youths whom they engaged as factory workers.

He called on the Federal Government to look into the alleged slavery and injustice meted on Nigerian youths.

While calling on the foreigners to obey the labour laws of Nigeria, Igbawua said, “Our resources cannot be used to enslave us again.”

He said, “We have labour laws in Nigeria for goodness sake and we also have industrial standards; people working in various industries are entitled to good working conditions and minimum conditions of service.”

He added that the law was clear on the issue of casualisation and should be implemented.

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Investment

Foreign Direct Investments into China Shot Up by 9% in 2020 to $163 Billion Against 49% US Decline

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Foreign Direct Investments into China Shot Up by 9% in 2020 to $163 Billion Against 49% US Decline

China had the highest inflow of Foreign Direct Investments (FDI) globally in 2020, surpassing the US which took the lead in 2019.

According to the research data analyzed and published by Comprar Acciones, China’s inflow shot up by 9% to $163 billion up from $140 billion the previous year. Meanwhile, the US had a 49% drop from $251 billion in 2019 to $134 billion.

Based on data from the National Bureau of Statistics, China reported a 2.3% growth in GDP in 2020. It was the only major economy to record a positive growth rate during the year.

Chinese Stock Market Saw 18 Million New Investors in 2020

Global FDI took a hit in 2020, falling by 42% year-over-year (YoY) from $1.49 trillion in 2019 to $859 billion. The figure was 30% lower than the one reported during the 2009 financial crisis.

Developed countries saw the worst performance, sinking by a cumulative 69% YoY to $229 billion. For developing economies, there was a 12% decline of $616 billion. By the end of 2020, developing countries accounted for a 72% share of global FDI, the highest on record. India had the highest growth among top-rated economies, shooting up by 13%.

China bore the brunt of the pandemic much better than its peers, posting a 6.5% GDP growth in Q4 2020. During the year, there were 18.02 million new investors in its mainland stock market, raising the total to 177.77 million. Driving the surge in interest was the stellar performance of Chinese stocks in 2020.

The Shenzen Component grew by 38.7% in 2020, and the CSI 300 increased by 27.2%, compared to the S&P 500’s 16.26% growth. IPO activity also soared, with China and Hong Kong accounting for 40% of global IPO volume in 2020 according to Ernst & Young.

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