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Nigeria Remains Attractive Investment Destination



  • Nigeria Remains Attractive Investment Destination

The Chief Executive Officer of Rand Merchant Bank Nigeria (RMBN) and Regional Head, West Africa, Michael Larbie, has emphasised that despite the recent economic headwinds in Nigeria, the country remains an attractive investment destination.

Larbie, said this whilst speaking during a panel session at the 2019 Annual Investor Day which took place recently in London recently.

According to a statement, the conference, partly sponsored by RMBN and organised by the Association of Assets Custodians of Nigeria focused on stimulating foreign investors interest by convening a forum for market participants, institutions and regulators. The panellists discussed Nigeria as an attractive investment destination, recent developments in the Nigerian securities markets, capital markets regulations and the role of key securities market operators.

Continuing, Larbie noted that efforts in ensuring a conducive business environment in Nigeria were yielding some positive results. This, he said showed by Nigeria moving up 23 places in the World Bank’s ease of doing business ranking to 146 in 2019, from 169 of 190 countries ranked in 2016.

RMB Africa research also confirmed the improved attractiveness of Nigeria as an investment destination, with Nigeria moving up five places to eighth position in its annual ‘Where to Invest in Africa’ report.

He also noted that the government was also providing incentives to investors in select sectors known as pioneer sectors and opening free trade zones to boost manufacturing and trade.

“From a demographic perspective, Nigeria has one of the most attractive demographics in Africa boasting of a young population with a median age of 18 years, the largest labour force (90 million) and consumer market ($270 billion) in Africa.

“In addition to these, Nigeria is strategically located in the Gulf of Guinea, providing access to export goods to developed markets as well as the potential to be Africa’s manufacturing hub,” he added.

The RMBN boss also noted that Nigeria’s infrastructure deficit which requires a funding of $3 trillion over a 30-year period also provides significant investment opportunities for potential investors.

He, however, noted the need for clarity of regulations and improved security.

According to him, a deliberate and concerted effort by government partnering with the private sector to improve education, healthcare and infrastructure are catalysts to ensure Nigeria truly benefits from its large and growing population.

The conference was organised to promote foreign portfolio investment (FPI) inflows into Nigeria. The theme of the conference was, ‘Nigeria – The Economics of the Capital Market.’

The panel sessions dissected Nigeria as a case study in terms of the push and pull of investment opportunities, the capital market opportunities available, the safety of investments and the role of custodians, fund managers, broker dealers, and regulators in upscaling the market.

The CBN Governor, Mr. Godwin Emefiele, who was at the event, reiterated the strength of Nigerian banks and the broader banking system. According to him, the central bank has a strong bias for monetary policy that is conducive for growth and ensures a stable currency during his session at the conference.

Speaking on the sidelines of the conference, the Head of Global Markets, RMB Nigeria, Nadia Zakari, said the addition of custody services to the product offering of the bank would further deliver end-to-end efficient trading and post trading experience of the bank’s existing and future clients.

Also, the Head of Custody, RMB Nigeria, Abiodun Adebimpe, noted that recent developments in the securities markets such as CSCS’s risk management assessment upgrade from A to A+, stable and liquid FX markets, launch of FMDQ Clear to support derivatives, among others, were testaments to the fact that Nigeria is open for business and is a market that welcomes and listens to investors.

The Head of Research for RMB Nigeria Stockbrokers, Gbenga Sholotan, noted the role of key securities market operators in providing a forum to drive healthy debate and prompt action by market regulators and operators in creating a sustainable, transparent and efficient market.

He said Nigeria’s investment environment would continue to experience growth given the focus of key market operators in the areas of cutting edge product development to enhance market liquidity.

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


Afreximbank, AAAM to Drive Automotive Investment




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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FG Warns Foreign Investors Against Enslaving Nigerians




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




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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