Nigeria continues economic growth
Nigeria continues its robust and sustained economic growth
EY’s Africa by numbers report on Nigeria indicates Greenfield FDI projects into the country have grown at a compound rate of close to 20% since 2007.
Nigeria also attracted the most FDI capital totalling US$55,318m and the second most FDI projects (306), in Sub-Saharan Africa since 2007, thus positioning the county among the ten countries with the highest growth rates in Africa.
Diversified nature of investment
Although more than 50% of the FDI capital invested into Nigeria since 2007 has been into the capital intensive resource sectors (primarily oil), nearly 50% of FDI projects are service-orientated. There has been particularly strong growth in investment into telecommunications, with the sector attracting 23.9% of FDI projects between 2007 and 2013. Investment growth into other service sectors like financial services, consumer products, tourism and business services, further highlights the growing opportunities emerging in these sectors.
Henry Egbiki, West Africa regional leader at EY says, “The growth in FDI projects clearly reinforces the Africa growth story and positions our country as one of the most attractive investment destinations in the world. As our economy continues to remain remarkably robust, there are also challenges such as poor infrastructure, which are cited as constraints to investment and doing business. Business needs to continue to work closely with government to ensure these partnerships continue to transform the business environment in Nigeria. An example of this is the recent progress made in the privatisation of the power sector.
A robust economy
This report contains a heat map that EY produced to show the economic health of a group of 25 different emerging markets, drawing on previously published research into currency banking crisis, and ranking each country under seven indicators of risk (current account balance, government debt, inflation, currency volatility, etc., scores Nigeria third highest ranking.
This ranking is also well ahead of the aggregate ranking for the US, Japan and Germany. This strong macro-economic perspective should ensure 5-6% growth for the foreseeable future.
Egbiki concludes, “Given the continued growth rates and the recent GDP rebasing, coupled with a portfolio of active infrastructure projects, Nigeria’s billing as a powerhouse in a dynamic, high growth region is certainly justified.”