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Nigeria’s Statistician-General told investors on Tuesday that those fundamentals that make Nigeria a good investment destination have simply not changed despite the economic shocks and fragile growth still being witnessed.
Kale was speaking at the opening of the ongoing Direct Investors’ Summit organized by the Nigerian Investment Promotion Commission (NIPC) in Abuja.
The summit, the first in series, seeks to highlight the numerous opportunities for investments in Nigeria, and facilitate the networking of new and experienced foreign investors with established local businesses.
This initiative, organized by the Nigerian Investment Promotion Commission, focuses on attracting direct investors to the key sectors of Agriculture, Transport, power, Gas, Manufacturing, Processing and Information Technology which are sectors that combined, accounted for about 50 percent of Nigeria’s nominal gross domestic in and about 59 percent of the Nigerian work force in 2017.
In his presentation, Kale highlighted the good news that Nigeria’s economy, which is Africa’s largest, has exited its recent oil-price induced recession and well on its way towards sustained economic recovery.
Nigeria has seen its GDP growth improve consistently each quarter since the third quarter of 2016. From -2.34% to -1.73% in Q4 2016 to -0.91% in Q1 2017, 0.72% in Q2, 2017, 1.17 percent in Q3 2017, 2.11 percent in Q4 2017 to end the year with 0.83 percent in 2017.
Though the economy slowed down in the first quarter of 2018, it recorded a strong growth of 1.95 percent, according to recent numbers released by the National Bureau of Statistics (NBS) on Monday.
Kale also told the investors that Inflation has seen downward trend for15 consecutive months of dis-inflation from a high of 18.72% in January 2017 to a two -year low of 12.48% in April 2018.
He also noted that the trade balance and balance of payments have turned positive and getting stronger.
As these signs of recovery have emerged, foreign investment flows have started to return, he said, noting that in Q3 2017 when exit from recession was announced, significant portfolio investment inflow was immediately recorded.
“It is a clear vote of confidence in the Nigerian economy post-recession that capital inflows have returned to 2014 levels,” he stated.
Highlighting on the developments in the stock market, he said the All Share Index continues to improve as many quoted companies publish better and better financial statements compared to a year or two earlier.
“The fundamentals that make Nigeria a good investment destination has simply not changed irrespective of the economic shock in 2014 and the temporary recession in 2016,” he stated.
“We are all aware of Nigeria’s vast potential. With a hard working population of over 198 million people, Nigeria, Africa’s most populous country and its largest market. Nigeria has a young population with a median age of 18.63 years.
Furthermore, Nigeria is geographically well positioned and not susceptible to many of the economy of the natural disasters that many other countries are prone to.
We are rich in intellectual capacity, with many Nigerians at home and abroad distinguishing themselves among the best in the world, in various areas of endeavor. Furthermore, Nigeria is abundant in natural resources. The country is the 8th largest producer of petroleum, with oil reserves estimated at about 36 billion barrels
Nigeria also has the 6th largest deposits of gas with our natural gas reserves estimated at a minimum of 100 trillion cubic feet. Nigeria has over 34 discovered solid minerals, including significant uranium deposits, abundant arable land and over 44 exportable commodities.
He said based on GDP (PPP), the World Bank ranks Nigeria as the 21st largest economy in the world and the largest in Africa, with a PPP GDP of about $1.09trillion.
Nigeria’s population, currently estimated by the National Population Commission at 198 million, manifests a youthful population, with nearly 60% of the population between20-39years.
Over the next decade, ,the UN projects Nigeria’ population to reach 264million and by 2050, w ill be larger than the United States’. W ith such a huge population advantage, the country is by default a major consumption market.
He said even when the population living below poverty, estimated at 62.4% in 2010 is taken into consideration, there’s still about 40% of the population (or over 74million who are reasonably able to consume and produce.
The Statistician also told the audience that Capital importation in 2017 more than doubled the inflows recorded in 2016 du ring the recession. According to him, this trend has been maintained in 2018 as inflows were over 500 percent higher in the first quarter of the year than in the corresponding quarter in 2017.
The official and BDC exchange rates have also remained stable at N305/$ and N360/$ respectively for the last 12 months as foreign reserves have risen to over US$48 billion, compared to less than half of this just 15 months earlier.
This has helped to restore investors’ confidence in the economic management process,” Kale said in his presentation.
Kale however, highlighted that the economy, though rebounding, remained largely dysfunctional due largely to the major focus on oil.
“Like many other oil exporting developing countries however, the Nigerian economy exhibits signs of a mono-cultural (oil-driven) economy.
“It was this weak and dysfunctional structural composition of the Nigerian economy that made it, and continues to make it susceptible to shocks in the global market.
Concluding, Kale said the potential in investing in the country outweighs the odds and reminded the audience of the simple but fundamental rule of investing, which is ‘buy low, sell high’.
“A slow grow ing economy that has grown strongly in the past and with considerable space for expansion, recognized potentials, strong fundamentals, and clear evidence of policy and structural reforms being implemented is a great opportunity to invest in especially while growth is slow due largely to an external economic shock.”
Also corroborating Kale’s views, Bismarck Rewane, Managing Director, Financial Derivatives Company ltd, in his own presentation called Nigeria’s economy has very strong fundamentals.
