As current economic pressures persist in Nigeria, experts that attended the Netherlands Africa Business Network which held recently in Lagos said it may lead to increase in private capital investment.
The event brought together 50 Nigerian entrepreneurs and 10 Dutch delegation companies and was organised by the Netherlands-African Business Council (NABC) in partnership with AsokoInsight, Nigerian-Netherlands Chamber of Commerce and the Embassy of the Kingdom of Netherlands.
Abiola Ojo-Osagie, managing director of AfricInvest, a private equity firm and one of the major sponsors of the event, said irrespective of the crisis, the opportunities that Nigeria possess was “too great to waste; too great to ignore.”
According to her, the challenges have only revealed that government does not have the solution to developing the economy of the country.
“We therefore need to have a clear shift (or balance) in the composition of investment in favour of the private as opposed to the public sector,” Ojo-Osagie said.
Private capital thrive the most when economies are under pressure, she said. First the recipient of investment becomes far more receptive during recession. Also companies are more open to equity participation. In terms of financing, banks are less willing to make it available especially for SMEs and this improves possibility of investments at reasonable pricing with value-add.
She noted further that inflow of foreign funds into an economy can help it overcome the investment-savings gaps thus enabling it to grow faster without sacrificing current consumption.
“Foreign funds also come with innovative financial structures, products and techniques thus promoting the development of the financial sector in the receiving economy,” Ojo-Osagie said.
Ben Zwinkels, chairman of NABC told BusinessDay that foreigners that want to invest in Nigeria must have a long-term projection in mind.
“It is not a one-off venture. You do not come once and leave, otherwise you may be discouraged. But if you stay, you can then see the opportunities that abound in every sector of the Nigerian economy. That is what we tell the investors we bring to Nigeria from the Netherlands,” Zwinkels said.
Entrepreneurship is a major ingredient that has sustained the Nigerian people according to Reginald Ihejiahi, chairman, Nigerian-Netherlands Chamber of Commerce.
Ihejiahi agreed with Zwinkels that foreign investors coming into the country must be aware of how business is done by not visiting once and working with partners to know what is driving the macroeconomic situation in Nigeria.
“A trade and investment mission works best if it is focused. Take time to go into the shops so you will know what people are buying and what they can afford. Be open but also wary like every businessman,” Ihejiahi said.
Paul Okunaiya, an investment manager, told BusinessDay “It is our firm believe that Nigeria is an important market – recession or not – that cannot be ignored. This trying time demands creative response to the challenges. AfricInvest seeks for the opportunities in adversity and can be seen in our 23 years of investing in both good and interesting times. We are happy to be associated with the NABC and to co-host the international business match-make.”
