1 / 10

(A part of the FirstBank Group)

FBN Capital Limited. (A part of the FirstBank Group). Invest in Nigeria: The Way Forward. Kayode Akinkugbe CEO, FBN Capital Limited 2 nd Nigeria International Investment Forum Lagos, 4 th October 2012 . A leading FDI destination in Africa.

nida
Download Presentation

(A part of the FirstBank Group)

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript


  1. FBN Capital Limited (A part of the FirstBank Group)

  2. Invest in Nigeria: The Way Forward Kayode Akinkugbe CEO, FBN Capital Limited 2nd Nigeria International Investment Forum Lagos, 4th October 2012

  3. A leading FDI destination in Africa • Nigeria was the no 3 destination in Africa in 2010 per UN • Figure for Nigeria for 2011 per CBN was US$8.9bn (gross) or US$8.1bn (net) • Levels are modest in context of a market size of close to 170 million • Need to more than double current rate of 2.7% of GDP to soak up unemployment • Some way to go to join the BRICs by this measure Gross FDI 2010 (US$bn)

  4. A popular regional comparison Net FDI (US$ bn) • Trend for Nigeria more stable than SA • Nigeria outflows largely in finance sector, which is now curtailed • SA outflows more diverse, including mining, telecoms and retail • Potential of reform agenda and active infrastructure programme in Nigeria to yield substantial increase in FDI

  5. Direct vs portfolio flows Capital inflows (gross; US$ m) • Direct second to portfolio investment in Q1 due to offshore entry into FGN debt market • This story likely to have been repeated in subsequent quarters • Both inflows valuable in underpinning current account of BoP and naira exchange rate • More enduring value of direct investment than portfolio flows

  6. The many fruits of FDI • A substantial increase in FDI in conjunction with FGN’s infrastructure programme has the potential to push the GDP growth rate from 7% to 10% and beyond. • The example of Brazil shows that agriculture has piggy-backed on the building of roads for the development of natural resources. • FDI can help to soak up unemployment, which was running at 24% nationally and as high as 38% for the 15 to 24 year age group in 2011 according to the NBS. • It opens the door to technology transfer and higher productivity: examples include plantations, mining, hotels, shopping malls and cable tv.

  7. Some steps to boost FDI • FDI should never be a substitute for domestic investment. If FDI predominates, there are negative implications for entrepreneurship, employment, wealth creation and even sovereignty. • The policy environment is appropriate yet the annual surveys from the World Bank Group, the World Economic Forum and others all point to remaining challenges on the ground. • The passage of the investor-friendly petroleum industry bill and the review of the Land Use Act of 1978, not to mention further reforms at FGN and state government level, would all enhance the environment. • A deepening of sub-regional integration, based around ECOWAS, along the lines of the East African Cooperation would broaden the market for Nigerian products and attract new investors.

  8. The Nigerian banks: a way forward • On the surface the banking industry is in good health: AMCON has cleansed its balance sheets, the valuations of listed banks on the NSE are compelling and the regulatory environment has been tightened since 2009. • Financial inclusion policies targeting the banks e.g. mobile money which is in its infancy – most Nigerians are unbanked and IT offers the potential for efficiency gains. Over time, mobile money extends the taxed economy. • The banks continue to be large holders of FGN debt because of the slower development of the buy side community.

  9. The financial sector: A future • Large gaps remain in the pensions business, insurance companies and in the overall savings industry. Filling those gaps on the buy side would transform the low level of financial intermediation. • Pension assets under management have reached N2.75trn but this is just 7% of GDP and covers just five million employees nationally. The public sector is under-represented. • Insurance penetration stands at just 2% of the population. • Promotion of collective investment schemes

  10. FBN Capital Limited • 16 Keffi Street • Off Awolowo Road • S.W. Ikoyi • Lagos, Nigeria • Tel: +234-1-2798300, +234-1-2707180-9 • Fax: +234-1-2707192 • info@fbncapital.com • www.fbncapital.com

More Related