Economy
From The Report: Nigeria 2012
View in Online Reader

As one of the fastest-growing economies in the world, according to the Federal Ministry of Finance (FMF), Nigeria is certainly appealing to foreign investors. Growth has averaged 6.7% since 2006 and has been relatively uninterrupted by the global financial crisis. An emerging middle class is beginning to fuel growth in domestic consumption. Income per capita has increased almost four-fold since 2001, from $357 to $1541 in 2011. Foreign investment surged in 2011, with the country attracting $8.7bn in FDI, up from $6.1bn in 2010. Investment broadened beyond the oil and gas sector, with deals in industry, agro-processing, retail and telecommunications. To achieve its vision of becoming a top 20-economy with a GDP of $900bn by 2020, the country must sustain annual growth rates of around 13.5%.

This chapter contains interviews with Ngozi Okonjo-Iweala, Coordinating Minister for the Economy and Minister of Finance; Frank Nweke Jr, Director-General, Nigerian Economic Summit Group; and Mustafa Bello, Executive Secretary and CEO, Nigerian Investment Promotion Commission (NIPC). It also includes a viewpoint from Elizabeth Littlefield, President and CEO, Overseas Private Investment Corporation (OPIC).

Articles from this Chapter

Overview

Forging ahead: Efforts to become one of the world’s 20 largest economies continue
OBG
plus

Although depressed growth in developed economies has added a level of uncertainty to Nigeria’s macroeconomic outlook, it has also contributed to its attractiveness. As one of the fastest-growing economies in the world, according to the Federal Ministry of Finance (FMF), the country is certainly appealing to foreign investors in large part due to its vast potential. In 2005 US investment bank Goldman Sachs included Nigeria, with a GDP of $247.1bn in 2011 (approximately 65% of West Africa’s…

Interview

Custodians of the system: OBG talks to Ngozi Okonjo-Iweala, Coordinating Minister for the Economy and Minister of Finance
OBG
plus

Interview: Ngozi Okonjo-Iweala How can Nigeria limit the broader economic fallout from the drop in remittances in 2011? NGOZI OKONJO-IWEALA: Remittances largely go to family members in Nigeria for domestic use, such as paying school fees and building houses or businesses. Nigeria can provide incentives to channel more remittances into productive uses rather pure consumption, such as by offering matching funds for entrepreneurial start-ups. The government can also create awareness for expatriate…

Interview

OBG talks to Frank Nweke Jr, Director-General, Nigerian Economic Summit Group
OBG
plus

Interview: Frank Nweke Jr What are the obstacles to improving corporate governance and transparency in the private sector? FRANK NWEKE JR: It’s an inconvenient truth that our private sector continues to put up with ingrained issues such as conflicts of interest and a lack of independently minded executives. Despite some improvement, many of our companies still face weak internal and external controls. Although they may appear adequate on paper, checks and balances are often not implemented in…

Analysis

Lifting subsidies: Fuel price liberalisation remains a work in progress
OBG
plus

While Nigeria is the 14th-largest crude oil producer in the world and has the 10th-biggest proven reserves, the legacy of petrol subsidies has left a gaping hole in public finances. The partial lifting of these subsidies in January 2012 has given the government more room for manoeuvre, but dealing with the consequences of massive corruption in fuel imports and broaching the issue of further increases in domestic pricing will bring challenges of its own in 2012. STRUCTURE: Established in the…

Analysis

Macro-level management: A sovereign wealth fund is in the process of being set up
OBG
plus

The country is set to join the ranks of the leading oil producers in establishing a sovereign wealth fund (SWF) to manage the excess proceeds of its production in times of high pricing. Yet despite legislative progress in 2011, the initiative has been met with political uncertainty – not concerning its objectives as such, but rather the funding structure. A balance between state and federal interests was struck in mid-2012, which led to the establishment of a much-needed additional tool of…

Interview

OBG talks to Mustafa Bello, Executive Secretary and CEO, Nigerian Investment Promotion Commission (NIPC)
OBG
plus

Interview:Mustafa Bello How can import-substitution policies be transformed into investments in agriculture? MUSTAFA BELLO: A number of concessions and fiscal incentives are being provided to investors engaged in agriculture and agro-allied activities. Examples include a 0% import duty on agricultural machinery and equipment, an export expansion grant to export-oriented agro-allied enterprises, and low-interest loans from the Agricultural and Rural Development Bank. The government is also…

Viewpoint

Elizabeth Littlefield, President and CEO, Overseas Private Investment Corporation (OPIC), on investing in West Africa
OBG
plus

Shifting global economic trends and the increasing flow of information about emerging markets highlights what those with experience in the region have long known − West Africa is ripe for growth and rich with opportunities for private investors. In the past decade Africa has experienced a remarkable turnaround. In 2000 the cover of The Economist declared Africa “The Hopeless Continent”, but 11 years later the story had become “Africa Rising”. Over the past decade, six of the world’s 10…

Analysis

Redirecting trade: New partnerships offer much potential for growth
OBG
plus

Western investors have not been the only ones to notice Nigeria’s resilient growth. While global demand has gradually rebalanced towards large emerging economies such as the BRICS, Nigeria’s trade patterns are shifting. The displacement of the US by India as Nigeria’s largest trading partner in the first quarter of 2012 (for the first time since 1964) is symbolic of a wider shift in trade. The authorities hope to expand the share of non-oil exports to match the rise in imports and have…

Analysis

Bridging the divide: Reforms are under way to harmonise the business environment
OBG
plus

As the country focuses on filling important gaps in transport and power infrastructure to improve the business environment in Nigeria, overcoming important shortfalls in the soft infrastructure will also be key to accelerating economic growth in the years to come. Having dropped 28 places in the World Economic Forum’s Competitiveness Index to 127th out of 133 in 2009 – where it remains in 2011 – there are still important hurdles in areas such as sanctity of contract and property registration.…