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Chapter | Insurance from The Report: Nigeria 2017

With many competing firms offering a robust suite of product offerings and related services, the insurance market in Nigeria is vibrant and growing. Like many sectors across Africa, however, domestic insurers often lack the capacity to underwrite the majority of risks stemming from the main drivers of the economy. Nigeria’s primary revenue generators – oil and gas, and the mining sector – require a level of coverage that is currently beyond the capacity of many domestic insures. This is especially true in the reinsurance market, which is dominated by foreign players. As a result, the National Insurance Commission (NAICOM) is seeking ways to increase the capacity of insurers under its purview. Over the course of 2017 NAICOM will institute risk-based supervision across the industry, which is expected to enhance the sector’s ability to effectively assess and manage risk, and encourage firms to significantly raise their capital buffers. Furthermore, Nigeria’s young and growing population will continue to be a force driving foreign investment into the insurance sphere. This chapter contains an interview with Eguarekhide Longe, CEO, Aiico Pension.

Chapter | Capital Markets from The Report: Nigeria 2017

Given the difficulties experienced by Nigeria’s economy in 2016, every sector grappled with challenges, and capital markets were no exception. From external pressures such as low oil prices and US interest rate shifts, to internal factors such as depreciation and slowing oil production, investors in Nigeria had to account for a range of risks. These factors had a clear impact on inflows. In 2016 foreign investment in emerging markets fell to its lowest level since the 2008 global financial crisis, with capital flight accelerating in early 2017. However, the slowing of the economy has had some positive consequences. Perhaps equally important, Nigeria’s capital markets are in the midst of a robust reform programme, which should significantly improve the market’s growth and sustainability over the long term. This chapter contains interviews with Mounir Gwarzo, Director-General, Securities and Exchange Commission; and Kayode Akinkugbe, Managing Director, FBN Merchant Bank.

Chapter | Banking from The Report: Nigeria 2017

Despite the challenges to Nigeria’s economy, many of the country’s banks enjoyed healthy revenue and asset growth in 2016. Asset quality issues continue to hinder the sector, but banks have found avenues outside of lending activities to expand their balance sheets. One area of growth stemmed from the devaluation of the naira in 2016. According to the IMF, 45% of loans held by banks are in a foreign currency. Upon devaluation, the book value of these loans in naira terms grew instantly. Naira devaluation provided a one-off boost to the value of existing assets, but material growth in forex or naira lending is not expected in 2017. The purchase of government securities is providing one of the few significant sources of actual revenue growth in the sector. While the past two years have been challenging for Nigerian banks, there is a sense that the industry has turned a corner, and that conditions are set to improve. This chapter contains interviews with Godwin Emefiele, Governor, Central Bank of Nigeria; and Godwin Nwabunka, CEO, Grooming Centre.

Chapter | Economy from The Report: Nigeria 2017

The past few years have been difficult for Africa’s largest economy, with a fall in oil prices from more than $100 per barrel in 2014 to roughly $50 per barrel at the start of 2017 having damaging consequences for Nigeria. The fall in revenues from the country’s largest export-earner led to a slowdown in investment throughout the economy, a ballooning of federal government debt, a rise in non-performing loans in the private sector and high inflation. These factors contributed to the economy contracting 1.5% in 2016, compared to growth of 2.8% in 2015. This marked the country’s first recession in 25 years. The government, which was voted into office in 2015, has made a number of moves to stoke a recovery, with some success. Broader efforts have also been taken to accelerate growth in the coming years, with a focus on import substitution, industrialisation, diversification and export orientation. This chapter contains interviews with Kemi Adeosun, Minister of Finance; Akinwunmi Ambode, Governor of Lagos State; Laoye Jaiyeola, CEO, Nigerian Economic Summit Group; and Yewande Sadiku, Executive Secretary, Nigerian Investment Promotion Commission.

Chapter | ICT from The Report: Trinidad & Tobago 2017

The liberalisation of the Trinidad and Tobago telecoms industry, which has been under way since 2004 under the guidance of state regulator the Telecommunications Authority of T&T, has been one of the major successes of the non-oil economy of the last decade. The country now boasts a number of high-quality, fixed-line internet and cable TV providers, and two mobile operators, which have invested in developing infrastructure and delivering competitively priced, high-tech services. There have also been positive strides in terms of developing the domestic ICT industry. Recognising that education – both in terms of general digital literacy and advanced training – is the necessary first step towards building up the sector, the government has focused on drafting a five-year ICT in education strategy, which should be published in 2017 or early 2018. In order for the sector to grow it will be critical to develop adequate human resource talent, only then can the sector develop locally created software solutions for domestic or regional use.

Chapter | Energy from The Report: Trinidad & Tobago 2017

Low global oil and gas prices have left Trinidad and Tobago’s energy sector with challenges, and underinvestment in upstream exploration has resulted in declining production and gas availability, leading to downstream industries operating below capacity. Still, the country continues to attract strong investment from oil majors and independent producers. With the government and sector players committed to crafting an equitable new fiscal regime, a strong energy services industry and a new frontier in deepwater exploration, there is good reason to expect the sector to bounce back over the medium term. This chapter contains interviews with Derek Hudson, Vice-President, Shell Trinidad and Tobago; Mark Loquan, President, The National Gas Company of Trinidad and Tobago; and Vincent Pereira, President, BHP Trinidad and Tobago & Chairman, Energy Chamber of T&T.