RIDING THE EAGLE
A Guide to Investing in Nigeria
Toyin F. Sanni
Investment flows into a country today are to a modern economy, as impactful and life-giving as blood in the veins of a human body and for a developing or ailing economy, as vital and life-saving as a blood transfusion for an anaemic or haemorrhaging patient.
One of the hallmarks and greatest effects of globalization is the increased mobility of funds across national and regional barriers. These include both Foreign Portfolio Investments (FPIs), at the extreme end of which you have what is derogatorily referred to as “hot money” and the more “sticky” flows involved in Foreign Direct Investments (FDIs).
However, according to the United Nations Secretary-General António Guterres in his introductory comments on the United Conference on Trade Developments (UNCTAD) World Investment Report 2018, “Global flows of foreign direct investment fell by 23 per cent in 2017. Cross-border investment in developed and transition economies dropped sharply, while growth was near zero in developing economies. With only a very modest recovery predicted for 2018, this negative trend is a long-term concern for policymakers worldwide, especially for developing countries, where international investment is indispensable for sustainable industrial development.
This troubling global investment picture underscores the importance of a conducive global investment environment, characterized by open, transparent and non-discriminatory investment policies. The theme chapter of the report shows that over 100 countries have adopted industrial development strategies in recent years. New types of industrial policies have emerged, responding to the opportunities and challenges associated with a new industrial revolution.”
African economies are naturally some of the hardest hit by these reversals and must not only investigate and address the causes of these reversals in FDI flows as regards their specific markets, but must pluck the low hanging fruits obtainable from implementing needed reforms to improve the level of transparency in their markets and implement investment policies to make their markets competitive and attractive to investors.
In a global market in which nations now compete like suitors for the hand of the highly mobile and financially savvy global investor represented mostly by pension funds, sovereign wealth funds, private equity firms, multinational companies and other institutional investors, the challenge of keeping domestic markets attractive and competitive must not be left only to governments and their representatives.
This book seeks to make a contribution to the imperative of making Nigeria a sustainable and preferred destination for FDI flows by providing detailed yet concise information on the Nigerian market via a roadmap or guide for foreign, domestic, institutional and individual investors alike. It also examines the challenges currently faced by the Nigerian economy across sectors and by its investment markets, proffering solutions to some of the nation’s economic and development challenges.