Nigeria has been ranked as one of the four major investment destinations and growth areas in the world.
According
to KPMG, one of the world’s foremost audit, financial and tax advisory
firms, Nigeria’s newfound status followed the disappointing returns
recorded by the BRICS, with the exception of China.
BRIC was the
term coined by Goldman Sachs’ economist, Jim O’Neill in 2001, to
symbolise the emerging global economic powerhouses of Brazil, Russia,
India and China. The term was later expanded to BRICS to accommodate
South Africa.
However, KPMG at the weekend, said the poor
regulatory environment, slower than expected growth prospects and
disappointment returns on investment recorded by the BRICS, with the
exception of China, has worked in the favour of Mexico, Indonesia,
Nigeria and Turkey which have been termed the MINTs, as well as the
ASEAN (Association of South East Asian Nations) region, now considered
the new destinations
for global capital and investors.
Global
Chairman, KPMG International, Mr. Michael Andrew, who was on his first
visit to the country last week, told reporters in Lagos that Nigeria and
the other countries among the MINTs have attracted increasing
investment offers and enquiries through the services of KPMG, amongst
others investment and financial advisories, with the view of taking
advantage of the high rates of return on investment.
According to
him, with the exception of China, international investors have found
the Brazilian, Russian, Indian and South African economies disappointing
in the last few years and are looking for safe havens with better
returns for their investments.
“The offers for the MINTs are
intense and we are getting a huge amount of enquiries about these
countries. People want to know how to do business in these countries,
how to access the markets and how to take advantage of the long-term
growth that is coming.
“If you are a CEO and you are sitting in
London, New York or Frankfurt, because the market is growing and the
cash inflow to these markets, the markets are putting pressure on the
CEOs to try and find new markets where they can find growth.
“Particularly,
companies in consumer markets such as financial services, food and
energy are the ones that they are really focused on in these emerging
economies,” he said.
Andrew, who spoke alongside the National
Senior Partner, KPMG Professional Services, Mr. Seyi Bickersteth, and
Partner, Management Consulting, KPMG Professional Services, Joseph
Tegbe, said the international investors are interested in investing in
the Nigerian capital market and could later move to the real and other
sectors of the economy.
He said: “Initially they are going to
move into the stock market, then they will move into the property
market, then they will start to move into the real sector in economies
such as Nigeria.
“So everyone is watching where this cash goes,
but the real question is what are the factors that will actually drive
this growth?”
Elaborating on the determining factors, Andrew
said: “People are looking for a growing middle class, they are looking
for a predictable regulatory environment, and they are looking for
stable and transparent corporate governance structures.
“In the last
few weeks, I have been to Mexico, Indonesia, India and then Nigeria, and
their similarities are remarkable – between those economies and this
one are the ones attracting a lot of interest.
“In the last few
years, we have talked about the BRICS being the area of focus. But if
you talk to international investors, their views will be that the BRICS,
with the exception of China, have been quite disappointing.
“So they
have found it difficult to invest in these countries, their regulatory
environment is unpredictable and they have not been able to get good
returns on their investments.
“As such, people are now focused on
the MINTs – Mexico, Indonesia, Nigeria and Turkey. They are the four
countries that international investors are really focused on for growth
and investment.”
Bickersteth while fielding questions on the
power reform and recent sale of successor companies of Power Holding
Companies of Nigeria (PHCN), gave a pass mark to the Federal Government
on the exercise.
He said: “The process is being handled by
someone for whom I have a lot of respect for – Mr. Atedo Peterside. The
process has been very transparent.
“However, you are not going to
satisfy everybody in this particular deal, so my own opinion is that we
must move forward. We need to move forward because if we don’t we are
going to have a real problem in the power sector.”
Stressing that
it has been shown quite clearly that the public sector cannot deliver
the amount of electricity that the country needs to form the industrial
base in the country, he observed that Nigeria needs the resources and
the expertise of the private sector.
“On the overall basis, the
power reform programme is something that I welcome; the process has been
fair and the valuation, from what I understand, has been fair. So let’s
move on and deliver the power objective that we say we want to
deliver,” he submitted.
