Sunday, February 12, 2017

Nigeria Not utilising its Investment opportunities

Many Nigerians are not keying in on emerging investments opportunities in critical areas like agroallied processing and agricultural products storage, education and human capital development and electronic payment platforms.

Meanwhile these sectors represents new investment frontiers aided by growth in technology, government’s keen interest to drive growth in their value chains, relative ease of securing private capital and a yawning supply gap.

These are the views of experts who made presentations at the Vantage Forum 2017, an annual entrepreneurship advancement initiative organised by the Elevation Church in Lagos on January 26.

With unemployment rate at about 13 percent and underemployment rate of 19 percent, for over 61million Nigerians without gainful employment, an ability to scan the environment for opportunities and sharpen their entrepreneurial skills are now winning skills.

Doyin Salami, economist and faculty member at the Lagos Business School in his lead presentation said Nigeria’s current economic recession masks opportunities for discerning investors.

“There are emerging opportunities in the economy and the sectors that will continue to thrive despite the current recession are the biggest sectors, fastest growing sectors, those sectors that are the best recipient of capital either debt or equity and those sectors that are the resilient.”

In his presentation, Okey Enalamah, minister of Trade and Investment represented by Toyin Adeniyi, a director at the Bank of Industry (BOI) said that government has left the planning stage and is now diversifying the economy to insulate it from external shocks and increase investors’ confidence.

With a mandate to improve the ease of doing business by 60 places before 2019, Enalamah said the ministry’s strategy is built on implementing Nigeria Industrial Revolution Plan (NIRP), providing support for Micro Small and Medium Enterprise (MSMEs) and support digitisation of the economy.

“Short-term headwinds should not becloud the fundamentals of a strong market, as government is seeking to partner private capital to diversify the economy,” said Adeniyi.

Enalamah said the government is tackling the current poor macroeconomic performance of the economy by making the economy more inclusive, tackling export dependent nature of the economy with diversification and increasing investors confidence to encourage foreign direct investments.

Godman Akinlabi, lead pastor of Elevation Church while responding to questions from journalists said government can find ready partners in leaders of faith-based organisations who are ramping up social programs to tackle societal ills.

“The level of cooperation and partnership between government and private sector is growing but it is not the same with faith-based organisations.”

Akinlabi said government is missing out an opportunity for more robust, inclusive ideas to develop the society as these leaders have potentials to contribute developmental ideas and even sell government’s programmes better to the people.

John Obaro, CEO of SystemSpecs said government’s drive towards digitising the economy signifies opportunities to advance technological knowledge in areas that will solve practical problems for in Nigeria.

However, 80 percent of new businesses never make it out of the start-up stage despite leveraging technology.

Ndidi Nwuneli, founder of LEAP Africa in her presentation said a possible reason is because some are not running demand-driven businesses, poorly leveraging the power of technology, and failure to instilling corporate governance practices which limits access to funding needed to lead their business to scale.

“How many of you have a properly articulated vision, manage your businesses ethically, have a board, communicate your goals properly, have a governance structure, a regular audit and engage with your communities?”

Salami said that entrepreneurs who will remain in business despite the current challenges will adopt three key strategies: improve in their knowledge of their customers, competitors and remain persistent despite headwinds.

However macroeconomic challenges still poses a threat. Nigeria’s inflation rate rose to 18 percent in December even as prices of basic commodities soared by over 50 percent.

Inefficient exchange rate management has seen over about eleven different exchange rates providing inefficiencies and ‘opportunities for bad behaviour,’ according to Salami.

“The solution is implementing fully the Monetary Policy Decesion reached last year to liberalise the foreign exchange market.

The guidelines were in place and the market started but because of the acute problems of the supply side we have not implemented the framework as articulated.

“I know people are worried that if we allow it, to what level do we allow the currency to depreciate, but there’s nothing that says also that it will not appreciate.

Salami said the issue is to determine the fair value of the currency and if it is liberalise the “value of the naira should probably be somewhere between N307/$1 and N325/$ depending on the assumptions you make.”
By Kay Ugwuede

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