Why Nigeria remains good destination for investment –Adebayo, Minister of Industry

“Nigeria, with a population estimated at 200 million people with 72 per cent under the age of 30, indicates huge potential for future investment and consumption activities”, says Otunba Niyi  Adebayo, the minister of Industry, Trade and Investment. According to him, this is one of the reasons savvy  investors offshore should regard the nation as an investment haven.

At a CEO interactive session for the Consumer Goods sector, organised by the Nigerian Stock Exchange (NSE,), in Lagos recently  , Adebayo took time to reel out Nigeria’s qualities that should make foreign investors channel their investments into the country.

Hear him: “Nigeria is one of the fastest-growing consumer markets not only in Africa, but the world at large. Nigeria’s consumer market is valued at $377 billion in 2013 and expected to peak at $454.3 billion in 2025.Also high on the agenda of this Administration is the stabilization of our economy to recapture exiting foreign direct investments from the country. Available statistics shows that Nigeria’s GDP grew 1.94 per cent (year-on- year) in real terms in the second quarter of 2019, with the Manufacturing sector contributing 11.49 per cent to nominal GDP. It is projected by the United Nations (UN) that most global population, between 2017 and 2030, will be absorbed by cities, and that new residents in urban areas will count for about 1.1 billion over the next 13 years. Similarly, the UN Department of Economic and Social Affairs forecasts that 66 per cent of the world population (2.5 billion people) will reside in urban areas by 2050. This anticipated push towards urban centers will undoubtedly provide a unique opportunity for the growth of the consumer sector.”

At the parley, the minister also disclosed plans of his ministry to address some of the challenges confronting the sector.

“The Federal Ministry of Industry, Trade and Investment, through the Nigeria Industrial Revolution Plan (NIRP), is also addressing some key challenges in the manufacturing sector, such as limited access to credit and financial services, poor infrastructure and unreliable power supply, which have resulted to reduced competitiveness and profitability. In addition, the Ministry is promoting a strategic linkage between agriculture and Industry through the implementation of an agribusiness and Agro-Industry initiative (NAADI).”

Adebayo explained that the purpose of the interface was to formulate strategies and collaborative efforts with the Federal Government to optimise the intrinsic potential in the sector and  proffer solutions to the numerous challenges faced by players in the sector.

Excerpts:

Capital market

The theme of this CEO interactive session for the Consumer Goods sector is the Role of the Capital Market in Unlocking Value in the Consumer Goods Sector.” Nigeria’s consumer market is valued at $377 billion in 2013 and expected to peak at $454.3 billion in 2025. The consumer goods sector remains a critical segment and plays an integral role in the development and advancement of the Nigerian economy.

It is indeed my singular honour and privilege to address you today at this CEO Interactive Session for the Consumer Goods Sector, a programme put up by the Nigerian Stock Exchange (NSE). This event is timely at this stage of our economic development, particularly with the rapid growing population and the need to create effective linkages between and among sectors. I would like to commend the leadership of NSE for the critical role they are playing in the economy by providing businesses with access to long-term funding and providing platforms such as this, to drive continuous discussions among Industry players, Policy makers and the government. There is no doubt that the consumer goods sector remains a critical segment and plays an integral role in the development and advancement of the Nigerian economy.

Available statistics shows that Nigeria’s GDP grew 1.94 per cent (year-on- year) in real terms in the second quarter of 2019, with the Manufacturing sector contributing 11.49 per cent to Nominal GDP. The sector has nonetheless experienced various economic turmoil in recent years, as witnessed in areas like foreign exchange challenges between 2014 and 2017. Immediate steps were taken to redress the problems as in the ban of 41 items in 2015.We also can recall currency depreciation which triggered higher cost of production, Insecurity in the country leading to reduced sales, high excise duties on importation of raw materials and multiple taxations, just to mention but a few. I believe that the purpose of this interactive engagement today is to formulate strategies and collaborative efforts with the Federal Government to optimise the intrinsic potentials in the sector and  proffer solutions to the numerous challenges faced by players in the sector.

Nigeria is one of the fastest-growing consumer markets not only in Africa, but the world at large. Nigeria’s consumer market is valued at $377 billion in 2013 and expected to peak at $454.3 billion in 2025.This growth is driven by three major factors – Population, Urbanization and Increased spending power. It is common knowledge that the existence of a large market presents an opportunity for growth in the consumer goods sector. Nigeria with a population estimated at 200million people with 72 per cent under the age of 30 indicates huge potential for future investment and consumption activities. It is projected by the United Nations (UN) that most global population, between 2017 and 2030, will be absorbed by cities, and that new residents in urban areas will count for about 1.1 billion over the next 13years.Similarly, the UN Department of Economic and Social Affairs forecasts that 66 per cent  of the world population (2.5 billion people) will reside in urban areas by 2050. This anticipated push towards urban centers will undoubtedly provide a unique opportunity for the growth of the consumer sector.

In all of these, Nations must be proactive and focused to deliver the right policies and programmes using critical institutions – both public and private – to boost output by providing the right environment and financing for businesses to thrive. This, to my mind, is where the capital market should take the lead as a financial intermediator.

The Federal Government remains committed to improving the business environment towards Industrialization and Economic prosperity. The restriction of the availability of foreign exchange to the importation of 44 items in 2019 which could be competitively produced within the economy and the recent border closure hinge on government’s policy of enhancing demand for locally manufactured goods and enabling favourable competition amongst manufacturers. The gains being recorded from this twin policy should increase domestic business activities and make the capital market more active.

ERGP

You are all aware that the Economic Recovery and Growth Plan(ERGP) aims to achieve a more diversified and inclusive economy by 2020. We are therefore committed to work with stakeholders to eliminate the bottlenecks which hitherto have hindered the growth of the sector. Also high on the agenda of this Administration is the stabilization of our economy to recapture exiting foreign direct investments from the country. I would like to use this opportunity to assure the business community that Nigeria remains a good destination for investment. President Muhammadu Buhari’s strategic and strong reforms agenda places Nigeria in the top 10 improver list. This laudable progress is in addition to the marked improvement from 145th to 131st position on the 2019 ease of going business World Bank rankings. This progress was due to reforms initiated and implemented by the Nigerian Government in providing an enabling environment for businesses to thrive.

Challenges

The Federal Ministry of Industry, Trade and Investment, through the Nigeria Industrial Revolution Plan (NIRP), is also addressing some key challenges in the manufacturing sector, such as limited access to credit and financial services, poor infrastructure and unreliable power supply, which have resulted to reduced competitiveness and profitability. In addition, the Ministry is promoting a strategic linkage between agriculture and Industry through the implementation of an agribusiness and Agro-Industry initiative (NAADI). The main goal of this initiative is value addition through processing of Agri commodities. A lot of investment is required in the implementation of this initiative and the Capital Market should come in handy alongside other funding institutions such as the World Bank, African Development Bank, Afrixim Bank, e.t.c to promote the initiative.

Finally, I wish to restate Government’s commitment to collaborate with the private sector in key business areas, and proffer viable solutions to challenges bedeviling our economy. I urge the private sector to continue to provide candid feedback on the impact of Government’s economic reforms, as we collectively strive to make Nigeria Africa’s economic hub.

THE SUN

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