Nigeria’s new growth pockets to attract investors, says report

With the greater weighting accorded to sectors such as telecommunication and financial services following the rebasing of Nigeria’s Gross Domestic Product (GDP), investors will be eyeing these sectors as pockets of growth in the years ahead, said a new report by StratLink, an international business advisory firm, focusing on emerging and frontier markets.

“This is because the sectors are playing an increasingly central role in the growth of the economy,” said the Africa Market Update. “The domestic entertainment industry has also featured prominently as a key driver behind the rebasing. We expect that investors will be eyeing these sectors as pockets of growth in the years ahead.”

Nigeria has emerged as Africa’s largest economy following a rebasing exercise that saw its GDP size leap-frog by 78.56 percent to $509.9 billion by-passing South Africa at $384 billion.

The report stated that the rebasing has brought forth changes in key macro-economic indicators that could lure investment appetite into the country.

“With the GDP rebasing, investors are likely to keenly view the manufacturing, agriculture and education sectors as well,” the report said.

Nigeria remained among the top three choice investment destinations in sub-Saharan Africa in 2013. In the year, the country registered the third highest number of private equity (PE) deals (9) behind South Africa (10) and Kenya (12). Between 2011 and 2013, Nigeria had the highest valued PE deal within a single country worth $750 million.

“PE interest has been skewed towards the extractive industry accounting for 58 percent of the worth of deals in 2013 at $2,132 million. This augurs well for Nigeria which has a strong oil sector.”

Femi Asu