The US and the UK are the most important sources of FDI largely through major oil companies. The US invested $3.4 billion in Nigeria in 2008 and the UK accounted for about 20% of Nigeria\u2019s total foreign investment that year. Nigeria is China\u2019s second largest trading partner in Africa after South Africa. The oil and gas sector receives 75% of China\u2019s FDI in Nigeria.<\/p>\n
Beyond oil, other sectors that received large FDI inflows include the telecoms sector thanks to liberalization that has made Nigeria Africa\u2019s largest mobile market. The brewing industry is another top recipient of foreign investment.<\/p>\n
Nigeria has also gained popularity as a tourist and business destination and consequently, major international hotel chains have increased their investments or are planning to invest for the first time.<\/p>\n
\u201cImprovements in banking, telecommunications, airport arrivals and the removal of banned products such as furniture are benefiting the hotel industry,\u201d says Andrew McLachlan, Vice President of Business Development for Africa and the Indian Ocean Islands for South Africa\u2019s Rezidor Hotel Group, which is developing six hotels in Nigeria. In 2013, the group will open its first Park Inn by Radisson in Apapa.<\/p>\n
Why Nigeria?<\/p>\n
Nigeria\u2019s GDP is growing fast \u2013 7% in 2010 and 7.3% in 2011. And experts say growth will go into double digits by 2015 if Nigeria successfully transforms its agricultural sector through a series of recent policy initiatives. This would put the country\u2019s growth rate ahead of Brazil and Russia and slightly behind India and China.<\/p>\n
Per capita income also has continued to rise in the past decade, driven by strong growth in new sectors such as wireless telecommunications, construction and a revival of manufacturing, helping drive a growth in per capita income from $520 in 2003 to $712 in 2011.<\/p>\n In addition, Nigeria has the largest consumer market in Africa. Nigeria\u2019s population dwarfs that of South Africa and Egypt and the structure of its population \u2013 with 72% under age 30 and eight cities of populations exceeding 1 million \u2013 promises a healthy growth picture ahead with a significant base for future investment and consumption activity.<\/p>\n In 2009, the extension of an amnesty in the Niger Delta saw some 8,000 militants lay down their arms. A ceasefire has held since and President Goodluck Jonathan has made reinvigorating the amnesty program one of his chief priorities.<\/p>\n Corruption has been another worry for investors. But the Economic and Financial Crimes Commission (EFCC) and Independent Corrupt Practices and Other Related Offences Commission (ICPC) have tried and convicted many public figures, and the government has reiterated its commitment to fighting corruption.<\/p>\n Beyond oil and gas<\/p>\n Moreover, the government is working on reforms and infrastructure improvement to enable the economy to diversify beyond petroleum. Both the ruling and opposition parties have pledged backing for the reforms and infrastructure programs in an effort to make Nigeria one of the globe\u2019s 20 largest economies by 2020. President Goodluck Jonathan\u2019s commitment to the reforms is seen as particularly crucial.<\/p>\n \u201cWe believe that now is a very good time to invest in Nigeria across a number of sectors,\u201d says Michael Lalor, a Director at Ernst & Young South Africa. \u201cPresident Jonathan has an opportunity to continue driving reform and entrenching practices of good governance. This, combined with growing oil production, relative stability in the Niger Delta and high oil prices, is all positive for investment in key sectors.\u201d<\/p>\n Great changes are expected in the infrastructure development landscape when projects begin to rollout, thereby creating lucrative spin-off opportunities for well-positioned companies.<\/p>\n \u201cBesides oil and gas, power, and other key infrastructure projects, we see several other sectors, notably, telecommunications and construction, continuing to grow strongly,\u201d says Lalor. \u201cGrowth should also pick up in financial services and consumer products.\u201d<\/p>\n Investment managers, such as South Africa\u2019s Stanlib, say while there are many long-term investment opportunities in infrastructure development and petroleum, they favor companies and banks that have exposure in the non-oil economy.<\/p>\n For more information:<\/strong>![\"investments_tab\"](\"..\/wp-content\/uploads\/2013\/09\/investments_tab3.png\")
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