New GDP will at­tract more for­eign in­vestors, say ex­perts

Daily Trust - - BUSINESS - Sto­ries from Kay­ode Ogun­wale, La­gos

Stock­bro­kers have ex­pressed their hope that re­based econ­omy would at­tract more for­eign in­vestors into Nigeria.

Nigeria, last week, af­ter re­bas­ing its econ­omy, emerged Africa’s big­gest econ­omy in terms of Gross Do­mes­tic Pro­duc­tand moved 10 po­si­tions up to num­ber 26 in the list of economies in the world, ahead of South Africa, which used to be the largest in Africa.

Speak­ing with Daily Trust, Man­ag­ing Di­rec­tor and Chief Ex­ec­u­tive Of­fi­cer of APT Se­cu­ri­ties and Funds Limited, Mal­lam Kasimu Kurfi, said the re­bas­ing may ben­e­fit the cap­i­tal mar­ket by at­tract­ing more in­vestors into the coun­try, adding that the re­bas­ing of the econ­omy was a good de­vel­op­ment.

He said: “It also changed the ear­lier po­si­tion of agri­cul­ture as a ma­jor com­po­nent of GDP not be­cause it con­trib­uted only 22 per cent which means other sec­tors of the econ­omy play ma­jor roles. It also put us at ma­jor radar of the world and that can­not be ig­nored.”

Also speak­ing, Man­ag­ing Di­rec­tor and Chief Ex­ec­u­tive Of­fi­cer of Cowry Se­cu­ri­ties Limited, Mrs. Edoka Nkoli, said re­bas­ing of Nigeria GDP is a pos­i­tive ini­tia­tive.

He said: “It shows the level of our eco­nomic ac­tiv­i­ties. The size of the econ­omy (GDP) de­ter­mines the size of eco­nomic ac­tiv­i­ties, the higher the size of our GDP, the big­ger the op­por­tu­nity for cre­at­ing wealth by in­di­vid­ual agent or eco­nomic ac­tor.”

Speak­ing on the im­pact on Nigeria econ­omy, she said for­eign­ers tar­get­ing in­vest­ment in emerg­ing mar­ket will con­sider Nigeria as their first choice.

It will show the rest of the world that our econ­omy/ lo­cal mar­ket can ab­sorb larger busi­ness ac­tiv­i­ties, she said, adding: “Nigeria will be at­trac­tive to for­eign in­vestors. Sev­eral sec­tors of the econ­omy will ex­pe­ri­ence growth as in­vestors in­di­cate in­ter­est and in­vest sub­se­quently. Since 62 per cent of our pop­u­la­tion are be­low the age of 25 and our GDP is N510 bil­lion, there is ten­dency of grow­ing the GDP at more than 10 per cent per an­num.”

On cap­i­tal mar­ket, Nkoli noted that for­eign in­vestors might buy into quoted firms and bring in their man­age­rial com­pe­ten­cies.

“They can also buy quoted com­pa­nies out rightly,” she said.

She ar­gued that the de­vel­op­ment could in­flu­ence more un­quoted com­pa­nies to seek quo­ta­tion in or­der to be more vis­i­ble to po­ten­tial in­vestors, adding that com­pa­nies might ac­cess long term funds from the cap­i­tal mar­ket for their growth.

“We might ex­pe­ri­ence more cor­po­rate gov­er­nance stan­dard in quoted firms,” she added.

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