Nige­ria loses top FDI desti­na­tion to Mo­rocco, S’africa

The Guardian (Nigeria) - - THEGUARDIAN BUSINESS - By Chi­jioke Nel­son, Asst. Ed­i­tor, Fi­nance/econ­omy

NIGE­RIA may be filled with a huge “po­ten­tial” nar­ra­tive, but its at­trac­tive­ness has been over­taken by Mo­roc­can and South African economies, which now lead the in­vest­ment des­ti­na­tions in the con­ti­nent, EY re­port has shown. More wor­ri­some for the Africa’s largest econ­omy, is the fact that other coun­tries in­clud­ing Ethiopia, Kenya, and Zim­babwe reg­is­tered stronger For­eign Di­rect In­vest­ment (FDI) gains ahead of it.

While South Africa, Mo­rocco, Kenya, Nige­ria, and Ethiopia were the dom­i­nant an­chor economies within their re­spec­tive re­gions, col­lec­tively ac­count­ing for 40 per cent of the con­ti­nent’s to­tal FDI projects, Mo­rocco and South Africa took the shine off Nige­ria, with more projects com­ing their way.

The sit­u­a­tion por­tends a se­ri­ous dan­ger for the re­cov­ery and growth of the econ­omy, even as hopes for in­creased FDI were dashed fur­ther with the clo­sure of busi­ness of­fices of HSBC and UBS, two ma­jor global lenders that at­tract in­vestors.

The EY’S lat­est Africa At­trac­tive­ness re­port, ti­tled: “Turn­ing Tides”, showed that FDI was up across the con­ti­nent in 2017, and pro­vides an anal­y­sis of FDI in­vest­ment into Africa over the past 10 years.

The ris­ing FDI at­trac­tive­ness, es­ti­mated at 718 projects, rep­re­sent­ing six per cent in­crease over 2016 record, how­ever, saw Nige­ria los­ing some of its al­lure to smaller economies.

Ac­cord­ing to the re­port, the higher project num­bers were driven by in­ter­est in ‘next gen­er­a­tion’ sec­tors, like man­u­fac­tur­ing, in­fra­struc­ture, and power gen­er­a­tion.

EY Nige­ria Coun­try Leader and Re­gional Man­ag­ing Part­ner for Africa, Henry Eg­biki, said the past three years have been sig­nif­i­cant for the con­ti­nent, as it had wit­nessed var­i­ous changes in lead­er­ship, in­clud­ing Nige­ria, South Africa, Zim­babwe, An­gola, and even in Kenya.

“The changes, no doubt, brought about a re­newed ur­gency to in­tro­duce and im­ple­ment fresh so­cio-eco­nomic poli­cies that would spur eco­nomic growth.

“As Nige­ria pre­pares for an­other gen­eral elec­tion in Fe­bru­ary 2019, I be­lieve what is needed, as a mat­ter of ex­pe­di­ence, is to en­trench risk-mit­i­gat­ing poli­cies that will as­sure both lo­cal and for­eign in­vestors that the busi­ness en­vi­ron­ment is safe for in­vest­ment.

“This is the first step, and if this is done, I can as­sure of more for­eign di­rect in­vest­ment flows into the coun­try,” he said.

The long-sought trade in­te­gra­tion in the con­ti­nent was brought to the fore, as low in­tra-african flows were largely driven by a weaker ap­petite by both Mo­roc­can and Kenyan in­vestors into neigh­bour­ing coun­tries. Also, South Africa’s out­ward in­vest­ment project num­bers were stag­nant, as weak

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