Finance experts see investment surge in Nigeria in 2021, but warn risks remain

Three experts in the financial sector have projected that a lot of investment outlays should happen in Nigeria in 2021.

This stems from the fact that most companies in the Nigerian financial sector have adjusted their operations to fit into the economic realities brought about by the coronavirus pandemic, they said.

The experts, who spoke during a pre-awards conversation at the 2020 edition of the Banks and Other Financial Institutions Awards (BOFIA) organised by Businessday on Saturday, however, warned that the risks inherent in Nigeria will not disappear.

“There are so many opportunities that people who are brave can cash in on to turn the corner,” said Banji Fehintola, president of the Nigerian arm of Chartered Financial Analysts (CFA) Society, during the discussion tagged ‘Interpreting an Irrational Year: Coping, Adjusting and Thriving in a Wicked Learning Environment’.

According to him, there is a perception and a reality of risk in Africa and Nigeria in particular. However, there has also been a bridge in the gap as investors now see that the opportunities that lie therein outweigh the risks.

“Nigeria is blessed fundamentally with vast resources and a huge thriving population, and investors see this. We see a lot happening in the Fintech space which should continue next year,” Fehintola said.

Bayo Olugbemi, president, Chartered Institute of Bankers of Nigeria, said due to the pandemic, most banks have gone digital, employing technology to drive financial services.

“A lot of investments are happening in the technology space by the banks because they know that minus tech, they can’t go anywhere in their journey to moving services online to promote less of contacts,” Olugbemi said.

“We see this trend continuing next year. However, there is a downside to this which is cybercrime, and I believe they are conscious of that as well,” he said.

The economy has been battered by the economic and health impact of the Covid-19 pandemic that has caused a plunge in government revenue, pushing Africa’s biggest economy into its worst recession since 1987.

Many companies are struggling to keep up with operations amid weak demand/income, FX crisis, increasing commodity prices/cost of production and strict regulations.