Explain what is preventing Nigeria from becoming an excellent emerging market to invest in
Answers
Explanation:
the enterprise which is operated by the government to operate the public utilities.
Since 1999 Nigeria has experienced a profound level of structural, political and economic changes that have made it one of the emerging markets in Africa as well as a vital contributor to the world economy. Nigeria has evolved to the point where there are excellent investment opportunities in multiple asset classes, including public equities, debt, and private equity.
The key themes creating this opportunities are well known, including the re-capitalisation of Financial institutions and Insurance Companies, the trend towards privatisation of state-owned companies, the emergence of world-class companies and an overhaul of legal regulations guiding Investments.
WHY INVEST IN NIGERIA?
The fundamental case for Nigeria's high economic growth combined with valuations that are near historic lows is due to the various economic reform programmes the Government has embarked on. Gross Domestic Product (GDP) growth of Nigeria is almost double that of developed markets (In 2006 GDP growth rate of Nigeria was 5.6 percent and GDP growth rate of England was 2.8 percent source Economist Intelligence Unit), The inflation rate has also falling to a single digit of 7.5 percent and economists forecast that this trend is likely to continue for the foreseeable future.
The private equity markets are still at an early stage of development compared to public equity and debt, but this asset class offers substantial opportunities to invest in a broad range of smaller, rapidly growing companies. Various foreign companies have commenced to harness this gold mine. For instance no fewer than six Nigerian banks have raised fresh funds from foreign institutional investors.
While Nigeria may have significant risks, a number of developments have reduced risk in the markets. Improvements in corporate governance, accounting, local securities regulations, and the investment infrastructure, such as the Investment and Securities Tribunal, have all seen steady improvements and significantly reduced the risk factor.
To fully appreciate the viability of the Nigerian economy, some structural changes that have occurred over the years shall be intrinsically considered: