By Omoh Gabriel
William Shakespeare in his book, Julius Caesar wrote centuries ago that “There is a tide in the affairs of men. Which, taken at the flood, leads on to fortune; omitted, all the voyage of their life is bound in shallows and in miseries. On such a full sea are we now afloat, and we must take the current when it serves, or lose our ventures.”
In this Shakespearean plot, power is seen as a force that ebbs and flows in time, and one must “go with the flow.” Waiting around only allows your power to pass its crest and begins to ebb; if the opportunity is ‘omitted’ (missed), you’ll find yourself stranded in miserable shallows.
Looking at the Nigerian economy in the last few years from global perspective, foreign investors are now looking to Africa, Nigeria and Kenya in particular. There seems to be a tide, the type Shakespeare spoke about, in the economic affairs of Nigeria if only policymakers can see beyond their noses and stealing culture, to take the tide at its flood to give Nigeria an economic take-off. Investors are seeing what most Nigerians are not seeing. The complaint of lack of infrastructure, epileptic power supply, low industrial base etc., are fast becoming opportunities to foreign investors.
At the Reuters Africa investors’ forum last week in Johannesburg, foreign investors who have their businesses in Nigeria and other African countries were quoted as saying; “If you want to ride Africa’s business boom, choose your country well and be ready for bumps on the road. But the momentum is upward and you will be rewarded if you stay the course.”
African policymakers and chief executives of companies operating in Africa are spreading this upbeat message, qualified with some caveats, as interest in what was once dubbed the “hopeless continent” blossoms along with growth rates. Few doubt that the Africa rising narrative, which has grabbed the attention even of traditional skeptics, is based on solid fundamentals: growth outpacing most of the world, a rising young population of workers and consumers and global demand for the continent’s commodities.”
Just two weeks ago, Global X Funds listed the first Exchange Traded Fund (ETF) on the New York Stock Exchange to track Nigerian stocks. The head of the Fund said this is a move which will enable U.S. investors to buy high growth Nigerian shares at home. Nigeria in the eyes of funds managers and economists today is growing in popularity as an investment destination, offering the promise of seven percent economic growth and a consumer market of around 170 million people.
The Nigerian stock market index rose 35 percent in 2012, making it the second best performer in Africa and one of the best in the world. The index is up 22 percent so far this year and analysts expect gains to continue as strong corporate earnings trickle in. There are a massive amount of U.S. investors looking to get exposure to Nigeria.
“I absolutely believe in a consistent upward trend,” said Diana Layfield, Chief Executive Officer for Africa of Standard Chartered, the London-listed bank which is investing $100 million in Africa to double its business in the next five years. But this bullish pitch for Africa, enthusiastically echoed by most participants at a Reuters Africa Investment Summit, comes accompanied with a caution that the continent remains a volatile, uneven and challenging place.
Also last week, Carlyle Group said it is looking at a number of banks in East and West Africa for a potential investment. Carlyle, which last year invested in a pan-African grain trading firm, has recently signed a second deal, Marlon Chigwende said. Investors’ interest in the fast-growing continent is growing by bounds, drawn by a commodities boom and an expanding consuming population.
Nigeria’s stock exchange disclosed that it is reviewing applications from some leading global investment banks to join its trading floor, as reforms aimed at improving liquidity and transparency bear fruit. Mr. Oscar Onyema, Chief Executive Officer of the Nigerian Stock Exchange told the Reuters Africa Investment Summit in Lagos that some foreign investment banks have applied to trade on the floor of the exchange.
“We cannot announce which ones yet but they are in the top ten in the world,” Onyema said of the banks that had filed applications to trade on the NSE. Rencap and Standard Bank already have traders operating on the floor of the exchange. Before the stock market bubble burst in 2008, wiping nearly two thirds off its value in a year, domestic investors owned 85 percent of shares, with foreigners owning the rest.
The investment tide is afoot; will Nigerian public servants, government functionaries and elected officials stop stealing and ride on the tide of development?
Can President Goodluck Jonathan mobilise the populace to ride on this tide?
The world is watching.