Financial experts have identified policy instability and exchange rate volatility as the two biggest headaches investors have with Nigeria. In an interview with CNBC Africa yesterday, the experts stated that although Nigeria can be a very challenging market, a better knowledge of the local market, as well as precise contracts and engagement of knowledgeable local partners can help foreign investors to succeed.
The experts spoke against the backdrop of an investment survey by the group, Nigerians in the Square Mile (NISM), which found that policy instability and exchange rate volatility are the two biggest obstacles facing investors in Nigeria.
Executive Member of the NISM, Ikenna Iroche, said, “Nigeria is part of the African growth story and Nigeria is the biggest African country and so, that is the primary appeal.
The whole point of the survey was to try and get away from all the rhetoric and get real hard facts.
“For an emerging market investor, unless they’re oil investors specifically, the oil price really doesn’t affect them. What these guys are telling us is their main challenges are things that are creating uncertainty for them in either entering investments or at the time when they’re thinking about exiting.”
Beises, he said, “High volatility in exchange rates, clarity about macro-economic policy consistency, those are the key findings. Nigeria is a very attractive market, but one that can be difficult to transact in and policy instability, exchange rates volatility, are the two biggest headaches that these people find.”
Also, the Managing Director of Eagle Capital Markets, Gbite Oduneye, said, “The general good of what people are saying about Nigeria is that it’s one of the more exciting frontier markets. Nigeria is one of the places in Africa where one can generate very good returns. GE, for example, has invested close to a billion in the Nigerian market.
