SYSTEMATIC PLANNING, MARKETING WILL ATTRACT FDI TO NIGERIA – REPORT

Filed in News by on July 15, 2011

Systematic planning, marketing will attract FDI to Nigeria – Report
On July 15, 2011 · In Business

By Michael Eboh

Nigeria has been advised to market itself effectively and undertake consistent and systemic long term planning if it intends to remain an attractive destination for foreign investors and foreign direct investments, FDI.

According to Ernst and Young, in its 2011 Africa’s Attractiveness Survey, Nigeria and the entire continent of Africa have to be properly positioned in order to take advantage of the opportunities presented by the expected increase in FDI inflow to the continent.

The report, made available to Vanguard, said that the African region is on a sustainable growth curve, predicting that FDI rates will steadily grow, hitting N22.65 billion (US$150 billion) by the year 2015.

According to the report, to accelerate and take advantage of this growth process, governments and investors, both foreign and local investors, should act now.

The report said, “Africa competes for FDI in a global market. Many countries are already highly effective at presenting their right side to investors. This marketing is most effective on an African or regional level in order to achieve critical mass.

The report disclosed that a major hindrance to foreign direct investment in the continent is the fact that a number of investors are not aware of the strides taken by African countries towards development, as many of them limit their focus to political stability, corruption and weak infrastructure.

“Executives in developed economies tend to be less positive about Africa than their peers in emerging economies. Yet, developed economies still account for the lion’s share of investment in Africa.

“This suggests that if perceptions of Africa can be improved in developed economies, FDI from these countries should increase significantly,” the report stated.

The report further urged African countries to diversify their economy and ensure a systemically long term plan, taking into cognizance adjacent markets, transport infrastructure and other legislative and administrative measures that will encourage foreign investment in their various countries.

“As a conglomerated market, Africa is large: Its Gross Domestic Product, GDP (based on Purchasing Power Parity) share of world total was reported at four per cent — on a par with India amd greater than Russia or Brazil.

If its countries and economic trade zones can work in unison, investors will find the critical mass they need,” the report further added.

The Ernst & Young report also advised foreign investors to focus more on sectors with high growth potential, secure high quality human resources, spread the risk of their investment through portfolio diversification and concentrate on expansion from strategic economic hubs.

The report said, “Looking at Africa as a conglomerate market can be useful in realizing critical mass, but the strengths of different sector vary significantly from country to country. Investors must thoroughly investigate the growth prospects of different sectors before committing investment.

“Some African countries are significantly more developed than others in terms of financial services and transportation infrastructure. These countries can provide a useful local base from which to expand further into the continent.

Expansion plans should look at non-conventional market groupings such as urban corridors and cultural affinities in order to find the highest return.”

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