NIGERIA: A STRATEGIC INVESTMENT DESTINATION THE PREFERRED LOCATION FOR CANADIAN INVESTMENTS IN AFRICA YEWANDE SADIKU EXECUTIVE SECRETARY/CEO NIGERIAN INVESTMENT PROMOTION COMMISSION ABUJA | 05 NOVEMBER 2018 Private and Confidential
Nigeria – Canada Comparative statistics GDP ($’ bn) Nigeria Canada 1,843 1,799 NIGERIA CANADA 1,653 1,560 1,536 Capital Abuja Ottawa Official Language English English & French Land Area 910,770 km² 9,093,510 km² People (2017) 568 515 481 Population (m) 191 36.7 404 376 Pop. growth rate (%) 2.6 1.2 Median age 18.4 40.6 Economically active pop. (15-64) 98 24.6 2013 2014 2015 2016 2017 Economy (2017) GDP nominal ($’ bn) 375.8 1,653 Population (m) Agriculture (% GDP) 24.5 1.7 Industries (% GDP) 22 28.1 Services (% GDP) 53.6 70.2 Nigeria Canada GDP growth rate (%) 0.8 3.1 411 Inflation (%) 15.7 1.6 61% Labour (2017) Labour force (% of pop.) 59m (31) 20.1(55) Trade (2017) 181 Age 15-64 Import $’ bn, (% of GDP) 30.7 (8.2) 548.3(33) Export $’ bn, (% of GDP ) 44.5 (11.8) 510.7(31) 0.006 % 45 60% 36 Trade balance (% of GDP) 13.8(3.6) -37.6(<0) Investment Climate (2017) EoDB 145 18 2015 2020 2025 2030 2035 2040 2045 2050 GCI 125 14 Sources: United Nations World Population Prospects; World Development Indicators, World Bank Doing 1 Business (EoDB) Report 2017; Global Competitiveness Index (GCI) 2017-2018; www.countryeconomy.com
Nigeria in global context 2
How the world will look in 2050 Most populous countries China India China India India China 3 USA Nigeria USA 410.6m Russia Indonesia USA Japan Brazil Indonesia Germany Pakistan Pakistan 7 Indonesia Nigeria Brazil 190.9m Brazil Bangladesh Bangladesh Britain Russia Congo DR Ethiopia Italy Mexico Japan Mexico France Bangladesh Egypt Ethiopia 2050 2017 1950 Forecast Source: United Nations World Population Prospects: the 2017 Revision, medium variants 3
How the world will look in 2050 Projected average real GDP growth p.a., 2016-2050 5% 4.2% Nigeria could be the fastest growing African economy to 2050 , and could move up the GDP rankings, to 14th by 2050 , if it can 4% diversify its economy away from oil and strengthen its institutions and infrastructure. 1.9% 3% 2% 2.3% 1% 0% 14 -1% Vietnam India Bangladesh Pakistan Philippines Nigeria Egypt Indonesia South Africa Malaysia Colombia Mexico Saudi Arabia China Iran Turkey Argentina Thailand Brazil Australia Poland Russia United Kingdom Canada South Korea United States Netherlands France Spain Germany Italy Japan Average pop growth p.a % Average real growth per capita p.a % Average GDP prowth p.a. (in domestic currency) Source: PWC Analysis , from “The long view: how will the global economic order change by 2050?” 4
The African growth story is real 1988 - 2000 2001 - 2012 2013 - 2030 GDP growth (CAGR) Above 5% Between o% and 5% Less than 0% (negative) Number of economies growing faster than 5% a year 24 21 1988 - 2000 2001 - 2012 11 11 2013 - 2030 7 8 6 6 2 1 4 1 3 3 1 Asia-Pacific CIS Central and Southeast Middle East SSA Europe (CSE) Source: EY’s 2015 Africa Attractiveness Survey 5
But a wide perception gap exists: present optimists, absent doubters Respondents who are not Africa is the most #1 established in Africa attractive investment destination in the world Africa is the second believe attractiveness least attractive has improved over the 66% investment destination past year in the world Believe attractiveness believe attractiveness improved over the past will improve over the 30% 81% year next three years Believe attractiveness Respondents who are already 50% will improve over the established in Africa next three years Source: EY’s 2015 Africa Attractiveness Survey (total respondents:501) 6
Nigeria in context Spain 46.6m Italy 294,140 km 2 Population (m) Land size (km 2 ) Panama 74, 340 Belgium 11.4 Kano Borno Most populated region Largest region 13.0 72,609 North-West 48.7m North-East: 280,419 km 2 Rwanda 12 .2 Ireland 68,890 Lagos Niger 12.4 68,925 Israel 8.7 Croatia 55,960 Top 5 Taraba Kaduna Top 5 56,282 8.2 Dominican Republic 48,310 Bauchi Katsina 49,119 Sierra Leone 7.5 7.7 Denmark 42, 262 Yobe Oyo 46,609 7.7 Botswana 2.3 Least populated region Luxembourg 2,590 Smallest region Smallest Smallest South-South: 20.6m Lagos Bayelsa South-South: 76,852 km 2 3,671 2.3 Sri Lanka 21.44m Czech 77,210 km 2 Total: 192,449,083 Total: 910,710 Sources: National Bureau of Statistics (2018 estimates), http://www.data.worldbank.org 7
Improving Nigeria’s business environment 8
Nigeria: a strategic market, undergoing dynamic changes and transformation 0 Increasingly friendly business Southern Africa Note: Size of bubble environment reflects relative GDP East Africa of each country 20 West Africa 40 60 Target South Africa Botswana 80 Kenya Ease of doing business (ranking) Zambia 100 Nigeria is the emerging economic locomotive of the Ghana African continent Uganda ▪ Largest population on the continent and 7th in the world 120 ▪ Largest GDP in Africa ▪ Largest gas reserves and second largest oil reserves in Tanzania Africa 140 Côte d'Ivoire Senegal Togo Ethiopia 160 Cameroon Nigeria Equatorial Guinea 180 Angola 200 0 20 40 60 80 100 120 140 160 180 200 Population (millions) Increasing population Source: World Bank Doing Business Report 2017 9
Africa’s investment attractiveness Biggest draws: natural resources, high growth rates and large domestic markets… …yet concerns about business environment persist Source: EY’s 2015 Africa Attractiveness Survey 10
Africa’s perceived barriers to investment… Business environment is most important barrier… … incentives are least important barrier Source: EY’s 2015 Africa Attractiveness Survey 11
Security concerns should not discourage investments Security incidents have reduced… …and are far from commercial hub 4,000 3,500 Sambisa Forest 3,000 2,500 2,000 1,500 1,000 500 0 Comparative flying distances Ontario – Ottawa to North Carolina – 1,182 km Fayetteville Deaths Per Month 12-month Moving Average Quebec – Montreal to Wisconsin, USA 1,192 km Above represents incidents motivated by political, economic or social grievances Sources: Council on Foreign Relations, 12 www.timeanddate.com/worldclock/distances.html
Business case for improving business operating conditions Strong correlation between economic prosperity and ease of doing business Income Per Capita (log scale) USD per person per year Norway 100,000 USA R² = 0.4918 # of Objs = 185 Brazil Nigeria 10,000 Singapore 1,000 South Africa 100 200 180 160 140 120 100 80 60 40 20 0 Doing Business Rank (2018) Source: World Bank Doing Business Report 2018 13
Response: highest level commitment to ease of doing business reforms Presidential Enabling Business Environment Council (PEBEC) inaugurated in July 2016 24 Remove criticalbottlenecks Up by 24 places in World Bank’s 2018 and bureaucratic constraints Ease of Doing Business ranking President Muhammadu Vice President Yemi Osinbajo to doing business in Nigeria Buhari , GCFR SAN, GCON Participating No of announced Success rate No of initiatives agencies reforms Launch NAP 1.0 February 2017 8 22 12 72% EO 1 May 2017 Transparency and improving the business environment October 2017 11 22 29 52% NAP 2.0 NAP 3.0 February 2018 9 28 26 68% NAP: National Action Plan, EO: Executive Order Source: Enabling Business Environment Secretariat Reports 14
Global competitiveness index: Nigeria (115/140) Positive national Performance overview 2018 competitiveness ranking… 2018 115/ 140 2017 125/ 137 Previous edition Lower income group average Sub-Saharan Africa average Source: World Economic Forum: The Global Competitiveness Report 2018 15
2019 Ease of Doing Business ranking: Nigeria (146/190) Nigeria’s ease of doing business score improved by 1.37 points … positive national doing 2019 DB Ranking business score … Rank Difference Starting a business 120/ 190 +10 Dealing with construction 149/ 190 +2 permits Getting electricity 171/ 190 +1 DB Year *DTF Difference Rank Difference Registering property 184/ 190 -5 2019 +1.37 -1 146/ 190 52.89 Getting credit 12/ 190 -6 2018 +6.89 Protecting minority investors 145/ 190 +24 51.52 38/ 190 -5 Paying taxes 157/ 190 +14 2017 -0.06 169/ 190 +1 44.63 Trading across borders 182/ 190 +1 2016 0 +1.14 44.69 170/ 189 Enforcing contracts 92/ 190 -4 2015 -23 43.56 -3.06 170/ 189 Resolving insolvency 149/ 190 -4 * The distance to frontier (DTF) score measures the distance of each economy to the Source: World Bank, Doing Business 2019 16 “ frontier ”, which represents the best performance observed on each of the indicators across all economies
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