There is a myriad of economic and even infrastructural bottlenecks bedeviling the business landscape of Nigeria, much of which has led to the death of startups and the crawling of many SMEs. But even with these challenges, Nigeria remains an investment hotspot in Africa.
Asides venture reports that have seconded this claim, a recent survey from the stables of Klynveld Peat Marwick Goerdeler, a professional accounting firm popularly known in the West African country as KPMG, reveals that investors are yet willing to pump funds in Nigeria in spite of the economic drawbacks experienced in the past year.
Thanks to the Netherland-headquartered firm’s second edition of its annual investors experience survey on doing business in Nigeria; the country can hold its head high in the investee crowd due to its yet promising economy and general ease of doing business.
Per response on the survey findings, Partner and Africa head, Deal Advisory and Private Equity at KPMG Nigeria Dapo Okubadejo, said that the survey was relevant in discovering the extent of attractiveness of the Nigerian market to investors year by year. The report also highlights the areas needed to be improved to further encouraged multimillion-dollar financial receptions into the country.
Adding, Okubadejo said: “Indeed, an impressive 80 percent of our survey sample expects deal activity to increase over the next year, and more than three-quarters of respondents said they were more likely to invest in Nigeria as a result of their previous M&A experience in the country; almost half suggest that they are now significantly more likely to invest in Nigeria.
“As income rise and Nigerians significantly access banking services, there are likely to be two notable sectors that benefit – consumer goods and financial services.”
Having examined 50 top business executives cutting across foreign and local investors in the country, the survey found that 40 percent and 26 percent of them were strategic and financial investors respectively, and the residual 34 percent were local financiers. While strategic investors were named those who invest on behalf of firms and also manage them, the financial investors are the ones who use their personal money for investments.
Per insights on the survey shared by the Partner, Deal Advisory of KPMG, Ijeoma Emezie-Ezigbo, Nigeria’s consumer industry shows signs of persistent convalescence. She said that on a short-term basis, the development is being fueled by Nigeria’s continued emergence from the recession that began in 2016, the direct result of an oil price slump.
“And financial services have been named the second most attractive sector for Nigerian M&A over the next five years with 40 percent of respondents citing this as producing attractive investment opportunities. Our survey also reveals that respondents are optimistic that M&A will increase over the next two years,” she added.
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