Investors revel in the promise of “business as usual.” In West Africa however, we often have anything but.
For example, although Nigeria boasts both the world’s fourth largest largest oil reserves (with oil now selling at $93 USD per barrel) and an entrepreneurial spirit among the finest in Africa, corruption and limited capital and credit have earned the nation an undeserved and oft-uninformed reputation as a haphazard climate for investment.
However, as is seemingly always the case, where some investors see risk, others seek and reap reward. And it is these intrepid investors – those who look at promising economic figures and read the writing on the proverbial wall, that we commend for integrating with a cohesive West African market. This market is unwaveringly on the rise and we implore such international connectivity while at the same time encouraging said activity brings with it the best practices of corporate and social responsibility.
Nigeria offers a bevy of opportunities to such an investor. The economy continues to improve year-on-year, boasting figures that are promising both for national development and for inevitably joining the echelon that is the BRIC. The GDP at purchasing power parity reached over $450 billion USD in 2012, more than double the figure not seven years prior. At the same time, real GDP growth exceeded seven percent, allowing for Nigeria to garner the top twenty-fifth spot among world economies. Thus, as many nations continue to struggle amidst a global recession, it can be argued that Nigeria remains relatively unscathed, perpetually turning the corner towards economic sustainability.
Nigeria ranks third on the African continent for factory output and fifth for services – this despite the fact that the nation operates at far below its inherent natural capacity. We have seen India seek to increase its trade with Nigeria as of late, and China has also placed greater emphasis on the Naira market – most notably by signing a major agreement to build an oil refinery in-country. It is from this impressive backdrop that the West African nation has emerged as the continent’s third-largest economy with a determinedly bright, globally-interconnected future.
There are interesting reasons why The Gambia also deserves the attention of such an intrepid investor. The country offers a market relatively free of the invasive business laws that are so burdensome to growing firms (and also so common to developing nations across the world) and a comparably inexpensive labor market. These factors alone equate to an opportunity for foreign investors to enter The Gambian market and develop their respective business without the massive expenditure on start-up costs.
Although peanuts and agriculturally-developed products continue to account for the majority of Gambian exports, the businesses sector has stressed a need to diversify, increasing the export of manufactured merchandise goods and encouraging greater tourism.
Investment in Ghana has also been no secret. Richly diverse in mineral wealth, Ghana is further endowed with an efficient civil service infrastructure, a booming entertainment industry and a standard of education setting a precedent across Africa. Ghana Oil Co. (GOIL), the second-biggest operator of fuel stations in the nation, reported recently record highs as sales of new engine lubricants advanced its revenue outlook dramatically, garnering the attention of the global marketplace
There is no question that doing business in West Africa is not simple. Attention is often diverted to political and social conflicts, national infighting and security risks. One can look at the recent events in Mali and even the attacks in Kano, Nigeria and feel justified in rushing to a conclusion that investment in West Africa is a roll of the dice too far.
However, to divert attention away from such an ample opportunity at this inflection point would be costly, as one will not only miss an opportunity to dynamically amplify their business offering, but also the chance to serve as bold actors in the transformation of a region, indeed a continent. West Africa is not a dream, but a reality worth pursuing.
Business is anything but “usual.” However, it is exactly in this “unusual” that I believe West Africa will lure the intrepid investor – the very investors that we so need –where they will grow profitable businesses, thriving social enterprises and work together to better the lives of their families at home and newfound communities abroad.