Nigeria's international profile on the rise

Nigeria's international profile could increase as Africa's most populous country approaches GDP rebasing and is deemed one of the key emerging economies.

During the holiday period developments on Nigeria's economy have been somewhat muted, certainly compared to the contentious period culminating in the setting of the reference oil price for the budget and the actual 2014 Budget presentation by finance minister Ngozi Okonjo-Iweala (and pointedly not the under-fire President Jonathan) in December. Besides the nitty-gritty of Nigeria's spending plans recent international events may emphasize its growing importance in Africa. These include the chaos in South Sudan which has not only impacted global oil prices, but place Nigeria's oil-related environmental, theft and piracy troubles in perspective. Indeed, market observers are becoming increasingly worried about the Africa-portion of global oil supply.

 

Nigeria - regardless of the palaver over the Obasanjo and Sanusi letters to Jonathan - is set to become Africa's officially largest economy by GDP when rebasing exercise concludes this year. It has also been included as one of the “MINTs”, or emerging economies set to become major global players in the wake of the BRICs – the other MINTs being Mexico, Indonesia and Turkey. Goldman Sachs' influential Jim O'Neill – who recently designated the MINTs amongst in a widely-publicised interview - maintains his optimism on Nigeria despite its chaotic nature, partly due to its demographics, resources and entrepreneurial spirit.

 

Nigeria, whose stock market was one of the world's best performing during 2013, can surely benefit from any change in perceptions and especially given its current reputation as a country where some multinationals have been reluctant to send key individuals (in less secure regions), and reputation for corruption.

 

For more news and expert analysis about Nigeria, please see Nigeria Focus and Nigeria Politics & Security.

 

© 2014 Menas Associates

Libya: Sovereign wealth to finance infrastructure

Libyan Investment Authority (LIA) funds will be used to finance reconstruction inside the country rather than invested abroad. The sovereign wealth fund's acting chief executive, 46-year-old Rafik Nayed, recently told international wire services that he expected the $65 billion fund to contract in the short term because of this decision.

Since August, Nayed has led a team that is reviewing all LIA investments and has put a moratorium on operations until this is complete. 'We aren't interested in new deals,' he told the Wall Street Journal back in September. 'My mandate … is to untangle the inheritance of the regime and stabilise.'

When it was established, the LIA said that it aimed to be transparent and to follow the best international investment practices. This was partly to allay suspicion about the motives that a powerful Qadhafi-controlled fund might have for acquiring assets in Europe and the United States.

These resolutions were not kept. By 2010, several original members of the board of trustees had resigned. Documents leaked to activist organisation Global Witness in June 2011 showed that many large investments made by the fund had in fact lost money. Nayed has attempted to introduce greater openness, telling Reuters that cash, equities, and fixed income products accounted for about 77 per cent of the total assets under management. He identified potential problems in many of the asset classes, describing the equities holdings as insufficiently diversified and some of the strategic shareholdings, managed partly through the Libyan African Investment Portfolio,as loss making.

He also said that he planned to examine the alternative and hedge fund investments closely, including deals with Goldman Sachs and Société Générale.

For more news and expert analysis about Libya, please see Libya Focus and Libya Politics & Security.

© 2011 Menas Associates