Attracting Indian Investments in Nigeria

E kaaro o, Ututu Oma, Barka da Safiya - Good morning, and a warm welcome to ThinkBusiness Nigeria, your Monday – Friday dose of commentary, contexts, and insights on business and economic news that matter to you.

Our democracy is not perfect. Indeed, none is. It is evolving and maturing, but it can be done faster.

What I would like to see is a truly independent electoral umpire. That cannot happen when the President hires who becomes the Chairman of the Independent National Electoral Commission except you are a very unlucky President Jonathan that appointed his “enemy”.

With a truly independent electoral umpire, very few cases will go to the courts.

Please, also share so we can continue to build a community of “business thinkers”.

Markets

• The benchmark NGX All-Share Index (ASI) pared 48.40 (-0.07%) points to close at 68,286.28, representing a week gain of 2.78%, 4-week gain of 6.42%, and an overall year-to-date gain of 33.24%. Vitafoam Nigeria share price depreciated by 10% at NGN 22.50 per share, followed by Veritas Kapital Assurance (-7.69%), Linkage Assurance (-5.56%) and Dangote Sugar Refinery (-4.79%).

• Brent crude futures held above US $90 per barrel on Wednesday after hitting over ten-month highs in the previous session as OPEC+ majors Saudi Arabia and Russia extended their voluntary supply cuts through the rest of the year. Meanwhile, global economic uncertainties continued to weigh on the demand outlook amid soft manufacturing and services data in major economies.

• Naira declined at both the I&E Window and on the streets. Naira depreciated by 3.29% at the I&E exchange closing N771.59 against the US dollar. On the streets, Naira was down by 0.27%, reaching a value of N922.5 against the US dollar.

• US natural gas futures traded around US $2.5/MMBtu on Wednesday, the lowest in one week as investors anticipate lower demand in the upcoming weeks.

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National Headlines

• Presidential Election Tribunal validates February 2023 elections – The Presidential election tribunal, led by Justice Haruna Tsammani, yesterday upheld the result of the 2023 presidential elections. It dismissed virtually all the petitions by the People’s Democratic Party and the Labour Party. With this result, the conclusion on all matters of the elections potentially has only one leg to go – the supreme court if the opposition choses. Let me reiterate at this point that our democracy is evolving and maturing. The most important element of that process should be a clearly, transparent, independent electoral commission. While the opposition have not been able to convince the judges that the infractions during the election was sufficient to change the outcome of the result, virtually all the infractions were tied to an incompetent, inherently biased, corrupt INEC that did not deliver on its promises.

• Attracting Indian Investments in Nigeria – President Bola Ahmed Tinubu has continued to woo Indian investors to scale up their investments in Nigeria during his trip to New Dehli for the G20 meeting. With his largest delegation of Ministers and Nigeria’s businessmen yet, the President has shown desperation to attract private investments and equity in Nigeria’s enterprises, a welcome development from the awful approach of his predecessor. It has been widely reported that the President met with Indorama Petrochemicals, Jindal Steel and Power, Hinduja group of companies etc.. The Indians will be looking out for credible investment and business environment. That is currently a challenge as Nigeria is experiencing the most volatile economic environment since the return to democratic rule. But the President is steadily building that credibility, not only with his twin major reforms, but also with his little appetite for more debt.

• Electricity meters prices up – Electricity consumers seeking to get meters will pay more going forward. Nigeria Electricity Regulatory Commission (NERC) announced increases in the price of single-phase and three-phase pre-paid electricity meters, now N81,975.16k from N58,661.69k for single phase, and N143,836.10k from N109,684.36k for three phase meters.

Global Headlines

• India as third largest consumer market in the world – As the G20 meeting holds in New Dehli this week, a BMI report estimates that India’s consumer expenditure will become the third largest in the world before the end of this decade, after the US and China. That is remarkable. India, with largest population in the world of 1.4 billion has already become the fifth largest economy in the world and currently fifth largest consumer market. It currently has the largest growth rate of any large economy of 8.7%. A growing consumer market means a great deal to global retailers and luxury houses. Just as these companies entered and built franchises in China in the last two decades, they are doing the same in India today. Apple recently opened its first store in New Dehli and its shifting some of its manufacturing operations to the country.

• Monetary Policy responses to uncertainties – The Bank of Canada (BoC) on Wednesday held its key overnight interest rate at 5%, after GDP declined by 0.2% Q2 2023. Inflation was 3.3% in July. Meanwhile, Bank of Japan has ruled out an early exit from negative interest rates, waiting for robust domestic demand and sustained wage growth.