Tuesday, September 20, 2016 9.18AM / Melissa Cook
African Sunrise Insight has just released its latest 87-page Insight: Nigeria: Finding Gems in the Rough.
· Stay the Course. We are not blind to Nigeria’s problems. Policy mistakes, currency and oil revenue collapse, lack of electricity, and corruption are well known. We strongly disagree with those who state that “the Nigeria growth story is over.” In this report, we outline findings from our late-July trip to Nigeria. We spoke with executives and policymakers about strategies and opportunities happening now.
· Power: Lights Out, But Not Forever. Vandalism of gas infrastructure exacerbates system cash-flow shortfalls. The signing of 15 solar power purchase agreements and a sensible plan to attract investment and diversify the fuel mix give us hope that electricity availability will improve. Problems are known, and solutions well under way. In this report: detailed year-by-year forecasts for fuel mix, installed power and electricity output from the Nigerian Ministry of Power.
· Agriculture: Green Shoots. The push to produce rice, sugar, and palm locally is bearing fruit. Agribusiness-sector growth should boost jobs growth and consumption, in our view, while reducing forex outflows.
· Banks: Stabilization Is Key. Non-performing loans have risen, banks are not making many fresh loans, and balance-sheet preservation is top of mind. We expect further write-downs but not a sector collapse.
· Economic Complexity and Diversification. We spoke to the Lagos CFA Society about this essential topic, tapping knowledge from the Atlas of Economic Complexity and the IMF—slides inside.
· Some Strong South African Firms. In late June, we met several South African firms in healthcare, logistics, and infrastructure—these companies appear to be on the right track in sub-Saharan Africa.