By Mr Atedo N. A. Peterside CON, Chairman, Stanbic IBTC Holdings Plc, Chairman, Cadbury Nigeria Plc, Member, National Economic Management Team
06 February 2014
Honourable Minister for Investment, Trade and Industry, Mr Olusegun O. Aganga; Director General of the Securities & Exchange Commission (SEC), Ms Arunma Oteh OON; CEO The Nigerian Stock Exchange, Mr. Oscar Onyema; Valued Investors and Clients of the Stanbic IBTC Bank and Standard Bank Group; Ladies and Gentlemen of the press; good morning.
NIGERIA: TIME TO DELIVER
It is with great pleasure that I welcome you to the Nigeria leg of the fifth edition of the Standard Bank West Africa Investors’ Conference, which continues to be the conference of choice for investors seeking genuine insight into topical events in Nigeria.
As portfolio investors in frontier and emerging markets, many of you have been on this Nigerian journey with us for several years as we have navigated through the boom, bust and recovery of the Nigerian equity markets. The Nigerian equity market is likely to constitute c.20% of the MSCI frontier market index by the second quarter of this year, which is likely to increase its visibility further. We may well have also seen the conclusion of the GDP rebasing exercise by that time, which brings with it the possibility of Nigeria officially becoming the largest economy on the continent in the short to medium term. All this has occurred against the backdrop of various policy measures that have sought to position Nigeria for diversification of its economy and the unlocking of Nigeria’s vast economic potential.
This year’s conference has been themed Nigeria: Time to deliver. We at Stanbic IBTC Holdings plc believe that several efforts in both the public and private sector in recent years have ushered Nigeria to a point where execution is now the primary lever for the economic transformation we all desire to see. Despite the frustrating pace of some of the reforms, we can arguably take some comfort from Nigeria’s track record to date in instances when the private sector has been sufficiently enabled.
- The telecoms revolution is something to which we can all attest with 119m active GSM lines from a standing start 13 years ago. Nigeria, which we know has a colossal infrastructure deficit, also became self sufficient in cement in 2013 with 20.5mt produced domestically from just 5Mt in 2007, thanks to measures that have encouraged domestic production over imports.
- Our ports continue to undergo a quiet revolution, currently operating 24 hours a day after decades of operating between 9am and 5pm. We have significantly reduced the number of government agencies represented there leading to reduced clearing times from around 40 days to less than a week as government reforms continue to drive greater efficiency, a critical development particularly given Nigeria’s dependence on imports.
- Nigeria’s agricultural sector, the largest employer of labour, currently the largest component of GDP, a critical lever for economic diversification, job creation and more inclusive growth, is being repositioned to draw momentum from the private rather than the public sector and we anticipate significant economic and social dividends from this effort in coming years.
- The all important transformation of the Nigerian power sector is now underway with the privatization of most of the previously federal government owned assets now complete and the sector now poised for several waves of investment to drive the transformation. If this investment is successfully executed, it has the ability to dramatically reposition the prospects of the Nigerian economy, improving efficiency and competitiveness and lowering the cost of doing business. You will have the opportunity to interface with some of the beneficiaries of this power sector privatisation a little more closely on Thursday with a visit to Egbin, the largest of the recently privatized generating companies as well as engagement with the management of Egbin Generating Company as well as the management of Ikeja Distribution Company.
The urgency of successful execution in the aforementioned areas is only heightened by some of Nigeria’s most obvious failings in recent years. For all our extensive talk of economic diversification, we cannot deny that the oil & gas sector will remain critical to this economy for many years to come. Despite this, the legislature has been unable to amend and pass the long awaited Petroleum Industry Bill, which would help create a degree of visibility and certainty that should facilitate much needed FDI to the sector. This, among other things, has contributed to the output challenges experienced in the sector in recent times. Fortuitously, the adverse impact on government revenues through output constraints has been cushioned somewhat by continued pricing strength. The fact that the supply and demand dynamics for oil and gas are changing around the world, however slowly, only makes matters more urgent for this country. We also cannot ignore the fact that a segment of the North Eastern region of this country remains in the throes of a State of Emergency which crippled it economically and resulted in a decoupling of sorts from whatever positive momentum we have witnessed in the rest of the country.
Such challenges underscore the need to reduce the margin for error in the rest of the country. Therefore, we are grateful to have the Honourable Minister for Investment, Trade and Industry, Mr. Olusegun O. Aganga, with us this afternoon and we look forward to his insights on some of the many measures taken by his office to help harness these emergent opportunities in the Nigerian economy over the short, medium and long term. We are also delighted to have the DG, SEC, Ms Arunma Oteh, OON, with us to articulate the measures taken by SEC to make sure that the Nigerian Capital Markets continue to evolve in support of the growth and development of the real economy. We also have the CEO of the Nigerian Stock Exchange, Mr. Oscar Onyema, with us to shed more light on the readiness of the stock exchange to respond to the expected evolution of the real economy and the likely continued growth of interest in Nigeria from across the global investing community.
After lunch today, investors will begin the all important process of engaging with senior management of Nigerian corporates, which is the heart of the conference. However, we have sought to enrich your short stay in Nigeria by creating more relaxed opportunities for our guests to engage with corporate Nigeria. Later this evening, we will host you at the first of two evening dinners and you will have the opportunity to hear some remarks from Dr. Lazarus Angbazo, CEO of GE Nigeria, offering insight into GE’s perspective on the Nigerian power sector. You will also have an opportunity to engage with the CBN Governor Mallam Sanusi Lamido Sanusi, as he reflects on the key achievements and challenges of his tenure as governor and offers thoughts on the outlook for the banking sector and the economy as a whole.
Tomorrow evening, we look forward to hosting you at our conference gala night where the Executive Governor of Lagos State, His Excellency Mr. Babatunde Raji Fashola, SAN, will join us to offer his perspective on what it takes to execute effectively in the public sector.
We are confident that this few days of high quality interaction will enable you all to further deepen your understanding of our rapidly evolving market and the opportunities herein. Once again, I am delighted to welcome you to Standard Bank’s Fifth West African Investor Conference and to remind you that our market leading equities brokerage and research teams are on hand to guide and support you during your stay in Nigeria.