In Continuation of our Up Close And Personal Series Our Man Sola Rogers had a one on one Interview session with New “Super Eagles” Kid on the Block Babatunde Micheal: below are excerpts of the Interview
my name is Babatunde Micheal i am an indigene of Abeokuta, Ogun State, born in Maroko, Lagos but i grew up in Surulere Lagos. Somewhere around Lawanson.
Whats your Educational background?
I attended Itire Pry School. and from there i moved to Community Secondary School Mushin.
When did you Start playing Football.
I started at an early age, we had a lot of fields then in my part of Surulere. we played football in places like Agbebi, Adebayo, Oshiga and Fadairo playing grounds.
I was very active while growing up, i was the Class Captain and Games Prefect, i was part of the Athletics team and of course i played…
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Acha Leke, McKinsey Nigeria Director
There is no disguising the challenges that Nigeria is facing.
The world is well aware of the concerns around terrorism and Nigeria’s ongoing struggle with poverty.
However, there is another side to the Nigeria story that has been overshadowed both by the recent headlines and the persistence of outdated beliefs and assumptions about Nigeria’s economy. A new report from the McKinsey Global Institute (MGI) (http://www.mckinsey.com/mgi) and McKinsey’s Nigeria office (http://www.mckinsey.com), Nigeria’s renewal: Delivering inclusive growth in Africa’s largest economy, examines the country’s economic potential and finds that with the right reforms and investments, it can become one of the world’s leading economies by 2030.
Since 1999, Nigeria has proven to be both politically and economically stable and new data released this year show that it is now the largest economy in Africa, in addition to being the most populous.(1) The new data also show that Nigeria’s economy is far more diverse than previously understood. While the nation’s rich oil reserves remain a critical source of government income and exports, the entire resources sector today is only 14 percent of GDP. Agriculture and trade are larger and faster-growing. It is also not generally recognized that Nigerian productivity, which remains low, has been growing recently and now contributes more to GDP growth than does the expanding population.
“What people overlook is Nigeria’s extraordinary advantages for future growth, including a large consumer market, a strategic geographic location, and a young and highly entrepreneurial population,” says Reinaldo Fiorini, director and location manager of McKinsey’s Lagos office.
The results of Nigeria’s progress, however, have not been spread evenly across its economy. More than 40 percent of Nigerians live below the nation’s official poverty line and 130 million (74 percent of the population) live below the MGI Empowerment Line(2)—a level of income and access to vital services that provides a decent standard of living.
Chief reasons for Nigeria’s persistent poverty include low farm productivity due to limited access to fertilizer and mechanized tools, and inefficient markets. At the same time, urbanization has not raised incomes the way it has in other developing economies. This is because formal job creation and skill development in Nigeria’s cities have been weak, making productivity in urban sectors such as manufacturing lower than in agriculture.
Looking ahead, the report finds that Nigeria has the potential to expand its economy by roughly 7.1 percent per year through 2030, raising GDP to more than $1.6 trillion. This could make Nigeria a top-20 global economy—with higher GDP than the Netherlands, Thailand, or Malaysia in 2030.What’s more a large consuming class is developing in Nigeria, with potentially as many as 160 million members by 2030, more than the current populations of France and Germany combined. This upside scenario is based on a bottom-up analysis of the potential for five major sectors of the Nigerian economy:
– Trade. Based on an expanding consumer class in Nigeria, MGI projects that consumption could more than triple, rising from $388 billion a year today to $1.4 trillion a year in 2030, an annual increase of about 8 percent. This would make trade the largest sector of the economy and provides a particularly good opportunity for makers of packaged foods and fast-moving consumer items such as juices, which could grow by more than 10 percent per year.
– Agriculture. Improvements on several fronts can help raise both the volume and value of Nigerian agricultural production in the next 15 years. The sector, which is now the largest at 22 percent of GDP, could more than double from $112 billion per year in 2013 to $263 billion by 2030. This would require raising yields through greater use of fertiliser, seeds, and mechanized implements; shifting the crop mix to more valuable crops; increasing the amount of land under cultivation; reducing post-harvest losses; and raising more livestock and increasing the output of forestry and fisheries.
– Infrastructure. On average, the value of a nation’s core infrastructure—roads, railways, ports, airports, the electrical system—is about 70 percent of GDP; in Nigeria, core infrastructure is estimated to be about 35 – 40 percent of GDP. It has one-seventh the roads per kilometer as India. On a per capita basis, Nigeria has one-third the residential buildings of Indonesia and one-sixth of the commercial space. Between core infrastructure and real estate, total infrastructure investments in Nigeria could reach $1.5 trillion between 2014 and 2030. This would not only make infrastructure building a major contributor to GDP, but also an enabler of growth across the economy.
– Manufacturing. Manufacturing in Nigeria remains at a relatively early stage of development, contributing $35 billion, or about 7 percent of GDP, in 2013. It has, however, achieved strong growth recently, with output rising by 13 percent per year from 2010 to 2013. Based on current trends, this could yield a four-fold increase in manufacturing output by 2030, to $144 billion per year (an annual growth rate of 8.7 percent). Local processing (packaged foods, for example) and commodities would continue to be the largest manufacturing industries in Nigeria.
– Oil and gas. While the oil and gas sector is expected to grow by 2.3 percent per year at best, its success is still vital to the Nigerian economy. With the right reforms, liquids production could increase from 2.35 million barrels a day on average to a new high of 3.13 million barrels a day by 2030, contributing $22 billion to GDP by 2030. Natural gas output could grow by as much as 6 percent per year, adding $13 billion to GDP by 2030. In total, the oil and gas sector has the potential to contribute $108 billion per year by 2030, up from $73 billion in 2013. However, this assumes that the sector is successful in dealing with current obstacles such as security and can attract fresh investment.
If Nigeria can better link growth to poverty reduction, 70 million citizens could be lifted out of poverty and 120 million could have the resources to reach the Empowerment Line. We estimate that, under the most favorable circumstances, for each percent of GDP growth, poverty would be reduced by 0.20 percent, a rate that is between the ratios of Brazil (0.15) and Ghana (0.25). Tying growth to rising living standards across the economy will depend on raising farm incomes and creating more formal urban jobs. It will also require actions by the government—including reconsidering tariffs that raise the cost of imported food and re-prioritizing government spending needed to programmes that lead to economic empowerment.
While government has put in place clear strategies and plans for various sectors, the most important step that government can take now is to improve its ability to deliver its programs and services. These range from “safety-net” support payments to the poor, to health care, education and infrastructure. Nigeria trails peer economies on metrics such as child mortality and literacy. Basic literacy among 15- to24-year-olds—a crucial indicator for potential economic success—is just 66 percent, compared with 99 percent in South Africa, for example.
A critical initiative for Nigeria, then, will be to adopt the best practices that have been well established around the world for improving delivery of government services. These include selecting strong, empowered leadership, raising pressure for government departments and agencies to perform, using “delivery units” (dedicated multi-disciplinary teams that can work across bureaucracies), and collaborating with the private sector and other stakeholders.
Nigeria can also capitalize on several favorable trends such as rising demand from emerging economies, growing global demand for resources, and the spread of the digital economy. Nigeria also has a young and rapidly-growing population and an advantageous geographic location in West Africa, which enables trade within the continent and with Europe and North and South America.
“By capitalizing on its strengths and positioning itself to take advantage of emerging global trends, Nigeria could potentially triple its GDP by 2030,” says Acha Leke, a director in McKinsey’s Nigeria office.
“This adds up to a huge opportunity for inclusive growth that should not be missed.”
Bloomberg News by Chris Kay
July 16, 2014
Nigerian President Goodluck Jonathan requested permission from parliament to borrow $1 billion to help equip the armed forces in its fight against the Islamist-insurgent group Boko Haram.
“I would like to bring to your attention the urgent need to upgrade the equipment, training and logistics of our armed forces and security services to enable them to more forcefully confront this serious threat,” Jonathan said in a letter dated July 15 and read out today in the capital, Abuja, by Senate President David Mark. The $1 billion may be sourced from other governments, said Jonathan.
Though $6 billion was allocated to defense and security this year’s budget, Nigeria’s government is struggling to curtail a five-year-old insurgency by Boko Haram militants, who are seeking to impose Islamic law on Africa’s biggest economy and most populous nation of about 170 million people.
Boko Haram, whose name means “western education is a sin” in the local Hausa language, drew global outrage with its April 14 abduction of 276 schoolgirls from their dormitories in the northeastern town of Chibok. The group has killed at least 2,053 civilians in about 95 attacks in the first six months of the year, according to New York-based Human Rights Watch.
Reuters by Chijioke Ohuocha
July 15, 2014
(Reuters) – Nigeria forecasts its economy will grow by at least 6.2 percent this year following a solid first-quarter performance, the statistics office said on Tuesday.
That would be faster than growth last year, which was revised down to 5.5 percent last week.
Nigeria overtook South Africa as Africa’s largest economy in April, after a rebasing of its calculation almost doubled its gross domestic product to more than $500 billion.
In the first quarter of 2014, the Nigerian economy also expanded by 6.2 percent from a year earlier, driven by its services sector, which offset a drop in oil production, the statistics office said on Tuesday.
“The first quarter is always the quarter with the slowest growth … because it’s the beginning of the planting season and consumers tend to spend less,” Director General of the National Bureau of Statistics, Yemi Kale, told Reuters.
The first-quarter performance was slightly slower than a 6.8 percent annual expansion in the final three months of 2013.
The services sector, which accounts for half of GDP, expanded by 7.2 percent in January-March from a year earlier, decelerating from an 8.7 percent rise in the previous quarter.
Crude production fell to 2.26 million barrels a day in the first quarter, from 2.29 million barrels per day a year ago, due to pipeline shutdowns and oil theft.
Most governments overhaul GDP calculations every few years to reflect changes in output, but Nigeria had not done so since 1990, so sectors such as e-commerce, mobile phones and its prolific “Nollywood” film industry, had to be factored in.
July 15, 2014
President Goodluck Jonathan said Nigeria has no business being a net importer of food.
The president, who spoke on Monday at the commissioning of Olam Rice Mill in Rukubi Local Government Area of Nassarawa State, said, “Nigeria’s position as the largest economy in Africa is not enough unless we attain food sufficiency target of 2015, and even within the next 5 years begin exportation of rice and other staple food.”
He lauded Olam Farms for growing the rural economy with investment worth over $72 million that has 1,000 workers mostly rural women and youths in Nassarawa State.
Jonathan, who expressed believe that Nigeria would in the next five years begin rice exportation given the rice policy adopted by the present administration said, “Olam investment of over $72 million in Rukubi Doma Local Government Area of Nassarawa is a mark of confidence in the rice transformation agenda of the present administration.”
Jonathan afterwards designated the farm a staple crop processing zone centre to drive more inclusive growth and growing of the rural economy which would absorb more youths and women in the agribusiness.
According to Jonathan, “Olam Farms is strategic in growing the rural economy and we would factor into it the development of staple crop processing zone, which would take care of provision of rural infrastructure for agribusiness.
“The staple crop processing zone seeks to grow the rural economy by providing the basic facilities required in boosting the rural economy.
“By growing the rural economy with greater policy articulation, we would surpass our food import target. We have achieved 90 percent of 20 million metric tons in 2015.
“From a total food import of N1.1 trillion in 2009, we have reduced our food import bill to N684 billion in 2013. We are progressing in the right order”, he said.
Reuters Africa by Chijioke Ohuocha
July 9, 2014
LAGOS (Reuters) – Nigeria’s ARM Infrastructure is close to raising $250 million in the country’s first infrastructure fund, to invest in transport, energy and utility sectors across West Africa, with much of the money coming from pension funds, its managing director said.
ARM said the fund was expected to close by mid-August and was at the documentation stage with various investors including some Nigerian pension funds and other institutional investors such as the African Development Bank, Opuiyo Oforiokuma said.
Nigeria, Africa’s most populous nation and home to 170 million people, requires around $50 billion a year for the next decade to develop badly needed infrastructure, especially for power, roads and water, to help boost economic growth.
Nigeria’s pension assets have grown to $25 billion in 2014, from under $4 billion seven years ago, as the government targets schemes to try to encourage domestic savings. But the funds have traditionally invested in debt and equity portfolios.
“We are setting up a new infrastructure fund … (The) target fund size is $250 million. This will be the first time pension funds are actually going to invest in infrastructure,” Oforiokuma said on the sidelines of a pension funds conference in Abuja.
ARM is a financial services firm with interests in real estate, insurance and capital markets. It developed Nigeria’s first toll road under a private-public partnership in the commercial hub of Lagos.
The fund will target equity stakes in airport and sea port projects across West Africa, and invest for a period of 12 years, targeting investment returns of 18-20 percent over the period.
“We don’t have basic roads, power supply and water. All of these have significant consequences for the economy, the social well being (of Nigeria),” Oforiokuma said, adding that Nigeria generates around 4,000 megawatts of electricity, compared with Brazil, which generates 100,000 megawatts.
Nigeria is the United States’ largest trading partner in sub-Saharan Africa, largely due to the high level of petroleum imports from Nigeria, which supply 8% of U.S. oil imports–nearly half of Nigeria’s daily oil production. Nigeria is the fifth-largest exporter of oil to the United States. Two-way trade in 2010 was valued at more than $34 billion, a 51% increase over 2009, largely due to the recovery in the international price of crude oil. Led by cereals (wheat and rice), motor vehicles, petroleum products, and machinery, U.S. goods exports to Nigeria in 2010 were worth more than $4 billion. In 2010, U.S. imports from Nigeria were over $30 billion, consisting overwhelmingly of crude oil. Cocoa, bauxite and aluminum, tobacco and waxes, rubber, and grains constituted about $73 million of U.S. imports from Nigeria in 2010. The U.S. trade deficit with Nigeria in 2010 was $26 billion. Nigeria was the 13th-largest trading partner for the United States in 2010. The United States is Nigeria’s largest trading partner after the United Kingdom. Although the trade balance overwhelmingly favors Nigeria, thanks to oil exports, a large portion of U.S. exports to Nigeria is believed to enter the country outside of the Nigerian Government’s official statistics, due to importers seeking to avoid Nigeria’s tariffs and regulations.
The United States is the largest foreign investor in Nigeria. The stock of U.S. foreign direct investment (FDI) in Nigeria in 2010 was $5.2 billion, down slightly from $5.4 billion in 2009. U.S. FDI in Nigeria is concentrated largely in the petroleum/mining and wholesale trade sectors. ExxonMobil and Chevron are the two largest U.S. corporate players in offshore oil and gas production.
In March 2009, the United States and Nigeria met under the existing Trade and Investment Framework Agreement (TIFA) to advance the ongoing work program and to discuss improvements in Nigerian trade policies and market access. Among the topics discussed were cooperation in the World Trade Organization (WTO), market access, export diversification, intellectual property protection and enforcement, commercial issues, trade capacity building and technical assistance, infrastructure, and investment issues.
Dominated by Oil
The oil boom of the 1970s led Nigeria to neglect its strong agricultural and light manufacturing bases in favor of an unhealthy dependence on crude oil. Oil and gas exports account for more than 95% of export earnings and over 80% of federal government revenue. New oil wealth and the concurrent decline of other economic sectors fueled massive migration to the cities and led to increasingly widespread poverty, especially in rural areas. A collapse of basic infrastructure and social services since the early 1980s accompanied this trend. By 2002 Nigeria’s per capita income had plunged to about one-quarter of its mid-1970s high, below the level at independence. Along with the endemic malaise of Nigeria’s non-oil sectors, the economy continues to witness massive growth of “informal sector” economic activities, estimated by some to be as high as 75% of the total economy.
Nigeria’s proven oil reserves are estimated to be 36 billion barrels; natural gas reserves are well over 100 trillion cubic feet. Nigeria is a member of the Organization of Petroleum Exporting Countries (OPEC), and its current crude oil production averages around 1.6 million barrels per day. Poor corporate relations with indigenous communities, vandalism of oil infrastructure, severe ecological damage, and personal security problems throughout the Niger Delta oil-producing region continue to plague Nigeria’s oil sector. Multinational oil companies have launched their own community development programs in an attempt to improve their relations with host communities. The Niger Delta Development Commission (NDDC) was created to help catalyze economic and social development in the region, but it is widely perceived to be ineffective and opaque. Significant exports of liquefied natural gas started in late 1999 and are slated to expand as Nigeria seeks to eliminate gas flaring.
Nigeria inspects all imports on arrival, rather than at ports of origin; as a result, about 95% of containers are physically examined. This procedure, along with Nigeria’s uneven application of import and labeling regulations and poor infrastructure, complicates the movement of goods through Nigeria’s notoriously congested ports and increases the cost of doing business. The government has promoted foreign investment and encouraged reforms in these and other areas, but the investment climate remains daunting to all but the most determined.
Agriculture has suffered from years of mismanagement, inconsistent and poorly conceived government policies, and the lack of basic infrastructure. Still, the sector accounts for about 40% of GDP and two-thirds of employment. Agriculture provides a significant fraction (approximately 10%) of non-oil growth. Poultry and cocoa are just two areas where production is not keeping pace with domestic or international demand. Fisheries also have great potential, but are poorly managed. Most critical for the country’s future, Nigeria’s land tenure system does not encourage long-term investment in technology or modern production methods and does not inspire the availability of rural credit.
Oil dependency, and the allure it generated of great wealth through government contracts, spawned other economic distortions. The country’s high propensity to import means roughly 80% of government expenditures is recycled into foreign exchange. Cheap consumer imports, resulting from an overvalued Naira, coupled with excessively high domestic production costs due in part to erratic electricity and fuel supply, have pushed down industrial capacity utilization to less than 30%. Many more Nigerian factories would have closed except for relatively low labor costs (10%-15%). Domestic manufacturers, especially pharmaceuticals and textiles, have lost their ability to compete in traditional regional markets; however, there are signs that some manufacturers have begun to address their competitiveness.
Arguably Nigeria’s biggest macroeconomic achievement has been the sharp reduction in its external debt, which declined from 36% of GDP in 2004 to less than 4% of GDP in 2007. In October 2005, the International Monetary Fund (IMF) approved its first-ever Policy Support Instrument for Nigeria. In December 2005, the United States and seven other Paris Club nations signed debt reduction agreements with Nigeria for $18 billion in debt reduction, with the proviso that Nigeria pay back its remaining $12 billion in debt by March 2006. The United States was one of the smaller creditors, and received about $356 million from Nigeria in return for over $600 million of debt reduction. Merrill Lynch won the right to take on $509 million of Nigeria’s promissory debt (accrued since 1984) to the “London Club” of private creditors. This arrangement saved Nigeria about $34 million over a simple prepayment of the notes. Nigeria faces intense pressure to accept multibillion dollar loans for railroads, power plants, roads, and other infrastructure. Expanded government spending also has led to upward pressure on consumer prices. However, a drop in world oil prices and the global financial crisis prompted the federal government to tap its foreign exchange reserves, which consequently decreased from $60 billion to $48 billion, in order to meet pressing budget demands from cash-strapped state and local governmental bodies.
In 2009, Nigeria took significant steps to strengthen the banking sector. After completing financial audits of all 24 national banks, the Central Bank found 10 of the banks to be undercapitalized or suffering from illiquidity. The Central Bank replaced many of the failing banks’ management teams and pumped nearly $6 billion into the sector. In addition, the Central Bank published the names of significant loan defaulters, which included many prominent political and business figures. These reforms came on top of a major banking overhaul in 2006 that reduced the number of banks from 89 to 24, increased a bank’s minimal capital requirement to $190 million, and required banks to hold 40% of their deposits in liquid assets. Retail, corporate, and Internet banking are seen as intensively competitive, and the home loan market is considered moderately competitive. Less than 10% of lending is believed to be made to individuals. About 65% of the economically active population is serviced by the informal financial sector, e.g., microfinance institutions, moneylenders, friends, relatives, and credit unions. Since 1999, the Nigerian Stock Exchange has enjoyed strong performance, although equity as a means to foster corporate growth remains underutilized by Nigeria’s private sector. Credit is largely inaccessible to rural communities, the real estate sector and small businesses receive a low level of lending, and the credit card market remains at an early stage of development.
Nigeria’s publicly owned transportation infrastructure is a major constraint to economic development. Principal ports are at Lagos (Apapa and Tin Can Island), Port Harcourt, and Calabar. Docking fees for freighters are among the highest in the world. Of the 80,500 kilometers (50,000 mi.) of roads, more than 15,000 kilometers (10,000 mi.) are officially paved, but many remain in poor shape. Extensive road repairs and new construction activities are gradually being implemented as state governments, in particular, spend their portions of enhanced government revenue allocations. The government implementation of 100% destination inspection of all goods entering Nigeria has resulted in long delays in clearing goods for importers and created new sources of corruption, since the ports lack adequate facilities to carry out the inspection. Four of Nigeria’s airports–Lagos, Kano, Port Harcourt and Abuja–currently receive international flights. There are several domestic private Nigerian carriers, and air service among Nigeria’s cities is generally dependable. The maintenance culture of Nigeria’s domestic airlines is not up to international standards.
Nigeria has made progress toward establishing a market-based economy. In recent years, it privatized the only government-owned petrochemical company and sold its interest in eight oil service companies. The Yar’Adua administration paid especially close attention to due process by overturning or reviewing a number of suspect contracts awarded by its predecessor. Nigeria’s implementation of non-tariff barriers has been arbitrary and uneven and continues to violate WTO prohibitions against trade bans. However, Nigeria has made some progress in its implementation of the Economic Community of West African States (ECOWAS) Common External Tariff by removing some textile items from its list of prohibited imports in 2006. In a September 2008 breakthrough, Nigeria decreased the number of banned import categories from 44 to 26 items, reduced a number of tariffs, and reiterated its commitment to harmonizing its tariff regime with its neighbors. Enforcement of criminal penalties against intellectual property rights (IPR) violations is weak, and firms that are successfully countering IPR piracy have generally done so through civil court cases. The government has created an intellectual property commission. Rules concerning sanitary and phytosanitary standards, testing, and labeling are well defined, but bureaucratic hurdles slow trade opportunities. The government is generally supportive of biotechnology cooperation, although legislation governing biosafety is sparse at best.
A co-member of the International Advisory Group of the Extractive Industries Transparency Initiative (EITI) initiated by the G8, Nigeria’s federal government is playing an important role in having volunteered to pilot the new disclosure and validation methodologies. It has completed a comprehensive audit of oil sector payments and government revenues from 1999-2004. The federal government has passed implementing legislation on public procurement and fiscal transparency, but now it must ensure that Nigeria’s 36 states pass and implement similar bills. There is a perception that government contracting remains rife with corruption and kickbacks, and that many state and local officials continue to steal public monies outright.
Nigeria’s economic team had enjoyed an excellent reputation in the international community. It produced an encouraging body of work, notably budgets described as “prudent and responsible” by the IMF and a detailed economic reform blueprint, the National Economic Empowerment and Development Strategy (NEEDS). Other positive developments included: (1) government efforts to deregulate fuel prices; (2) Nigeria’s participation in the EITI and commitment to the G8 Anticorruption/Transparency Initiative; (3) creation of what had been an effective Economic and Financial Crimes Commission (EFCC), which until 2008 had earned 150 convictions and recovered over $5 billion in mishandled funds; and (4) development of several governmental offices to better monitor official revenues and expenditures.
Nigeria is not on track to meet its Millennium Development Goals because of a lack of policy coordination between the federal, state, and local governments, a lack of funding commitments at the state and local levels; and a lack of available staff to implement and monitor projects on health, poverty, and education.
Although Nigeria must grapple with its decaying infrastructure and a poor regulatory environment, the country possesses many positive attributes for carefully targeted investment and will expand as both a regional and international market player. Profitable niche markets outside the energy sector, such as specialized telecommunication providers, have developed under the government’s reform program. There is a growing Nigerian consensus that foreign investment is essential to realizing Nigeria’s vast potential. Companies interested in long-term investment and joint ventures, especially those that use locally available raw materials, will find opportunities in the large national market. However, to improve prospects for success, potential investors must educate themselves extensively on local conditions and business practices, establish a local presence, and choose their partners carefully. The Nigerian Government is keenly aware that sustaining democratic principles, enhancing security for life and property, and rebuilding and maintaining infrastructure are necessary for the country to attract foreign investment.
BERLIN, July 1 (Reuters) – Boko Haram’s insurgency will slow Nigeria’s economy again this year, knocking half a percentage point off growth like last year, the finance minister said on Tuesday, adding that her 6.75 percent 2014 growth forecast took this into account.
Ngozi Okonjo-Iweala told Reuters that while the violence in the northeast might put off some potential foreign investors, those who were in Nigeria for the long term seemed to be holding their nerve, as did portfolio investors in its government debt.
“We are expecting about 6.75 (percent growth in 2014) and we have accounted for the impact of the insurgency which we will think will take half a percentage point off GDP growth,” she said in an interview during a visit to Berlin.
Nigeria overtook South Africa as the continent’s biggest economy this year, following a rebasing calculation that almost doubled its gross domestic product. The economy grew about 6.4 percent last year, the minister said, with the Islamist rebels having most economic impact on agriculture in the northeast.
The economist and former World Bank vice-president said her talks with German Finance Minister Wolfgang Schaeuble emphasised “our strong fundamentals despite the challenges that we face”.
She sought his support for the creation of a new Nigerian development bank to improve financing to small and medium-sized private enterprises which could become an “engine for growth” as the country seeks to diversify its economy away from oil.
Rebasing GDP had revealed hidden strength in sectors such as services and telecoms, which had “gone to 0.7 percent of GDP to 7 percent” and was seeing strong growth, said the minister.
She said the creation of a secondary mortgage market could help kick off growth in housing, another sector that she hoped could “help to make up for some of the lost growth”.
The minister cited government bonds yields of 4-5 percent as evidence financial investors were not panicking: “The prices are quite reasonable which is an objective assessment that investors may be looking at the long-term underlying fundamentals of the economy, which are strong.”
Some potential foreign direct investment might be affected negatively by the Islamist insurgency, she said, but existing investors – especially those from emerging powers such as South Africa, China and Brazil – were proving resilient.
“Part of our turbulence may also be linked to the upcoming election (in 2015),” she said. “Whenever we have elections there is always some increase in violence and disturbance.”
Boosting the regional economy is part of President Goodluck Jonathan’s response alongside counter-insurgency efforts and attempts at dialogue with Boko Haram, which was hampered by the fact that “they have not articulated any political demands”.
She was due to meet former British prime minister Gordon Brown in London on Wednesday to discuss a “safe schools initiative” aimed at avoiding a repeat of the still-unresolved kidnapping of more than 200 Nigerian schoolgirls by Boko Haram in April.
The hope is to raise $100 million for infrastructure such as solar-powered lighting, sanitary facilities, walls or alarm systems and to coordinate with local communities to make girl students especially “feel safer”, the minister said. (Editing by Alison Williams)
By Simnikiwe Mzekandaba
Nigeria holds the key for Microsoft’s future growth in Africa, according to the company’s former South African managing director Mteto Nyati.
Nyati made this statement at a media briefing on Tuesday, when he announced his promotion as the general manager for Microsoft’s Middle East and Africa (MEA) emerging regions.
For the past six years, Nyati led Microsoft South Africa as the unit’s managing director. His promotion to an emerging region role means that is expected to oversee countries such as Nigeria, Bahrain, Iraq, Libya, Tunisia, Lebanon and Jordan.
At the briefing, Nyati explained that Microsoft expects its African business to double in size over the next four to five years, but he declined to disclose current revenues.
“Nigeria being a country that has the biggest potential for us,” said Nyati.
Nigeria has come more sharply into Microsoft’s focus this year.
The software giant has appointed South African IT veteran Kabelo Makwane as Microsoft Nigeria country manager.
Meanwhile, Nigeria has this month joined South Africa and Egypt in being self-sufficient business units that manage their own resources.
Earlier this year, Makwane told ITWeb Africa that Nigerian revenues are six times smaller than that of the South African office.
But Nigeria has a booming economy that has recorded over 6% annual growth over the last five years, and a population that surpasses 160 million people.
Nigeria also overtook South Africa this year as the continent’s biggest economy owing to a gross domestic product (GDP) recalculation.
More broadly speaking, Microsoft doesn’t have a physical presence in all 35 countries in the MEA region.
However, that could change, Nyati said.
“We are looking for growth, we are looking at making investments in these areas and looking at helping country leaders of these territories to drive growth for the Microsoft corporation.
“Our view about these countries is that we are seeing the opportunities in the long term, ” he said.
Nyati also announced that the South African operations is being led by the company’s former chief operating officer, Zoaib Hoosen.
Hoosen has been with Microsoft SA for the past three years.
Going forward Microsoft SA intends focus on skills and entrepreneurship to create jobs, affordable access and devices, Hoosen told the audience.
“I am really excited about the potential and through this how we will be able to create jobs and really enable South Africa to drive our economic development and become more globally competitive. I look forward to the new challenge,” he said.