What Does the NIPC Do?

In the previous post emerging markets the Ashay Mervyn blog provided an overview of what the NIPC (Nigerian Investment Promotion Commission) is all about. Here and in the attached PDF document we will now explore in more detail the work of the Commission and the various ways in which it supports investors and markets attractive investment opportunities within the country.

Promotional Activity

The NIPC participates in a range of promotional activities to market investment opportunities and to stimulate investors in a variety of ways. These include exhibitions, seminars and conferences and using effective promotional means to promote investments both within the country and overseas.

Investment Support Services

The NIPC supports all investors pre and post-investment as well as during the lifecycle of each investment. This support includes monitoring and offering guidance and information, effectively co-ordinating investments to boost returns, supporting and initiating measures that enhance the overall investment climate of the country, acting as a liaison between private investors and organisations such as the government, lending institutes and other authorities and providing and disseminating up-to-the-minute information for investors in terms of incentives. The NIPC also registers all businesses to which the NIPC Act legislation applies and keeps records of these enterprises.

Evaluation and Sourcing

As a one-stop-shop for Nigerian investment, the NIPC performs a range of evaluation services to ensure investors are kept informed of all relevant information. This includes identifying specific projects and matching them to the investor profile best suited, inviting those investors to participate. It also includes the collection of information regarding investment opportunities and potential sources of capital as well as advising on the suitability, chance or availability of partners for any joint-venture projects. The impact of the NIPC itself is also evaluated and additional remedies and appropriate incentives are suggested to boost investment in Nigeria.

Cross-Sector Investment

Nigeria is the 8th largest exporter and 12th largest producer of oil and petroleum products in the world and has long attracted foreign investment within the oil sector. The NIPC is now working to diversify overseas investment into the critical non-oil sector. Industries that the NIPC work with include agriculture, communications, financial services, manufacturing, mining, oil and gas, pharmaceuticals, power, privatisation, solid minerals, textile and apparels and tourism. Natural resources within Nigeria are plentiful and include minerals such as coal and tin, agricultural products such as sugar cane, palm oil and groundnuts and arable land as well as one of the largest proven reserves of natural gas and petroleum.

The services of the NIPC are designed to smooth the pathway for investors in a wide variety of ways and to offer a fully co-ordinated and streamlined investment journey with full support every step of the way.

What is the Nigerian Investment Promotion Commission?

The Nigerian Investment Promotion Commission was established in 1995 by the NIPC Act No.16 as a Federal Government Agency for the promotion, co-ordination and monitoring of all investments within the country of Nigeria. As shown in the attached infographic and short video, the NIPC provides a full range of services for local and international investors in Nigeria, including business entry permit granting, authorisations, licences and attractive incentives all in one place. The NIPC smooths the pathway into Nigeria for global investors and provides services that are transparent, streamlined and fully co-ordinated to meet the individual needs of each investor.

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As a Private Management and Investment Fundraising Consultant focusing on the region of West Africa, Ashay Mervyn understands the need for organisations like the NIPC. Experienced trader Ashay Mervyn also works as the Head of Region for Emerging Markets in the private sector, where he is responsible for investment and currency flows, leveraged trades and liquidity within all emerging markets including Nigeria. The Executive Director of the NIPC recently called on all investors within Nigeria both local and overseas to ensure their interests were registered with the NIPC in order to protect those investments and discover all the relevant information on how to invest in Nigeria.

The country has improved drastically in terms of access to credit ranking, moving up from position 125 in 2014 to position 52 in 2015. The recently instated NIPC Diamond-Taking beyond Oil investment strategy is aimed at promoting the diversification of investment beyond the oil and infrastructure sectors in order to both increase exports and decrease imports. The NIPC promotes and facilitates a wide range of private investment within the country, providing long-term support before, during and after investment maintaining responsibility for the creation of a supportive, friendly and conducive business environment. In the post to follow, we will be looking in more detail at the various ways the NIPC markets the attractions of investment in Nigeria and supports private investors throughout their investment journey.

Barclays Investment Report June 2015

Investments in emerging markets were predicted to be a bigger growth area than in developed countries such as the US in 2015, according to a report from Barclays issued in June of that year. The forecast according to the report expected economies in emerging markets, Japan and Europe (ex-UK) to grow by 12% or more over the second half of 2015, while the US was predicted growth of just 7% over the same period.

As explored in the attached PDF document, the imminent approval in Japan of the TPP (Trans-Pacific Partnership) was seen as an added bonus for Japanese stocks. In light of the findings, Barclays added emerging markets to its overweight stock holdings alongside Japan and Europe. For traders and investors such as Ashay Mervyn, focusing on emerging market investments can expect to see higher returns on those investments than on others in US stocks. While emerging market investments remain volatile, the high returns long-term coupled with attractive dividend yields in the short to medium term compensate for that volatility. Factors underpinning the strong economic growth of emerging markets forecast include lower energy costs, competitive currencies and aggressive easing of monetary policy. While this growth was not expected to be universal certain emerging markets, such as India and Indonesia in particular, were expected to see robust growth.

Of the three countries (Russia, Brazil and Greece) on the iShares MSCI Emerging Markets ETF (EEM) in correction territory, Russia was expected to see recession slowing down economic growth and Brazil was expected to bottom soon, while fallout from the Greek exit or default from the Eurozone was predicted to bring more opportunities for investors to buy European stocks. The weaker yen and euro combined with ease of monetary policy at both the Bank of Japan and the European Central Bank and signs that the economy in both regions was set to improve made those territories equally attractive for investors as emerging markets. Barclays stated in their report that the TPP was ‘an under-appreciated positive for Japan’ and analysts recommended focus on cyclical assets like financial over sectors like consumer staples.

Check back soon for more posts on investments and emerging markets

Why Choose Emerging Markets for Investment?

Following on from the last post on the blog, which discussed Barclays’ predictions for emerging market investment in the second half of 2015, this article explores some of the reasons why traders like Ashay Mervyn are suggesting investors consider emerging markets.

While of course not all emerging markets will perform equally as well, Barclays forecast robust growth for India and Indonesia in particular. Emerging market stocks are typically more volatile, but for the long-term investor should offer higher returns that easily compensate for that volatility. Many emerging market stocks are currently offering attractive dividend yields, making longer-term investment even more attractive. Active management investors operating in the emerging markets arena have a wealth of options to choose from and, as opposed to indexing, are not as dominated by a small percentage of large stocks dictating the performance of the index. International Monetary Fund estimates forecast growth in emerging market economies to be two to three times faster than that in developed economies such as the US and historically when economic growth is higher, so are corporate profits.

The following post, and the last in the series, will look more closely at the Barclays June 2015 Investment Report and what those forecasts mean for global investors.

Investment in Emerging Markets Predicted to Improve

In a report issued by Barclays in June 2015 it was predicted that stocks in emerging markets would perform better than those within the US market. Barclays pinpointed aggressive monetary policy easing measures, lower energy costs and more competitive currencies as factors that combine to form a solid underpinning for growth. As can be seen in the attached infographic, the bank expected to see growth of 12% or higher in emerging markets, Europe and Japan while the forecast growth for the United States was just 7%. These forecasts will no doubt be of interest to existing and prospective emerging markets investors and traders. As an emerging market assets trader, Ashay Mervyn is responsible for investment flows into China and the Middle East, Sub-Saharan Africa and Latin America. Alongside this role Ashay Mervyn is also self-employed as a private management and investment fund consultant focusing on transactions and business projects in West Africa.

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While emerging market investments are often seen as volatile, taking a longer term look both forwards and backwards indicates strong potential. The MSCI Emerging Market ETF had of October this year gained 172% since being launched in 2003, while the S&P 500 saw growth of 96% over the same period. With valuations on emerging market stocks reaching historically low levels and with the potential for growth appearing much greater than that in developed countries, emerging market investment is becoming an increasingly attractive proposition for many. In the video post to follow, the Ashay Mervyn blog will feature discussions as to why investors should give emerging markets serious consideration.