Nigeria's agriculture sector has attracted substantial interest from foreign investors during 2009.
The Ganmo substation in Kwara State. The year has seen many state governments announcing new investments in power generation and distribution.
The past year has been a rollercoaster ride for most economies as the global economic slump took its toll. Although many believed that Nigeria and other African markets would be unaffected by the crisis, it proved not to be the case. In spite of the economic difficulties, Nigeria however still managed to attract significant foreign investment to its non-oil sectors in 2009. TradeInvestNigeria gives an overview of the major investment news stories of the year.
Agriculture and agri-processing
Agriculture is widely seen as the sector most likely to lead the way as Nigeria tries to diversify its oil-dominated economy. Foreign players are increasingly eager to be part of any agrarian revolution.
During 2009, a South African company, Wise Design International Limited announced plans to build a sugar factory in Gombe State situated in north-east Nigeria. Williams Bawise, group managing director, said the firm will grow 40,000 hectares of sugar cane to supply the proposed sugar factory. Nigeria's Dangote Group, also looking to capitalise on the short supply of sugar in the country, has revealed it intends to add an extra plant to the existing Savannah Sugar Company which will give the facility a total capacity of between 100,000 and 150,000 tonnes of sugar a year.
Early in June, Notore Chemical Industries Limited and the Cross River State Government signed a memorandum of understanding to build Africa's largest rice mill. The mill will have a capacity of 255,000 tonnes and the project will also include a 20,000 hectare rice farm in the state. A state-wide outgrowers buy-back scheme is expected to cater for extra rice that the mill would require.
Nigeria's agriculture sector is also starting to see more and more investment from Chinese companies. In October the Osun State government signed a memorandum of understanding with Qianchan Trading Company Limited to resuscitate a cocoa processing industry at Ede.
The year also saw Nasarawa State, situated in central Nigeria, launching itself into the international trade market with the formal introduction of its yam into the United Kingdom and other European Union markets. Governor Aliyu Akwe Doma stated this development came after three successful export trials of the yam to the United Kingdom during which the product was well received in the market.
In the area of livestock production, African Chicken Farm signed a memorandum of understanding with the Kwara State Government to establish a poultry farm in the state. The 700 hectares farm will be a world-class facility costing around US$400 million. The project will be a public-private partnership with well-known Syrian farmer Sebasten Clamorgan at the helm.
It was reported that the Ekiti State Government has imported 880 animals from South Africa to revive the state-owned Fountain Dairies. The animals consisted of 690 pregnant cows, two bulls, 90 female sheep, 90 female goats, four male goats and four male rams. South African farmers were also approached by the Niger State Government to boost beef production in the state.
Banking and financial services
During 2009 Nigeria's banking sector was dominated by news of the Central Bank of Nigeria's (CBN) audit of all the country's 24 banks. In August, new CBN governor Lamido Sanusi, announced a N400 billion (US$2.5 billion) bailout for five of the country’s banks – Oceanic Bank, Intercontinental Bank, AfriBank, Finbank and Union Bank. The CEOs and top management of the five banks were also suspended and replaced. The banks were found to have an extraordinary high percentage of non-performing loans on their books, with poor risk management and corporate governance structures in place. In October the CBN announced that four more banks – Bank PHB, Equatorial Trust Bank, Spring Bank and Wema Bank were undercapitalised, in a poor liquidity position and in what it called a "grave situation". A fifth bank – Unity Bank – was adjudged to have insufficient capital but a healthy liquidity position. The CBN also announced it would inject an additional N200 billion (US$1.3 billion) into the four distressed banks to stabilise them.
The CBN's intervention led to rumours about possible merger and acquisition activity within the banking sector. In an interview Sanusi said that four South African banks and a British bank have expressed interest in taking a stake in Nigeria's banks. The new year therefore promises to be an interesting one for Nigeria's banking sector.
Another noteworthy development in the year was the launch of XDS Credit Bureau Limited, Nigeria’s first licensed credit bureau. In an interview with TradeInvestNigeria, a company official said: "XDS Credit Bureau will change the financial sector by making available an information service on borrowers to credit grantors and other financial institutions. This will discourage solicitors of credit from defaulting, while encouraging them to keep good history and make consistent payments to grantors. It will consequently encourage grantors of credit to give more loans to consumers with good history. Customer lending as a whole would also expand."
On the insurance side, London-based Old Mutual indicated it is looking to enter the Nigerian market and has already started talks with potential partners. Old Mutal will follow in the footsteps of South African insurer Liberty Health that earlier in the year acquired 35% of Nigerian health management organisation, Total Health Trust.
Mining and metals
Although still relatively undeveloped, Nigeria's mining sector is also attracting more and more interest. Sixteen investors from countries such as the United States, Canada, China, South Africa and Nigeria have submitted expressions of interest for bitumen blocks in the country. Minister of Mines and Steel Development, Diezani Alison-Madueke, also said that a number of Chinese companies have shown an interest in investing in Nigeria's mining sector, especially in gold.
Dana Steel Limited, the core investor in the Katsina Steel Rolling Company, has announced it will establish a new 180,000 metric tonnes billets manufacturing plant. Unlike other existing steel plants that import billets for their production, Dana's US$15 million billets plant will source all its raw materials locally.
Information and communication technology
Earlier in the year South African telecommunications provider, Telkom, gained 100% ownership of Nigerian mobile operator Multi-Links after it increased its stake by 25%. Its Nigeria venture has however proved to be a huge challenge to Telkom. Fellow South African ICT company, iBurst, also indicated it was planning to enter the Nigerian market. The voice and data services provider said it expects to serve 200 000 customers within 10 months after starting with operations.
Mobile phone manufacturer, Nokia, and Digital Mobile Television (DMTV), a Multichoice subsidiary, has signed a memorandum of understanding on mobile television services. The partnership will allow Nigerians to watch DStv content from certain Nokia phones at no cost for 12 months.
In the ICT infrastructure space, Dancom Technologies, a subsidiary of the Dangote Group, has partnered with Huawei Technologies to construct a fibre optic network that will cover the eastern part of Nigeria. The project is expected to cater for Nigeria's capacity needs and improve the country's telecommunications environment in general.
The Kano State government has committed N171.4 million (US$1.2 million) for an ICT park situated in the Kano city centre. According to Alhaji Garba Yusuf Abubakar, commissioner for environment, the park is looking to attract software, hardware and outsourcing businesses.
In other ICT, news SugarAnt Technologies and Idenizen Smartware Private Limited have introduced a smartcard product aimed at empowering educational institutions in Nigeria. Girish Baliga, managing director and chief operating officer of Idenizen Smartware, said the card is designed to give management, students, administrative staff and parents easy access to information. The technology is currently being used by over 100 institutions across India.
Manufacturing
In an exciting development, brewing giant SABMiller during 2009 said it is planning an eight-fold increase in output at its Pabod Breweries. The London-based company is also seeking additional acquisitions in Nigeria. SABMiller last year acquired 70% of Pabod. Since its Pabod acquisition, SABMiller has reintroduced brands such as Grand Lager and Grand Malt in Nigeria.
A Ukrainian firm, Baltic Holding Corporation, has announced it is ready to invest in fertiliser production in Nigeria. Aniefiok Ayaya, Baltic's vice-president for business development in Africa said the company decided to invest in Nigeria because of its abundant natural resources.
Another notable investment has been the recent restoration of the Jebba Paper Mills in Kwara State by MINL Limited. The company purchased the assets of the erstwhile Nigerian Paper Mills, which halted operations 15 years ago, in 2007 and will have injected $75 million of fresh capital into the facility once all the phases are completed. MINL plans on supplying paper to the entire West Africa region.
Nigeria-based UCL Resources and Investments Ltd. will start with the production of ceramics in 2010. The company was privatised by the Abia State government in 2003. At the time of privatisation the premises and facilities of the ceramics company were in a very poor state. Chief Pascal Dozie, chairman of UCL, said the firm has repaired and reconstructed the facility for commercial production.
Transportation
The year's big news in the transportation sector was that Virgin Atlantic cut its ties with Virgin Nigeria. Virgin Nigeria has since changed its name to Nigerian Eagle Airlines and is in discussion with investors to raise fresh capital. While Nigerian Eagle is realigning its business, fellow Nigerian airline Arik Air is going from strength to strength. Arik Air recently announced non-stop routes from Abuja to London and from Lagos to New York. The airline during 2009 also introduced a Lagos to Johannesburg flight, among others.
Energy
Sufficient and reliable power supply is of utmost importance to Nigeria's future economic growth. Kwara State made significant progress in this regard during 2009 by completing a new substation and improving distribution and transmission. The completion of the 330/132/33KV substation at Ganmo is a great success story. Because of the Ganmo facility, power supply in the state, which used to be between 30 and 40 megawatts per day (a typical scenario for many parts of Nigeria) improved to 80 to 90 megawatts per day.
The Osun State Government is busy finalising arrangements for the construction of two hydro power plants to improve electricity supply. According to the Osun State Governor, Olagunsoye Oyinlola, these measures are being taken in anticipation of an increase in visitors to the state because of the Living Spring Free Trade Zone. Kogi State Government has also made plans to establish an independent power plant which will improve power supply in the state. Phrank Shaibu, Special Advisor to the Kogi State Governor said the step has been taken to attract investment to the state.
In Abia State, Geometric Power Limited has announced it will invest $400 million in the first phase of the Aba Independent Power Project. Prof Barth Nnaji, chairman/chief executive officer of the company, said an additional investment of over $50 million would be made to the distribution system over the next three years, bringing the total investment in distribution to $120 million by the end of the first three years. Geometric Power is building 188 megawatt in phase one of a two-phase 1000 MW capacity power plant.
A 215 megawatts dual thermal power plant is also set to be constructed in Kaduna. A contract was signed between the federal government, General Electric and Rockson Engineering Nigeria.
Infrastructure
In Lagos work on the much talked about Lagos–Badagry Expressway has started. The project would see the current four lane road upgraded to ten lanes. A light rail and BRT bus system will also be incorporated into the project. Julius Berger plc is the contracter on the N220 billion ($1.4 billion) project.
In a bid to improve water transport and logistics in the country, Nigeria's federal government has started with the dreding of the River Niger.
The government is also pushing ahead to finish the construction of the Nigeria National Complex in Abuja by 2010. The multi-billion-naira complex comprises the Millennium Tower, the Nigerian Cultural Centre and the National Square.
Property
The Persianas Group, developer of The Palms shopping centre in Lagos, has started with the construction of a modern mall in Enugu, Enugu State. The facility, dubbed The Polo Park Mall and a first of its kind in the state, will cost in excess of N7 billion (US$47 million). Work on the project started in February and is expected to be completed by December 2010. The company has also concluded a deal to construct a N3 billion (US$20 million) modern shopping mall in Kwara State.
Situated next to the seat of the Lagos State government, a new mall in Ikeja, with its Grade A office complex, is set to become the destination of choice for shoppers and companies alike. Developed by Gruppo Nigeria Investment Ltd., the mall with tenants like Shoprite and Silverbird, is due to be completed in 2010 and will bring a one-stop shopping, leisure and working experience to a discerning public.
In the area of hotel development, The Rezidor Hotel Group, in a bid to further strengthen its presence in Africa, will build three new hotels in Nigeria. The Radisson Blu Hotel, Victoria Island Lagos (250 rooms), the Radisson Blu Hotel Abuja (200 rooms) and the Park Inn Abuja (125 rooms) are all scheduled to open in 2012.
South Africa-based golf course developer, Pinnacle Point Group , has also announed it will invest in the ambitious Lagos Keys development. The development will feature a private golf and residential estate, marina and waterfront complex, hotels and a 18-storey pyramid, among other facilities.
Tourism
American company Jack Rouse Associates has signed an agreement to design and plan a world class theme park in Cross River State. The theme park will be situated on a 100 hectare piece of land opposite the Tinapa Business and Leisure Resort and is expected to cost N100 billion (US$680 million). Also in the Niger Delta, SarnerPFM, part of the United Kingdom-based Sarner Group, has signed a memorandum of understanding with the Delta State government to construct two leisure parks.
Here's to 2010!
