….says Nigeria’s plans to borrow to finance infrastructure‘ll not yield much revenue in 2018
A leading global risk consultancy, Control Risks, has projected improved investor sentiments for Nigeria and other West African economies in 2018.
This is even as it identified political uncertainty ahead of Nigeria’s 2019 presidential elections and on-going security concerns among the key risks for businesses operating in Nigeria during the year.
The risk consulting entity predicted that in its just published annual political and security risk forecast – ‘RiskMap’- that as Nigeria exited recession this year, investor sentiment across West Africa would likely experience uplift in 2018.
In a news report distributed by the Africa Press Organisation (APO), the specialist global risk consultancy Senior Partner for West Africa, Tom Griffin, was quoted as saying that “2017 has been a tough and turbulent year for businesses in the region, however with Nigeria exiting recession, and foreign exchange shortages easing, we see a strong improvement in investor sentiment emerging.
“Another major engine of growth will be Cote d’Ivoire, where economic expansion is projected at around 7% next year. There will be only a handful of elections in the region in 2018, meaning continuity will largely prevail with policy decisions having the biggest impact on the business environment.”
“In Nigeria however, although presidential elections are next slated for 2019, campaigning has already started. The uncertainty that generates, as well as the need for cash that an election brings, mean that political instability and regulators whose actions will be difficult to predict remain among our top risks for businesses in the year ahead.”
Control Risks also identified the key risks facing businesses in West Africa in 2018 to include,
terrorism and militancy, irregular regulators, political instability, new sectors, new risks, and on-going operational risks, amongst others.
Specifically for Nigeria and Ghana, the consultancy forecasts that plans by the two countries “to borrow heavily to finance long-term infrastructure projects will not generate sufficient revenues in the coming year to finance debt repayments.
“Amid rising inflation and muted oil prices, Nigeria’s debt servicing payments – which in 2016 doubled to 66% of total revenues – are likely to rise further, placing extreme strain on an already stretched budget.”, it added.
It predicted further that with the government of President Muhammadu Buhari well over halfway through its term, yet to fulfil many of the promises that brought it to power and already entering campaign mode, businesses in Nigeria will remain acutely sensitive to political and operational instability in 2018.