Abuja - The worst violence in about two years posed a threat to the momentum Nigeria had built from years of economic growth, executives said yesterday at the World Economic Forum (WEF) on Africa conference in the country’s capital, which is being held amid heightened security after a wave of attacks.
Attacks by Islamist group Boko Haram, including two bombings near the capital Abuja, and in the northeast region in the past month have left hundreds of people dead. The group is holding more than 200 girls it kidnapped from a boarding school, threatening to sell them as slaves and prompting offers of assistance from the US, the UK and other countries to help rescue them. More than 100 people were killed in a May 5 assault on the northeastern town of Gamborou blamed on the militants.
“It does slow down the plans we have, it does put out the projections by a year or two,” Thabo Dloti, the chief executive of JSE-listed insurer Liberty Holdings, said in an interview at the WEF summit.
His is one of the companies committed to investing in Africa’s biggest economy, where, for now, the promise of selling goods and services to a population of about 170 million outweighs the danger of bomb attacks like the two that killed more than 90 people near Abuja in the worst attacks on the capital.
The worry was the impact on “potential foreign investors currently sitting on the fence and waiting for the right time to come to Nigeria”, Guinness Nigeria chief executive Seni Adetu said. “It’s massively of concern to me, first as a Nigerian and secondly as a Nigerian businessman.”
Foreign direct investment in the oil-exporting country rose 28 percent to $21.3 billion (R223.4bn) last year, and was $2.5bn in the first two months of this year, according to the national statistics agency.
Less than a month after a revision of its data propelled Nigeria ahead of South Africa as the continent’s biggest economy, it has become the focus of international outrage after Boko Haram militants kidnapped the schoolgirls.
President Goodluck Jonathan’s government said this week that it would accept help from the US in the search and rescue operation.
Boko Haram’s five-year insurgency, largely confined to the northeast for the past two years before the Abuja attacks, has caused the deaths of more than 4 000 people, according to the Brussels-based International Crisis Group.
Many investors remain optimistic about Nigeria’s prospects, even as ethnic and sectarian blood-letting dominate global attention.
On Wednesday in Lagos the Nigerian Stock Exchange all share index gained 0.3 percent, the biggest leap in a week. The naira weakened 0.2 percent to 161.95 against the dollar.
Frans van Houten, the chief executive of Dutch electronics firm Royal Philips, said his firm would not be deterred by the violence.
“Philips has a strong commitment to develop the business here,” he said in Abuja. “Yet there needs to be stability and at this time there’s more stability in the east of Africa than the west of Africa, and that is bound to have some effect.”
Julian Roberts, the chief executive of Old Mutual, said: “People are naturally concerned from a human point of view with the tragedy going on, but not from an investment point of view.” Speaking during his visit to the capital for the gathering of business leaders and politicians, he added: “It doesn’t take away from the fundamental improvement that we’ve seen. So we’re keen to carry on investing, it doesn’t put us off at all.”
Key to the sentiment is the security situation in Lagos, a city of about 20 million people. The country’s commercial hub lies 700km southwest of Abuja, and so far has not suffered attacks by Boko Haram.
Dloti said the metropolis was a safe haven from violence.
Insecurity remained a challenge across the entire Sahel region of Africa, said Ismail Douiri, the co-chief executive of Attijariwafa Bank, Morocco’s biggest lender.
“If you wait for all countries to resemble Sweden or Norway then you will wait until returns become equal to 1 or 2 percent. Unfortunately that’s the equation. With high returns you have high risk.” – Bloomberg