They are taking their money to places less mysterious

I hear you say investors have grown used to Nigeria’s political grandstanding, bickering, and violence included and then the wobbly economy, hugely controlled by political pirates. And amidst all of that argue that they will sit it out this time around while the 2015 elections shenanigans play out. You’ve got another think coming!

These guys avoid risks as much as Nigerian politicians revel in vile and derelictions. They are prepared to pay for safety as much as they weight the risks to take them. They have choices and they don’t wait for the rainy day. They move on as fast as they pluck up return on their investments and they are very impatient with an unserious economy or government.

Ask them-they will tell you that the alternative is not to take risks at all, particularly when the risk is unnecessary and when the reward for the risk taken is measly. 

In Nigeria’s case today, the reward is fading as fast as the stoking of civil tension that is clouding the environment for doing business. And so, more and more of those who redrew their investment preferences in their various boardrooms shortly after the big global announcement that the Nigeria economy’s gross domestic product (GDP) is as fat as $509.9 billion, are beginning to show their disdain for unwarranted risks.

Across the globe, investors are seriously reassessing the country, aided by the not so tasty assessment by the likes of S & P which recently revised Nigeria’s rating lower to negative, setting the stage for further rating cut. The rating agency has been peering on the country’s current account which have been mercilessly battered by cheaper oil and the currency which seems to defy medication.

At home, after a gritty survey, the Lagos Chamber of Commerce reeled out figures on business confidence that underscores the pain businesses are feeling and the ugly perception that is flowing across borders too. In their report, from the survey, 1st quarter 2015 aggregate Business Confidence Index (BCI) dropped by 7.7 percent, from 30 percent in Q4 2014 to 22 percent. They called it “the largest quarter on quarter point drop of the BCI score over the last three years.” The factors listed for this: heightened uncertainty surrounding the 2015 general elections, depressed crude oil price in the international market and the volatile exchange rate leading to significant depreciation of the local currency. 

And they are (investors) also looking at the plummeting numbers. I bet they are fed up already. Oil prices are falling off the cliff  (Brent is currently trading below $57 dollars per barrel) and still unsure which direction to plunge next. The corruption-plagued economy is growing at a very negative pace, in opposite direction from the 6.6 percent initial World Bank 2015 projection, long-term growth projection are coming short of target and political leaders act and speak as if un-willing to draw up and maintain sustainable policies and institutions that are supportive of growth.

The currency’s ailment is compounded by the opaque and mysterious Naira policy currently pursued by the Central Bank of Nigeria (CBN), similar to what you had in the grey era of import licencing when ‘preferences’ ruled in deciding who gets what and who doesn’t get, particularly at the official window. The Naira numerous problems means that businesses can’t conclude contracts. This will be a story for another day.

Investors don’t have the capacity to take these types of bad news. They take bad news very badly, particularly when opportunities to reform walks through the door like the case of the falling oil price and it is ignored-just like is the case with Nigeria today where the government still conveniently hang on to oil business, ignoring the call for far reaching reforms that for instance, could unbundle the gas and energy sector.

These investors are already contending with an array of complex economic risks and increasing number of uncertain business environments and all of that is changing the way they engage.

So, if Nigeria chooses to frivolously continue (in the way of a foolish 55 year old), to cut off response to the global and internal meltdown, investors will be left with no choice but to look to a more serious country in the continent willing to play game.

Charles Ike-Okoh