Views on Life & on Equity Investing

Wonder, Wealth & Abundance

Nigeria Trivia

with 14 comments


Nigeria, one-third larger than Texas and the most populous country in Africa

Its GDP has recently overtaken that of South Africa.

The country is gradually transitioning from military to civilian rule, although with violence in northern part of the country. 75% in north and 50% in rest of the country is unbanked.

Current population is 170 million (7th most populous country in World). Per capita income is 3000 USD ( India is at 1500 USD)

Fertility rate is 6 births per woman.

It is on track to be 3rd most populous country of the world by 2050 after China and India overtaking USA.

Jumia.com, Konga.com are equivalents of flipkart.com, growing rapidly.

Nigeria gained independence in 1960 and joined the Commonwealth. Most of the history has been marked by Army rule. In 80s Nigeria was considered outstanding democracy. In 90s UN categorised human rights and political problems as terrifying.

Boko Haram (literally translates to “Western education is sinful.”) were peaceful for initial seven years from 2002 – 2009, in July of 2009 when the uprising turned violent and deadly. Problems with morale and organisation of Army are grave to dominate over Boko Haram even as at 2014, government is seeking western help to upskill army.

1/3rd of Nigerias 36 states are governed by Sharia Law.

95% of Nigerias export and 75% of Government revenues depend on oil. (Oil price in 2014 down by 35%). This will have negligible impact on social life of most citizens, as most of the money is stolen.

Nigeria, like most of Indian states suffers from “resource curse” despite being oil rich, with only a small minority being rich while 75% of the country lives in extreme poverty.

For over two decades Nigeria has been repressed and mostly unfree as the states intrudes heavily into private sector development.

Top Individual tax rate is 24% while corporate tax rate is 30% ( much better than Bangladesh’s 42%)

Nigeria is amongst the countries which have “decades of catching up to look forward to” and part of Next 11 (http://en.wikipedia.org/wiki/Next_Eleven) and 3G (Global Growth Generators) countries (http://en.wikipedia.org/wiki/3G_%28countries%29 ).

Market Cap to GDP ratio (vital for long term investing) is more than attractive at 12% (115% US, 85% India)

Agriculture contributes 40%, while services 30% to the economy.

Nigeria has grown as fastest pace in the world post 2008 ( only after China, but before India) but terrorist attacks ( another persons freedom fighter) have shaken the country. Security is a risk. GDP has grown every year over 6% since 2003 !

Nigeria needs a few breaks such as this 30 Billion USD investment (Nigeria needs a few breaks) and its own equivalent of India’s Narendra Modi!

http://renewableenergy.gov.ng/nigeria-korean-firm-to-invest-u-s-30-billion-in-solar-power-plants/

I am usually astounded to read some mid cap annual reports with statements like  “We cannot rely on national grid, we need to generate our own electricity”. Capital is really scarce and it could earn 20% returns on equity for prolonged periods.

Opportunities for value investors are hard to ignore even though equity markets may have to cross mountain of misery and hills of headache ( not just Peter Lynch’s Wall of Worry).

Disclosure: Vested interest in Nigeria. Views are personal notions and do not represent any organisation or company. I am not an investment adviser. Investment in stock market can (and many a times do) result in loss of principal capital.


http://www.elevendimension-funds.com

Written by amitdipsite

December 7, 2014 at 6:03 am

Posted in Uncategorized

14 Responses

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  1. Dear Amit,
    I remembered Prof. Bakshi Article when i was reading above post. I am quoting it for reference.
    “The article was based on a talk on India value investing opportunities given to a global audience who, I believe, needed to be told that issues like political uncertainty, currency depreciation, and relatively high P/E multiples are not good reasons to prevent them from making sensible investments in Indian public markets…”
    https://fundooprofessor.wordpress.com/2013/07/21/article-in-outlook-business/

    Karthikraja K

    December 7, 2014 at 7:25 am

  2. What about Ebola and Boko Haram? They are capable of derailing Nigerian economy.

    shri

    December 7, 2014 at 12:37 pm

  3. 😀

    Forgotten the link to 30 Billion USD investment

    http://renewableenergy.gov.ng/nigeria-korean-firm-to-invest-u-s-30-billion-in-solar-power-plants/

    Do not have a link to their Narendra Modi

    Most people will say “If the opportunity is so good, why ain't everyone flocking”. Some people believe its not possible to earn over 10% in equity markets, India was a country of snake charmers until 1990s, list of ignorance goes on… on many many levels !

    Regards

    Amit Arora

    December 8, 2014 at 3:00 am

  4. That is what you read in mainstream media !

    EBOLA caused a grand total of 9 deaths in Nigeria

    WHO – “Nigeria is now free of Ebola virus transmission”

    http://www.who.int/mediacentre/news/ebola/20-october-2014/en/

    Without your own research, you cannot even rely on your own doctor.

    I don't know about Boko Haram, I hope they continue to scare the investors for another 5 years.

    Amit Arora

    December 8, 2014 at 3:04 am

  5. Hi Amit, do you mean to say that India will still grow at a healthy pace in the next decade, thanks

    hrithik

    December 9, 2014 at 12:36 am

  6. “Investors lose N274bn in Nestle, Unilever in two months”

    http://newtelegraphonline.com/investors-lose-n274bn-in-nestle-unilever-in-two-months/

    Amit Arora

    December 10, 2014 at 8:40 pm

  7. Brilliant Notes by Mark Mobius

    http://mobius.blog.franklintempleton.com/2011/04/21/africa-opportunities-in-nigeria-ghana-and-kenya/

    “Africa is expected to grow more than 7% annually in the next 20 years”

    “More than 100 African companies have revenues in excess of $1 billion.”

    “60% of the world’s uncultivated arable land is found in Africa”

    Amit Arora

    December 10, 2014 at 11:29 pm

  8. More trivia:

    Including dividends, the S&P 500 gained 135% from March 2009 through January 2013, during what people remember as the “Great Recession.” It gained the exact same amount from 1996 to 2000, during what people remember as the “greatest bull market in history.”

    According to Bloomberg, “The 50 stocks in the S&P 500 with the lowest analyst ratings at the end of 2011 posted an average return of 23 percent [in 2012], outperforming the index by 7 percentage points.”

    Fortune Magazine recommended Buy and Forget Portfolio / Decade-buy-and-hold portfolio which lost 74% of principal capital

    http://www.ritholtz.com/blog/2012/12/10-stocks-to-last-the-decade/

    According to David Wessel of The Wall Street Journal, Americans “spend about half of their food budgets at restaurants now, compared to a third in the 1970s.”

    Amit Arora

    December 11, 2014 at 8:05 am

  9. John Sutton's Enterprise Maps are invaluable in understanding organizational landscape of five countries in Africa

    http://cordobafund.com/?p=35#more-35

    http://personal.lse.ac.uk/sutton/

    http://www.theigc.org/project/the-enterprise-map-series/

    Amit Arora

    December 13, 2014 at 8:32 pm

  10. BOTSWANA

    To me it looks like the Switzerland of Africa

    Landlocked, no ports and benefit of oceans, yet one of the richest countries in Africa

    With gift of uninterrupted democracy, this country has risen against all odds, 60$ per capita PPP bases in 1960s to 16,000 USD per capita now ( India 2500 USD on PPP)

    Never read this kind of amazing annual report, one feels uplifted on an African Safari

    http://www.wilderness-group.com/system/assets/149/original/Wilderness_IAR_2014_WEB.pdf?1407143997

    Amit Arora

    December 13, 2014 at 9:59 pm

  11. FUNNY BUT TRUE:

    CHOPPIES is a legendary Botswana Supermarket business with 34% market share nearly 500 million USD of revenues

    Company got listed on Botswana Stock Exchange (BSE) in 2012 but on Page 10 of 92 in Annual Report 2014, company stole the logo of BSE India (Bombay Stock Exchange) for Annual Report listing on Botswana Stock Exchange, lazy or plagiarism ?

    http://www.bse.co.bw/docs/Choppies%20AR_2014.pdf

    Lawyers should have a field day !

    Amit Arora

    December 14, 2014 at 6:50 am

  12. Hi Amit,

    Based on IMF and World Bank data India GDP per capita PPP is 5400$ while based on CIA it is 4000$(Source Wikipedia). From where did you get 2500$?

    Gyan

    December 14, 2014 at 7:28 am

  13. INDIA MICROCAP

    A principle to reduce code in software engineering is DRY ( Don’t Repeat Yourself ), WET ( Write Everything Twice ) is the antonym. In corporate world they are synonyms for dodgy corporates WET ( Wealth Esoterically Transferred ) and DRY ( Delinquents Ripped You).

    http://en.wikipedia.org/wiki/Don%27t_repeat_yourself#DRY_vs_WET_solutions

    Then there is SWeT Effect

    http://multibaggersindia.blogspot.com/2012/02/swet-effect.html

    It pays to be on the receiving side of SWeT Effect, Pidilite is shielding
    Vinyl Chemicals to protects its image

    Keshav Garg has written about it on his blog

    http://equitymechanics.blogspot.co.nz/2012/05/vinyl-chemicals-india-ltd-pidilite.html

    Disclosure: Invested

    Amit Arora

    December 16, 2014 at 3:29 am

  14. it is no other than haste and negligence. I cant apply that negligence to balance sheet🙂

    Karthikraja K

    December 18, 2014 at 3:51 am


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