IMF: Nigeria Economy Will Attract Investment

The current global financial conditions favour Nigeria, and therefore should attract foreign direct investment into the West African country.  That’s according to an IMF report published this week.

The Global Financial Stability Report “identifies the current key vulnerabilities in the global financial system as the rise in corporate debt burdens, increasing holdings of riskier and more illiquid assets by institutional investors, and growing reliance on external borrowing by emerging and frontier economies”.

Despite the good news, the report cautions against an ever-increasing Chinese debt-profile.  Nigerian debt currently stands at well over N25 trillion, most of which is Chinese.

It further warns against non-Paris Club creditors, which often leads to vulnerability and instability.

The Paris Club is a group of officials from major creditor countries who aim to coordinate their efforts to find sustainable solutions to payment difficulties experienced by debtors.  It includes officials from, amongst others, the UK, US, Canada, Germany, and Japan.

Within the last two decades China has launched a huge investment drive into Africa, largely in energy and infrastructure.  The good news that has come out of the IMF seems to be in spite of, not because of this.