LAGOS (Reuters) - Citibank expects annual investment flows into Nigeria through its banking platform to double to around $2 billion this year, as multinational firms and foreign funds expand operations, its country officer told Reuters on Thursday.
Emeka Emuwa also said Africa’s second-biggest economy was witnessing an increasing mix of trade and investment from Africa and Asia, though the bulk was largely from Europe and the United States.
Contributions to trade and investment flows from Africa and Asia were likely to overtake Europe and North America over the next 4-5 years, he said in an interview in his office in Lagos.
“In 2011, we saw flows of almost $1 billion, made up of both portfolio flows and FDIs (foreign direct investment). We expect this to double this year, a lot of which will come from the portfolio side and foreign companies expanding ... in the country,” Emuwa said.
He said Citi, which has been in Nigeria for 27 years, had been focused on institutional banking and public sector finance, but was looking to develop consumer banking and equity brokerage over the next three years.
Headlines on Nigeria this year have been dominated more by an upsurge in violence by Islamist sect Boko Haram in the north than by investment flows. More than 250 people were killed by the group in January, according to Human Rights Watch.
But the violence is taking place hundreds of kilometres north of the commercial hub Lagos and the southeastern oil fields. Emuwa said the unrest was not impacting investment.
“From 2010 to 2011, what we saw coming through our own channels grew by a multiple of 5-6 times on the portfolio side and foreign direct investment,” Emuwa said.
“If you use investment flows, current and potential, to measure the sensitivity of Boko Haram, I’d say I haven’t yet seen ... an adverse impact,” he said, adding that investors see it as something to consider, but not enough to change their investment plans.
Analysts say northern Nigeria, where most of Boko Haram’s attacks have taken place, contributes such a small portion to the country’s GDP that its broad economic fundamentals have not been affected by the instability.
Citi has 12 branches in Nigeria and is looking to expand.
“We don’t have any consumer banking at all, our business is entirely institutional (but) given the growth in consumer incomes in Nigeria, it is a new and growing segment for us,” Emuwa told Reuters.
“We will focus on where there’s a concentration of income,” he said, adding the consumer banking side would start with employees of companies that hold corporate accounts at Citi.