Specifically, Nigeria, South Africa and some Asian countries have been increasingly named as some of the countries that have been attracting foreign investments.
The Research Specialist, Standard Bank Group London, Mr. Gadio Samir, noted this in a research material made available to our correspondent on Thursday.
According to him, the increase in local investments in Nigeria is mainly as a result of the global challenges as well including the Greek crises which have affected some global economies.
He said, “Our research has shown that inflow of funds into Nigeria, Kenya and some other emerging economies in the last few months is as a result of the higher returns the investors received from these emerging markets.
“It is clear that the risks from the sovereign debt overhang in the Euro zone will continue to undermine confidence in coming months. It is increasingly likely that Greece will exit the Euro, but the major concern is that other key countries (including Spain or even Italy) could see their cost of funding rise to unsustainable levels, these might be a plus for the emerging markets.”
Samir added that growth in private sector credit in Nigeria was hampered in 2010/2011 because of the accounting challenges that banks had to grapple with during that period.
He said, “Private sector credit growth was negative in 2010 and early 2011, but this mostly reflected an accounting exercise as the Asset Management Corporation of Nigeria acquired the Non-Performing Loans of the banks.
“Yet private sector lending accelerated rapidly in the second quarter of 2012, a trend also supported by favourable base effects in the time series in the first quarter of 2012.”
Analysts from Afrinvest West Africa Limited in their outlook for 2012 had said that policies such as the introduction of market making, securities lending, short selling and introduction of Exchange Traded Funds need to be accompanied with effective regulatory oversight.
The company in the report estimated a Gross Domestic Product growth rate of seven per cent and 7.5 per cent for the country’s economy in 2012 with increased contribution from the non-oil sector especially agriculture, telecoms and financial services.
“We expect the CBN’s banking sector reforms to berth in 2012, giving further impetus to bank lending particularly given the mild uptick in credit growth observed towards the end of 2011. We envisage less aggressive fiscal tightening measures in 2012 even as reduced government borrowing should bear positively on the domestic equity market,” they stated.