Business in West Africa

As ever, Nigerian banks dominate our regional table, although it will be interesting to see how they manage the introduction of more testing reserve requirements. The central bank has also instructed lenders to cut the fees and commissions they charge customers. Other Nigerian firms have also enjoyed rising values: the market capitalisation of Nestlé Nigeria has almost tripled over the past two years.

Yet is would be wrong to play up international interest in Nigerian companies too much. The Lagos Stock Market trades less than $900m a month, compared with New York’s $12 trillion, so it is a mere dot on the global investment map.

Nigeria should still be the most attractive investment destination on the continent but concerns over the removal of Lamido Sanusi as governor of the Central Bank of Nigeria, persistent corruption, the eternal delay in the passage of the Petroleum Investment Bill and slow improvement in most forms of infrastructure continue to shake investor sentiment. Uncertainty over the outcome of next year’s Presidential election adds to the doubts.

The sacking of internationally respected Sanusi appears to have prompted foreign investors to avoid Nigeria’s most recent sovereign bond issue. The government offered N180bn ($1.1bn) in early March but most was taken up by domestic investors. In a statement, JP Morgan revealed: “Our February client survey shows investors having moved underweight FX in Nigeria for the first time in over two years.”

While the Ghanaian economy continues to grow at a rapid rate and Côte d’Ivoire seeks to claw back the stagnation of the lost decade, there seems little chance of this situation changing. The highest ranked non-Nigerian firm in the table is telecoms provider Sonatel, with market capitalisation of $4.8bn, up from $3.1bn last year. Sonatel recorded an 11.1% increase in profits in 2013 to CFA 190bn ($400m), on an 11.3% rise in turnover.

However, the company’s finances could be affected by an agreement that it signed with the government of Senegal at the end of March. The country’s main telecoms provider, which is part owned by French firm Orange, has pledged to try to halve government telephone costs.