By Anayo M. Nwosu
For 21 years that I have been a
banker, sixteen of which I was managing large corporate banking relationships,
I have learned and internalized what a profitable investment opportunity is;
which is simply that investment yields profit for the investor/s as well as
that which yields a reasonable return on the investment considering the amount
of money invested in the project.
DEFINITION OF ROI (RETURN ON
INVESTMENT)
Return on investment or return on
costs is a ratio between net income and investment. A high ROI means the investment's
gains compare favourably to its cost. As a performance measure, ROI is used to
evaluate the efficiency of an investment or to compare the efficiencies of
several different investments.
FACTORS AFFECTING ACHIEVEMENT OF
PROJECTED PROFITABILITY OF AN INVESTMENT:
We must hold all other factors
like interest rates which are common all over the country constant, and then
isolate those factors that could affect the profitability of investments in the
southeast. There are factors which will certainly discourage investment. These
include insecurity and wrong political choices of the governors of our states.
Bad government policies can sink investment just like good ones would encourage
investment and profitability.
I don’t want to engage in
lamentations on lack of enabling infrastructure that could enable or ensure
profitability of investments in the southeast region like stable and adequate
public power, easy access to sea or river ports for import or export, etc. I will be making my suggestions based on what
is presently obtainable.
DEMOGRAPHICS OF SOUTH EAST:
Projecting based on the 2016
census with annual population growth of 2.6%, the population of the southeast
is estimated at 24,961,946 as at August 2021 which is about 3million people
more than the population in 2016.
State Population
Abia. 4,237,763
Imo 6,149,421
Anambra 6,284,776
Ebonyi 3,274,817
Enugu. 5,015,169
TOTAL. 24,961,946
The 24.96m population of the
southeast will be better understood when compared to:
COUNTRY POPULATION SIZE
Ghana 28.5m
Senegal 14.2m
Togo. 7.1m
UAE. 9.4m
Oman. 4.5m
Qatar 2.7m
Israel 8.8m
It is instructive to note that
southeast population is higher than the combined population of UAE, Israel and
Qatar. I leave the implications of this
to your imagination.
MARKET INFORMATION BASED OF
POPULATION DEMOGRAPHICS:
Primary School Aged: 3.0m
Secondary School Aged: 3.7m
Tertiary School Aged: 5.0m
Elderly: 0.8m
Women of Childbearing Age: 10.0m
Understanding the population
demographics is key to every investor or seller of goods and services. One must
define the target market or targeted customers of the goods and services. The
targeted population size for goods or services is known as the MARKET.
You can now understand why
Nigeria with a current population of 212 million is regarded as the biggest
market in Africa.
BASIC INVESTMENT LOGIC
1. What do I put my money in and
make the highest returns?
2. What type of investment can I
do?
3. Do I have the required
experience to do the investment or do I need the help of others?
4. Do I want a short or long term
returns on my investment?
5. How much capital do I have?
6. Can I borrow to add to my
capital or get someone or people to join me?
7. What location do I site my
investment?
8. What factors support my siting
of the investment in my location?
IDENTIFICATION OF PROFITABLE
OPPORTUNITIES IN THE SOUTH EAST
Considering the different shades
of my audience and for the purpose of this lecture, I think it makes sense to
categorize the investors into:
1. Medium & Small Scale
Enterprises
2. Big investors
A twist in my career happened
sometime last year in August when my Managing Director asked me to consider
moving from my corporate banking beat to the retail sector to help revamp the
bank’s medium, small scale enterprises and retail business. I was required to come up with strategies to
enable the bank support the endeavours of non-corporate customers. In our way
before, we were witnessing the declining performance of many commercial and
industrial concerns mostly dependent on imported stocks or raw materials. I’m
required to make business sense out of the unusual economic mutation or
changes.
Keystone Bank had to roll out
products and service pots to support unstructured businesses, small and medium
enterprises, and also individuals trading in their personal names. We have
created a support unit with end to end support for this category of customers.
Anyone interested in our support should please contact me after this programme
or visit any branch of Keystone Bank.
We cannot over-emphasize the
importance of small businesses in the development of the economy especially in
the Southeast. So many business areas are available for the low capital people.
Such business areas include but not limited to the following:
1. Processing of farm products
like garri, cocoyam, maize, etc. No serious investor engaged in primary or
secondary processing of agric products would regret it. For example, Neke Foods
and Gentle Giant Fish now export their products.
2. Shoe Making: It is time to
tell a story of what is happening under the buildings in and around Upper Iweka
in Onitsha. This story must be told to the world. They compete vigorously with
their Abia counterparts. Keystone Bank is now telling the story of Mrs Chidimma
Emodi and her Footwear Academy. The governor of Abia State wears and advertises
her products to drive home the Abia State Government’s “Wear Aba“ policy.
3. Making interlocking concrete
stones and pavements. This takes lower capital outlay to start but the demand
is huge as most internal roads or streets are now made with interlocking
stones.
Whatever the classification or
intentions of an investor, the motive is still the same; which is to make
profit from their investments.
BIG OR CORPORATE INVESTMENT
OPPORTUNITIES
Let us talk about bigger
investment opportunities. Here, I am required to identify bigger investment
areas that would yield good returns on investment in the southeast region. Again,
these areas include but are not limited to the following:
1. Secondary and tertiary schools
of international standards
2. Internet service provision
3. Technology hubs
4. World Class hospitals and
reference labs
5. Embedded power or independent
power generation
6. Agro-allied industries
7. Amusement parks and
development of historical sites for tourism
8. Modern mini and micro estate
development
9. Quality leadership recruitment
SCHOOLS & WORLD CLASS
UNIVERSITIES
The fruits of Pan African
University, Afe Babalola University, Babcock University and Covenant University
experiments are very visible the blind to see. I know of many families living
in the southeast that send their children there. Even though we have many
private universities in the southeast, one wonders why our people still send
their kids to the schools outside of the southeast for university education.
We may have to look at:
• Quality of delivery of learning
• The qualities of lecturers
• Learning environment
• Linkages of our schools with
foreign universities
• Streamlining of the courses of
study to what the market needs
• Working relationship with
companies for partnership and employment
INTERNET SERVICE PROVISION -
Nowhere in the southeast can
boast of very reliable or dependable internet. There is need to meet the
requirements of the Internet age that has come upon us. The internet services
as provided by telecoms are currently not unreliable.
• The telecoms must invest in
capacity
• Internet Service Provider using
satellite technology should spring up
• Our people in Diaspora should
look for disruptive technologies to fix this challenge
A region with very stable and
reliable internet penetration has a comparative advantage over others in areas
of e-commerce, e-learning, telemedicine and social media marketing.
Imagine an internet service
provider take on the major markets
in the southeast region as Fibre-one has
done in Lagos, and how a major boost it will be for those markets as it relates
to their ability to use the internet and its allied services for their
businesses.
Other captive areas that require
stable and reliable internet coverage are:
• Schools
• Hospitals
• Sprawling estates
WORLD CLASS REFERENCE MEDICAL
FACILITIES
While we have many doctors in the
southeast; we have fewer versatile healthcare entrepreneurs. There have been
increasing health challenges needing specialized medical facilities as
commercial investment. Our doctors are making subsistent money but not the
billions the market can offer.
Investors can now intervene in
the manner Mecure, Clinix, Reddington in Lagos have done.
I am not talking of a good
hospital but the one with world class equipment that will attract people who
can pay. We need to be the India for Nigeria’s medical tourism.
Imagine the following:
• A medical lab connected to
consultants in many cities in the world who could read medical tests, interpret
results and send back the readings within hours. The key consultants don’t have
to be in Nigeria.
• A properly run specialist
hospitals for cancer treatment, kidney and heart diseases that take our people
abroad.
We must note that the owner of
the hospital doesn’t have to be a doctor just as the owner of an airline
doesn’t have to be a pilot. Chief Onyema of Airpeace is a trained lawyer.
TECHNOLOGY HUBS
The southeast should embrace the
huge economic potentials of tech hubs in the region. The Genesys Tech Hub in
Enugu has been a success story. Other states in the region need to emulate the
practical approach of the Enugu State government who, by inaugurating Tech Hubs
and Youth Innovation Centres located in Independence Layout and another in
Obollo Afor, has rolled the ball.
Tech hubs offer services such as
ICT training in Software Development, Website Design/Hosting, Linus/Unix
Systems, Graphic Designs, Internet of Things (IoT), etc. The successful
trainees will now be let loose to develop applications to solve commercial and
development problems.
The economic value of tech hubs
can be easily measured by the acquisition of Paystack; a startup Fintech in
Lagos by Stripe for over $200 million (N100bn). Paystack had developed a quick
way to integrate payments services into an online or offline transaction by way
of an API (Application Programming Interface). Flutterwave is a similar company
owned by Nigerians recently valued at $1bn or N500bn. I cannot easily remember
any companies operating in the southeast that are so valued.
These hubs could be set up as
Corporate Social Responsibility (CSR) by existing companies in the southeast
through their chambers of commerce or by government. This initiative will
benefit both the companies and the government and will take the creative youths
out of cybercrimes by channeling their creative energies towards legitimate
profitability.
INDEPENDENT POWER GENERATION
The epileptic public supply of
electricity in the sub-region is a huge business opportunity. Despite the
regulatory constraints, whosever finds cheaper sources of energy to homes and
industries in the southeast would make a lot of money. Some of the options not
hampered by regulation include independent power generation via solar energy
technology or wind mills with capacity less than 10MW.
LEISURE & TOURISM
Southeast has not fully tapped
the economic potentials of investments in leisure and tourism. Imagine how much
money to be made from investment in making Ogbunike Cave and other historical
sites conducive for tourists. Our understanding of leisure and tourism should
not be limited to building of hotels, entertainment centres and nightclubs.
The Taj Mahal and Agra Forte in
India and the number of tourists that annually flood there and many other
tourist destinations are a proof of how much money that could be made from
leisure and tourism. Kenya, Seychelles, Dubai, Senegal etc make a lot of money
from tourism.
The good news is that Keystone
Bank in partnership with Kenworld Cinemas is planning a roll out of the best of
entertainment and leisure places in the southeast region.
Incidentally, the CEO of
Kenworld, the award winning Kene Mkparu shall be speaking after me.
REAL ESTATE
Real estate practitioners in the
Southeast know that investors make more margins in buying and selling of land
than from rent from housing estate. The main reason why the rents are poor is
because of demand. When demand is higher than supply then the price will go up.
The truth is that investments in real estate in Abuja, Lagos and Port Harcourt
give more rental income than those in Owerri, Awka and Enugu.
Begging Opportunities:
• Many Igbos living in Diaspora
have an unmet need of Modern Mini Estates.
• Low budget housing for workers
financed through the National Housing Fund
• Recreation of bigger estates
like Northern Foreshore, Carltongate, Nicon Town and VGC in Lagos.
POLITICS
All the villages and town in the
southeast must realize that Britain is no longer our colonial master; that our
states and local governments belong to us. We should immediately do the
following:
• Institute a recruitment process
that will ensure that their best and brightest get into leadership positions.
• Always hold their leaders
accountable not during elections but on annual basis. Religious leaders can
help achieve this,
• Elect only those with records
of achievement and integrity and ensure they are voted into power.
• Ensure that Southeast states
are secure to attract customers outside their zones or foreigners.
I leave you with the following
adage:
“No nation or state has
progressed when they elect idiots into power. The development or progress of
any state or region can be reversed by an incompetent leader. There is a
positive relationship between good government policies and prosperity of businesses.
Only a mad man would burn his house to kill a rat or to prove a point”
Thank you
Ikenga Ezenwegbu
anayonwosu@icloud.com
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