German Industry, Others Withhold New Investments Over Nigeria’s Poor Economy
German, Swiss and Austrian companies in Nigeria may not consolidate on existing investments until the economy improves.
A recent survey indicated that the tough economic climate and growth stagnation are forcing most of the companies to withdraw new investments.
The report, fourth Austrian-German-Swiss Business Outlook (AGSBO) 2019, by the delegation of German Industry and Commerce in Nigeria, recently disclosed in Lagos, showed four major factors affecting their operations. They are: compliance and corruption, infrastructure and insecurity, access to forex, and overall security, which also forms part of the major factors affecting Nigeria’s ranking on the 2019 ease of doing business analysis.
However, majority of the companies remain optimistic about the economic condition of Nigeria and hope to see future improvements.
The delegation of German Industry and Commerce in Nigeria, organised a survey among the Austrian, German and Swiss companies operating in Nigeria, to understand the challenges faced with regards to operating a business in Nigeria and also share their success stories.
Giving an analysis of the survey at a press conference, Delegate of German Industry and Commerce (AHK Nigeria), Dr. Marc Lucassen, said the problems, which are systemic in Nigeria is also hindering them to employ more Nigerians, as the challenges are yet to be resolved.
He said it was important that the current government provides policies that are geared towards improving these factors, to increase Foreign Direct Investments (FDIs) and more foreign representation in Nigeria.
The Deputy Consulate General of the Federal Republic of Germany, Alexandra Herr, expressed confidence that the interest in the Nigerian market would continue to translate into a series of initiatives and visits of trade delegations among others in the months to come.
Pledging her country’s support, she said: “With more than 90 German companies’ active in Nigeria, we will continue to work tirelessly to support these efforts.”
Similarly, Commercial Attaché of the Austrian Embassy, Hannes Scheiner, said Nigeria is her second largest trading partner in Sub- Saharan Africa, and the Austrian exports to Nigeria fluctuate around 80 million Euros per year.
Scheiner noted his country’s interest in strengthening existing economic ties and initiating new business relations with Nigeria.
With an increased interest in the innovation and tech space, Scheiner said he continued to see potential for economic exchange between both countries, specifically as it relates to high quality, specialised machinery for the manufacturing industry; renewable energy solutions and environmental consulting; construction machinery and materials; supplies and general infrastructure improvement.
Consul General of Switzerland in Lagos, Yves Nicolet, expressed positive signs of recovery for the Nigerian economy as Swiss companies operating in Nigeria has increased significantly from 45 to 54 within a year.
Specifically, he said Nigeria, especially Lagos State, remains a very important and potential place for business.
The report further explained that there is still a huge gap in finding the right skills in mechanical and electrical engineering, IT and communications and service technicians.
However, Lucassen noted that almost 50 per cent of the companies are, therefore, willing to pool their resources together in a joint Dual Vocational Training (DVT) programme in order to bridge this gap.