“Barclays Africa Group Ltd.’s corporate and investment banking unit has approached Nigerian authorities for approval to convert its representative office to a fully-fledged business in the continent’s biggest economy,” Bloomberg reported today.
The whole process to obtain the Nigerian licence may take around 12 months.
Currently the following banks have operating licences in Nigeria:
- Standard Chartered Plc
- Standard Bank Group Ltd.
- FirstRand Ltd (investment banking) which is Africa’s biggest bank.
In addition to Nigeria, Barclays Africa would like to expand its operations in other African countries like Ghana, Egypt, Kenya, Zambia, Mauritius, Mozambique, and Botswana.
Economists predict the Nigerian economy will expand by 4.8 percent this year. On the other hand the International Monetary Fund (IMF) sees South Africa to grow only by 2.1 percent in 2015. That’s less than half of the Nigeria’s growth.
“Nigeria’s economy has been growing at an average rate of around 7% a year over the past decade. It is rich in resources, especially oil. It has energetic entrepreneurs and aspirations to be the tech hub of Africa, boasting startups such as Konga and Jumia, budding Nigerian Alibabas” the Economist reported.
International investors can gain exposure to Nigeria via Global X Nigeria Index ETF (NGE). Since July 2014 the NGE lost more than 50% due to the plummeting oil prices weighing on the Nigerian naira.
Top two sector allocations of the NGE constitute more than 80% of the portfolio with financials accounting 45.5% and consumer staples 34.9%.