Nigeria 2006

As the year is coming to a close, I was thinking about what will happen in Nigeria next year. Although there is sure to be the usual turbulence, I think Nigeria is going to surprise the world. Here's why:

1. Banking consolidation will stabilise the economy. The new big banks (First Bank merging with Ecobank, UBA-STB, Oceanic-Stanbic etc) will add more ballast to the economy and engender trust. With a much larger shareholder base to satifsy, the banks will turn to internal investment opportunities. Foreign capital should flow in more steadily than before.
2. The reform process will gather pace, in the final push before 2007. Tafa Balogun, Alama etc are just the beginning of the good work the EFCC are doing. This should mean there is less money swilling around to swing elections unfairly, leading to a fairer election in 2007. The focus on State-level reform based on activity-based budgetting should mean more money ends up where it is needed. Of course, none of this is going to be a smooth ride, but it looks like Obj is pushing the boat strongly in the right direction.
3. The telecoms sector should strengthen. I'm not sure about the impacts of the Universal licence regime coming in, but it should be the equivalent of banking consolidation: fewer and stronger telcoms companies, which should lead to better customer service. The eventual privatisation of NITEL and SAT-3 will be a major catalyst for growth and development..
4. Chinese and South African investments in Nigeria will increase apace. The mooted national rail network would dramatically alter the business potential of the country.

So I think as we look to 2006, we should focus on these very positive opportunities for the country. All the negative stuff is just friction along the way..