Henry Egbiki

Henry Egbiki

West Africa Regional Managing Director, Ernst & Young (EY)
Kunle Elebute

Kunle Elebute

Senior Partner, KPMG
Given the enormous potential of Nigeria's market, global accountancy firms have invested heavily in their people, methodology, and technology.

How would you assess the status of the Nigerian economy today?

HENRY EGBIKI When I travel and talk to foreign investors, there is never a doubt about Nigeria's potential; it has always been about how to deal with the challenges such as infrastructure and power. In terms of security, there is some stability right now, though it is still something investors talk about. The infrastructure deficit is so huge that the government needs private sector participation; however, the private sector is concerned about consistency in government policies. Overall, there has been a huge improvement in the ease of doing business. Times are changing, and so is the business environment in Nigeria compared to three or four years ago. More importantly, there is a government focus and executive sponsorship for ease of doing business in the country.

KUNLE ELEBUTE The recession technically ended once we registered two quarters of positive growth, though the rate of growth is still far from what is required to achieve the correct growth. One of the measures that helped to improve liquidity was certainty in the FX rate and the Central Bank's investor window. Significantly more dollars came into the market, which improved dollar liquidity. Many companies did extremely well on revenue because of price increases, while production was at the same level. Foreign investors like the market because asset prices are low and PO issues are down; they are buying cheap and if things continue for the next five to seven years, they can exit at a good price in the future.

Can you give us some background on your services and operations in Nigeria?

HE We have been in Nigeria since 1963, first as Ernst & Whinney and Arthur Young and then as Ernst & Young after the merger in 1990. Our footprint spans all sectors. Our audit and assurance services contribute about 50% of our business. We are also strong in taxation services and advisory, which includes traditional consulting as well as performance improvement and risk services. Other services include transaction advisory, due diligence, raising capital, valuations, financial modeling, and more. We are growth leaders in this market, and in the last few years we have been outgrowing our competitors.

Do your clients see the effectiveness of the Made in Nigeria brand policies?

KE The fact that we had to devalue the currency means that imports are more expensive than a year ago; a company that produces locally at a cost lower than imports is making money. The only problem is that people smuggle in foreign products so that they do not have to pay duty in order to compete with local manufacturing. The only way importers can compete is to smuggle and not pay duty.

What is your outlook for 2019?

HE 2019 will be a great year; we already see a recovery of the economy, and we hope this will be sustained throughout 2019. We anticipate higher growth in 2019 than the previous year. This is subject to the outcome of the election and how fast the new government settles down. As for EY, we have aggressive plans for 2019; we want to improve our growth rate as the economy will turn around, the opportunities will open up, and Nigeria will be open for business.

KE Our business is doing much better than it has is the last two years. We have the capacity in this market and need to work across the border. More importantly, as the economy gets more attractive for current businesses and investors, businesses are looking at different ways to grow. We are helping businesses to define their growth plans and execute them. On our side, our challenge is attracting and retaining people. But by keeping them busy and excited about what they are doing this problem is solved. We need great investments in the health and education sectors with these revenue flows. As for infrastructure, this will happen whether the government funds the sector or not since private investors will step forward. There is still a great deal of unfinished business to make the economy work the way it ought to work, and we have to see what happens. ✖