Diaspora investment into Nigeria

1
Diaspora investment into Nigeria

• Ben ERONINI
• CEO, TopAir Intl Ltd

African Diaspora Investment Workshop Transcorp
Hilton, 16-17th October 2008
2
Agenda

• Background
• Investment in Nigeria
• Challenges to diaspora investment
• Recommendations

3
Background

• Resident in Belgium since 1982.
• Education Masters degree in international
  finance in 1987
• Established Grupo Trade NV in Belgium in 1987-
  later became BPL International N.V.
• Has been investing in Nigeria since 1988.

4
Investment in Nigeria

• ACT Nigeria Limited from 1988 till 2006 in the
  oil gas sector.
• Specialized in corrosion control, solar power for
  cathodic protection, pipeline rehabilitation,
  pipeline construction for Agip Addax petroleum,
  Well head fabrication and others.
• The company is now know as Bennic Engineering
  Services Limited. Web site www.benniceng.com and
  the revenue around 10 million USD annually.
• E. Clemfan Co Limited till 2006 was in charge of
  Air conditioning and Refrigeration and its now
  know as TopAir International Limited.

5
Investment in Nigeria

• TopAir International Limited
• Sector Air conditioning Refrigeration
• Sole representatives of Johnson Controls in
  Nigeria with the product (YORK )
• Established in 2006
• 2007 Sales estimated at 5.5M US dollars
• N of Employees 15 and working with consultants,
  contractors, Architect and designers.
• Presently building an assembly line for CKDs
  SKDs in Lagos for the low end air conditioners

6
Challenges

• Access to finance from the local banks.
• Unfavourable taxation system (3 year audited tax
  paper for startups)
• Clearing costs and import duties on the custom
  side (not standard and indescriminate import
  duties by the inspection agents)
• Real estate cost (very high like 2 5 year lease
  term)
• Government regulations (not clear enough)
• Bureaucracy
• Infrastructure deficiency energy, security,
  roads, etc.

7
Lessons Learnt

• Make provisions for financing basic
  infrastructure (energy, security, etc)
• Be aware of existing tax regimes for startups
• Consider local banks as warehousing agents for
  inflows rather than as long term financial
  partners.