Perception is the way something is viewed, regarded, understood, or interpreted which might not equate to its reality. A company with positive perception is considered to offer products and services with good value. Their products and services are perceived to be a sound buy for investors. Negative impressions indicate that consumers and investors do not view a firm favorably.
Perception isn’t limited to only products or services but also to a country; how a particular country is managed. Did you know that when Buhari won the presidential election, Nigerian Stocks gained the most in the world as the win triggered a strong rally. Nigeria’s all-share index jumped 8.3 percent in a day. Till date, that’s the highest singular gain on the stock market since 2015. Some tagged the gain as the “Buhari Bounce”. It signified investor’s confidence, market optimism, lower political risk, hope amongst others. That’s the power of perception.
Can you remember when Economist tagged Africa the Hopeless Continent? The article was along the line: “No one can blame Africans for the weather, but most of the continent’s shortcomings owe less to acts of God than to acts of man.”
Eleven years on, the music changed. The issue had a title “Africa rising.”The hopeless continent changed to “Africa’s hopeful economies: The sun shines bright” according to its May 2011 headline. What were the mega changes that occurred? We kept toiling. As a people, we kept striving. We kept making leaps albeit in bits.
Nigeria posted its Q4 (2015) GDP growth of 2.11%, the lowest in the past 16 years. Coincidentally, electricity generation at 1580MW is also the country’s lowest in 16 years. Analysts were flying over themselves, some prophesiphying further doom while others were predicting stability in the future.
But if we look inwardly in the midst of the weak macroeconomic indices, the metrics that stirred an influx of investor before are still present to a certain extent;
-the large population
-the relatively large middle class (depending on how you define it)
-the unsaturated sectors (creating a minefield for investors that want to drive change locally).
I won’t deny the existence of challenges but we all know that they are not insurmountable.
The emerging market is currently experiencing a capital flight and a drop in capital importation. For instance, in Nigeria, the total capital importation for 2015 was recorded at $9,643.01 million. This represents a whopping 53.53% fall on the previous year, when the total was $20,750.76 million. Over $10 million didn’t make its way back into the economy in 2015.
Are the concerns of foreign investors valid? Yes. Is the reaction to the macro weakness exaggerated? Yes/No depending on who is answering. One thing is sure: the positive perception is waning. It is time for Nigeria to go back to work yet again. We need to create an environment that is conducive for business. It is time to stimulate the economy.
There are still opportunities, those opportunities didn’t disappear. Nigeria is one of the largest producer of tomatoes, however, spends about $300 million in importing tomato pastes. We are one of the largest producer of Cassava but not the largest processor, loosing potential revenue in the value chain. Nigeria has a growing middle class. Nigeria plans to spend a good percentage of its budget on infrastructure which will address critical infrastructure deficit while the ripple effect will create jobs, improve standard of living, and increase money in circulation amongst others
Let’s put this further into perspective and make it personal; you are still consuming data, you had breakfast, your intellectual property – human capital hasn’t evaporated. The demand is still there and it can be grown.
Let’s take a stake in our country and keep harnessing it.
Perception can rally out of control if we don’t make concerted effort to manage it.
If we need the perception of Africa to still rise, we need to get to work.