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Nigerian Economic Environment Challenging But Rewarding – Kroll

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…seeks to expand footprint in Nigeria to support growth

Kroll, a foremost global corporate investigations and risk consulting firm, has described the economic operating environment in Nigeria as one with a unique set of challenges and opportunities for the discerning investor.

Giving reasons on Nigeria's spotlight among the growing global markets, Mark Simmonds, Kroll EMEA's senior consultant, says in Lagos as the company plans to expand its footprint in Nigeria, that the country's rebased GDP in 2014, which placed Nigeria at top position in Africa ahead of South Africa, is traction.

According to him, Nigeria is also maintaining the growing middle class comprising a large, vibrant entrepreneurial workforce of at least 73.4 million (1Q 2015). Another fundamental attraction is the successful and peaceful transfer of power to the new democratically elected government. All of these factors, Simmonds highlighted, have strengthened investors' confidence in the maturity and dynamism of Nigeria's economy.

However, the country also has its own unique challenges. A much-weakened currency and a low oil price are affecting government revenues. These and other factors present local and international investors with a complex set of challenges and opportunities that require expert guidance to tackle.

Kroll's recent work for Nigerian clients includes an overseas investment advisory project for a Nigerian business making an investment in India and the Middle East. On behalf of the investor, Kroll drew on its cross-border capabilities to develop an understanding of the investment target's profile, activities, political connections, operational vulnerabilities and reputation in the relevant markets outside Nigeria which fed into the client's strategy and deal structure

Commenting on the scope of Kroll's business intelligence work, Alex Booth, senior director, Kroll EMEA, states, “Kroll has been operating in sub-Saharan Africa for over two decades, helping both the public and private sector deal with critical issues.”

He says Kroll recently worked with a Nigerian government agency to identify and profile the shareholders in a business venture inside Nigeria. At the client's request, particular effort was made to identify undisclosed beneficiaries of the business, and to expose undisclosed connections and relationships between the business and senior political figures.

Kroll was also instructed to assess the business venture's likely viability and attractiveness to external investors.

Kroll has also conducted international asset tracing exercises for leading Nigerian banks, many of which had lent heavily into the domestic petroleum sector, but then seen depressed oil prices reduce the value of the underlying assets.

It was retained by the banks to investigate the guarantors of the loans, to identify and locate assets held by them, their companies and their family members, and to support and inform the client's legal strategy for making recoveries.

It has also worked with several leading Nigerian private equity firms, and was recently asked to investigate allegations of financial irregularities within a portfolio company.

Through a combination of sources in the local business community, and Kroll's own research in Nigeria, an investigation was carried out bringing together external intelligence gathering, computer forensics, accounting reviews and supplier audits, he says.