Nigeria’s Economic Environment Challenging, Yet Rewarding – Risk Consulting Firm, KROLL

Kroll's consultant Mark Simmonds. PHOTO:

Kroll’s consultant Mark Simmonds. PHOTO:

KROLL, the world’s leading corporate investigations and risk consulting firm, has described the economic environment in Nigeria as one with a unique set of challenges and opportunities for the discerning investor.

Speaking recently in Lagos, Senior Consultant, Kroll EMEA, Mark Simmonds stated: “International and regional investors are attracted by Nigeria’s increasingly diverse economy, last year’s GDP rebasing (which elevated Nigeria beyond South Africa to become Africa’s largest economy), growing consumer markets, and a vibrant and entrepreneurial business community. The recent democratic change of government also boosted confidence.

“At the same time, however, the country continues to face a difficult macro-economic environment, with a much weakened currency and a low oil price affecting government revenues, and the new administration’s policy direction remains uncertain. All of these factors combine to present international and Nigerian clients alike with a complex set of opportunities and challenges.”

Kroll’s recent work for Nigerian clients includes an overseas investment advisory project for Nigerian businesses investing in India and the Middle East. On behalf of these investors, Kroll draws 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, Senior Director, Kroll EMEA, Alex Booth stated, “Kroll has been operating in Sub-Saharan Africa for over two decades, helping both the public and private sector deal with critical issues. 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. Kroll 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.

Through the research, a range of assets were identified often including petroleum storage depots, oil tankers, shareholdings in companies, domestic real estate, private jets, overseas apartments, high value sports cars and other personal assets. The work was carried out in Nigeria, South Africa, UK, Dubai, Canada, US, France, Switzerland, and a series of offshore jurisdictions such as BVI, Mauritius, Jersey, Guernsey and Isle of Man.

Kroll 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.

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