Identifier
Created
Classification
Origin
08LAGOS147
2008-04-22 05:57:00
UNCLASSIFIED
Consulate Lagos
Cable title:
NIGERIA: OPIC SUPPORTED INVESTMENT FUNDS IN THE
how-toVZCZCXRO4116 PP RUEHMA RUEHPA DE RUEHOS #0147 1130557 ZNR UUUUU ZZH P 220557Z APR 08 FM AMCONSUL LAGOS TO RUEHC/SECSTATE WASHDC PRIORITY 9870 INFO RUEHZK/ECOWAS COLLECTIVE RUEHUJA/AMEMBASSY ABUJA 9586 RUCPDOC/DEPT OF COMMERCE WASHDC RUEATRS/DEPT OF TREASURY WASHDC
UNCLAS LAGOS 000147
SIPDIS
SIPDIS
DEPT PASS TO OPIC FOR APATEL, BPEARCE
E.O. 12958: N/A
TAGS: EINV ECON NI
SUBJECT: NIGERIA: OPIC SUPPORTED INVESTMENT FUNDS IN THE
REGION: GEF AFRICAN CONSUMER FUND
REF: A. STATE 27714
B. LAGOS 549
C. LAGOS 99
UNCLAS LAGOS 000147
SIPDIS
SIPDIS
DEPT PASS TO OPIC FOR APATEL, BPEARCE
E.O. 12958: N/A
TAGS: EINV ECON NI
SUBJECT: NIGERIA: OPIC SUPPORTED INVESTMENT FUNDS IN THE
REGION: GEF AFRICAN CONSUMER FUND
REF: A. STATE 27714
B. LAGOS 549
C. LAGOS 99
1. Summary: The objectives of OPIC,s supported GEF African
Consumer Fund are compatible with the Government of Nigeria's
desire for more and longer-term equity investment in private
companies operating in sectors that do not traditionally
receive funds. More private equity funds are needed for
investment in companies operating outside the financial,
infrastructure, energy, housing, and telecom sectors because
these other sectors have limited and short-term local funding
sources. Mission Nigeria encourages OPIC to support GE
African Consumer Fund. End Summary.
2. The Central Bank of Nigeria (CBN) had mandated that ten
percent of all private equity funds must be invested in small
and medium size enterprises (SMEs); however the CBN recently
discontinued this requirement. As a result, some banks have
pooled funds that had been set aside to fulfill this mandate
into a common fund called the Small and Medium Enterprise
Equity Investment Scheme (SMEEIS). Early in March 2008, the
Bankers' Committee, made up of the 24 consolidated banks,
replaced SMEEIS with the new Micro Credit Fund (MCF) and put
the unused funds from the SMEEIS into the MCF.
3. To ensure a flow of credit to SMEs, banks also have the
option to contribute five percent of their before-tax profit
to a pooled fund created to support microfinance banks. In
addition to the SME equity schemes organized by banks, four
well-known major private equity funds currently operate in
Nigeria. One of the firms, Capital Alliance (CA),has
established a management team to vet SMEs' readiness for
equity investment and when necessary to assist SMEs fine-tune
their operations to qualify for CA's funds.
4. Comment: As it stands, Nigeria's private equity market is
fledging, and more private equity funds are needed for
investment in companies operating outside the financial,
infrastructure, energy, housing, and telecom sectors (reftels
B and C) because these other sectors have limited and
short-term local funding sources. Mission Nigeria encourages
OPIC to support GE African Consumer Fund. End Comment.
5. This cable was cleared with Embassy Abuja.
BLAIR
SIPDIS
SIPDIS
DEPT PASS TO OPIC FOR APATEL, BPEARCE
E.O. 12958: N/A
TAGS: EINV ECON NI
SUBJECT: NIGERIA: OPIC SUPPORTED INVESTMENT FUNDS IN THE
REGION: GEF AFRICAN CONSUMER FUND
REF: A. STATE 27714
B. LAGOS 549
C. LAGOS 99
1. Summary: The objectives of OPIC,s supported GEF African
Consumer Fund are compatible with the Government of Nigeria's
desire for more and longer-term equity investment in private
companies operating in sectors that do not traditionally
receive funds. More private equity funds are needed for
investment in companies operating outside the financial,
infrastructure, energy, housing, and telecom sectors because
these other sectors have limited and short-term local funding
sources. Mission Nigeria encourages OPIC to support GE
African Consumer Fund. End Summary.
2. The Central Bank of Nigeria (CBN) had mandated that ten
percent of all private equity funds must be invested in small
and medium size enterprises (SMEs); however the CBN recently
discontinued this requirement. As a result, some banks have
pooled funds that had been set aside to fulfill this mandate
into a common fund called the Small and Medium Enterprise
Equity Investment Scheme (SMEEIS). Early in March 2008, the
Bankers' Committee, made up of the 24 consolidated banks,
replaced SMEEIS with the new Micro Credit Fund (MCF) and put
the unused funds from the SMEEIS into the MCF.
3. To ensure a flow of credit to SMEs, banks also have the
option to contribute five percent of their before-tax profit
to a pooled fund created to support microfinance banks. In
addition to the SME equity schemes organized by banks, four
well-known major private equity funds currently operate in
Nigeria. One of the firms, Capital Alliance (CA),has
established a management team to vet SMEs' readiness for
equity investment and when necessary to assist SMEs fine-tune
their operations to qualify for CA's funds.
4. Comment: As it stands, Nigeria's private equity market is
fledging, and more private equity funds are needed for
investment in companies operating outside the financial,
infrastructure, energy, housing, and telecom sectors (reftels
B and C) because these other sectors have limited and
short-term local funding sources. Mission Nigeria encourages
OPIC to support GE African Consumer Fund. End Comment.
5. This cable was cleared with Embassy Abuja.
BLAIR