According to the Nigerian independent election commission the former military ruler Muhammadu Buhari, of the APC party, has won the hotly contested presidential election. This marks the first democratic transition of power between parties in Africa’s biggest country and is hugely symbolic.
While many challenges remain, not least the war in the north east, a currency that appears overvalued and ongoing corruption concerns, the opportunity for positive change with genuinely new leadership is enormous. We note that the entire market capitalisation of all of Nigeria is circa $45bn (£30bn), a mere fraction of the country’s official GDP, and a sum roughly equal to one mid-tier UK FTSE 100 / S&P 500 corporate. Within Nigeria we think the banking sector has tremendous long term potential and trades at inexpensive relative and absolute valuations.
Sam Vecht is manager of the BlackRock Frontier Markets Trust