Kroll, a global provider of business intelligence and risk solutions, believes that good strategies and global best practices can reposition Nigeria’s business environment, writes Raheem Akingbolu
With more than 35 offices in 20 countries around the world, Kroll, a global provider of business intelligence and risk solutions has been operating in the Nigerian market for over two decades, helping the country and her business enterprises to become stronger and competitive globally. During a recent visit to Lagos, its promoters had stated that the rebased Gross Domestic Product (GDP), which positioned Nigeria as number one in Africa, put the country at an advantaged position. They also suggested that the growing middle class that was then comprised about 73.4 million vibrant entrepreneurial workforce would continue to attract the attention of international investors.
As a firm that has a strong global reach, Kroll does a range of activities including market entry strategies for businesses that want to invest in Nigeria. It also provides advice for Nigerian businesses looking to expand and partner with companies coming from outside. Through this, the consulting firm is helping Nigerian businesses understand what is happening in their supply chains. To forestall fraud and other challenges that come with today’s business environment, Kroll also provides cyber security and investigations as well as helping Nigerian banks understand what is happening to their non-performing loans.
The company is working for Nigerian clients, many of them corporate, energy companies or banking groups, which are seeking to expand overseas or raise money on the international capital markets. In addition, the rise of internet-enabled crime has seen increased levels of interest amongst Nigerian clients for Kroll’s cyber security services.
Kroll’s team of experts has successfully provided strategies to companies operating in Nigeria across various sectors and has also created a strong road map to new international investors, willing to explore the market. According to Kroll’s Associate Managing Director, Alexander Booth, the firm has, thus, been engaged by some of the larger Nigerian banking groups to help make asset recoveries to offset their large loan exposures.
“Kroll in the last one year has helped Nigerian banks to identify where their loans have not been performing. We have been hired to work with their legal team to carry out research and liaise on work overseas to help with recoveries. In manycases the borrowing will be in Nigeria but the asset will be in United Arab Emirate (UAE), South Africa, United Kingdom or Canada. The second area has been to help multinationals enter and navigate the Nigerian market. In that area, we are doing more work for companies which are not related to oil and gas. Nowadays, we are busy with fast moving consumer goods (FMCG), insurance, aviation, without the service sectors which I think is a reflection of the evolution of the Nigerian market.
“We are helping them understand what their competitors are doing, the licensing and policy regime. We have assisted companies in Nigeria to battle counterfeiting, to ensure only their legitimate products are on sale. Kroll has history of working on this across sub Saharan Africa. Among other things, we are trying to help companies understand if counterfeit products are being made in the country and who is making themso clients can plan how to shut theoperations down,” he said.
According to him, Kroll recently helped a client investigate a large scale fraud in relation to diesel procurement in one of its portfolio companies in Nigeria.
“This involved imaging the laptops and email servers of the suspects, carrying out a forensic review of the books and records and supplier payments, interviews with members of staff, and intelligence gathering on the external actors who had colluded with the employees to make the fraud possible. We were able to quantify the scale of the loss to support their legal team in making recoveries, and to advise on procedures to reduce the chance of a similar fraud re-occurring,” he added.
12 months assessment
Speaking on how the country has fared in the market over the last 12 months, the associate managing director said the demand for Kroll’s services has been increasing.
“In the last year, we have seen a large demand for our services. For instance, a huge number of interests; both from international and domestic Nigerian companies have approached us for strategies on how to grow their operations. The complexity of this market has kept us and our clients very busy,” he said.
In helping new investor in Nigeria and Nigerian investors extend their businesses abroad, the consultant admitted that there have been challenges but was quick to add that the opportunities are more.
“It is a large economy although there are some challenges with foreign exchange, repatriation of capital and delays to some policy decisions. Apart from that, it’s an interesting promising destination for investors,” he said.
Potential of the Nigerian private sector
The firm’s Senior Consultant, Mark Simmonds pointed out that the country’s private sector is dynamic with a huge amount of energy and ambitious organisations. He added that the roadmap plan of Kroll is not just to help Nigerian companies locally but to use the entrepreneur expertise to grow them across the whole of Africa continent and beyond.
“There is a growing volume of intra-Africa investment and trade taking place and Kroll is well positioned to help Nigerian investors achieve their aim of expansion. So far, we have identified three important areas. First, cyber security and cyber investigation, which can contribute to reducing fraud.Secondly, to assist Nigerian businesses to understand and connect with relevant partners enabling them to attract foreign capital and partners. Thirdly,resolving challenges in the Nigerian supply chain to make sure money flows in the supply chain legitimately and smoothly.
“Cyber security is a challenge in the UK as well. And it is an increasing area of importance as fraudsters are becoming more sophisticated. Likewise, businesses must becomemore sophisticated as well. They want to protect their goods, information and data. Kroll has skills and expertiseto help clients defend themselves against internet crimes and reduce their vulnerability to cyber crime,” he said.
Impact in Nigeria
Looking back at the asset tracing and recovery side, Simmonds asserted that the firm’s impact has been very helpful.
“We recently worked for an oil field services company. They are already in Nigeria but expanding and buying Nigerian businesses locally. We helped them to understand the target business, who are the owners, who are they connected to, on what basis were they winning contracts, what was the management team like, their strength and weaknesses in the market, what does the change of government mean for the business. Overall it’s about giving our client an insight into the environment, to seek what the risks are and where the exposure is.
As a strategic intelligence and advisory firm, Kroll has continued to see real interest amongst its clients for the exciting investment opportunities offered by the Nigerian market,” he said.
He made reference to how a leading Lagos-based banking group hired the firm to conduct a global asset search into a high-profile Nigerian businessman active in the midstream and downstream domestic energy sector.
“We recently advised a multinational consumer goods company on its move into the Nigerian market, helping them to navigate the complicated Nigerian political system and to understand more about their supplier and distributor risks. This enabled the client to structure its entry in a way that would allow it and its local partners to take best advantage of what is a very exciting opportunity in a market of some 170 million people,” he said.
The experts unanimously agreed that international and regional investors are increasingly engaging Kroll for support in Nigeria – to increase their understanding of the country, or to deal with operational and strategic issues – despite the economic headwinds the country is currently facing.
Although 2016 has been a challenging year for Nigeria – low oil prices have subdued economic growth, acute currency pressures continue, and policy direction has often been uncertain – the outlook in the medium term for this large and dynamic market remains highly favourable.
As well as being Africa’s largest oil producer, Nigeria is an agricultural and soft commodities powerhouse, and has substantial under-exploited mineral reserves, with real potential to scale up output. Coupled with its important and diverse services sector, growing consumer markets, and vibrant and entrepreneurial business community, the country continues to attract a wide range of international and regional investors.
Kroll is often engaged by these investors to support their entry to the Nigerian market.
“We gather intelligence and draw on our deep regional knowledge to help our clients identify commercial opportunities in Nigeria, assess risks, analyse competitors, and carry out due diligence on acquisition targets or joint venture partners. The scale and sophistication of the Nigerian market generates high levels of interest,” he said.
According him, their unparalleled investigative pedigree and forensic accounting capabilities also see them engage frequently in Nigeria to combat fraud, bribery and corruption.
“We are ideally equipped to support private sector Nigerian clients which have suffered thefts of money, stock or sensitive data, and to support Nigerian government agencies involved in President Buhari’s laudable and ambitious initiatives to prosecute state corruption, reduce tax avoidance, and recover stolen sovereign assets from foreign jurisdictions,” Booth added.