Here’s the latest Auerbach & Grayson report from our globetrotting friend Jonathan Auerbach, who searches the world for ground-floor investment opportunities that his colleagues have largely shunned or overlooked:

As of January 1, Nigeria has abolished their long-standing fuel subsidies with the result that gas at the pump immediately costs N138-43/liter (~$3.32/gal) from N65/liter (~$1.54/gal). While your evening news may show massive protests along with other local hysteria, take a walk here with us to assess the bottom-line of this critical free-market transformation which will be highly beneficial economically to sub-Sahara’s largest economy to be. Just let this sink in…the value of the fuel subsidy was equal to 25% of the annual Nigerian Federal Budget! Its removal now provides significant private-sector incentives to develop up and down stream projects in the energy sector. It clearly will provide reallocation of government revenues to massive infrastructure and residential shortages. Our local partner CSL (soon to release a comprehensive impact piece on this event) see the event as currently FX neutral but later strengthening based on experiences from similar events in other emerging markets (Indonesia and Iran) where the balance of payments was positively impacted by the removal of incentives to import dodgy products in order to collect subsidies. Bottom line: This is going to have magnificent impact on a country where government is truly making great strides on empowering the private sector. You had better have Nigeria on your radar screen and do not lose sight of their impact on the rest of the continent. Yes, that includes Egypt.