Another big challenge arises from corruption which is a major problem in
Nigeria. As a respected elder statesman once lamented, it is not just
that officials are corrupt but corruption has almost become official.
However, much has been made of the issue of corruption. Corruption is
not exclusive to Nigeria. Many monumental corruption cases making
headlines around the world today do not involve Nigerians. Two agencies
(EFCC and ICPC) are also combating corruption in Nigeria full time.
Thankfully, many Nigerians in the public and private sectors exhibit
high ethical standards in their personal and professional interactions.
Another challenge inherent in our investment environment is bureaucratic
bottlenecks. Contrary to the media claims of Corporate Affairs
Commission (CAC) and the Nigerian Investment Promotion Council (NIPC),
processing of business documentation in Nigeria still progresses at
snail speed. Conducting a business name availability search, for
instance, is expected to take a few minutes but it often ends up taking
weeks.
Similarly, anyone trying to obtain basic information (such as say a
tourist guide or an investment guide) from a ministry or agency that
ought to have such material in stock may find himself or herself being
directed back and forth from one ministry or agency to the other in an
endless ding dong mostly because some people are unable to know what
they ought or to do what they should.
There is also the challenge of multiple taxes which take a heavy toll on business and investment.
Though more prevalent in the period before 1999, political instability
is another challenge which raises the risk of administrative
expropriation by successive governments. It also often results in fear
of the ability of government to honour it’s contractual obligations or
counterpart funding obligations. This discourages private investors.
Fortunately, the polity is more stable today.
Economic instability which is the cumulative effect of political
instability, inflation and/or policy inconsistencies for which our
country is known also raises the red flag in the minds of serious
investors and constitutes a bad advertisement for prospective investment
in a capital intensive area like infrastructure.
Insecurity is a perennial challenge. Nigeria is a huge country with a
turbulent political history. Although the country has enjoyed relative
stability since 1999, religious intolerance, intense competition for
political power, Niger Delta militancy, kidnapping for ransom, road
safety issues and, more recently, terrorist-style bombings have led to
substantial unease among the citizens and consternation among
prospective investors. However, contrary to popular opinion, Nigeria is
certainly no more dangerous than most African countries and
substantially safer than many.
Negative perceptions and stereotyping of Nigeria and Nigerians presents a
peculiar challenge: Nigeria and Nigerians are often victims of negative
perceptions and stereotyping by foreigners. Every country has within
its population the good, the bad and the ugly. Unfortunately, bad eggs
in Nigerian communities at home and abroad create an image problem for
the nation which is foisted on the silent majority of law abiding
citizens who, as a consequence, are exposed to harassment and hostility.
Nigerians are also guilty of self condemnation. We easily say negative
things about our country in self-righteous indignation. In many online
forums, Nigerians write revolting things about Nigeria without caring
about who reads it. This trend is unknown among the citizens of any
other nation who are circumspect about what they write or say about
their country no matter the circumstance. Really, should we be
highlighting our strengths or our weaknesses?
Other challenges include lack of access to financing. Nigerian banks are
in the main not investor friendly. Interest rates are high and even to
access loans with the high rates involves excruciating processes and
hard to meet conditions.
There is also lack of sufficient investment awareness and information.
In particular, there is low international awareness of investment
opportunities in Nigeria. The ICRC Act 2005 only allows the Commission
to publish the list of projects eligible for infrastructure concession
contracts “in the Federal Gazzette and three national newspapers having
wide circulation in Nigeria and such other means of circulation”.
Invariably, the international media on which most prospective foreign
concessionaires depend for information are ignored.
Crime is also a challenge. Nigeria has a record of violent criminal
activity and poor crime detection for which it is classified as unsafe
by foreigners. However, the crime rate in Nigeria relative to the
population is not higher than the global average. The crime rate in
Nigeria may in fact not be as high as the crime rate in South Africa but
Nigeria receives more negative publicity. The vast majority of visitors
to Nigeria have a safe and crime free experience.
Again, federal budgets often do not reflect the most critical points of
need. Of the N4.4 billion appropriated for 2011, 54% would be expended
running the government, 24% on infrastructure and development projects
under the capital programme, while 9% and 11% respectively was allotted
to debt service and statutory transfers respectively.
-There are many challenges alright which is not unusual in any emerging
economy but there are opportunities too even within these challenges.
-What opportunities exist for prospective investors in infrastructure
concession? A close look at Nigeria’s fact-file shows a bouquet of
opportunities which supports Nigeria’ position as a viable investment
destination:
-Nigeria is vast with 36 states and an active population of over 150m
growing at 3.5% per annum which means that one out of every six Africans
is a Nigerian!
-Nigeria offers an abundance of skilled and unskilled labour (50m strong
labour force) at an economic cost as well as in production costs which
are among the lowest in Africa.
-With it’s large population, Nigeria offers an incredible market and is
the gateway to ECOWAS – an additional 250m people in 16 countries of
West and Central Africa
-Nigeria is one the 6 Fastest Growing Economies in Africa which are among the 10 Fastest Growing Economies in the world
-Nigeria is predicted to have the highest GDP growth in the world over the next 40 years
-Nigeria’s GDP as at 2008 was $141.7b and GDP per capita income now stands at $2,500
-Exchange rate has stabilized around N150/$1
-Investors are guaranteed attractive incentives and tax reliefs both in Nigeria and the rest of West Africa
-Nigeria enjoys robust trade relations with most countries with annual trade turnover in millions of dollars
-Several multinational companies operate in Nigeria – Unilever, Diageo,
Waitrose, GSK, Vodaphone, Coca Cola, Glanbia, Guinness, PW, Shell,
Virgin, HSBC, Standard Chartered Bank, KFC, etc
-Nigeria has substantial foreign reserves of over $45b (May 2009)
-Strong and Fast Growing Financial Sector with global branch networks –
thanks to early capitalization and consolidation of the banking sector
and an investor has easy access to working capital and other credit
facilities.
-Abundant Resources (mineral, agricultural and human)
-Diversity of the economy: oil and natural gas, abundant solid mineral
resources (tin, iron ore, coal, limestone, niobium, lead, zinc),
telecoms, energy, tourism, infrastructure, arable land
-Enormous oil and gas reserves and high production capacity – Nigeria is
the 13th largest producer of petroleum in the world with the 10th
largest reserves and Oil price is $118 per barrel ($75 budget benchmark)
-Concerted anti-corruption drive powered by EFCC and ICPC. Nigeria
recently secured the global standard for transparency in oil, gas, and
mining which is an affirmation that MNCs publish what they pay and
government publishes what it receives – a vital step in making the oil,
gas and mining sectors accountable and transparent
-Reform in critical sectors: Energy, Transport, Financial, Civil Service, and Judiciary
-Diversification in agriculture (cocoa, carrot, groundnuts, palm oil, yams, etc)
-Nigeria has invested heavily in key priority sectors – critical
infrastructure (power, aviation, works, transport, petroleum resources,
etc), food security (focusing on agriculture and water resources) and
the development of the Niger Delta
-Nigeria offers stable political environment – the building blocks of
democratic culture have been put in place: rule of law, independent
judiciary, open and accountable government, active civil society, free
and unfettered press, free, fair and credible electoral process such as
was witnessed in the 2011 General Elections conducted by the Prof.
Attahiru Jega led INEC.
Clearly, Nigeria is a land of opportunities – an attractive investment
haven with great potentials and one of the highest rates of return on
investment in the world. These unique selling points (USP) of Nigeria
present a cornucopia of marketing tips for a concerted investment drive.
And of course, the global economic recession makes it inevitable that
investors and business leaders must look elsewhere for new markets and
fresh investment opportunities.
What roles can Diasporans play? Diasporans remain the most portent force
in the promotion of trade and investment. Diasporans are also a strong
mechanism for economic stimulation, job creation and empowerment in
their home countries. Chinese, Indian and Mexican Diasporans have proved
this point beyond doubt. World Bank estimates of remittances by
Nigerians in Diaspora in 2009 amounted to $18.2 billion. Beyond fiscal
contributions, Diasporans also have invaluable knowledge and expertise
which they have acquired. By their exposure and locations, Diasporans
also have access to invaluable contacts and new markets which makes them
natural middlemen in the structuring of business alignments.
The need of the moment is for a new era of constructive engagement
between Nigerians in Diaspora and the Government. This can be achieved
through collaboration with the appropriate agencies involved in
investment promotion and regulation – principally, the Ministry of Trade
and Investment, Nigeria Investment Promotion Council (NIPC), the
Infrastructure Concession Regulatory Commission (ICRC), etc.
Diasporans should initiate a scheme to identify and build a database of
investors and investment consortia in their countries of residence. This
will create a critical global pool of prospective foreign investors who
could be invited to partake in economic missions to Nigeria or to
investment fairs.
Diasporans should spearhead (in collaboration Nigerian embassies abroad
and appropriate Ministries and Agencies in Nigeria) the organisation BIG
investment Expos and Infrastructure Concession-specific fairs in major
global economic hubs to promote Nigeria as an investment haven as it
relates to infrastructure development.
Generally, there are no restrictions on foreign nationals or foreign
entities doing business in Nigeria. However, in consonance with local
laws, they must incorporate a local vehicle before commencing business.
Since prospective foreign investors will necessarily need to find the
right partners in Nigeria, you should assist them to achieve that goal
in order to ensure that they do not fall into the wrong hands which
could further dent the image of the country and, by so doing, corrode
your credibility and hard earned integrity. Shine your eyes!
More steps which should be taken to ensure the success of the vision of
national transformation via accelerated infrastructure development
include:
-Devising an Infrastructure Concession Master plan
-Profiling approved concession projects to make them readily available and accessible to prospective concessionaires
-Reviewing the ICRC (Establishment, etc) Act 2005, first, to expand the
powers of the Commission and, in particular, to empower ICRC to impose
necessary sanctions and second, to provide for unsolicited proposals
from prospective concessionaires in areas covered by the ICRC Act.
The Nigerian moment has arrived, the Nigerian dream is within our grasp.
As the real ambassadors of this country, Nigerians in Diaspora who have
experienced the best infrastructural facilities, who have been nurtured
on global best practices and steeped in the best traditions of the rule
of law are best placed to lead the new drive to transform Nigeria. The
challenges are before you. So are the opportunities. Thank you for
listening.
(Paper Presented by Barr. Uche Ohia at the 5th NATIONAL DIASPORA
CONFERENCE Held at Transcorp Hilton Hotel, Abuja, July 25-27, 2011)
