By Nik Ogbulie
Series of intervening challenges had discouraged investments in Nigeria, most of which were not necessary, but took their wrong places based on the applications deployed by past administrations. Unfortunately, such developments have invariably constituted serious reasons why many investors are either whittling down their investments, pulling out of Nigeria or considering other options that have not been the nature of investing in Nigeria. With the dawn of a new government and the putting in place of a new economic policy which is completely investor-friendly, the government has boldly declared its determination to make the country a hub for all possible investments in the West African sub-region. With the trends in the last few months, government’s intentions and responses from several economic blocks like G20 look so positive to call.Chris Ubah, our Economic Intelligence icon, have been following government’s efforts, local investment trends and global reactions to the new Nigerian declaration.. Excerpts;
The very ambitious manifesto carefully crafted by the ruling All Progressives Congress (APC) may not have revealed the fears of the new government and its cabinet until they sat down to see that they inherited a cocoon of frills and thrills signifying nothing. That was when they stood up to agree that spectre may be haunting the Nigerian economy. A number of bubbles in the system which the ruling party had endured or concealed for the past eight years had just become a Pandoras, box whose content calls for global concern so that Nigeria will continue to remain relevant to humanity, some of which are the over 200 million inhabitants. The past administrations in Nigeria pretended that the fate of the Nigeria economy was strictly under their control only to bequeath the new administration with challenges, which, if not carefully understood, may not augur well for the economic existence of Nigeria.
The good thing about the current development is that the Nigerian economy is in the hands of new max-men who have also not pretended that their membership of the immediate past administration is not any criterion to take the situation of the economy for granted. This is why a copious declaration for a new lease of life in the manner and character businesses were conducted in Nigeria must quickly change. These changes have already started with the dismantling of the road-blocks which have been the major discouragement to investment in Nigeria. Apart from clearing the domestic backlog of astonishing policies, the approach to foreign investment outlook has remained germane to the intention to attract huge investments into the country. This call has remained highly relevant based on the indication that the Nigerian economy must return to neo-activity so that it can earn enough revenue for the ever growing middle-income economy that is being stifled by an astonishing debt crisis. To a large extent, the President Bola Tinubu administration has declared to the world, especially the traditional allies and economic partners of the biggest economy in African that Nigeria is open for business in thought, word and deed.
This has been said, believing that such a change from investors would not only affect the Nigerian economy but the world at large who would indirectly benefit from a wealthy global economy through the avoidance of food insecurity, deprivation, migration and other vices. This becomes very important in view of the threat which a growing climate change poses to the world. Today, the country has a huge deposit of assorted natural minerals, and other productive activities capable of generating a supply chain for many materials. What the Nigerian government has been asking is that investor will be offered a generous investment opportunity that will offer that opportunities for handsome return, using a most refined conditions for doing business as against what investors feel were unattractive to them. Huge interests are expected to be generated from this because the country really means business this time around.
Nigeria is desperately in need of sustainable economic growth to jump-start economic development improve the quality of life of her citizens. The country has been struggling to return to the path of growth for some years. The history of the immediate past administration of Muhammadu Buhari, aside from two or three recessions, was replete with cases of slow or outright zero growth. Nigeria’s Minister of Finance and Coordinator of the Economy, Olawale Edun, recently, alluded to this when he outlined President Bola Tinubu’s vision, agenda and strategy for the economy, saying, “ I think as we all know, we are not where we should be. The economy is barely growing above the rate of population growth. But it was not always so, and in trying to look at the way forward, if we now have a situation of slow growth, double-digit inflation, weak and depreciating currency, as well as security concerns that are resulting in an economy that is not growing and not taking Nigerians out of poverty it will be difficult to make reasonable progress. If we think back to the last time when the economy was stable- when it was growing, when inflation was low, and the interest rate was affordable, that period was about a decade ago. Growth was about 6% in 2013 and 2014.”
From the Minister’s statement, acceptable economic growth has not been recorded in Nigeria for quite some time and this is a source of concern to the new government. For a developed economy, a GDP growth rate of around 2%-3% on average is normal and acceptable but not for a developing economy like Nigeria. Developing economies such as China and India expect high GDP growth rates. Both are growing at around a 6%-7% on the average; almost triple that of a developed economy. Economists’ said this occurs because there are many opportunities for profitable projects in such highly populated countries. In Nigeria, Edun said growth was about 6% in 2013 and 2014 and the government wants to re-enact or bring back that growth trajectory.
The new leadership is working on how to put the economy back on track with a view to enabling it gradually return to meaningful GDP growth. It believes that the solution lies in the steady inflow of foreign direct investments (FDI) into the country. The new President, did not hide this , when he at the Paris Summit for a ‘New Global Financial Pact stoked foreign investors’ interest with some of his actions including the removal of petrol subsidy and the start of foreign exchange reforms. He has also hosted several major companies including Airtel, ExxonMobil, Shell Petroleum Development Company and Bank of America as part of efforts to drive up investments into the country.
FDI inflows into Nigeria turned negative last year for the first time in at least 33 years, according to new data from United Nations Conference on Trade and Development (UNCTAD), representing one of the major challenges inherited by the new president. FDI into Nigeria plunged by a third last year as severe dollar shortage deterred companies from expanding in Africa’s biggest economy, according to Bloomberg.. Investment fell to $468 million in 2022 from $698 million a year earlier, the National Bureau of Statistics. FDI has collapsed about 90% from a high of $4.7 billion in 2008, the data shows.
While there has yet to be consensus on the nexus between growth and FDI, there is a growing view that a relationship exists between the two. Studies over the years show that FDI is a key to growth. The Nigerian government believes that FDI plays an important function in the her economic growth by increasing the amount of investable capital, and by way of technological spill-overs contribute to her economic growth.
Nigerians also believe that huge inflow of capitals is one of the most significant factors to influence economic growth in the country. This investment is crucial for the much-needed industrialization in a country. This is exactly the policy focus of the new administration in the country. Nigerian government officials shared this sentiment when they said that “the President wants to network with international finance corporations and countries that would facilitate FDI into Nigeria. They noted that the President has taken some very bold steps in the area of economy, in the area of social engineering in the last few weeks, and particularly concerning the unification of the multiple exchange rates, which they believe has caused a very positive multiplier effect.
Apart from the immediate, medium and long-term positive effects of the unification policy, there could be a need for an injection of direct foreign exchange into the economy to shore up the value of the naira as market forces stabilize, they noted. The minister further substantiated this when he said that the prevailing circumstances that necessitated the economic growth of the 2010s are no longer present today, hence the latest strategy of the new government is to promote private funding of key sectors, through FDIs and domestic investment by Nigerians, as ways to spur economic growth. It is his opinion that, overall, the President is going to provide a better life for all by encouraging investment that improves productivity, grows the economy and thereby creates jobs and reduces poverty
In his inaugural speech May 29, 2023, Tinubu sized the opportunity to make pronouncements as regards the priority of his administration. He promised to create at least one million jobs for Nigerians, especially the youths. He also revealed that security will be his administration’s top priority. He promised to tackle the menace of insecurity that has assailed the country over the years and indicated that Nigerians shall invest more in our security personnel to effectively tackle the menace of insecurity as well as reforming both the security doctrine and its architecture. He also abolished subsidy on petrol (PMS), saying that it is gone forever, saying that, “subsidy can no longer justify its ever-increasing costs in the wake of drying resources. We shall instead re-channel the funds into better investment in public infrastructure, education, health care and jobs that will materially improve the lives of millions”.
The President also noted that his administration must create meaningful opportunities for youths to leverage the creation of one million new jobs in the digital economy as well as promoting domestic manufacturing and making electricity to become more accessible. He said his government will target a higher GDP growth and to significantly reduce unemployment. All these were meant to clear the way for a conducive production process which will attract and accommodate the comfort of all sorts of investors in the system. In his declaration, he noted that, “I have a message for our investors, local and foreign: our government shall review all their complaints about multiple taxation and various anti-investment inhibitions. We shall ensure that investors and foreign businesses repatriate their hard earned dividends and profits home.” This appears to have been a recurring difficulty that has continued to dampen the investment enthusiasm of notable global business moguls and conglomerates, most of whom have been moving out of the country, only to turn round to use Nigeria as a mere distribution centre because of its huge market powered by the over 200 million inhabitants with notable disposable income when compared with their neighbours.
He said that the currency-swap policy shall be reviewed, indicating that Nigeria’s monetary policy needs thorough housecleaning. The President hinted that the Central Bank of Nigeria (CBN) must work towards a unified exchange rate which will be expected to direct funds away from arbitrage into meaningful investment in the plant, equipment and jobs that power the real economy. According to him, interest rates need to be reduced to increase investment and consumer purchasing in ways that sustain the economy at a higher level. “Whatever merits it had in concept, the currency swap was too harshly applied by the CBN given the number of unbanked Nigerians. The policy shall be reviewed. In the meantime, my administration will treat both currencies as legal tender,” he said. He said his administration shall govern on the people’s behalf but never rule over them. “We shall consult and dialogue but never dictate. We shall reach out to all but never put down a single person for holding views contrary to our own. We are here to further mend and heal this nation, not tear and injure it.” While indicating her commitment to expanding the base for new investments in the Nigerian space, the Federal Government has further emphasized that it must fancy the existing international global governance structure to which she currently believes was established prior to the independence of the African continent and many countries in the global south; as, it is indeed imperative to reform global governance to align with the realities of today’s world and to acknowledge the necessity for partnerships that ensure shared prosperity, inclusivity, and sustainable development.” There are strong indications that Nigeria is committed to shaping and fortifying the global framework and governance concerning all major international issues, particularly in the fields of finance, climate change, bridging the digital divide, adopting a comprehensive strategy towards debt alleviation, addressing food and energy insecurities, instituting post-pandemic recovery measures, and fostering financial inclusion within developing countries.”
Stressing the need for a revitalized international cooperation that is effective, representative, and inclusive to tackle the challenges facing the world, the government opined that Nigeria is ready for collaboration and a “partnership that guarantees a world governed by acceptable rules and norms. It is believed that Nigeria seeks partnership that provides opportunities for all to engage in trade, prosperity, and shared progress with no marginalisation based on geography, race, and legitimate sovereign affiliations”.
A stable government ( political stability) is very crucial for attracting any form of investment whether local or foreign. The investor will always look out for a stable government which is supporting investment and which will not take any steps that are anti-investment. The investor should not have any fear of takeover by the government. This will enable him to go for expansion. Political stability is the ability of the government to provide the services its people need, in order to build the public’s confidence in the institution of the state. Stability is also related to predictability which means that a stable government acts in a way that is expected by the people as economic growth and political stability are deeply interconnected. These are all of the very important issues the government is addressing and enforcing legally so that investors will not be short-changed in any way
The Nigerian government believes that countries with an uncertain political situation, will be a major disincentive. Related to government stability is the level of corruption and trust in institutions, especially judiciary and the extent of law and order. Nigeria, although, haven practiced democracy for more than two decades, has only passed one huddle of democracy consolidation which is short of Two-Turnover-Test required. It has only passed One-Turnover -Test. As a matter of fact, the government is seriously addressing the developments in the polity to the extent they would be made to be very favourable to investment to all, especially foreigners. The streamlining of various social, economic, and political institution so that they will be able to remain largely independent is part of the tasks the National Assembly would be saddled with so that no single person, group or government can subvert the will of the Law. In other words, the government is putting up very strong case for investment stability in such a way that but local and foreign inflows into the Nigerian economy will feel very free to embrace the kind of expansion which will guarantee a very huge leveraging considering the identifiable huge opportunities in the system.
One of the dragons the new government endeavours to eliminate is exchange rate instability which had affected the level of flows into government treasury. It believes that the underlining exchange rate instability in the system has been responsible for the instability in investment decisions by foreigners. Exchange rate volatility which implies uncertainty in the rate of exchange at any point in time has the potential to impact on FDI. Nigeria with her multiple exchange rate system has had the potential of inducing exchange rate volatility which had constituted so much discouragement to investors. According to experts, commercial viability of any FDI is based on exchange rate stability. What this means is that the value of domestic currency should not drop abnormally by which while repatriating the funds; the foreign investor will lose heavily. The current Nigeria government understands this and has acted accordingly in the interest of investors. Exchange rate should be stable; it should be more or less the same as prevailing at the time of investment. Nigeria is currently enmeshed in crisis induced by exchange instability. The new government has already tinkered with it by unifying the exchange rates in the country.
Related to the exchange rate volatility is the inflationary trend in the country. This is another trouble spot, which President Tinubu has to tackle headlong. Annual inflation rate in Nigeria accelerated for a sixth month period to 24.08% in July 2023, the highest since September of 2005, compared to forecasts of 23.7%, National Bureau of Statistics (NBS) said. The statistics office said the July 2023 inflation rate showed an increase of 1.29 per cent points when compared to June 2023 headline inflation rate. The NBS said on a year-on-year basis, the headline inflation rate was 4.44 per cent points higher compared to the rate recorded in July 2022, which was 19.64 per cent. “This shows that the headline inflation rate (year-on-year basis) increased in July 2023 when compared to the same month in the preceding year (i.e., July 2022),” it said However prolonged periods of rising inflation will result in a decrease of FDI flows due to the impacts high levels of inflation has on other aspects of a country’s economy that influence FDI inflow. Analysts said that while high levels of inflation could be off-putting to foreign investors, as they reduce the value of assets pegged to the local currency and lead to currency depreciation in relation to foreign currency, moderate levels of inflation benefit foreign direct investors by helping to promote domestic growth, reducing the value of debts to suppliers and, via currency depreciation, increasing the competitiveness of exports. Government had indicated that it will intensify efforts to tackle the problem of hyperinflation in the economy. The minister said that inflation is a key issue that the administration will systematically deal with to allow flow of investment into the country.
In the financial sector, Ecobank Transnational Incorporated, reported profit before tax of $29million in the Nigerian market in the first half of 2023 compared with $16million in the first half of 2022, representing a growth of 77 per cent. However, its operating expenses in Nigeria rose to $104million in the second quarter, rising by 10 per cent, driven mainly by consumer-price growth, which accelerated following removal of fuel subsidies and exchange rate reform. The bank fingered weak currencies as one of the factors that impacted the pan-African lender’s figures. They achieved these results despite continued challenging macroeconomic conditions in the second quarter, with significant weaknesses in African currencies, high consumer prices and tepid economic growth. Another financial institution, FBN Holdings, reported N187.24billion as profit in the first half of 2023, marking a 231 per cent increase compared to N56.60billion recorded in 2022. This profit was on the back of interest income and fee and commission income. However, the foreign exchange income trended towards the negative for the financial period as it was N98.42billion in the red. Government admitted that the removal of petrol subsidy had slowed down the economy, but said there were interventions in place to cushion the pains of the reform and plug leakages on subsidy management, believing that the benefits of petrol subsidy removal would be ploughed back into various sectors in order to boost government revenue and improve the business environment. The Minister of Finance has also noted that, “the aim of all reforms at this time is to focus on what we call equity to focus on investment to attract investments; investment by foreign direct investors and even investment by portfolio investors that want to invest in the financial aspects of the Nigerian economy, such as the stock bond market,” he said.
There is a high negative relationship between FDI and insecurity as scores of research findings have revealed. An environment in which a business operates is a major determinant of its success and survival, as well as the host country’s overall growth. Investors seek to set the business up in tranquil, progressive settings where they may do business without the dangers of insecurity, insurrection, or violence. Insecurity has posed serious challenges and threats to the security, peace and stability of the country. This assertion has been supported by many other research reports which came out with the conclusion that insecurity in Nigeria has negative effect on FDI by scaring away investors, draining economic resources, reducing productive capacity, increasing cost of production, and ultimately taking away lives. It is therefore on this background that a strong policy stance must be taken to address the state of insecurity in Nigeria so as to attract more FDIs essential for economic growth and development. The Nigerian government alluded to this and has factored it in as part of its agenda. Nigerians and investors are waiting to see how this will pan out. For the first time in history, the Nigerian government appointed two ministries to take care of insurgency while prompting all the defense departments in the Army, Navy and Air force ,as well as the Civil Defence Corpse and the regular police to beam their searchlight continuously on the insecurity prone zones so as to reduce the snowball effect to other parts of the country. This has adequately curtailed the level of insecurity in the country at a rate that business activities are no more disrupted on daily basis.
Another strong factor necessary for inflow of investment into any country is the state of infrastructure in that country. Good infrastructure is key to attracting FDI. Unfortunately, the epileptic nature of power supply in Nigeria, for instance, does not only make the country one of the harshest environments to do business but also renders the country less competitive. Going by World Bank projection, businesses in the country experience an average of 239 hours of power outages every month with about US$0.20 to 0.30 per kilowatt hour (kWh) spent on self-generation. This accounts for nearly seven per cent of the business losses recorded by these enterprises that are now forced to resort to self-generation at a high cost to themselves and the economy. The situation, according to the World Bank, results in economic losses exceeding $25 billion annually to the country. The Manufacturers Association of Nigeria (MAN), the umbrella body of manufacturers in the country, says the country’s shortage of electricity supply has been identified as a hindrance to the profitability of manufacturers with an annual economic loss valued at about N10.1trillion, about two per cent share of the country’s GDP. MAN noted that the unfavourable situation has positioned the country among the worst countries to do business with a rank of 171 out of 190.
The government is currently addressing the issues of power, ports, development of highways, among others. These measures will attract more FDI. Transport and infrastructure are key factor in the desirability of investment. A country may have low labour costs, but if there is a high transport cost to get the goods onto the world market, this is a drawback. Already, there is an on-going rail project in the country. The government is already intensifying efforts to complete the project various electricity, rail, road and ports projects so as to grow the capacity of the critical infrastructure for the enhancement of business activities in a country that has very huge land mass.. Countries with access to the sea are at an advantage to landlocked countries, which will have higher costs to ship goods. Tinubu in June assented to the electricity bill, which authorizes states, companies and individuals to generate, transmit and distribute electricity. The new electricity law repeals the Electric Power Sector Reform Act which was signed by President Olusegun Obasanjo in 2005. Today in Nigeria, the provision of electricity in no more the monopoly of government. It is now a matter of choice based on the nature of business being undertaken. At the same time, the national grid has remained much better efficient as power supply has vehemently increased from a mere three hours each day to 24 hours in more than 45% of the country and some 80% in the dedicated industrial domains or places of important activities or business districts. The consequence is more businesses would soon be arriving to the country even as dedicated gas pipelines are being opened for heavy manufacturing while tax reductions are enjoyed by operators that want to use power importation such as embedded technology in their operations.
The President is emphasizing ease of doing business in the country. The Ease of doing business is an index published by the World Bank. It is an aggregate figure that includes different parameters which define the ease of doing business in a country. The index ranks countries against each other based on how the regulatory environment is conducive to business operation and stronger protections of property rights. Economies with a high rank (1 to 20) have simpler and friendlier regulations for businesses. According to the World Bank, Nigeria is ranked 131 among 190 economies in the ease of doing business in the latest annual ratings. The rank of Nigeria improved to 131 in 2019 from 146 in 2018 and the Nigerian government has been improving this ranking on yearly basis with the current administration promising to bring it to a more competitive level that creates room for investment in its numerous rich resources. In West Africa, Nigeria is the eighth country in the ranking. Nigeria has currently improve tremendously on flexibility of adopting to government policy permitting FDIs in all areas including those in which they were prevented previously, uniformity of tax policies as per international norms.
Another issue that comes under the ease of doing business is the return on investment .This is very necessary because one of the major attractions for FDIs is the profit or the return investors get for investment made. Unless the return is substantially higher than what they could have obtained elsewhere they will not venture for investment. The rectum should also be consistent and it should be increasing over a period. These factors are closely looked into while undertaking investment. The financier of the FDIs will also ensure that they get their money back as it is a safe investment. As the Nigerian government embarks on shuttle diplomacy, assurances are being made on this, while certain bottlenecks already identified by investors both at home and abroad are being urgently addressed and the proper regulatory environments being provided. Today, the Nigerian government has comprehensively aligned with several bilateral institutions to fully undertake responses that affect their participation in businesses in the country.
The new Nigerian government has began a shuttle that tries to remedy some broken ties or establishing one where it is absent in line with the determination to explore more opportunities across the globe.. President Bola Tinubu and President of the United Arab Emirates, Mohamed bin Zayed Al Nahyan, few weeks ago discussed bilateral improvement that can offer growth opportunities to the two countries in view of their unsurmountable investment potentials. While Nigeria has a huge mobile population that is based on trade and various aspects of tourism, UAE has some of the renowned global fleets that can improve the Nigerian aviation industry. Everyday Millions of Nigerians travel out of the country and same return on daily basis indicating huge forex outflow.
Nigeria’s President Bola Tinubu’s investment drive assumed greater tempo with his visit to India for the G-20 Summit. He was at the Summit, chiefly, to promote foreign investment drive for his country as well as mobilize global capital to develop infrastructure to instigate growth and development in the Africa’s most populous country Indian Prime Minister Narendra Modi had extended a special invitation to Tinubu, as Nigeria’s membership is under consideration. While Nigeria’s membership of the G-20 is desirable, the government has embarked on wide-ranging consultations with a view to ascertaining the benefits and risks of membership .The G-20 brings together 19 countries and the European Union, with India currently holding its presidency, which rotates annually among the members. Many world leaders attended the two-day global summit in New Delhi, offering the Nigerian president a nest to optimize his drive for real sector investment into the country. If Nigeria joins the G-20 bloc, it would be the second African country after South Africa. Nigeria has the highest GDP in Africa, according to the World Bank. On assumption of office early this year, the president embarked on the country’s boldest reforms in decades, which have been welcomed by investors. His interest in the G-20 summit was heavily predicated on the urgent need to attract foreign direct investment; and to ensure that the country was able to mobilize private capital from around the world towards the development of Nigeria’s public infrastructure, some of the development deficits that investors want to see in the country
As a demonstration of his determination to achieve his investment drive object, Tinubu immediately embraced Gopichand Hinduja, Chairman and CEO of the Hinduja Group of Companies, a conglomerate with a total asset portfolio exceeding $100 billion U.S. Dollars, whom he received for a meeting. Accompanied to the meeting by Nigeria’s Ministers of Finance, Trade & Industry, and Foreign Affairs, the Nigerian leader made it clear to his first visitor that he was in India with one focus: attracting investments to Nigeria with lucrative opportunities for investors, but most essentially, jobs for Nigerians and new revenue opportunities for Nigeria’s federal and sub-national governments.
According to the Nigerian President, “We are here for business. I am here to personally assure our friends and investors that there is no bottleneck that I will not break. Nigeria will become one of the most conducive places on earth to make good profits and create lasting jobs. With my support, there is nothing standing in your way of enjoying the unrivalled opportunities presented by our massive market and the ingenious and hardworking nature of the Nigerian people. We are open for business,” the President assured. In his response, the Hinduja Group Chairman told the President that he was a living witness to his landmark effort as governor of Lagos State in turning a coastal erosion and water encroachment crisis into a massive free trade zone where industry now thrives. This, he said, was partially responsible for his excitement to partner with Nigeria’s new President to create win-win prosperity for Nigeria’s talented population. The host noted that, “We believe in you as a leader who has done this before. You know what the challenges are. You know how to fix them. We are going to make investments into the billions of dollars under your leadership, because we see you are already addressing the systemic problems. I am ready now to sign MoU and to begin execution. You tell me who to liaise with, and we will get to work immediately, particularly with respect to bus and automobile manufacturing in Nigeria, amongst other areas.” The President, who did not wait to respond, immediately directed that “Ministers of Trade and Finance, the two of you will follow this up immediately, and you will draw up the terms to the satisfaction of both parties. If there are any issues at all that require my intervention, they must be brought to my attention immediately”.
The President commended Indian investors for significant investment pledges amounting to nearly $14 billion committed during the Nigeria-India Presidential Roundtable and Conference in New Delhi, India, saying, “we are ready to give you the best returns for investment possible, there’s nowhere else like our country. Nigeria offers the best returns for investment today, so invest now.” Among these many new investments are Indorama Petrochemical Limited which pledged a new investment of $8 billion in the expansion of its fertilizer production and petrochemical facility in Eleme, Rivers State and Jindal Steel and Power Limited, one of India’s largest private steel producers, which committed to invest $3 billion in Nigeria. Founding President of SkipperSeil Limited, Mr. Jitender Sachdeva announced that, following Tinubu’s personal intervention, he is investing $1.6 billion in the establishment of twenty 100MW power generation plants across the states of Northern Nigeria, amounting to 2,000MW of new power within the next four years. Additionally, the President has approved finalization on a new $1 billion agreement to bring the Defense Industries Corporation of Nigeria (DICON) to 40% self-sufficiency in local manufacturing and production of defense equipment in-country by 2027 through a comprehensive new partnership with the Managing Arm of the Miltary-Industrial Complex of the Indian Government. Another Indian firm, Bharti Enterprises, which is a major first-generation corporation in India with interests in telecom, space communications, digital solutions, insurance, processed foods, real estate, and hospitality, has expressed its commitment to invest an additional $700 million in Nigeria, with work set to begin immediately. Emphasizing that under his pragmatic leadership, agreements must now manifest in industries and jobs on the ground in Nigeria, Tinubu expressed gratitude to all Indian companies and individuals who have responded positively to his administration’s efforts to improve Nigeria’s macroeconomic and investment climate. “Do not procrastinate. Don’t be frightened about investments in Nigeria. Bring it on. Ask your questions and make your requests. The trade and investment opportunities are enormous. I have a team, and I am the captain of that team, and I assure you that we solve problems,” the President affirmed.
Prospective investors were informed by the President that in Nigeria, there is no free lunch or shortcuts, but that he has “good economic policy for the investors as well as able men and women in leadership and on ground, who can drive the goal of broad prosperity through investment and infrastructure.” “I will captain and lead the course of investment, development, and prosperity for the largest democracy in Africa and for investors from the rest of the world,” the President added, reiterating that Nigeria is open for business with intelligent, innovative, capable, and highly committed individuals in government, who are ready to drive the largest economy in Africa to destiny.
The President also told the Summit that “he is proud” that the Nigerian stock market had broken records in its consistent bullishness since he assumed office. Minister of Finance and Coordinating Minister of the Economy, who addressed the roundtable themed, “Building Partnerships with Renewed Hope for a Diversified and Prosperous Economy,” thanked Mr. Naveen Jindau, Chairman of Jindal Steel and Power Limited, for the new $3 billion investment in iron ore processing and steel development in Nigeria. Commending the Tata group and so many others who have immediately responded to Tinubu’s bold and decisive moves to correct the major systemic faults in the macro-economic and investment climate in Nigeria, the Finance Minister noted, “I also wish to thank Mr. Sunil Bharti Mittal, Founder and Chairman of Bharti Enterprises, for his continued commitment to invest in the first phase at least $700 million dollars more in Nigeria,”.
The Minister further used the opportunity to explain the underlying principles of President Tinubu’s eight-point strategy, emphasizing that his agenda aims to promote growth and job creation, poverty reduction, food security, improved access to capital, inclusivity, business and citizen security, and fair play on a foundation of rule of law and anti-corruption.
On behalf of investors, Chairman of Bharti Enterprises, Sunil Bharti Mittal said to the President, “You have unified the FX market. You have freed up crucial capital to upgrade your public infrastructure. Now, you have just dropped your prepared remarks and have spoken from your heart. Our investors have heard from a leader who is doing everything possible to attract capital to Nigeria for the benefit of Nigerians and our companies. Mr. President, we will bring these investments to Nigeria, and with your inspiring leadership style, we can only do more and more.”
Also, at the event, Nigeria’s Minister of Communication, Innovation and Digital Economy, Dr. Bosun Tijani, and his counterpart from India’s Ministry of Electronics and Information Technology signed a Memorandum of Understanding (MoU) for Co-operation in the field of Sharing Successful Digital Solutions, to be implemented at total population scale for digital transformation. The Minister also signed an MoU with Central Square Foundation for Co-operation in the field of Sharing Successful Ecosystems, which involve interventions relating to education technology, to be implemented at population scale for digital economic transformation. Under the watch of Nigeria’s Industry, Trade and Investment Minister, Dr. Doris Uzoka-Anite, a third MoU on Infrastructure Development was signed between the Infrastructure Corporation of Nigeria Limited (InfraCorp) and Invest India, the National Investment Promotion and Facilitation Agency of India, which helps investors looking for investment opportunities and options in India. Mr. Chandrajit Banerjee, the Director-General of the Confederation of Indian Industries (CII), noted that the Presidential Roundtable serves as a robust foundation for Indian businesses looking to engage with Nigeria and would encompass cooperation across key areas, such as capacity building, skills development, agriculture, and the enhancement of digital and physical infrastructure, among others. “Under the determined leadership of President Tinubu, the CII is prepared to dispatch a high-level delegation to Nigeria, and we are keen on establishing a second presence in Africa, with Nigeria as our target destination,” he concluded. Following the Roundtable, the President met individually with each of the top pledging investors to finalize on the next steps to ensure that no environmental encumbrance stands in the way of their success in Nigeria.
For the Leader of Africa’s largest economy, a meeting with the Chief Executive Officer of Europe’s largest economy, Germany, presented a unique opportunity to expand ties of prosperity for the people of Nigeria, but with a pragmatic approach towards ensuring the effective execution of agreements struck. “It is not, for us, only a matter of designing the financial architecture for an expanded economic partnership. It is also about the practicality of aligning the perspectives of your large-scale manufacturers, such as Volkswagen and others, with the reality of the new incentives my government is putting in place for them to come and prosper across multiple value chains and sectors inside of our country,” the President said.
Apparently excited by the specific economic focus of the President’s proposal, German Chancellor, Olaf Scholz, responded by acknowledging the mutually-beneficial nature of an escalation in the scale of economic ties with Africa’s largest economy. “Thank you for this important discussion, Mr. President. I can appreciate this opportunity to advance our economic relations. Your market is unique and our companies have history in Nigeria. We acknowledge the business friendly reforms you have put in place. I am happy to inform you of my desire to visit you in Nigeria in October, which will allow us to carry forward these initiatives,” the German leader stated. Following Tinubu’s acceptance of the German Chancellor’s request to visit Nigeria, the President proceeded to sit down with the leader of Asia’s fourth largest economy, South Korea, during which, South Korean President, Yoon Suk Yeol, commended the President’s regional leadership in upholding democratic tenets and norms. “I wish to commend your strong leadership, following the peaceful transfer of power to you from your predecessor and we see a stable country in West Africa that is growing in stature,” he said.
President Tinubu responded by swiftly steering the discussion toward his economic focus as he immediately advanced proposals for an enhanced South Korean presence in Nigeria’s local manufacturing sector. “We will leave nothing hanging. We will finalise what we agree to and we will execute. We will work point-by-point with you to secure rapidly implementable MoUs across sectors of partnership that will involve the active presence of your biggest firms, not just in terms of Nigerian consumption, but in local Nigerian production, from telecommunications to technology, and oil & gas,” the Nigerian leader noted The South Korean President noted specifically that Nigeria’s education, technology and energy sectors are of utmost interest to South Korean investors and that he will mobilize his business community to take advantage of new Nigerian incentives for local industry. All the responses were in the affirmative to the economic partnership proposals, even as they expressed gratitude for the Nigerian leader’s invitation to visit. “Our teams must now stay close in touch to detail our priority areas of up-scaled cooperation with respect to agriculture, defense industries capacity building, and even FinTech growth. I see your commitment. We believe there are immense prospects for Nigeria in the UPI (Unified Payments Interface) and we will ensure that we come together and make progress on these fronts very rapidly,” the Indian leader concluded.
On the G-20 sideline meetings, Tinubu also had substantive, informal exchanges of views with U.S. President Joe Biden; European Commission President, Ursula von der Leyen; and World Bank President, Ajay Banga, amongst many others. The Nigerian government still believes that it is in a good position to play very important roles in form of partnership.. Addressing world leaders at the 18th G-20 Leaders’ Summit, the Nigerian leader called for global unity and cooperation in tackling pressing challenges, fostering inclusiveness, and establishing a fairer world order. While acknowledging the vital role of the G-20 in shaping a rules-based world order that promotes shared prosperity and security, Tinubu emphasized that most of today’s pressing issues are “international in character and cannot be addressed without multilateral cooperation. “Therefore, stronger collaboration, cooperation, and partnerships among diverse regions are the pathways to a peaceful, prosperous, and sustainable future for our world. “This is why the role and contributions of the G-20 in shaping a new world order that is fair and rules-based cannot be over-emphasized. A world that lives as one family, but is divided by staggering income inequalities and uneven access to basic social goods by the vast majority of our people cannot result in a peaceful and secure world where shared prosperity is achieved. I hasten to add that such rules and global governance structures of our collective dreams must be collectively designed, collectively owned, and collectively managed. This is consistent with the true spirit of One Family, mutual respect, and sustainable development. Nigeria is poised, able and willing to be a major player in this family of the G-20 and in shaping a new world, without whom, the family will remain incomplete,” he said.
Tinubu’s determined global push to aggressively attract foreign direct investment into Nigeria took him to the world’s second largest stock exchange, the National Association of Securities Dealers Automatic Quotation System (NASDAQ), in the world’s financial capital, New York. He told the financial community that, “It’s a great honour for me to be here. I am happy to bring Nigeria to your doorsteps and I am honoured that we are here today with a bubbling Nigerian stock market that will evolve in the West African sub-region. The greatest economy in Africa is Nigeria, there is an immense opportunity in Nigeria where you can invest your money without fear. You’re free to take in your money and bring out your money. I count on you to invest in Nigeria”.
At the Nigeria-U.S. Executive Business Roundtable held just after the closing bell, President Tinubu assured prospective investors that while he recognizes that investment capital is cowardly in nature, he intentionally brought successful Nigerian industrialists and public officials to share their experiences and operational plans respectively, in addition to all that he has already done to boost the confidence of the global investment community in Nigeria’s presently reforming fiscal, monetary, regulatory and tax policy environment.
“Nigeria is an opportunity that is impossible to replicate or find elsewhere in any part of the world. We have brilliant young people who both innovate and consume at a large scale. Our entrepreneurial spirit is a major part of what makes our market totally unique, aside from demography. Nigerians build businesses and Nigerian businesses partner with other businesses to conduct larger business. There is enough value to spread around. Be careful of what you hear about Nigeria. You may be dissuaded out of a major opportunity that others will take up. We are here for you. We will give you all the support you need to succeed and succeed abundantly,” the President assured the roundtable.
The American Business Council President, Mr. Sops Ideriah, said that the extensive turnout at the roundtable by American Business Chief Executives served as a testament to the degree to which confidence is rising in response to the actions and words of President Bola Tinubu’s administration with respect to ease of business, investment promotion, and his willingness to personally intervene where required to ease the historical concerns of American business people about doing business in Nigeria. “Having all the stakeholders in the room, His Excellency the President of Nigeria being here, from government actors at the federal and state level to ministers and tax authorities present, as well as private sector industrialists in Nigeria. We are very positive about the potential of Nigeria and we are just reinforcing to our colleagues the message about the economic opportunities that exist there,” Mr. Ideriah said.
