Economy
Although the concept of economic diplomacy is an acceptable foreign policy plank in the country, it should not be implemented at huge costs to the nation. Rather the federal government should ensure enduring security, provide basic infrastructure and strengthen institutions to attract private investment and enhance the effectiveness of public investment and services that will guarantee economic growth and wellbeing of Nigerians.
By Goddy Ikeh
NIGERIAN leader, President Muhammadu Buhari returned to Abuja on Thursday, May 20, 2021, after attending the African Finance Summit hosted by President Emmanuel Macron of France.
The conference, which was attended by many African leaders focused on reviewing the African economy following the devastating shocks from the COVID-19 pandemic. The summit also drew major stakeholders in the global financial institutions and some heads of government, who collectively discussed external funding and debt treatment for Africa and private sector reforms.
Apart from the Summit sessions, President Buhari held a bilateral meeting with President Emmanuel Macron of France to discuss growing security threats in the Sahel and Lake Chad region. And according to local and international media reports, the two leaders committed to working together to fight insecurity bedeviling the Lake Chad basin area and the entire stretch of the Sahel region.
President Buhari had also at the meeting highlighted the challenges facing Nigeria and its neighbors, as well as hinted at the steps taken to reignite response to the situation, which he said, included the appointment of the new service chiefs. He assured his host that Nigeria was willing to work with France and all international partners to reign in the security challenges in the country.
Responding, President Macron pledged his steadfast support for Nigeria and its people amid the disturbing rate of security challenges in various parts of the country. He assured that France would give Nigeria all the needed support to combat the security threats hindering the economic growth of the country as well as promised to support Nigeria in confronting the challenges faced with COVID-19 vaccines.
The Nigerian leader, who was accompanied on the trip by the Minister of Foreign Affairs, Geoffrey Onyeama; Minister of Finance, Budget and National Planning, Zainab Ahmed; Minister of Trade and Investment, Adeniyi Adebayo; and Minister of Health, Dr. Osagie Ehanire among others said on Tuesday, May 18, 2021, that France and Nigeria should deepen anti-terror cooperation to fight groups such as Boko Haram.
The reports by leading Paris-based magazine, Le Point said that Buhari made a case for Nigeria and France to deepen their anti-terror co-operations “if we are to overcome this scourge – particularly in the aftermath of the murder of the late President of Chad”.
“We must be agile and flexible, cooperating across our borders to cut the head off their groups,” he said.
Buhari noted that across the world, conflict and Coronavirus have not been far apart. As governments have struggled to contain COVID, jihadists have taken advantage in the Sahel – the vast arid stretch of territory that lies between the Sahara and Sub-Saharan Africa.
Terrorist incidents have become tragically common across Mali, Burkina Faso, and Niger. Around the Lake Chad Basin, Boko Haram terrorists have taken advantage of the pandemic and pushed back into my country Nigeria, whilst still launching raids and attacks in Chad, Cameroon, and Niger.
“We have seen more than once how Boko Haram – which in French means “l’éducation Occidentale est un péché” – can regroup, morphing in form and tactics. A matter of only a few years ago, they were reduced to a territory-less group, where once they had controlled an area in Nigeria three times the size of Lebanon.
It has demonstrated why pushing against one front can prove futile if groups can simply migrate to ponds of insecurity across porous borders. Yet as instability has spread, so the networks that sustain it have strengthened – whether that be weapons supply chains from Libya, ideological imports of Al-Qaeda and ISIS from the Middle East, or trafficking networks that take money from that escaping instability and feeds it back into the system that generates it,” he said.
On the Covid-19 pandemic, Buhari stated that the infection is spreading further afield and reaching into the heart of Europe and France is not being spared the malignant, with innocents murdered on its streets. “In that context, our fate is linked. Hence Paris has been active in this common fight. The French Operation Barkhane has provided critical boots on the ground in shoring up security across our region. Though challenges remain, it has ensured a wide expanse of territory has not descended into a lawless playground where terrorists masquerading as fighting for Islam groups can freely flourish and multiply. That assistance has been profoundly appreciated in the region,” he stated.
“Now Nigeria and France should deepen our anti-terror cooperations if we are to overcome this scourge – particularly in the aftermath of the murder of the late President of Chad. Where historical ties, support came to Nigeria from the UK, and to the G5 from France, the terrorists do not recognize these border-aligned distinctions. We must be agile and flexible, cooperating cross our borders to cut the head off their groups,” he added.
On the eve of the Summit in Paris, the OECD Development Centre said that African economies needed to expand their efforts for productive transformation in order to generate economic growth and quality jobs in the aftermath of the COVID-19 crisis.
In the paper released in the run-up to the Summit on Financing African Economies, the center noted that the African continent registered the world region’s second-fastest growth over the last decade.
However, Africa’s per capita real GDP growth over the period 2009-2019 was 1.3% per year, which is half the global average of 2.5% and insufficient to achieve its development vision, the African Union’s Agenda 2063.
A key factor hampering productive transformation and private sector development has been a persistent infrastructure investment gap estimated to range between USD 130 and USD 170 billion per year. The resulting poor logistics reduces firm-level productivity by as much as 40%, below their global competitors, stifling their capacity to generate quality, formal jobs.
According to the report, infrastructure projects yield significant development gains for Africa provided complementary policies, such as the provision of basic social services, are also in place.
The report focuses on three actions that can help African policymakers mobilize investment to advance their development goals:
First, deepening governments’ engagement with peers and the private sector will help them identify better policies to improve their public finances. This requires strengthening Pan-African policy dialogue on taxation, working with international partners to co-operate on the production of up-to-date and comparable statistics on domestic revenue mobilization and enhancing cross-border tax information sharing. And also providing assistance to efforts to build tax administration and auditing capacity.
Second, governments can strengthen institutions to attract private investment and enhance the effectiveness of public investment and services. Conditional on solid economic governance systems, national investment promotion agencies can improve investor confidence by acting as interlocutors between governments and foreign businesses, and monitoring policy reforms. Co-ordinating policies more effectively at a regional level, notably through the African Continental Free Trade Area launched in January 2021, by identifying investment priorities and marketing African countries to investors, can generate substantial advantages of scale.
Third, governments must create an African Infrastructure Ecosystem to accelerate and scale-up pipelines of bankable quality infrastructure projects. Rigorous standards of quality, such as applied by the AUDA-NEPAD’s PIDA Quality Label, can both enhance the quality of project preparation and reassure investors in support the continental integration agenda. Improvements in infrastructure project design and implementation will also come from better capacity building by developing a community of practice of African infrastructure experts, such as through the African Infrastructure Knowledge and Learning Platform.
Reacting to the outcome of the Summit, some Nigerian analysts applauded President Macron for convening the meeting, which allowed African leaders to further echo the devastation their fragile economies have fared under the prevailing Covid-19 pandemic and the activities of insurgents in many parts of Africa. They are, however, not in doubt that like most Summits involving Africa and some European and Asian nations often ended as talk shops without corresponding actions.
For instance, President Muhammadu Buhari had embarked on compulsive economic diplomacy to Asia, Europe, and the United States early in his administration in line with Nigerian policy of driving economic diplomacy. In about a year, President Muhammadu Buhari was in Riyadh, Saudi Arabia, United Kingdom, and Russia. Although the visit to the UK was a private one, the other visits were business trips.
The reports from the economic diplomacy trip to Saudi Arabia on what was themed ‘Future Investment Initiative’ FII, said that Buhari discussed and sealed funding arrangement from the United States International Development Finance Corporation, USIDFC, for infrastructure development.
Speaking after the Future Investment Initiative forum in Saudi Arabia, Buhari said that the federal government was ready to explore more ways of funding the upgrade of critical infrastructure in the country by mobilizing additional capital from development finance institutions for the upgrade.
According to the statement issued after the trip by the Senior Special Assistant to the President on Media and Publicity, Garba Shehu, Buhari made the commitment during his meeting with the U.S. Treasury Secretary, Steven Mnuchin, in Riyadh, South Arabia.
The statement added that Buhari and Mnuchin also discussed areas of strengthening Nigeria’s ongoing collaboration with the United States on stopping terrorist financing.
He said that Buhari vowed that Nigeria would leverage on the U.S. facility to address current challenges confronting the country’s power sector as well as the general upgrade of infrastructure.
Shehu explained that the USIDFC provides $60 billion for investments in developing nations and that the Nigerian leader also requested the continued support of the US to Nigeria, especially in accessing the $60 billion infrastructure fund under the USIDFC.
Aside from this new loan overture to the US financial institution, the visit to the Kingdom of Saudi Arabia by Buhari was aimed at improving the ties between the Kingdom of Saudi Arabia and the Federal Republic of Nigeria. In addition, the Nigerian leader and his Saudi counterpart stressed the importance of enhancing ties in all fields during their meeting. The two leaders also advocated strengthening cooperation between both countries on combatting terrorism and coordinating their work on international and regional matters of common interest to both countries.
However, it was the discussions held and agreements reached during the Russia – Africa Summit that attracted much attention and many Nigerian experts believed that it was the most successful outing of Buhari since he began his economic diplomacy trips abroad. The signing of the Memorandum of Understanding between the NNPC and the Russian oil giant, Lukoil was one of the notable deals sealed during the trip.
According to the NNPC, the all-important MoU would enable both countries’ oil giants, the NNPC and Lukoil to elevate the commercial relationships to a government-to-government backed partnership. With the signing of the MoU, NNPC and Lukoil would work together in the upstream operations and revamp Nigeria’s ailing refineries. The MoU would also entail cooperation in the deep offshore exploration of oil in Nigeria, production, trading, and refining.
Other important agreements reached included the interest of Russia’s leading rail line service providers, MEDPROM in undertaking the 1,400km Lagos-Calabar rail track that would pass through all the states in the South-South sub-region, support in tackling Boko Haram insurgents, cooperation in the strategic fields of defense, civil nuclear energy and dealing with piracy and oil pipeline vandalism in the Gulf of Guinea.
The revival and management of the Ajaokuta Steel plant and the Aluminium Smelter Company of Nigeria, ALSCON, Ikot-Abasi, Akwa-Ibom State were also discussed and agreed upon.
Unfortunately, most of these agreements reached in October 2019 at the Russia-Africa Summit have not been actualized in 2021. The same applies to those reached with Saudi Arabia. Reacting to this development, the Guardian report said that the much-trumpeted oil and gas investment plan between Nigeria and Saudi Arabia that would have addressed key challenges in the downstream sector, including the establishment of the refinery, has been left in limbo.
The development, hinged on the inability of the federal government to follow up after endorsing a draft pact by the Kingdom of Saudi Arabia. According to the Guardian, the expectations were that if the deal became feasible, Nigeria could address oil and gas infrastructure shortfall hovering around N18 trillion and stabilize economic development, particularly by blocking leakages, addressing pipeline infrastructure and vandalism challenges as well as spurring industrial activities through gas sector development.
In addition, some Nigerian experts are not favorably disposed to the president attending every Summit abroad like the just concluded African Finance Summit in France since recent deals and pledges from such diplomatic engagements abroad, come at a huge cost to the country’s economy and security.
They believe that the foreign affairs minister and his finance counterpart as well as the Nigerian envoys in these countries could achieve these same results at cheaper costs to the country. They prefer that the president should stay back in the country to coordinate state affairs, especially now the country is literally at war with insurgents, bandits, and kidnappers, and ensure that the enabling environment in the way of adequate security, power, and the right policies are provided to attract investors and investments to the country.
But Shehu sees it differently. Reacting to criticisms to the trips to Saudi Arabia and the Russia- Africa Summit in 2019, Shehu said that Nigerians should accept the fact that, “although active diplomacy as pursued by President Buhari fetches instant results, there are many instances where results take months, sometimes years to manifest”.
According to him, President Buhari’s strategy of selling Nigeria’s infrastructure priorities to countries with economic clout is paying off handsomely is in reality, doing Nigeria proud by tackling the gaps in the infrastructure deficit.
“The records of some of his predecessors in office bespeak a greedy trail, when they go abroad they first ask: what is in it for me? What is there for my family? President Buhari is different. Understood correctly, he is an opportunity manager who knows the worth of person-to-person contact in a working relationship.
“Given the possibilities of economic development and jobs creation, no sensible critic will ever say that there is anything wrong with this government’s efforts at attracting foreign investment,” he said.
– May 25, 2021 @ 13:57 GMT
A.I
Tags: Adeniyi Adebayo African Finance Summit African Finance Summit: Nigerians still expecting tangible results Dr. Osagie Ehanire Geoffrey Onyeama President Muhammadu Buhari Zainab Ahmed
