Mixed signals from Nigeria’s new economic diplomacy

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Muhammadu Buhari
Muhammadu Buhari

MANY Nigerians have applauded the likely gains from the recent economic diplomacy of the president, especially the deals sealed with the Russian government during Russia-Africa summit. But they also feel that the opportunity cost of this frequent trips abroad on the economy and security are equally worrisome.

By Goddy Ikeh

AS President Muhammadu Buhari concludes yet another of his economic diplomacy in Riyadh, Saudi Arabia and headed for the United Kingdom for a private visit, many Nigerians are full of expectations of the cost and gains that the nation can derive from it.

The reports from Saudi Arabia on the just concluded Future Investment Initiative (FII) said that Buhari added to the nation’s shopping list, funds from the United States International Development Finance Corporation, USIDFC, for infrastructure development.

Speaking on the margins of the just concluded Future Investment Initiative (FII) 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 mobilising additional capital from development finance institutions for the upgrade.

According to the statement by 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, on Thursday, October 31, in Riyadh, South Arabia.

According to Shehu, Buhari and Mnuchin also discussed areas of strengthening Nigeria’s ongoing collaboration with the United States on stopping terrorist financing.

He noted 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 U.S. to Nigeria, especially in accessing the $60 billion infrastructure fund under the USIDFC.

But this particular move may no doubt help the Nigerian economy as it will worsen the already huge debt profile of the country and the attendant trillions of naira set aside in the 2020 budget for debt servicing.

Aside from this new loan overture to the US financial institution, the visit to the Kingdom of Saudi Arabia by Buhari, would improve the ties between the Kingdom of Saudi Arabia and the Federal Republic of Nigeria.

Adnan Bostaji
Adnan Bostaji

According to Ambassador Adnan Bostaji, the Nigerian leader and his Saudi counterpart stressed on the importance of enhancing the ties in all fields during their meeting.

The report by NTA quoted the ambassador as saying that 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.

“His Excellency, President Muhammadu Buhari, alongside his accompanying delegation, also met with His Royal Highness, the Crown Prince, Muhammad bin Salman bin Abdul-Aziz, and ways of strengthening bilateral relations and cooperation on energy and investment were discussed, in addition to a number of regional and international issues and the efforts being made in that regard.

“During the meeting, agreement was reached on establishing a Saudi-Nigerian Council with the aim of enhancing mutual investment and supporting developmental projects in Nigeria, in all sectors: oil sector and other vital non-oil sectors. This will contribute to the realization of development and progress in Nigeria,” the report quoted Bostaji as saying.

For the ambassador, President Buhari’s visit to the Kingdom of Saudi Arabia achieved great success by all standards and in all fields: “political, economic, and in terms of security. This will have the greatest mark in improving the relations between both countries and in elevating the relations to wider horizons in the near future, which in turn will enhance the common interests of both countries to the benefits of our two friendly countries and people”.

The highlights of the Russia – Africa Summit, which has been seen as the most successful outing of Buhari witnessed the signing of the Memorandum of Understanding between the NNPC and the Russian oil giant, Lukeoil.

Mele Kyari
Mele Kyari
According to the NNPC, the all important MoU will enable both countries’ oil giants, the NNPC and Lukeoil to elevate commercial relationship to a government-to-government backed partnership.

With the signing of the MoU, NNPC and Lukeoil will work together in the upstream operations and revamp the Nigeria’s ailing refineries.

The MoU will also entail cooperation in 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 will pass through all the states in the South-South sub-region, support in tackling Boko Haram insurgents, cooperation in the strategic fields of defence, civil nuclear energy and in 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.

However, some Nigerians have already reservations on the nuclear energy project, which they believe that the country does not urgently need now in the face of daunting energy challenges and diverse energy sources.  They believe that Nigeria can best be powered with its huge resource and renewable energy resources and should not toy with the dangers associated with nuclear energy at this point of its development.

Chinedu Onyeizu
Chinedu Onyeizu

Reacting to the recent trips of the president to both Russia and Saudi Arabia, a Nigerian refinery expert, Chinedu Onyeizu, hailed the MOU signed between the NNPC and the Russian oil giant Lukoil to revamp the nation’s refineries.

Onyeizu told the News Agency of Nigeria, NAN, in an interview in  Abuja that the gas infrastructure development was part of the discussion with the Russian investors.

According to Onyeizu, the collaboration with the Saudi’s to push the country’s gas resources to other parts of the country would be significantly transformational.

“Aside job creation for the teeming youths of the country which implementation of the agreements will yield, it will also enhance efficiency of the oil and gas sector, strengthen the nation’s GDP, and encourage diversification of Nigeria’s economy.

“The effect of this singular move goes beyond achieving the administrations liquid energy independence agenda.

“It will help eliminate negative climate change externalities associated with burning charcoal or using wood as cooking fuel,” he said.

While Nigerians may have good reasons to applaud these recent deals and pledges from the diplomatic engagements abroad, they are of the opinion that these foreign trips are coming at a huge cost to the country’s economy and security.

Some experts 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 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.

Garba Shehu
Garba Shehu

But Shehu sees it differently. He is of the opinion 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 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.

– Nov. 5, 2019 @ 15:25 GMT |

 

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