As another investment Summit comes to an end, the Nigerian government should take stock of the country’s participation in these gatherings since most of the pledges made are never redeemed, while the agreements are hardly honoured
By Goddy Ikeh
NIGERIA has since 2015 been attending a good number of Investment and Finance Summits and conferences abroad, which should expectedly attract foreign investments and boost the nation’s foreign direct Investments, FDI. But these expectations appear to be misplaced. However, in the UNCTAD 2019 World Investment Report, Nigeria is the third host economy for FDI in Africa, behind Egypt and Ethiopia. It noted that Nigeria is among the most promising poles of growth in Africa and attracts numerous investors in the sector of hydrocarbon, energy, buildings etc.
Nigeria, according to the report, undergoes the effects of the oil counter-shock. It reported that FDI flows to Nigeria totaled to $1.9 billion in 2018, and showed a Decrease compared to 2017 with $3.5 billion under the effects of austerity measures. Estimated at $99.6 billion in 2018, the total stock of FDI represented 25.1% of the country’s GDP with USA, China, United Kingdom, the Netherlands and France as the leading investors in Nigeria.
Unfortunately, these figures have not translated into tangible infrastructural development in Nigeria. Incidentally, the battle against insurgents, poor state of the nation’s power sector and the ailing refineries had been subjects of discussions at these summits and pledges of support and collaboration were often made, but these problems are still there with us. The security situation is far from being resolved, the power sector is not better and the ailing refineries appear to have been orphaned with the attendant increase in the amount paid for petrol subsidy yearly by the government, while the industrial sector groans over high cost of production, multiple taxation and high cost of borrowing. Although the government has been reporting massive investments in agriculture and improvement in production, especially in rice production, but Nigerians are yet to feel the impact of these investments as the price of local rice is still high.
Apart from the transportation sector where work is ongoing in rail construction by the Chinese, not much has happened in the other sectors despite the pledges of investments and collaborations from these summits.
At the recent Japan-Africa Summit, some of the pledges of motor assembly plants made there went to Ghana and Nigeria had little or no meaningful projects to show for the summit.
However, the Russia –Africa Summit was quite fruitful for the country as pledges of revamping the nation’s refineries as well as the Ajaokuta Steel plant were secured.
But Nigerians are anxiously waiting for the implementation of these projects, including the coastal East-West rail line.
The 2020 UK-Africa Summit is the latest and many African countries are hoping to benefit from the new drive by Britain to join the new scramble for Africa. Britain voted to leave the EU in 2016, and after years of haggling over the exit on January 31. With its planned exit from the European Union, Britain needs Africa more than the continent needs it, especially in expanding its market after the exit.
Before the January 20, 2020 Summit, the former Prime Minister, Theresa May, made a brief visit to a number of African countries in 2019, including Nigeria, Ghana, Egypt and South Africa. In 2019 too, the UK Foreign Secretary, Jeremy Hunt, visited a number of African countries in furtherance of the drive for a share of the huge African market. Hunt was in Nigeria, Ghana, Kenya, Senegal, Chad and a host of others in readiness for his country’s exit from the EU.
At the UK-Africa Summit, there was a glimmer of hope that Nigeria will benefit from the new economic drive of the UK as the federal government was able to secure commercial deals worth over ₦153.4 billion from the Summit.
The report by Channels Television on Monday, January 20, said that the UK government, through the Department for International Trade, DIT, will provide an Investment Promotion Programme worth ₦13.1 billion for Nigeria and South Africa to stimulate Foreign Direct Investment and facilitate technology and knowledge transfer.
According to the report, other benefits announced at the summit include the newly launched £55m (₦26 billion), Land Transformation Facility, a £320 million (₦152 billion) UK Financial Sector Deepening Platform currently running in 45 Africa countries, including Nigeria.
It noted that the UK government will invest up to £45 million in Nigeria, Kenya, and South Africa to support inclusive connectivity and digital literacy, build cybersecurity capacity, and establish Tech Hubs to grow the digital economy.
In addition, Boris Johnson told the African leaders that Britain would be more open to migrants from Africa after Brexit as part of measures to boost trading ties.
He also promised an end to direct UK state investment in thermal coal mining or coal power plants overseas, saying London would focus on supporting a switch to low-carbon energy sources.
He assured African leaders that he wanted to make Britain their “investment partner of choice”. “Our (immigration) system is becoming fairer and more equal between all our global friends and partners, treating people the same, wherever they come from,” he said.
“By putting people before passports we will be able to attract the best talent from around the world, wherever they may be.”
In his assessment of the Summit, Buhari, noted that Brexit offered an opportunity for increased free trade across the Commonwealth and said that visas were the key issue.
In his usual manner, Buhari used the occasion to explain the partial closure of Nigeria’s Borders, stating that it was not meant to punish her neighbours, but to strengthen the country’s security and economy.
The Special Adviser to the President on Media and Publicity, Femi Adesina, said in
a statement that Buhari told a select group of the Nigerian Community in the United Kingdom that the period of closure will be used for stock-taking on threats to the nation’s security and economy.
He noted that Nigerian farmers have been celebrating the closure which has drastically reduced the smuggling of agricultural produce as well as arms and ammunition.
President Buhari attributed the country’s virtual food security position to the “very good last three rainy seasons;” the federal government’s reduction in the price of fertilizers by 50 percent and the presidential directive to the Central Bank of Nigeria not to give foreign exchange for food imports thereby saving the nations billions of naira.
Commending Nigerians in the Diaspora for their huge home remittances – more than $25 billion in 2018 – the President also lauded their individual performances in their various fields of expertise.
Explaining the achievements of his administration in implementing its three-point campaign agenda by focusing on fixing the economy, providing security and tackling corruption, the President said Nigeria’s “huge, vibrant youth population” have been encouraged to go back to the farms and are “living decent and respectable lifestyles.”
On security, he said “it is common sense that you can only run the country if it is secured,” adding that the country “has not done badly in the North East.”
Describing the havoc done by corruption to the image and economy of Nigeria as “terrible,” President Buhari said that his administration has now focused on retrieving stolen fixed assets and returning the proceeds of the sale “to the treasury through the Treasury Single Account, TSA,” so that nobody can return them back to the convicts even after his tenure.
The African Development Bank, AfDB, also announced at the side event of the UK-Africa Investment Summit that total assets under management alone by pension funds, sovereign wealth funds and the insurance sector in Africa was about $1.8 trillion; monies that can be leveraged on to develop infrastructure in Africa.
The President of the Bank, Akinwumi Adesina, noted that institutional investors hold a large pool of capital that needs to be mobilized and channeled into financing of infrastructure.
In a keynote speech at the UK-Africa Investment Summit, on “Sustainable Infrastructure Forum”, Adesina said: “Total asset under management alone by pension funds, sovereign wealth funds and the insurance sector in Africa is about $1.8 trillion. Tapping just a fraction of this into infrastructure will go a long way to close the infrastructure financing gap,” he said.
He, however, noted that for that to effectively happen, many reforms are needed. “One is to designate infrastructure as an asset class for institutional investors. Meeting their infrastructure allocation targets would require them to hire quality staff who understand infrastructure,” he said.
Speaking on the outcome of the Summit, a Nigerian development economist, Prof. Ken Ife, said that apart from the deliberations at the Summit, Nigeria would benefit immensely from Britain’s exit from the EU. Ife said in a recent programme on Channels Television that trade relations between Nigeria and Britain was about 8 billion pounds and that it was bound to grow beyond that figure by 2024, according to the pledge by former British leader Theresa May.
He listed the solid minerals sector as a viable sector where Nigeria should strive to develop with the assistance of Britain. According to him, the education sector is another area that Nigeria can benefit from in the new dispensation since Nigeria already enjoys close and cordial relations with Britain. “We must use this opportunity to close in with this new deal,” he added.
Indeed, Nigeria should take stock of its presence in these summits and examine why some the agreements entered into and the pledges made have not been fully implemented. The security issue in the country and the obvious poor infrastructure and human rights records could be among the factors scaring away these foreigners and their capital.
Following the outcome of the UK-Africa Summit, many Africans are full of expectations that
Britain will turn its attention to the huge African market, especially now that the single African free trade is about to take off.
– Jan. 27, 2020 @ 10:59 GMT |