Building stronger France-Nigeria economic ties: An Africapitalist approach

I am thrilled to see so many people excited to explore business opportunities in Nigeria or for those already in our markets, to share their stories of success and long-term investment. France is one of the largest economies in Europe and Nigeria is the largest economy in Africa. So, it makes good economic sense for us to build a strong trading relationship that will deliver goods and services and economic growth in both nations.

You may have heard the news that Nigeria, like many of the economies in Africa that rely heavily on natural resources and commodities such as oil, is experiencing very tough times. I am a realist and I will tell you in all honesty that the last year has been quite challenging, for both the government and most of the private sector.

Nigeria is an oil-dependent economy. The exploitation of domestic sources of energy in the U.S. and the re-entry of the U.S. and Iran into the oil market sent the price of oil plummeting from $114 per barrel to as little as $32 per barrel. This significantly impacted government revenues and caused it to take dramatic measures to protect the naira. It has surely been a difficult time, and we still have challenges ahead of us, but we are going to weather this period.

So, as a realist, I must also tell you that Nigeria is always a good bet. According to the World Bank, the highest returns on investment are to be found in Africa, and Nigeria is among those countries that generate these impressive returns. In fact, Nigerians and our government have made the smart decision to treat this as an opportunity to ramp up our efforts to diversify the economy, so there will be more opportunities for investors to come in and participate in expanding the economy.

Nigeria has always been a unique country. We are not only the most populous country; we are among the most educated and well-travelled. And while Nigerians are well known for our positive outlook and can-do spirit, even more importantly, we have a strong culture and spirit of entrepreneurship.

Over the last two decades, we have significantly ramped up our knowledge, capital investments and accomplishments in the business arena. Our banks are not only highly regulated, which has created stability in the system, they are also highly capitalized financially and professionally, so they are able to develop and finance complex transactions in a variety of sectors across many countries.

For example, the United Bank for Africa, of which I am chairman, was established in the British colonial era, more than 70 years ago. Post-independence, it came under Nigerian control and had operated profitably for decades. However, in 2005, we decided that we wanted to live up to our name and become a truly pan-African financial institution.

So, we developed a strategy to roll out in several Africa countries. We completed the first stage of the rollout and now operate in 19 African countries, where we are providing financial services for governments, citizens and businesses, particularly leveraging technology to enable electronic payments across countries and continents, including here in Paris where we have an office that supports businesses and transactions with francophone countries.

Critically, we are helping to finance major projects in the infrastructure, agriculture and construction sector most of which are francophone countries, and we have continued to open more and more branches as we have become more established in those markets. The second stage of the rollout begins later this year. So, Nigeria is not just about ourselves. We play an important role in the economy of West Africa and beyond. So, when you invest in Nigeria, the benefits spill over to our neighbours in dozens of countries.

As proud as I am of the accomplishments of UBA, this is just one story of one bank in Nigeria. Over the last two decades, new laws and reforms in Nigeria have enabled and incentivized local entrepreneurs to become players in sophisticated industries such as oil production and refining, telecoms, manufacturing, aviation and other sectors. For instance, Schneider Electric is pursuing opportunities in the power space. Additionally, in recent years, large retail giants from other parts of Africa have entered the Nigerian market because they have spotted the opportunities associated with servicing the growing Nigerian middle-class and they continue to do well, even in the current economic climate.

So, in my opinion, Nigeria remains a very viable, attractive and important investment and export destination for French companies. In fact, I would argue that now is a good time to come, because it is an investors’ market. The smart investor knows that this is the time to enter these markets because the fundamentals of the Nigerian economy remain strong, and where others perceive risk and challenge, the glass is actually half full rather than half empty.

Let me cite some examples of the trends supporting long-term growth: increased use of technology by the Nigerian population; high consumerism, meaning we still want to buy finished goods; a young demographic, which means energy for work and innovation; and increasing urbanization, which means more accessible markets for products.

So, I encourage you to come and “Discover Nigeria”. I will say that while Nigeria is a lucrative investment destination, as smart investors, you must ensure that you do the following two things: (i) find the right partner to help you navigate the environment; it will make things easier and protect your investment; and (ii) commit to being in Nigeria for the long haul. Companies like Air France and Total can tell you that Nigeria rewards the patient investor.

As you consider your entry or expansion in the Nigerian market, I want to share with you the philosophy which guides my own investment in Nigeria and across Africa. I call it Africapitalism. Africapitalism advocates long-term investments in strategic sectors that generate economic dividends for investors and social benefits for stakeholders.

I know it works because I was born and raised and spent my entire career in Nigeria, and I have been very successful adhering to this philosophy. I have invested in the financial services, real estate and hospitality, power, agriculture and health sectors because I consider them to be strategic in that they can help unlock jobs and growth in other sectors of the economy, thereby delivering benefits to the wider society. So, companies that are involved in these sectors should definitely come into our markets and partner with local businesses to provide goods and services to our population. Other strategic sectors in Nigeria include telecommunications, ICT, entertainment and retail, which will continue to do well even in the current climate.

And there are smart, hardworking, innovative and driven entrepreneurs on the ground waiting to embrace you in partnership, if you would just take the chance of venturing outside of the familiarity of home for the sake of your venture and for the sake of adventure. Because working in Nigeria will be an adventure, of the best kind.

I am particularly talking to the SMEs because they are the kind of partners we most need on the ground. SMEs are the backbone of any global economy and they form deep ties and relationships locally and employ the most people. I believe so much in SMEs, and the spirit of entrepreneurship and their power to deliver the kind of economic transformation that Africa needs that I, the big corporate leader, have invested $100 million to identify, mentor and seed $10,000 Africa businesses over the next 10 years to create 1 million jobs and $10 billion in additional revenue on the continent. And the good news for all is that under this merit-based system, Nigerian entrepreneurs have continued to lead over the first two years of the programme.

So, while I may be one of your partners today, I am also investing in developing your future partners and it will be a dream come true for me to witness Tony Elumelu Entrepreneurs, in Nigeria and beyond, doing business with French businesses.

To sum up, I want to thank you all again for gathering here today and for your enthusiasm about investing in Nigeria and I encourage you all to believe in Nigeria, come to Nigeria, discover Nigeria, invest in Nigeria, help develop Nigeria and prosper with Nigerians.

And very importantly, take an Africapitalist approach to entering and investing in Nigeria because what we are looking for are sustainable partnerships that will deliver sustainable development through the private sector going about its normal commercial activities. So, please come Discover Nigeria and the full potential of your business.

Being excerpts from a speech to a gathering of French investors and entrepreneurs interested in learning more about doing business in Nigeria, in an event tagged ‘Discover Nigeria’ held at Palais de Luxembourg, Paris, France.

Tony O. Elumelu