Nigeria’s mandate to ambassadors to woo foreign investors
The Nigerian government recently advised ambassadors to woo investors into the country. The mandate was given through the Nigerian Investment Promotion Council (NIPC) at a round-table on Economic Diplomacy.
According to the Federal Government, there are about 178 national investment promotion agencies across the world competing for limited investible capital, therefore showing the ambassadors the magnitude of task before them.
The mandate given by the Federal Government to ambassadors was long overdue. Nigeria has some qualities in Africa that so many countries do not have, and it amounts to the underutilisation of the potential of this country if these naturally endowed resources are not fully marketed to investors across the world.
The solutions to inadequate foreign investment inflows lie in Nigeria’s ability to execute reforms that will attract the quality and quantity of investments that we want
One of the resources is the country’s size. Not only is Nigeria the biggest economy in Africa, it is also the most populous nation. Another demographic feature that favours Nigeria is that majority of Nigerians are young people with a median age of about 18 years.
With young people, manufacturing activities should not be a problem in the sense that there is a ready pool of young labour force whose remuneration will be cheaper compared with what is obtainable in other developed countries. Low labour cost is one of the major catalysts that propelled China to become the second largest economy in the world.
Nigeria is highly blessed with rich fertile soils. From the savannah to the rain forests, there are opportunities for any kinds of crops investors may be willing to plant for optimal productivity.
Further, a lot of opportunities abound in Nigeria. In the services sector, there are unexplored opportunities in wholesale, retail, information and communication, banking and insurance. Presently, any of these sectors is guaranteed to offer investors high return on investment.
The manufacturing sector offers high returns as well. The oil and gas sector craves for new investments in the upstream, downstream and midstream. As widely reported, Nigeria’s petroleum industry is not optimised at all as in many areas, there are not yet adequate investments in the sector to capture all the opportunities therein.
The nation’s downstream industry deserves more than the number of refineries it currently has. According to Ranken Energy Corporation, a 42-gallon barrel of oil creates 19.4 gallons of gasoline, leaving 50 percent of the remaining oil that could be used to produce 144 other items.
It lists such items to include ink, upholstery, motorcycle helmets, vitamin capsules, motor oil, shoe polish, antiseptics, refrigerant, life-jackets, fan belts, refrigerators, fertilizers, fishing boots, paints, hair colouring, among others.
With the exception of the Dangote Petrochemical Complex, which is about to come on stream, most of the by-products that we could have produced locally since we are an oil producer are imported. The billions Nigerian consumers spend on these by-products stand as huge opportunities for investors who show interest in the Nigerian economy.
Nigeria is one of the countries well-endowed with mineral resources. There is hardly a sub-national government in the country without solid mineral endowments. Gold is in abundant quantity in Edo, Ebonyi, Kaduna, Zamfara, Kaduna and Oyo states. Oil and gas has been found in commercial quantities in Akwa Ibom, Abia, Bayelsa, Edo, Delta, Rivers, Ondo, and Imo states.
What about iron ore? This has been discovered in commercial quantities in Kogi, Kwara, Delta, Benue and Anambra states. Tin is in Jos, Plateau State, and Bauchi State. Coal can be found in Enugu and Ondo.
Minerals such as bentonite, gypsium, kaolin, limestone have been discovered in states such as Adamawa, Bayelsa, Gombe, Bauchi, among others. Bitumen has been discovered in commercial quantity in Edo-Ondo-Ogun belt.
There are other cash crops that are in hot demand in the domestic and at the international markets. These include cocoa, rubber, timber, coffee, oil palm and kola nut. From these, we could see that Nigeria’s problem is not the absence of resources. Therefore, why are investors not coming at the rate we initially expected? It is because they see most of government’s investment drives as mere rhetoric.
The solutions to inadequate foreign investment inflows lie in Nigeria’s ability to execute reforms that will attract the quality and quantity of investments that we want. Basic hard and soft infrastructure such as roads, electricity, water and security must be provided in adequate quantity if Nigeria truly wants our ambassadors to succeed.
Instances, where commercial cases will tarry for years in our law courts, must become a thing of the past. Financial resources must not be tied down unnecessarily as in most cases, the delayed proceedings might not stop the accumulation of interest on loans.
By and large, Nigeria must address the fundamentals that make attracting foreign investments easier if the Federal Government truly wants the ambassadors to succeed.