I would like to start by having a background of GE’s operations in Nigeria?
Thank you for the question, GE has been in Nigeria for many decades and over the course of these decades, GE has built a very large platform that covers all of our businesses across the globe so we’ve got huge platforms in Oil and Gas, in power and water, in Aviation, in Healthcare and also in transportation. This platform represents the biggest GE platform on the continent of Africa where about a third of the business that we do in Africa is coming out of Nigeria. We are very proud of this platform and we have about three hundred people in Nigeria we have also made some significant commitments over the past few years all of which is captured in the country to company agreement which we signed a few years ago and this has cascaded into what is now known as the MOU agreements for certain specific sectors.
So I could go into the specific details of the agreements but in a nutshell, decades in Nigeria, three hundred people, biggest operation on the continent covering Oil & Gas, Power, Health Care, Transportation and Aviation.
GE comes across like an octopus with operations in major sectors of the economy. It is worrisome though, that Nigeria still faces huge challenges in the power sector and I recall that at a time, GE had a foothold in the power sector. Is GE playing any role in surmounting the challenges in the power sector because without power the other sectors that GE is involved in may not achieve their full potential.
Specifically, what role is GE playing in the power sector?
That is a very good question …really this story needs to be told very clearly because GE is playing a very significant, leading role in developing the industry. Number one, we signed an MOU to help develop an additional 10,000MegaWatts of power over ten years. This is a very serious commitment on the part of GE, this is a commitment that we are taking seriously and we are committed to put in equity to put in project development expertise to support both green fields as well as the repowering of existing brown field facilities.
So to do that, we are working with serious project developers in the private sector side to actually get their projects to work successfully. With the privatization going on, we are also working with the winners to make sure they are able to actually refurbish these plants and bring them to full capacity and in plants where there is even capacity for expansion, we are working with these winners to expand the capacity beyond what the current capacity is today. So that’s number one, number two, we are dramatically scaling our training of Nigerians in the power sector. So we are hiring and recruiting, taking them through one to four years apprenticeship courses in different aspects of power industry management. Number three, we just announced a big investment that will support the growth and the sustainability of the industry in Calabar where we are going to be building a multi-modal manufacturing and assembly facility at the Calabar free trade zone. This facility will ensure that we have service and maintenance and also have the capacity to disassemble and reassemble turbines in Nigeria without the need to take them outside the country.
The fourth thing I want to say is, if you look at the installed base in Nigeria today, about 60% of all the generating capacity is GE technology, so we have a very long history of building the foundations of where the power sector industry is today. Now you are absolutely right, it is not enough and the country needs a lot more and we are quite literally at the forefront of supporting the development of the sector; that is one point I would like to stress.
But I also want to say that in the area of government advocacy, we have been pretty active working with all the critical agencies in the power sector whether it is NERC or the bulk trader or the TCN to help develop all of the key milestones that all of these developers are going to be needing in order to get their products from concept to execution. So, if you think about the role that GE is playing I am very proud to state that GE is playing a very critical role in the development and the sustainability of the industry.
Beyond the currently existing facilities which have been refurbished, is there any other role that GE is playing in that sector?
Absolutely. Let us take a step back and understand the importance of the transportation sector or the logistics sector is to the continued development of Nigeria’s economy. There’s a very strong correlation between the strength of the logistics sector and the growth of the GDP and just so you know, we are aware that Nigeria’s freight is only carrying one percent on the rail so we are really very far from where we are supposed to be as a country.
So what is GE doing? Starting from 2009, we entered into an agreement to support the expansion of Nigeria’s locomotive fleet with the supply of twenty five locomotives which are helping to drive the economy today on top of that we are now in the process of further expanding, making investments in Nigeria that will further expand the capacity of the sector as you may have heard when the Minister for Transport or the Head of the Nigerian Railway corporation talk about plans to actually build a locomotive manufacturing factory in Nigeria. So this is what we have agreed to do together and we are working on it.
But when will this be actualised?
We have a timetable we are working against. There is a lot that still needs to happen with regards to finalizing the plans with the government so there is shared responsibility here. So we are really waiting for this agreement to be finalized and the timeline is dependent on the completion of the agreement.
And you do not foresee anything like a policy shift on the part of government if there is a change in administration as this is a major issue in Nigeria.
That is a fair point but I believe that this is such an important and critical need for the country that it doesn’t matter whether you are from a one political party or the other. This is a consistent conclusion of everybody that the country needs a very strong logistical system and the railway lines are a critical part of this infrastructure that will support the logistics system in Nigeria.
It is surprising that GE has been in Nigeria for decades and has stayed consistent, whereas there are investors that have come and have left the country depending on the economic conditions. What has kept GE’s interest in Nigeria for so long?
That is a great question, just think about the fundamentals of Nigeria; the biggest country in terms of population, that means huge human capital resources. The country also has an unbelievable endowment of natural resources and the country is also blessed with an enormous pull of the entrepreneurial spirit.
And when you think about the positioning of the country, it’s really well positioned globally not only in terms geography but in terms of socio-political influence. So we have made a commitment to Nigeria and over time we will build a platform such that we are the biggest GE platform on the continent in Nigeria and we intend to be a critical part of the development of Nigeria. It is our commitment as part of the ‘Country to Company’ agreement that we are the preferred development partner for Nigeria… so companies may come and go but we are going to remain through thick and thin.
Let me take you back to railways, because I have an attachment to rail transport. The rail system in South Africa is very advanced, with GE’s involvement in the development of the Nigerian rail system do you see us surpassing South Africa in say, 10 years from now?
Well, your question is a valid one but we need to look at this realistically. The country is very far behind when it comes to the strength of its railway infrastructure but the key point here is that there is commitment and work has started in building the capacity that is required. Are we anywhere near where South Africa is? Absolutely not. Can we aspire to be where they are? Certainly. Now here is where the danger is; no country is standing still, if we do not invest now, if we do not continue to expand, obviously South Africa is not going to remain where it is waiting for Nigeria to catch up.