Numbers published by the National Bureau of Statistics (NBS) suggest a significantly healthy Germany-Nigerian bilateral relation. At least, the country’s capital importation into Nigeria gives a glimpse of it.
Germany’s capital importation into Nigeria stood at $15.38 million in 2016. This later increased to $19.81 million in 2017 but declined the following year to $13.347 million.
Germany’s investments in Nigeria increased again in 2019, at the time, $18.63 million. But following the outbreak of the pandemic, capital importation from the country dropped to $12. 87 million in 2020.
However, in 2021, a combination of the first ($22.94 million), second ($1.36 million) and third ($0.11 million) quarters saw Germany recording its highest investment in Nigeria till date at $24.4 million.
It was the year Germany became part of the top 10 countries in terms of capital importation origin for the first time.
Although the German consulate in Lagos called for increased spending in Nigeria to facilitate better trade between the countries in 2019; the foundation for that started about four years ago.
As gleaned from NBS’s data, banks also have a role to play in a country’s capital importation value as they are channels through which foreign businesses invest in a country. Access Bank has been at the vanguard of facilitating that trade between German-Nigerian businesses, BusinessDay findings show.
The story starts in 2017 when the bank decided partnerships and alliances with industry global players were the diet to satisfy its appetite to become the ‘World’s Most Respected African Bank,’ following a draft of its five-year strategic plan. The bank then identified the German Development Finance Institution (DEG) as one of such global players.
“We initiated a strategic partnership with DEG, and launched the German Business Desk, the first of its kind in Nigeria and indeed West Africa,” said Herbert Wigwe, group managing director, Access Bank, Plc.
Wigwe, in a keynote speech at the 9th German-Nigerian Business Forum delivered on his behalf by Ralph Opara, group head, Corporate Banking Division, Access Bank Plc; said the desk was established to serve as a financial intermediary between German organisations, Nigerian-based German enterprises, and local businesses.
He said the partnership held many opportunities for both countries. For Nigeria, its objective was to unlock new solutions to the pressing economic challenges facing the country, while the desk enabled DEG’s investment footprint to spread by providing access to clients and reaching frontiers it ordinarily would not have direct access to.
“We were poised to provide banking services and business advisory solutions for German companies wishing to establish a presence in Nigeria and neighbouring countries in West Africa,” he adds.
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BusinessDay learnt that the offerings of the desk also included transaction banking services, credit lines or investment financing for local companies wishing to acquire German equipment.
It was also learnt that the desk grew its market share of German businesses operating in Nigeria from 15 percent to 85 percent four years after it was set up, onboarding businesses like Lufthansa, BASF, Krones, Knauf and Robert Bosch, amongst many others. This was possible through the cooperation between the German Development Bank, the German Chamber of Commerce, and Access Bank, which, according to a source, enabled the bank to create “a pivotal momentum in the market that provides solid ground for investors and companies from getting a first feeling of the country to specialized consultancy in financial market products.”
Wigwe disclosed that the bank has now developed relationships with about 85 of approximately 100 German corporates as well as a few Swiss and Austrian companies operating in Nigeria; and supports over 50 German corporates whose trading partners are Nigerian.
By the end of 2019, Nigeria’s exports to Germany were about $1.34Billion, while imports from Germany were about $1.15Billion.
These figures were projected to grow by around 18 percent by the end of 2020. Unfortunately, the pandemic struck and created a decline of about 32.09 percent and 9.57 percent for exports and imports respectively, he further explained.
According to him, the desk has enabled a “momentum of trust” to build for foreign investors and corporates that were previously hesitant to enter the Nigerian market.
While acknowledging the pandemic-led setbacks, he said the bank has been able to build shared prosperity between Germany and Nigeria and further called for partnerships for sustainable impact.
“Partnerships are essential to achieving the scale and sustainable impact we all need to see,” he said.
Before the desk, the change in Germany’s investment in Nigeria was not so. BusinessDay learnt that German investors hesitated due to the uncertainties in Nigeria’s economy.
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