• Thursday, June 13, 2024
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BusinessDay

The Americans are coming, the Americans are here

The Americans are coming, the  Americans are here

For the first time in 22 years, an American Secretary of Commerce visited Nigeria in 2014. The primary aim of the visit was to foster a stronger, more strategic trade and investment relationship. But America’s involvement in Nigeria spans several fruitful decades.

The country has been involved in Nigeria though, the aid it provides, foreign direct investment (FDI) by its privately owned corporations, and military co-operation. And FDI by American corporations has had the biggest impact on the way Nigerians live.

A rich culture of investment

Currently, about 14 American corporations, which are also on the Fortune 500 list, operate in Nigeria. They include such notable companies as Citi Bank, Chevron, Exxon Mobil, General Electric (GE), Procter & Gamble (P&G), and Halliburton. Apart from these, there are hundreds of small American businesses that interface with Nigerians daily.

The investment and contribution of these businesses are huge and have helped provide jobs, improve quality of life and grow the economy.

Between April and July 2014, Citi announced that it had successfully managed a number of big ticket transactions in Nigeria. It concluded Seplat Nigeria plc’s initial public offer valued at $50 million, and facilitated Eurobonds issues valued at $400 million, $450 million, and $200 million for Access Bank, First Bank, and Diamond Bank, respectively.

Read also: ICCN to assist Nigeria deepen foreign direct investment

Citi has committed more than $560,000 to the development of local micro enterprises over the past few years and facilitated finance for the Federal Government of Nigeria for decades. The bank’s commitment to ACCION Microfinance Bank, in a bid to grow small businesses, has been commendable.

Apart from bankrolling projects, American corporations in Nigeria have put their money where their mouths are by making huge FDI commitments.

In 2014, P&G expanded local capacity by completing its $300 million plant at the Agbara Industrial Estate, Ogun State, thus adding to what it has already done at its main plant in Ibadan, Oyo State.

Rather than import already manufactured products, P&G’s ideology rests on domestic production. Using largely local raw materials and talent, it is meeting the needs of millions of Nigerians.

American concerns have also done a lot to develop the oil and gas sector as well as tackle the electricity conundrum in Nigeria. The contributions of Chevron, GE, Exxon Mobil, Halliburton and Baker-Hughes are clear in this direction.

For instance, Chevron and the NNPC commenced the development of the Escravos Gas-To-Liquid facility, a $10 billion 33,000-barrel-per-day gas-to-liquids project, designed to process 325 million cubic feet of natural gas per day in 2014. Chevron is the operator and has a 75 percent interest in the plant.

The company’s rich history has seen it commit huge investments to Nigeria thereby providing jobs for more than 7,500 Nigerians.

On its part, GE announced a $1 billion investment plan for Nigeria last year. The fund is to be spread across a five-year period. Of the total sum, $250 million was earmarked for the capital expenditure of the construction of a multi modal manufacturing and assembly facility in Calabar, Cross River State.

“What’s most interesting about the Americans is that when they invest, they develop local talent, make room for locals in management and transfer technology,” says Ikechukwu Kelikume, a don at the Pan African University. “They are also more particular about avoiding corruption because back home, they have a legal system that can penalise them for corruption,” he says further.

The continuous investment of American businesses in Nigeria does not only underscore their confidence in the economy but also gives credence to their commitment. And though the volume of oil, which Nigeria exports to the United States dropped in recent years, both countries have continued to benefit from mutual trade.

Total America-Nigeria trade was valued at $18.2 billion in 2013 (exports plus imports). American imports from Nigeria were valued at $11.7 billion ($11.6bn of which was crude oil). Non-oil Nigerian exports to the United States include leather, prepared vegetables, beans, cocoa paste, spices, and cassava.

On the other hand, American exports to Nigeria were valued at $6.5 billion. Major American exports to Nigeria include mineral fuels, vehicles, wheat, machinery, and plastics. But the relationship is not restricted to trade and investment. The Americans have made effort to improve the living conditions of locals.

Help from other lands

They have paid keen attention to corporate social responsibility (CSR) and the development of host communities. This they have done by providing health care, education, clean water and sanitation.

Recently, Exxon Mobil donated $250,000 to support the Ebola response effort in Nigeria. The NNPC/MPN Joint Venture sponsors aviation training for local youths in Bonny. Citi and Chevron have committed funds to building, renovating and equipping schools with computers. So also has the government of America.

Working through such agencies as US Agency for International Development (USAID) and the US President’s Emergency Plan for AIDS Relief (PEPFAR), the government of America has improved the living conditions of millions. By giving farmers tools to improve their harvest and connecting them with buyers, USAID is helping farmers earn higher selling prices for their crops.

It has helped train sorghum farmers in Kano State on techniques that will improve their yields, distributed safe drinking water equipment to communities, and invested in education. PEPFAR has disbursed more than $3.4 billion to support the Nigerian government in fighting HIV/AIDS.

Indeed, America’s presence in Nigeria has generated positive results. However, its commitment to quashing the extremist group, Boko Haram, has not shown any visible result.

Is Boko Haram the sore thumb?

When more than 200 girls were abducted by the Islamic extremists, America was among the few nations that promised assistance to track and retrieve the girls.

“At the direction of the White House,” said Pentagon spokesman, Col. Steve Warren, “the US military will send a small team of experts to the embassy in Abuja, Nigeria’s capital, to form an interagency ‘coordination and assessment cell’ that will work with the Nigerian government to locate and free the teenagers.”

Seven months later, this promise has yielded no result, the terrorist continues to unleash mayhem while the Nigerian Army continues the wild goose chase.

At some point, the Nigerian government even claimed that the US has placed an embargo on it from acquiring weapons because of alleged human rights violations.

“I don’t think the Americans have done all they are capable of doing to help Nigeria,” says Victoria Ekhomu, managing director, Trans-world Security Systems Limited. “As an ally of the United States, America should have done better than they have done. Consider how France came to the rescue of Mali when the country had a challenge, that is how allies help each other.

“It is possible the Nigerian government did not meet all the requirement of the Americans,” she says, “or the interests of both countries do not align on certain matters.”

While contrasting the solidarity shown to France (after the attack on satirical magazine, Charlie Hebdo), with cold responses of the global community to Nigeria (after the Baga attack that killed hundreds of people in the North-Eastern part of the country), a Conservative British MP, Richard Fuller, said “with the greatest respect to those who took part (in the rallies against the French attacks), our response to Boko Haram needs more than a hashtag and a photo opportunity.”

But Kelekume believes that, “it would have been difficult to assist Nigeria any way, here is a country that does not have a database of its own people, its local intelligence and institutions are weak. Given the circumstances, successful intervention could only have been a miracle.”