The Problem
Nigeria and indeed Africa need investment, not just a little, a LOT, to get us out of the enduring underdevelopment and stagnation of growth; and we need it yesterday.
That investment should be based on win-win scenarios; it should be enabled (not paid for) by government, and it should be significant.
While the country itself is poor, there are still many rich Nigerians. These rich citizens invariable achieve this wealth by leveraging the public sector/government in ways that most people can’t. Where others get their fingers burnt, they walk away with huge profits; they understand how to trade personal and political interests for development goals. They understand the balance between internal capacity and political will, the mysteries of the Nigerian civil service mechanisms. They are able to integrate their interests, structure deals and leverage the huge overarching power of government (executive, legislative, judicial, security, etc.) at national and international levels to retain vast yields from their operations.
The downside is that this knowledge is as arcane as magic. To the uninitiated, it can take lifetimes to acquire and even longer to leverage. It has little to do with academic knowledge or patriotism, and it unbalances the corporate playing field, so much so that private sector and international investment generally tend to opt out completely. Local players tend to rely instead on smaller margins and luck while ‘avoiding’, ‘tolerating’ or ‘bearing with’ the public sector. Foreign investment mostly gets redirected to markets that are easier to predict.
This has a particularly stifling effect on the growth of African economies today, chiefly because so many governments are financially challenged, but this was not always the case. In Nigeria for example, the dichotomy between the public and private sector was previously not so relevant to growth because government had direct access to massive resources from oil. These resources meant processes could remain suboptimal and yet still produce development (Babangida still boasts of how they internally funded the building of the Third Mainland Bridge in Lagos – something he says would be almost impossible now). With crippling debt, the world’s transition away from oil/fossil fuels and other socio-economic ills – Nigeria now needs investment to fund its growth. Private sector/foreign direct investment (FDI) is no longer just an advisable source of funds – it’s perhaps the ONLY viable source, the only way out of the current predicament.
So how do we level the playing field?
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The Solution
It’s our opinion at VIISAUS that winning this game requires data. What informs the successful building of a refinery, a power plant or any multibillion-dollar investment in Nigeria with all the uncertainties in the business environment? Data plays a huge role. Which states have locational advantage? Have investment friendly policies? Low incidents of violence? A history of intellectual capacity in the relevant areas of government? Which areas of federal government do you have to know/lobby? What is the impact of the ease of doing business policy? Which communities are friendly to foreign investors? Expatriates? What is the electricity supply like? Where are the food markets or eateries? Where is the nearest airport? What is the local transportation like? What is the competition on ground like? Who are the power brokers? Who are the key decision-makers (obvious and not so obvious)? What are the interests of the decision-makers? Religious? Ethnic? What are the success stories? What are the failures – and why? When in the political cycle is it wise to start your venture? Who are your allies? Your enemies? How do you make profit? Where do you keep the money when it is made? How do you access foreign exchange? How do you get it out of the country? What are the exit scenarios?
The list goes on and on, and the answers are critical; they are the difference between a billion-dollar investment occurring here and somewhere else. It is the ability to answer these questions correctly on a consistent basis that means there are three people in Nigeria who have the combined wealth of over 85 million of their compatriots.
Data can help level the playing field a great deal. Most, if not all, of these questions can be fully addressed with data, with viable research that has aggregated data across industries and warehoused them in a digital, online accessible format, a platform that geospatially tells you where the skeletons are buried and everything else you need to know. To be able to see and cross-reference on a map communities that are friendly, successful and failed projects in your area of concern, political history and data on local politicians along with their likely interests. To be able to request specific data and have that added to the platform for cross-referencing and strategic decision-making – such a platform begins to even the odds, guides you towards the necessary relationships you need to build, and a great deal more.
These platforms exist elsewhere; in Nigeria, we are not quite there yet. At VIISAUS, we are known for political data; however the larger part of our business tends to deal with answering questions like these for our clients (especially the multinational ones).
We are building Arvo to be that platform, a bridge that enables the investor who does not have that access, or understanding of public sector. A one-stop shop for instant insights and the ability to ‘know everything’ – before any serious money is spent. For a frontier economy like Nigeria we believe it is a necessity for the new president to support these types of systems, as he will need the transparency data offers to attract the type of investment needed to turn the economy around. We know from our business that there remains a great deal of interest in Nigerian markets; we need a president who understands this as the consequences of ignoring the role data plays are dire.
*Jiro Ejobe is the founder/managing partner and driving force behind VIISAUS, a leading research, gov-tech and consultancy business in Nigeria.
