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The UK Africa Investment Summit: A great opportunity for Nigeria

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Next Monday 20, January 2020, the British Prime Minister, Boris Johnson, will host 21 African leaders in London for one of the biggest events of his premiership so far – the UK-African Investment Summit (UK-AIS). His Excellency, President Buhari will be in attendance, alongside a strong Nigerian delegation of senior Ministers and officials. About 40 leading members of the Nigerian private sector will also be there to make their voices heard and to pursue new deals and opportunities.

The UK understands the value of trade and investment partnerships in Africa. Right now, Africa is home to eight of the 15 fastest growing economies in the world, and the coming decade could well see that proportion rise.  The UK wants to be the partner of choice for Africa’s largest economy – Nigeria – and build our two-way trading and investment relationship.

The City of London is already the number one global exchange for African business, and the home of some of the world most important global financiers. The UK is host to thousands of innovative firms looking for new opportunities. The UK-AIS is designed to showcase the best of the UK and the best of Africa – and help new partnerships flourish.

The UK and Nigeria have placed a great emphasis on our trade and investment partnership, especially in recent years.  In the twelve months, we have held two Ministerial level summits on economic development and trade, hosted a Nigerian investment showcase for Nigerian firms in London, and seen the UK Government’s investment arm, CDC, open its Nigeria office. CDC will grow its portfolio to almost 100 Nigerian investees, supporting over 40,000 jobs.

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Our Export Credit Agency, UK Export Finance, has increased its ceiling for support to Nigeria to £1.5 billion. And all the while, the UK Government is maintaining and increasing collaboration with the pillars of the Nigerian economy –Federal and State ministries of finance, trade and investment, the Central Bank, standards agencies, investment and export promotion agencies and, of course, the private sector  – all benefitting from one of UKAID’s biggest programmes of support for economic development to an individual country, totalling £200m over the next five years.

Our UK private sector has been busy too – two-way trade has now reached £5.5 billion, while the stock of Foreign Direct Investment (FDI) stands at over £4 billion.  Existing UK multinationals like Diageo and Unilever continue to invest in their massive operations here. Major UK firms like Prudential and the infrastructure firm Turner and Townsend have opened offices or joint ventures.  The best of FDI brings good jobs, technology and know-how.

We were delighted when UK firm Savannah announced a new £319 million investment last year in Nigeria’s energy supply – speeding Nigeria’s transition to cheaper, cleaner gas power (and helping to supply 10% of Nigeria’s power).  Even smaller firms can make a big difference.  A UK firm, West Africa ENRG, has brought new technology and efficiency to waste collection and recycling to the South West of Nigeria, and employs over 3000 people in safe and clean conditions.  Another small UK firm, SESO Global, is bringing blockchain technology to the Nigerian housing and mortgage markets.  It is developing the country’s first digital mortgage registry. Both firms are getting the chance to showcase their Nigerian success stories at the Summit.

How is the summit going to help?

There is potential for so much more.  FDI is critical for the economic development of any country but it is too low in Nigeria – Nigeria received only $1.8billion in 2018 compared with $7billion for both Egypt and Ethiopia.  Despite our long history and some recent success, we think UK companies have far more potential to make financial and investment partnerships work in Nigeria.

The Summit will see new commercial investments and new partnerships agreed between our governments. Sessions will focus on sustainable finance and infrastructure; trade and investment – including the potential of the African Continental Free Trade Agreement; the business environment; and the clean energy transformation.

The Summit is not a standalone event.  There are a range of events before and afterwards focused on specific sectors – including agriculture, infrastructure, manufacturing, technology, local currency financing and renewables.  For example, our Female Tech Founders event in Lagos saw five Nigerian women entrepreneurs selected to attend the Africa-UK Female Tech Founders 2020 event as part of the Summit.

The UK has worked closely with the Nigerian Investment Promotion Agency to develop new investment guides for Nigeria.  As well as highlighting key opportunities in sectors like agriculture and renewable energy, they can help challenge the negative image of Nigeria as an investment destination. Investors will have new, concrete information at their fingertips.

Nigeria will play a critical role in the success of the Summit – its delegation will be the only country to participate in every event at the Summit and we will need that team to come back with new partnerships and investment opportunities in order to demonstrate the success of the Summit.  Alongside the President and his senior delegation, we know the Nigerians that are attending give us every chance of achieving that –delegates such as Aliko Dangote andDamilola Ogunbiyi (recently appointed Special Representative for the United Nations Sustainable Energy for All initiative).

We should recognise that it is not all plain-sailing for investors. Although Nigeria has, with UK support, moved up 15 places in the World Bank Doing Business index, there is little point in hiding or denying the well-known challenges in the trading environment, and in power and infrastructure.  But we are confident there are opportunities to take despite those problems – indeed, some of those opportunities can help to fix them.

The UK’s rapidly growing economic team is here to work on trade, investment and the long-term business environment in partnership with Nigeria.  It is also here to help ensure that those returning from the Summit next week can turn their new partnerships into reality.  The 2020s should be the decade that sees UK Nigeria investment really take off.

Christopher Pycroft writes from Abuja.

He is the Nigeria Head of Office, UK Department for International Development (DFID)