Brent Omdahl is the commercial counsellor at the United States Embassy/United States Mission to Nigeria. He runs an office of 12 professionals, providing services to U.S. businesses entering the Nigerian marketplace. In this interview with ODINAKA ANUDU, Industry Editor, he talks up opportunities in the U.S. market and why Nigeria companies must organise themselves better to take advantage of them.
You recently had a maiden U.S. fair where Nigerian and American businesses interfaced. Tell us about it.
It was a great fair. We had 33 companies present at the fair. It was a three-day event. The first two days included exhibitions and were open to the public, which meant that any Nigerian business interested in learning about the 33 companies could come and meet them face to face. Each of the companies had specific objectives. Some of them were looking to sell more of their products; others were interested in finding joint venture partners or agents or customers. On the second day, each company had the opportunity to present its business case, its value proposition to a group of individual Nigerian companies in that specific sector. Then on the third day, we came to have very individualised and specific meetings so that the American companies could start to talk partnerships with individual Nigerian companies. We had been interfacing with these Nigerian companies for a couple of months. So, we got to know who they were and what they wanted, and then went out in the marketplace to see what companies fit the bill.
We were fortunate enough to have Nigeria’s minister of industry, trade and investment, Okechukwu Enalamah, come and speak to us. We had one of Nigeria’s top economists, Bismark Rewane, give us his view on where the economy is headed. We also had the head of the Nigerian Investment Promotion Commission, Yewande Sadiku, talk to us about the business case for Nigeria and why it is the destination in Africa. The American companies found that to be very informative and useful. The second part of the event is that we explored some topics that Nigerian and American companies both face, particularly when they enter partnerships. We had a series of workshops with discussion groups that explored key topics. The first was, what does US government have on offer to help promote bilateral trade? So, we heard from our colleagues from different agencies within the United States government, including the Overseas Private Investment Corporation (OPIC), U.S. Export-Import Bank, U.S. Trade and Development Agency, my office— US Commercial Service—so that Nigeria businesses could understand some of the grant programmes available and some of the investments available through OPIC. Other discussions we had revolved around the supply chain and logistics in Nigeria. Another area dealt with the roles of regulatory agencies in Nigeria like SON, NCC and NERC. We found out all these to be useful.
Were there commitments and deals?
We had about 7,000 people attend the fair over a two-day period. That tells me there is interest in doing business with U.S. companies. There are some pent-up demands. Some of our Fast-Moving Consumer Goods (FMCGs) in Nigeria were selling some of their products, but it really takes a little bit of time for deals to germinate. We will be tracking it within the next four to six months. It is something we measure ourselves by as an organisation. We call it a bottom-line. Sometimes it takes six months to happen. Whenever we do things like this, we want deals to happen. Let’s talk in another four months or so and I will highlight some of the things that have happened.
In your opinion, how can Nigerian and American businesses do more deals?
American companies are conservative from the investment point of view, but more aggressive from trading and selling point of view. We view doing business as a journey. We have some well-known investors here in Nigeria, including Chevron, General Electric and several oil and gas providers. We have some investors in FMCGs like Kellogg’s, Budweiser, Kimberly Clark, Procter & Gamble and others. Those companies do not start on investment front. They first need to prove the market. Is there demand? Can I sell my products? Can I sell in quantity that it makes sense for me to start manufacturing locally?
American West African Agro is a great example. This is a company that came to sell irrigation equipment but decided that what Nigeria needed was some farming solution. Jerry Cunningham ( the founder) has hired about 100 employees. He has sold a lot of American equipment that way, but more importantly, he has come with a solution for the Nigerian marketplace. That really is what it takes.
We have a record of investments of American companies in Nigeria. Any track of Nigerian businesses in the US?
One of our responsibilities in the Commercial Office is to help U.S. companies succeed in this marketplace. But we are also looking to attract Nigerian investments back to the US so that they can build wealth on both sides of the water.
We have seen that kind of activity in the oil and gas sector. Nigeria has a well-organised local content. A lot of service providers do not usually have the equipment or technology. So they come to us to help them get some specialised equipment or technology. Some of those specialised oil and gas companies set up companies in the U.S. in the procurement and relationship point of view. Every year, for the past four to five years, we have had the ‘Select U.S. Convention’ which takes place in Washington D.C. My team member is leading a delegation of 15 Nigerians to look at investment opportunities in the U.S. Last year, we had e-commerce companies who wanted to set up offices in the U.S. so that they could procure American products to sell on e-commerce exchanges in the U.S. We had a furniture manufacturer going to the US to transfer some technology here.
Again, one of my favourites from two years ago is a Nigerian company exporting agricultural products like dried hibiscus from Nigeria to the U.S. The company wanted to move up the value chain here but they didn’t know how to do it. Now, they are making an investment in the U.S. They will do manufacturing of the tea in the U.S. and will sell it here. To me, that is an example of how trade and investment create a cycle for creating wealth for both of our countries.
What specific sectors should Nigerian businesses invest in the United States?
It is not really my portfolio to help Nigerian businesses invest in the U.S. There are many agencies that can help Nigerian businesses to set up in the United States. But for specific sectors, there is demand in the cooking industry. Sesame seeds, Gum Arabic and shea butter grow wildly in Nigeria. We manufacture a lot of chocolates and some shea butter is used in the process. Any agricultural product can sell in the United States.
The U.S. has an insatiable appetite for agricultural products. America is a bread basket but there are things we do not grow there. Another one is cocoa. Cane sugar is something that can be exported to the US.
Why are Nigerian exporters not taking full advantage of the African Growth and Opportunity Act (AGOA)?
I think there is a bit of misunderstanding of what AGOA is. It is an act of US Congress. What it does by US law is to create zero duty access for products coming out of Africa into the United States. There are some minimum standards that countries have to adhere to and it mostly revolves around human rights, but Nigeria is certainly complaint. But that’s just how it is. Zero duty access does not mean you have to just start exporting. You have to organise yourself. If you are exporting an agricultural product, you will still be subjected to all of the Food and Drug Administration (FDA) regulations. You have to comply with sanitary and phytosanitary regulations. Through the US Agency for International Development, we do have some small resources available to help companies locally to develop their expertise and take advantage of AGOA.
It is the Nigerian industry that needs to organise itself. Unfortunately, it is the crude oil that has benefitted from it most, but that is not the intent of it. The intent of it is to create the pathway for a country like Nigeria to move up the value chain. I served in Vietnam from 2007 to 2010 and prior to me getting there, the U.S-Vietnamese bilateral agreement looked very much like AGOA but was specific. Vietnam did a very good job by attracting investments from Taiwan in the textile sector and they developed their textile sector as well so as to take advantage of exporting to the U.S. They developed their furniture sector and even started importing some hard wood from the U.S, especially from the North-West, turning it into furniture and sending it to the United States to sell in big outlets in the U.S. They created wealth and employment.
So, the question for Nigeria is, what are the products that are going to do that? I can think of some. Talk about the shoes. There is a history of making shoes here. The sky is really the limit.
What are some of the complaints of American companies in Nigeria?
The challenges are not just faced by American companies but companies that do business in an open and transparent way. We have macro economic constraints, but companies want to move capital freely back and forth. There should be no reason why some Nigerian fintech companies register themselves in the city of Delaware to enable them access funds easily. One of the biggest challenges American companies and other companies face is the difficulty in getting the products in and out of ports. In some cases, it is just the process not being clear. In other cases, it is just congestion. Oracle highlighted working with Customs to implement blockchain technology to make the whole Customs process transparent. It has increased revenue. We believe the revenue should retain with the Nigerian government. Again, when citizens pay taxes they hold governments to account.
What do you tell American companies wishing to invest in Nigeria?
The best way to succeed in Nigeria is through partnerships. Nigerians love to partner. American companies have been able to find good partners. My office set up a programme called ‘Networking with the USA’ whereby we go out and get Nigerian companies so as to find the best partners for American companies. We sit down with the companies, view the business, talk to their bankers, look at their finances and learn a little about their reputation.
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