Nigeria as investment destination?

Wooing foreign investors has always been one of the most popular alibi, on the lips of army of estacode-loving Nigerian political office holders, especially, the president, state governors, minister, and other high-ranking public servants, who had tasted the fruit, whenever they are accused of spending extravagantly on foreign trips that have no (at least, immediate) meaningful impact on the life of an average Nigerian. They embark on such trips with a retinue of aides and errand persons. Most governors, Ministers as well as high-ranking civil servants are culpable of this. In the case of the President; the venture of categorising President Muhammadu Buhari as “an estacode-loving president” is like jumping into a lion’s den; and right now, I am not feeling like a “Daniel”. I do not have the equanimity or the energy to withstand the e-lynching by self-styled “Buharists” that is likely to follow such a categorisation if I dare do, because; I was told, “he is a man of “integrity”, which is a debatable subject anyway. That is for another day.

The term, “foreign investment” popped up on front burner last week, when President Buhari left this shore of this country, with no fewer than ten government officials to attend an investment promotion event in the United Arab Emirates, tagged; “Dubai Expo 2020”. Top government officials in the entourage of the President included, the Ministers of, Foreign Affairs, Industry, Trade and Investment, Finance, Budget and National Planning, among others.

The event was organised by the Nigerian Arabian Gulf Chamber of Commerce; Nigeria’s ministry of industry, trade and investment; and the Nigerian Investment Promotion Commission (NIPC). While addressing a “Trade and Investment Forum” at the event in Dubai, President Buhari, said; “Nigeria remains the most viable and attractive investment destination in Africa”. While the assertion was once a truism, it is no longer so, as a lot of variables that ensured it was so then, had changed for the worse. According to a report by RMB, a division of FirstRand Bank Limited, titled, ‘Where to Invest in Africa 2021, Nigeria is no longer in the top ten investment destination in Africa.

The ranking, According to RMB, is based on countries operating environments. The report stated that, the top 10 African countries to invest in are; “Egypt,  Morocco, South Africa, Rwanda; Botswana, Ghana, Mauritius, Côte d’Ivoire, Kenya and Tanzania”, in that order. Nigeria is ranked 14th. Meaning that, Nigeria is not among the top-ten investment destinations on the continent of Africa, right now.

Even without reports from World Bank or IMF and other international economic bodies, accounts of events coming out of the country, on a daily basis, especially on the menace of insecurity is more than enough to scare away, even, a drunken sailor, from coming in with his funds, as an investor. It is reality that stands between the the notion of Nigeria being a most attractive investment destination in Africa – Hallucination; and the call on foreign investors to come in, with their funds.

For investors, especially foreign ones, to come into a country, a good mix of opportunities and ease of doing business is needed as magnetizers. Attracting foreign direct investment to a county takes much more than propaganda, and rhetorics, like the ones with which president Buhari and members of his entourage went to Dubai with. The President’s comment sounds as if those countries from where the investors are coming, do not have embassies here in Nigeria, from where business intelligence report, travel advisory are sent to their nationals, through their national government, who in turn, make same available, for them to be well-guided on investment decisions.

There is no gainsaying the fact that, Nigeria is endowed with unquantifiable amount of mineral deposits and a ready market of over two hundred million people. Not many countries in the world can boast of that. Only six countries have more population than Nigeria. They are; China, India, the USA, Indonesia, Pakistan and Brazil
That is a very huge economic advantage that would attract any producer of goods and services, if you ask me. But in addition to that, you need a very strong infrastructural base to go with a robust “Ease of Doing Business” policy, and an environment that is devoid of systemic corruption, like ours. Even if we pretend to have a process of “infrastructural revolution” in progress, can we talk about same, on ease of doing business? I doubt it we can. Applying for something as little as “Tax Identification Number” in Nigeria, will take weeks, if not months, if the applicant refuses to play ball with civil servants- if you know what that means. Your file could be reported to have gone missing; but could reappear in a matter of seconds, once the “right” palm has been greased.

There are other factors that make the Nigerian environment very hostile for legitimate businesses to thrive. For instance, according to a report on a popular online news website, “The cost of transporting a container from Apapa port to Ikeja, Lagos, has increased from ₦300,000 as of 2018 to ₦1.6 million or more in 2021. This represents an increase of about 400% at the minimum. On the other hand, the cost of trucking the same container from Ikeja to Kano has only hovered around ₦600,000 within the period under review”. This is so because you would encounter countless number of uniformed men on the road, waiting to fleece you of whatever they think they are entitled to.

As if that is not scary enough, the amounts quoted above is also reported to be almost the same cost as shipping one container from China to Nigeria, according to a report by the Financial Times of London titled, ‘Nigeria’s port crisis: the $4,000 charge to carry goods across Lagos.’ This is not talking about the issue of unnecessarily long bureaucracy at the port. This is aside, from the issue of wharf rats who pilfer consignments, thus eating into the profit margin of the importer.

Having come out of the wharf, one would think the nightmare is over. But far from it. On the highway is multitude of security agents, belonging to both military and different paramilitary organisation, posing as if they are revenue collection agents – extorting motorists, as well as haulage companies and commercial drivers. Most notorious among these groups of official extortionists are men of the Nigeria Police Force, LASTMA, FRSC, and other uniformed paramilitary outfits. We are not talking about the “Area Boys” yet. Theirs is as sure as the Sun rising from the East, and setting in the West. These costs, minute as they seem, are later aggregated and passed off as cost of operation.

Having managed to get the goods to the business premises, one should be pardoned for thinking that respite has arrived; but this is Nigeria. States and Local Governments agencies would still come up with all manners of taxes rates, that tend to run any entrepreneur out of business. This is in addition to what a prospective business promoter goes through, trying to register a company. They would one day tax Nigerian for oxygen. The crippling effect of the systemic corruption is the stuff of Nollywood. Do not forget, as an investor, you still have to provide yourself with independent sources of power supply, as the public power supply, which could have produced a cheaper alternative is nothing to write home about.

By the time an investor adds all these to the alarming scale of insecurity in the land, it will take an investor who is high on some cheap drugs to come in with his fund, the way and manner, Buhari and his Ministers in Dubai expect them to do. The only realistic measure for now, is if the Federal Government can reach out to the bandits across the country, through those who have unfettered access into, and out of their camps in the forest, to give rebates on ransoms. No pun intended. Otherwise, if bandits could be so audacious as to seize travelers on one of the major highways into the Federal Capital Territory, the seat of power, I wonder how safe an investor would be in such a situation.

Foreign investors are no fools. They are equipped with reports of research that border on investments in almost every country of the world, courtesy of their embassies, as a matter of consular responsibility.

The situation is however not irredeemable. With the necessary political will, the security situation is not insurmountable. The federal government just need stop trying to call a spade by another name. Identifying a problem by its proper name makes it easier to tackle. No serious government in the world needs the court to tell it that, a group of individuals who have have the capacity to bring down a military aircraft and have not only demonstrated it, but have also threatened to do more, is a terrorist organisation.

The Federal government should stop chasing rats, while it’s house is on fire. Foreign investors are well acquainted with the situation in the country, than the federal government intends to admit to, or reveal. They carry out their investment surveillance; do their SWOT (Strength, Weakness, Opportunity and Threat) analyses, before taking decisions. They do not need any President to tell them the difference between six and half a dozen; or that, an albino is a white man.

The President and his team of “estacodemaniacs” should stop hallucinating about the possibility of their “Dubai jamboree” attracting foreign investments. They should come back home and get governance right, and see everything fall into place. In the book of Mathew chapter 6, verse 33, the Bible says; “Seek ye first the Kingdom of God and its righteousness, every other thing shall be added unto to it”. Like my late father used to tell me; “if you learn how to safe Kobo, Naira would safe itself”. Do the most fundamental of functions of a government – provision security for lives and properties, and watch foreign investors fall on themselves in a bid to grab a piece of the abundant investment opportunities in Nigeria.

Abubakar writes from Ilorin. You can reach him via 08051388285 or [email protected]