(Excerpts from an interview the minister kindly gave to CT Productions in 2017 for the World in 2018, “Investing in Nigeria” Feature. We have omitted the questions and a few passages and apologize in advance for potential mistakes in the interview transcription from audio.)
“The first thing to talk about is the historical context and where we started from in Nigeria. High oil prices but not a lot to show for it in terms of conversion into growth and that’s because of the structure of how Nigeria’s government was spending money, 95% of which was on recurrence. So we had a very large wage bill and quite a high debt service but very little left for capital projects. It is the infrastructure that is needed to support true diversification. For example the reason why we will import wheat instead of growing wheat is because the transport cost of moving wheat from the wheat areas to the markets is so prohibitively high that it is cheaper to import.
So fundamentally we were looking to restructure the economy. And of course we are restructuring the economy at a very difficult time in terms of revenue because the oil prices are very low. It was very difficult for the people, they really felt the impact because there was so much dislocation but things have settled down quite nicely now. The oil price is a little bit more stable. We have been able to quell the problems in the Niger delta. Now the impact of the 1.2 trillion capital that we have released in the last twelve months will begin to be felt. Road projects are finishing, rail projects are moving, airports are being refurbished. You put the building blocks in place and then on the back of that we expect to see growth. With the work being done on ease of doing business we think the macro conditions are right, access to forex is available. That was a big problem in the past. All the ingredients are now in place for growth. And that’s really when it begins to touch people’s lives.
Addressing the black economy is a big objective for us. We have done a lot of work data gathering. Understanding who is in the tax net? Who should be in the tax net? Where are the gaps? And that data has come from various sources, trawling through bank records, the BVM (Bank Verification Number), from bank accounts, from transfers. We have done a lot of work gathering data. We’re about to start a really major initiative which will be announced in the forthcoming weeks but I’m sure that by the time this interview is published it will be old news. We really need to drive an increase in the number of tax players. At last record we have about 14 million active taxpayers in Nigeria out of an economically active population of about 70 million. That is a real, huge failure. We have got to enroll people into the tax system.
I think the investment climate is getting better and the government has shown great intent. We have shown that we are very serious in creating an enabling environment. Both in the ease of doing business, how easy it is to get things registered and fighting corruption. I think that for many foreign companies that I talk to, the biggest fear was the corruption. They would tell us “our rules don’t allow us to do brown envelopes. We can’t do business in Nigeria.” The fight against corruption which president Buhari has stood for is actually an economic fight. Not just in terms of preventing corruption and looting but also because it was a deterrent to investment. Now that is being corrected. We are seeing those signs that companies are really looking at Nigeria as a market. There has always been a compelling business case to come into Nigeria. In the past it was easier to import and harder to manufacture. We want to reverse that.
It is difficult to calculate the amount of stolen funds sitting in foreign banks. By their nature such funds are elusive. What’s helping us is that internationally there is a lot of movement against illicit financial flows. There is a common reporting standard, the automatic exchange of information, the beneficial ownership record. These are helping the global economy to fight this and of course Nigeria is a beneficiary in terms of information flow. But we’ve gone one step further. We’ve engaged one of the best known private investigation/asset recovery firms in the world. We have them now on retainer. We’re looking at the flows, at where the money went. We’re determined to get the money that went out in the last administration. There is also a lot of money that went there in the last twenty years. There is money that went out under Abacha sitting in Swiss bank accounts. It is not the professionals that are the problem. The problem is the will of those governments to do the right thing. I think there is self interest. If for example we take the Abacha loot. 323 million dollars I believe, has been there for twenty years. They are not paying us any interest on it. It is in their interest to slow the program down. I think the problem with illicit financial flows for us in Africa is that when the money is going out nobody asks any questions. When it is time for the money to be returned they have a million questions. We just think that the game should be played fairly. We’re borrowing. I’m issuing a EuroBond for a million, yet someone is sitting on 323 millions and they’re giving me conditions on why it shouldn’t return to Nigeria’s people who are after all the owners of that money.
The numbers suggest that we are already on the cusp of an exit from crisis. That suggests that Nigeria’s economy can return to growth at an oil price that is lower than the trend of the last 5-6 years. That is a very solid platform for us to grow forward. I think that the key change and the key intangible has been changing people’s attitudes. Changing the types of things that people are looking to invest in. Now it’s not all about oil. It’s about agriculture, solid minerals, transportation, toll roads, yes we can! Nigeria is about more than oil. Oil is just ten percent of our GDP yet the only story that anybody has really heard is oil. You’re going to start hearing about the rest of the economy.
The whistleblower act is going through the National Assembly at the moment. On ghost workers there is enough law, the problem was process. There is nowhere in the world where you need more laws for that. It’s about process and technology. We have used technology extensively to really clean up our payroll. Using biometric technology to identify duplicates and triplicates. The message is getting through. That game is over. When the systems are manual, you cannot control this problem.
The strong pillar of the economy apart from Agric is really going to be the youth. That’s really our biggest asset. We are doing a lot to try and enable them to really come into the market place and come into the commercial space. We are doing a lot of work on that and I think it is going to be the strongest. Around technology, entertainment, youth in agriculture, youth in business…it’s going to be the young people coming through. It think that is going to be the big structural change. For us 2018 is going to be a stronger growth year. Nigeria will begin to show what it has the potential to do.
Nigerians abroad should return. Nigeria has energy and dynamism. It is almost tangible, you can feel it. You can do anything in Nigeria! I think that is going to become a very attractive investment destination again. You can’t ignore it. There are better reasons than ever to have a good look at Nigeria. It has changed, we’re fighting the corruption, we’re making ease of doing business better, we’re addressing the infrastructure challenges. Come on!”