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The Economist - Investing in Nigeria

Date: October 26, 2017


The World in 2018. Investing in Nigeria

“You can do anything in Nigeria! Nigeria has energyand dynamism. It is almost tangible, you can feel it. Nigerians abroad should return.”
The Minister of Finance, Kemi Adeosun, might as well have been speaking about herself personally as we concluded the interview. After a stellar career in major corporations and institutions she chose to return to Nigeria and help turn things around. “All the ingredients are now in place for growth. And that’s really when it begins to touch people’s lives” she explains and then pinpoints the source of the problem: “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.”
Her government injected 1.2 trillion in twelve months and the results are starting to show. “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.” Not dwelling on the past, Mrs. Adeosun summarises and moves ahead. “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.”
In a vast, dynamic and fast growing country, there are now clear priorities: “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.”
“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! 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, were making ease of doing business better, we’re addressing the infrastructure challenges. Come on!”

“The strong pillar of the economy apart from Agriculture is really going to be the youth. That’s really our biggest asset!”

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