How Nigeria’s Losing Massive FDIs To Neighbouring African Countries

Latest United Nations estimate as at Wednesday, June 5, 2019, places Nigeria’s population at over 200 million, with a greater percentage of young people. Apart from being a great market, Nigeria’s population makes it a great hub where international companies should be comfortable enough to site their outlets and enjoy cheap labour. However, that is not the case. In this report NKECHI ISAAC looks at opportunities lost by Nigeria, the cause and what government can do to reverse the situation.

The advent of telecommunications took Nigeria like every other county of the world, by storm, owing mainly to massive population. Information and Communication Technology (ICT) has been identified as one of the fastest growing revenue generating sector in every economy, contributing significantly to national Gross Domestic Product of most countries around the world.

The National Bureau of Statistics (NBS), according to data provided by the nation’s telecom regulatory body, the Nigerian Communication Commission (NCC), recently reported that Nigeria’s active mobile subscribers increased to 172,824,239 million in the fourth quarter of 2018 from 162,032,481 million and 162,522,772 million recorded in the third and second quarter of the same year. Being the highest consumer of telecommunications service in Africa and the highest customers of mobile telecommunication devices invariably, it is expected that some telecom product producers would site their companies in a place with such massive percentage of customers like Nigeria but that is not the case as other neighbouring African countries wrestle such investment opportunities from the nation.

One case out of the many was the move by an international global company, Samsung, which sometime early this year, chose South Africa over Nigeria to site its plant. Similarly, Google also choose Ghana over Nigeria to site its first Africa Artificial Intelligence Lab.

Apart from the telecommunication sector, there are similar cases of massive loss of FDI to neighbourng African countries as well as cases of migration of oil companies like Shell and others like tyre manufacturing companies, Dunlop Nigeria Plc. and Michelin, which also relocated to Ghana.

In the textile industry as well as the iron and steel sector, there have also seen the outright closure or divesting of business interests from the nation.

Giving a recipe on how government can stem the tide and encourage companies to invest in Nigeria, president of the Association of Telecommunications Companies of Nigeria (ATCON), Olusola Teniola, harped on the need for government to hands-off business activities, give businesses freedom to grow the environment while providing them with an enabling environment to carry out their business.

“The government of the day must take steps to change the narrative, ensure it hands off from business, they have to create a truly enabling environment that is not just about bringing in multiple taxation, regulation and chasing businesses away, they really have to demonstrate to the investments community that they are pro-business, it is only the private sector that can change the fortunes of a nation.

“So, it is for this administration to recognise that the fortunes of this country will not change unless the private sector is given total freedom to grow the economy and to build the economy otherwise what we will see is an increase in our debt profile because we have not dealt with the serious questions which is who will build the infrastructure required for our citizens to actually take the advantage to grow the economy without that the problems will continue to exist.”

He added that the Presidential Enabling Business Environment Council (PEBEC) chaired by the vice president, is a great platform for government to reach out to business and industries.

“The real challenge for PEBEC is that they have to enforce proper execution, evaluation, monitoring of the initiatives that they are trying to instigate in resolving many issues in Nigeria. In being able to carry out business. We have to consider a regulation of the problems, we have executive orders or pronouncements on paper made by the initiative, and however, there isn’t really any evidence of MDAs implementing the recommendations or implementations. You see that without this business environments would not change and become enabling for new investments to feel comfortable to invest in Nigeria.”

The president of the Manufacturers Association of Nigeria (MAN), Mansur Ahmed, averred that absence of conducive manufacturing environment and basic infrastructure would continue to discourage international companies from investing in Nigeria, saying the trend would continue except something urgent was done to reverse the situation.

According to him, the dream of Nigeria being an exporter of manufactured goods would remain a mirage unless Nigeria tackles the underlying fundamental problems bedeviling the nation.

Similarly, the director, public affairs and media of the Galvanised Iron and Steel Manufacturers Association (GISMA), Alhaji Bello Mohammed, said government can stop smuggling and provide enabling environment to encourage companies to invest in Nigeria as well as encourage the indigenous ones to grow. He added that government should block loopholes created by smuggling by re-introducing pre-inspection at the ports to encourage indigenous companies to develop.

He urged government to immediately direct all relevant MDAs such as the Nigeria Customs Service, Standards Organisation of Nigeria, Presidential Committee on Trade Malpractices and Department of State Security Service etc., to immediately enforce all investors’ protective policy which he said, would put a stop to the activities of economic saboteurs.

Mohammed also called on government through the office of the vice president to quickly set up special anti-smuggling task force saddled with the responsibility to put a final stop to the smuggling of roofing sheets into the country, saying it is the only way the steel manufacturing companies would survive and Nigerians be gainfully employed.

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