Opinion: To attract foreign investment, stay at home Mr President

 

…we need to put our house in order to attract foreign investment. In all factors mentioned, none is related to the number of times our President visits other countries.

by Sheriffdeen A. Tella

God bless Chief Gani Fawehinmi, the late social crusader extraordinaire and of course, his ‘elder brother’ Tai Solarin, also of the blessed memory. Both of them came, like many of their compatriots living and dead, played their roles of re-shaping Nigeria for better but never able to achieve such objectives. Nigeria remains a cripple that caught polio few years after its birth and seems to be doomed to remain so forever. It appears that no amount of plaster of paris or traditional bone managing technique can straighten the crooked limbs.

It was Solarin, who wrote “The Beginning of the End” when Gen. Yakubu Gowon, was having fun in marriage while Nigeria was at war. About 1981, former President Shehu Shagari flew out of the country on a mission to attend a multilateral meeting that could also bring some foreign investment into Nigeria while the country’s tallest building then, NITEL in Lagos, was burning. He went, as usual, with a large contingent typical of a proud country called Nigeria. The public outcry that followed made him to cut short the trip. But then, Shagari had opportunities to travel many times thereafter, in search of foreign investments. All those travels were a child’s play when compared with that of President Olusegun Obasanjo in his second coming.

When Fawehinmi came up with the statistics of how many days Obasanjo stayed abroad as against the days he had to direct affairs of the country in Nigeria, it became embarrassing, even to his administration and the Peoples Democratic Party. In a particular incident, the President had to cut short his trip when the Nigeria Labour Congress, under the leadership of Adams Oshiohmole decided to go on strike over fuel price hike.

Obasanjo’s response to the incessant trips abroad was hinged on the fact that Nigeria had become a pariah state under the late Gen Sani Abacha, and there was the need to let the world know that the country had arrived in global arena of democracy. The outcomes of the trips never brought massive foreign investments envisaged, except in the traditional area of oil and gas which, without prompting, is of great importance to the Western world, particularly the United States.

Health matters prevented President Umaru Yar’Adua from travelling on business trips. He travelled mainly to avail himself of the modern health facilities and expertise abroad, even if those experts were part of Nigeria’s export to the world. It is therefore understandable if Jonathan has to fill the gap of business visits which his immediate predecessor could not make, in order to fill the vacuum created and prevent loss of contact that Obasanjo had opened up in his eight years in office. Apart, from the President’s business trips, many governors also direct the affairs of their states from overseas but not much is heard of these trips.

However, there was never a cost-benefit analysis of the trips, except the incidence of massive capital flight which partly arose from huge amount of estacode for the President and his retinue of aides and officials (including governors) that follow him in each trip, and that are lodged in foreign account abroad, as well as, over-invoicing funds from all sorts of imported goods (including used planes and vehicles). The period of all these travels to attract foreign investments also coincided with when many foreign businesses in Nigeria started moving to Ghana where the cost of production was believed to be cheaper, thanks to regular electricity there, and when many oil companies were closing some of their operations because of the insurgence in the Niger Delta.

What is important for noting is that when it comes to travelling abroad, no domestic emergency or calamity can stop our presidents from embarking on their journeys. In all cases, as we are made to believe, the travel is not for sight-seeing but for business, to meet with international investors and be able to attract foreign investment into the country. The irony of the last travel to Brazil by President Jonathan was that at the time he was supposedly talking business with the Brazilian business community (or was it the Minister for Trade and Investment or the First Lady with business women), the Brazilian football authority was busy discussing how and when to terminate an arranged friendly football match with Nigeria on the grounds of rising insecurity in Nigeria!

The question that should be asked is, what factors attract foreign investors to a country? Two major things have been mentioned in the foregoing, namely adequate infrastructure, particularly regular power for operating the industries at some minimum cost; and security of life and property or investment. Other major factors that can motivate foreign investments are population with some reasonable income level; good investment policies devoid of bureaucratic bottlenecks; skilled manpower and good payment system. The absence of any of these could hinder foreign investments.

A check on these factors shows that Nigeria is likely going to fail in most of them. The country is still grappling with less than 4,000 megawatts of electricity when a country like South Africa produces about 40,000 megawatts! The little we produce is not sufficient to meet residential needs but is being shared with industrial businesses. Of course, most industrial and commercial ventures are run on generators and its raw materials (diesel) with resultant high cost of production. While the Niger Delta insurgence has reduced greatly, the menace of Boko Haram has taken over and we do not know which next. Insecurity, particularly its unpredictability together with government’s helplessness cannot encourage investment in the country. Presently, many businesses in North are moving or thinking of moving Southward because of the insecurity in the region and semblance of peace in the South.

On population, Nigeria is a big market for any investor desirable of making profit, but when there is growing poverty, they may not be able to sell quality goods which may not be good for their image also. The preference will be to set up commercial outlets in the country where only packaging of products are done as pretence to production. This is also not good for the country because a country needs production of goods rather than distribution of goods produced elsewhere. With production, workers will be able to gain some skills, there will be technology transfer and advancement through research and development units of such manufacturing units. So there is the need for high income to make our population size attractive to investors of core production units like manufacturing.

Our investment policies require continuous revision. I read recently that China is now working on its investment policy to make it more attractive for foreign investors. A country that one can say is investment-saturated is revising its policies to attract foreign investment! Registration of businesses in Nigeria still remains cumbersome. A friend has been on registration of his business now for almost two years. He was told that the document has to go to the Attorney-General of the Federation for final signature and this could take additional six months! This leaves room for corruption by middlemen who are mainly civil servants. There is therefore the need for advertising the processes and procedures for business registration online so that anyone anywhere in the world can read them.

On skilled manpower, we have them in abundance but they are not here. There is hardly any country you visit around the world without highly skilled Nigerians making waves. We do not appreciate them here and the labour mobility at their level makes it easy for them to fit in elsewhere. So, there is inadequate skilled manpower to assist in running industries here and at cheaper rate than imported labour. The literacy level is also going down. The newly industrialised countries such as Brazil, India, South Korea, Malaysia, Singapore, China, among others have quality literacy level over 85 per cent. Half of the Nigerian population is illiterate. Nigerian students are engaged more in theories than practical in their science classes. The quality of teachers is on the decline basically because they have no facilities with which to teach or they themselves were taught without appropriate facilities. That is not the quality of labour foreign investors want.

While the financial sector seems to be growing, the incidence of fraud, inconsistent policies partly caused by all the stakeholders, the lack of depth in the capital market and instability of the exchange rate affect payment system greatly. But investors want to take out their money with ease and this is not available.

The foregoing has shown that we need to put our house in order to attract foreign investment. In all factors mentioned, none is related to the number of times our President visits other countries. Investors all over the world know the history and politics of their supposed hosts like the back of their hands. This is particularly true in this age of information technology. How many times has the President or Premier of China come to Nigeria to solicit for business, yet our markets are flooded with Chinese products?

In fact, given the number of times Obasanjo went round to sell Nigeria as an investment destination of first choice, there is no need for any President to go out again. The earlier our leaders realised that they have to stay and make the country’s environment conducive for investment, the better for the growth of Nigeria and less money will be wasted on avoidable capital flight.

Editor’s note: Op-ed pieces and contributions are the opinions of the writers only and do not represent the opinions of Y!/YNaija.

This article was originally produced in the Punch newspaper  with the title ‘On foreign travels and foreign investments’.

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