The recent inaugural UK-Africa Investment Summit in London, which was hosted by the British Prime Minister Boris Johnson, was an excellent platform for Nigeria to show off available business opportunities in the country. These include agriculture, manufacturing, mining and technology. It was cheering that the Summit, which was graced by over 1, 000 people, including heads of state, and ministers from across the continent, Chief Executive Officers (CEOs), and senior representatives from Africa and British businesses, institutional investors and international organisations, among others, offered Nigeria a rare opportunity to spur inclusive growth in diverse sectors of the economy.
At the end of the Summit, which came amid UK’s move to exit the European Union (EU), Nigeria and the UK investors sealed commercial deals said to worth more than N153.4billion (or £322 million).
Described as a big win for Nigeria, the Nigerian delegation, led by President Muhammadu Buhari, which comprised renowned entrepreneurs, secured five partnerships with the British government, designed specifically to deliver investment, jobs and growth, benefiting people and businesses across Nigeria and the UK. Though a total of 27 deals worth £65billion from across the African markets, involving different African countries were signed at the Summit, Nigeria came out the biggest beneficiary. With these commercials deals, Nigeria is reported to have been put ahead of South Africa, unarguably the most industrialised nation on the continent.
We are delighted that Nigeria seized the opportunity of the Investment Summit to attract more business deals. We believe that the government and the private sector investors should leverage on the gains to produce a comprehensive investment guide that will strengthen critical sectors of the economy. Undisputedly, the private sector has a far-reaching critical role to play to support Nigeria’s economic growth agenda. It is expected to create the much-needed jobs for the unemployed population. Indeed, stimulating the economy and creating more jobs will lift millions of Nigerians out of poverty.
We expect that the new deals will lead to improved energy, development of agriculture potential, access to banking and loans to the poorest consumers and female entrepreneurs running start-ups. It is therefore appropriate that the N153.5billion deals are directly designed for five critical areas of need: economy, energy, infrastructure, technology, and female entrepreneurs running small businesses. All of these are reportedly geared towards inclusive growth. For instance, in the economy, emphasis is on agriculture businesses to complement already investment in the subsector and other growth sectors that can create quality jobs.
Good enough, the deals will also focus on the installation of low energy designs for street lighting for Oyo State, smart metering for Abuja Distribution Companies (DisCos) and Tex ATC installation of five airports’ control room towers worth millions of British pounds. There is no doubt that huge opportunities exist in Nigeria for investments in renewable energy, hydropower, wind, solar, thermal and geothermal, all of which the government should embrace to tackle the power sector challenges. But, many of these projects may not be realised until government is financially committed to see them through.
We hope the new deals between Nigeria and the UK investors should succeed. We are delighted that the deal includes infrastructure financing worth £80 million. According to the National Infrastructure Plan, Nigeria should spend about $3trillion and five per cent of its Gross Domestic Product (GDP) annually to bridge the infrastructure gap. From roads to bridges, down to power and railways, Nigeria infrastructure had recorded a huge deficit in the last 20 years, owing to poor maintenance culture, lack of sufficient funds and corruption. Therefore, for Nigeria to bridge this gap, it requires borrowing to meet the desired revenue generation that can propel accelerated development.
Currently, total debt stock, according to the Debt Management Office (DMO), is about N27trillion. The government needs to borrow about N1.549trillion from domestic and international markets to fund the 2020 budget.
Also, the trade deal will attract N13.1billion investment Promotion Programme to stimulate Foreign Direct Investment (FDI) and to facilitate technology transfer, the N17.5bilion Gateway programme, offering trade and investment business support services across Africa. We believe that the deals will engender investors’ confidence in the economy. A recent survey by the Association of Chartered Certified Accountants (ACCA) and Institute of Management Accountants (IMA) showed that investors’ confidence in Nigeria has dropped below its nine years average. The 2019 report was based on major indicators of economic activity. It also provided valuable insights into the views of finance professionals on key variables such as, investment, employment and cost of doing business in the country.
Overall, Nigeria is in dire need of commercial deals that will ramp up growth and development, and improve the well being of the people. The UK-Africa Investment Summit will amount to nothing if the deals are not translated to more investments, jobs and growth opportunities for the Nigerian people and businesses. Since there are so many investment opportunities in the country, we urge the government to provide the enabling environment for such enterprises to thrive.