President Bola Tinubu recently wooed investors from Saudi Kingdom with high returns on investments. The President, who spoke at the recent Saudi-African Summit in Riyadh, the Saudi capital, assured the investors of the safety of their investments in Nigeria. For the Kingdom of Saudi Arabia under the leadership of Crown Prince Mohammed bin Salman, the summit was partly a fulfillment of its ‘Vision 2030’ Mega Projects aimed at creating a vibrant society in which all its citizens can strive and pursue their passions, anchored on a strong social infrastructure, underpinned by a society that values cultural traditions, national pride as well as maintaining close ties with African countries.
Specifically for Nigeria, the Summit was part of President Bola Tinubu government move to make the right business connections and chart a new course for the economy through foreign investment inflows that will stimulate economic recovery and growth. During the Saudi Summit, Nigeria and the Saudi governments agreed to a series of investment and cooperation deals, including a Memorandum of Understanding (MoU) to revamp Nigeria’s decrepit refineries with a timeline of between two and three years.
The Minister of State for Petroleum Resources, Heineken Lokpobiri, signed on behalf of the federal government. According to the government, the MoU will promote a framework of cooperation between the two countries and strengthen partnership in the oil and gas sector for mutual benefit. Both countries will enhance technology exchange, investment inflow and a strategic partnership that will pave way for sustainable growth and prosperity in both countries’ energy landscape. There were discussions on the stability of the petroleum market as well as clean energy. Beyond the deals to invest in Nigeria’s refineries, the Saudi government reportedly pledged some forex assistance to the Central Bank of Nigeria (CBN) to address the current acute shortage of forex.
Saudi’s Investment Minister, Khalid Al-falih, said that its country’s over $700 billion Wealth Fund would make some ‘game-changing’ investments in Nigeria and other African countries. Also, Nigeria and Saudi Arabia agreed to work together over the next six months to develop a comprehensive roadmap and blueprint to deliver on the investments. For Nigeria’s delegation, the Saudi-African economic Summit was a huge success for the country. Since his inauguration, President Tinubu has visited India, United Arab Emirates (UAE) and Germany to market Nigeria for investors.
For instance, during the official visit to India, the federal government secured $14billion of pledges from Indian investors and sought an economic cooperation pact with the South Asian country. The two countries also signed an agreement to help the Defence Industries Corporation of Nigeria located in Kaduna to attain 40 per cent of self-sufficiency in local manufacturing and production of defence equipment in the next three years. All the economic summits that President Tinubu has undertaken in UAE, India, Saudi Arabia and Germany, where he pushed for investments in Nigeria’s power and rail sector, were all meant to revive Nigeria’s ailing economy. Nigeria’s economic challenges include forex shortage, rising inflation, economic uncertainty, insecurity, poverty, unemployment and lack of conducive business environment.
Despite the efforts by the President to woo investors to Nigeria, the government must address the shortage of forex, lack of confidence in the government, depreciation of the naira, oil theft, infrastructure decay, general insecurity and poor rate of ease of doing business. It is not enough to woo foreign investors. The business climate must be made safe and attractive. There is urgent need for the government to put its house in order. The potential of the youth population that the President boasted of in Berlin, Germany, during the G20 Summit, is not in doubt. However, many of the youths are being impoverished by the government’s uncoordinated economic policies. Some of them have been disillusioned.
Putting in place concrete fiscal and monetary policies with implementation timelines will attract foreign investors. For now, these are largely lacking. The removal of subsidy on petroleum products and the harmonisation of multiple exchange rates have proved not to be well thought out. Many key government’s economic decisions have become rather contradictory. Government cannot be talking about low revenue generation in one breath, and in another breath, spending humongous amount of scarce resources to purchase luxury cars for legislators when some sectors of the economy are begging for urgent attention.
Without addressing the challenges of doing business in the country, we doubt that foreigners will revamp our economy. We even doubt that foreigners will fix our refineries. However, the expected influx of capital from Saudi Arabia to support our apex bank and bolster the petroleum industry, may not be feasible until the right economic policies are put in place. It unfortunate that Nigeria is expecting Aramco to come and fix our refineries when the Nigerian National Petroleum Company Limited (NNPCL) is still in place.
Saudi Aramco produces about 10 mbpd and owns the largest refinery in the United States. It made a record profit of $161.1billion in 2022. It achieved these feats through prudent management and fiscal discipline. While we commend President Tinubu for his foreign trips to attract investments, it is time for him to sit at home and provide Nigerians the much-needed good governance. The economy is in dire straits and needs to be urgently rescued.