Remarks by Nigeria’s Acting President Prof. Yemi Osinbajo, at Nigerian Initiative for Economic Development at the Banquet Hall, State House on Monday August 7, 2017
We are indeed very grateful to you for taking out time of your very, very busy schedule in America to be here with us. What I always find very interesting about the Diasporan community is how it is that everyone who we work with here comes from that same community. Practically, everyone who made the presentation is a Diasporan of one kind or the other.
So, I think that this country is going to benefit tremendously from its Diasporan community in one way or the other because almost everyone whom we come across and who is doing something important in government is from that background. And it is important that is the case because I am sure all appreciate and nobody needs to repeat that we live in a vastly different world community now than ever before. Everyone is related one way or the other.
The world is a much, much smaller place and gets smaller by the day. So I think that there is very little today and I like the point that was made by the DG of the Nigerian Investment Promotion Commission, NIPC that anyone who doesn’t invest in Africa or Nigeria in 10 years’ time, they would be queried by their establishment, by their businesses that “you just missed out on the best possible opportunity” and you know that it is easy to miss out on the best possible business opportunity.
I remember that I was counsel; I was a lawyer, teaching in the university but also in corporate practice when the first telecom licenses were to be issued. And I recall that at the time, even the most optimistic of the investors (because we had only 400,000 telephone lines at the time) thought well maybe in five years, we will double the number of lines or maybe triple the number of lines and then we will make profit in about five years or ten years. There were so many who thought, well, it may not be worth it. Aaaah! You know, the business environment is a difficult one etcetera, etcetera.
“I like the idea of investors knowing that the reason why you are coming to Nigeria is not to help Nigeria. You will ultimately end up helping Nigeria, but the reason why you are coming here is because this is a good place to do business.”
But in about a year of the licenses being granted all of those who did not invest in it, the big telecom companies who did not invest in it, found themselves holding the short end. They realized that it was a huge mistake because in five years MTN had shown that the telecom sector in Nigeria was just incredibly profitable. They had made profit in one year. MTN alone now has something in the order of about 12million or so lines if not more, and that’s one of the telecom companies that we have.
So, really, Nigeria is a place that is waiting to happen and it will happen. That’s really the point. It will happen. The truth of the matter is that any country that opens itself to free enterprise, the way Nigeria is opening itself to free enterprise, will somehow find that it will work.
That is one of the critical things that we are bringing into the mix. We are insisting that the only way that this country can make the profit that it needs to make is by private sector investment, beginning with local investment.
Acting President Osinbajo with a cross section of participants at NIED forum in Abuja
That’s why we are working so hard on making the investment climate profitable and easy for those who are doing business already, because we believe that those who are doing business already will invariably bring in those who want to do business from outside the country, foreign investment etcetera.
But we think that it must be private sector driven. Our budget is N7trillion this year. Now, N7trillion is a small amount of money. I am not adding the budget of the states because if you add that it comes to something close to N20trillion. But just looking at the federal budget it is just 7trillion.
But we have private sector investments that challenge that size. For example, the largest single line refinery in the world is a private sector investment and it’s going to be doing 650,000 barrels of oil every day. That refinery is purely private sector driven. Also, the largest single line fertilizer plant in the world is being set up here. All of these will be ready by the end of 2018, some early 2019. They are huge private sector investments that completely belie the size of the federal budget and belie everything else.
So, really what we intend to do is to push private sector and that’s why we are doing everything that we are doing to ensure that the private sector can come in and invest. Look at the power sector for example; the power sector is almost completely privatized. But we have had difficulties because of tariffs, for example. Many times you look at our power sector, we have an installed capacity of about 12,000 megawatts today but we are only able to put on the grid under 5,000, a little above 4,000 megawatts. But we know that the potential is way beyond that maybe four or five times that.
But what do we do to ensure that we realize that potential? What we need to do is to make this profitable for the private sector. So, we are working on the whole value chain. We are trying to free up that value chain, beginning with working on tariffs, and then, looking at the how, at the moment we have problem of liquidity in the value chain and we are addressing that. There is a massive payment assurance scheme of over N701 billion that we are infusing into the power value chain to free up that value chain. Once we are able to do that and we address the issue of tariffs we open it up again. And then people can come in and the big investors can come in and invest in power.
This is a country of 180 million people and in another 10 years’ time we are probably going to be the sixth or seventh largest country in the world. There is no way we are not going to need power, whether it is off-grid power or on-grid power. Power is required by everyone where we have a major power deficit. So, we are going to open up that power sector and anyone who invests in power sector will definitely make money. No question. It is going to be much bigger and better than even the Tele-cos.
You heard the Minister of Agriculture talking about agriculture and the sad poem by the way, I took the poem from him. This is a poem about how miserable it was at the time. Let me assure you that Chief Audu Ogbe became very wealthy in the farming business. We literarily had to beg him to come into government because he seemed to be enjoying his wealth a little too much. But the truth of the matter is that the agric sector is a massive, massive sector.
There was a Mexican who came to Nigeria; he is one of the big banana farmers, banana and pineapple farmers and he is still in Nigeria. He is in eleven states now. He came in on the invitation of some Nigerians who wanted to export bananas. They wanted him to come in here, grow banana and export them. But what happened? After a while, they found that he wasn’t interested in exporting anything at all. When they asked him why, he said: “Look, I’m selling this stuff here. I’m making more money here than exporting it. Every one of these bananas I’m selling; every one of the pineapples I’m selling. He is still very happy with the market and the market is growing. The market is right here, this is the kind of place where you really, just have to be here!
My friend is from Rwanda. Rwanda is a very lovely country and Paul Kagame is an incredible individual doing really good things in that country and I believe that the country will do great things. But compare Rwanda to Nigeria in terms of just the size of the economy. We have 36 states in Nigeria. Lagos alone which is the commercial nerve centre is six times the economy of Rwanda.
There was a Mexican who came to Nigeria; he is one of the big banana farmers, banana and pineapple farmers and he is still in Nigeria. He is in eleven states now. He came in on the invitation of some Nigerians who wanted to export bananas. They wanted him to come in here, grow banana and export them. But what happened? After a while, they found that he wasn’t interested in exporting anything at all. When they asked him why, he said: “Look, I’m selling this stuff here. I’m making more money here than exporting it.
So, really when you compare some of these things people say Oh! I want to go to there; I want to go here…Yaah! It’s okay. But the truth of the matter is that if you are really serious about investing in Africa, this is where you have to come to. This is absolutely where you must come to. There is no other place.
So, I really want to say that we are very excited about the partnership that we are building with Nigerian Initiative for Economic Development NIED. And we really want to make this work and that’s why we brought all of our people to make these presentations and we will be meeting with you later on in the day. Just as Industry, Trade and Investment Minister has said, we are here and we want to make sure that we are interacting with you on a regular basis. As he said, it is not a sprint, it is a marathon.
So, we have to keep at this. We should not lose focus. I like the idea of investors knowing that the reason why you are coming to Nigeria is not to help Nigeria. You will ultimately end up helping Nigeria, but the reason why you are coming here is because this is a good place to do business. And that is the only thing that should interest us and focus our minds. Ultimately, we will help our country, but first and foremost, this is a very, very good place to do business and it is going to be a profitable place—and very profitable for all of us.
Again, let me thank you very much for taking the time to come. I am very, very excited by the fact that you chose to accept our invitation. It just shows that you believe in what you are seeing and what you are hearing. I hope that we will all be very happy and satisfied with the results that we get from this engagement.