Don’t believe the hype. Nigerian rulers at state or federal level, despite the soundbites, do not have the slightest interest in “attracting” foreign investment. They all make the right noises about “attracting” investors, but discerning Nigerians should judge them by what they do and not what they say.
There is no Nigerian ruler, current or previous, that hasn’t made speeches about “attracting” investors to the country or their states. They say it because speechwriters always include it in speeches. And it sounds great. Who doesn’t want investment? And in Nigeria, if it is foreign, it must be great. So there is nothing greater than foreign investment.
Yet, despite all the noise, endless trips abroad wooing investors, and investment summits, Nigeria is not a major investment destination and the bulk of foreign investment in the country is in the oil and gas sector. This is primarily because there is no genuine intention to attract investment. As the late political economist Claude Ake once wrote in “Democracy and development in Africa”: “The assumption so readily made that there has been a failure in development is misleading. The problem is not so much that development has failed as that it was never really on the agenda in the first place”.
Foreign investment is not really on the agenda. The foreign trips to “attract” investors are usually a cover for laundering money. Anyone seriously interested in attracting investors would take the practical and essential steps required. As the saying goes, if you build it they will come. Yet rulers that have failed to build basic infrastructure and other essentials claim they want to attract investors.
A highly trained and skilled workforce is attractive to most investors. But Nigerian rulers have let the public education system decay beyond recognition and usually send their children abroad to study. So why should a major investor, looking to set up a high-tech facility, choose Nigeria over India for example? What confidence would such investor have in Nigeria’s education system? He can look at Nigeria’s rulers and see they don’t have much confidence in Nigerian education.
Most investors need a healthy workforce. Life expectancy in Nigeria is about 54. Several developing countries have raised life expectancy to the 70s. Life expectancy is related to access to a decent healthcare system and clean water. In the late 1800s, the UK raised life expectancy by 15 years through increased access to the public water supply system. It is estimated that about 70% of Nigerians do not have access to clean water. Yet many Nigerian rulers claim they want to create an “enabling environment” to “attract” foreign investors. According to Unicef, “poor water and sanitation result in economic losses estimated at US$260 billion annually in developing countries, or 1.5% of their GDP”.
Surely, an “enabling environment” for investment would be one in which most people have access to clean water and sanitation and are healthy as a result. The fact that that they don’t have to pay small fortunes to private water providers also means more disposable income to afford the goods and services that come with new investment.
The rulers that claim they want investors have done little to improve the education, healthcare or water supply systems. Other critical infrastructure such as electricity and transportation have been similarly neglected. It makes little business sense for an investor to site an industry in some remote corner of Nigeria, without a decent transportation network to move the products to markets. Then there are the additional costs of providing your own electricity supply.
Any investor that braves the poor education, inadequate healthcare, decrepit transportation and so on, would then be hit by the dangerous terrain caused by chronic insecurity. It is always amusing to watch Nigerian governors and presidents talk about foreign investment while moving around the country with security armed to the teeth like they are in a war zone. An investor is likely to see the sort of security required and know that he/she and their staff are not going to be safe in the country. One British MP spoke last year about visiting Nigeria with a parliamentary delegation and how they were followed around by heavily-armed security. This highlights the dangers of Nigeria to potential investors and usually puts them off.
So despite all the hot air about the need to “attract” investment, the reality is that investors don’t need any government official “wooing” them to invest. If you are a major player making investment decisions worth billions, you should know more about Nigeria than Nigerian rulers. You would have experts undertaking feasibility studies for you, informing you where you could get the best returns on your investment. If Nigeria were an attractive investment destination, these people would be falling over themselves to go there. They are not coming because those in power in Nigeria are not doing their jobs.