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nigeria
A new business climate |
 Business - Economy - Lean and clean - Core issues - Home truth -
Oil business - Private sector - Banking 
 LEAN AND CLEAN
Though old habits die hard the government is working on the fundamentals to reshape nigeria's character and image. The legislature is in the process of passing into law an anti-corruption bill presented to it by the President. Suddenly, public officers are accounting for skeletons in their cupboards as a ferocious media smells blood. With his links to Transparency International, Obasanjo instinctively seeks a very high standard of conduct by officers of his government. At the same time his various probes into the activities of past administrations threaten to bog down his government.
As it is, cleansing nigeria's Augean stable is a price the new government is willing to pay to earn the confidence of citizens and foreigners alike. Operators in the private sector have welcomed continuing changes in personnel, rules and procedures in the public sector.
Still the cure for the absurdities that mis-shaped nigerian business remains the withdrawal of government from business.
Within two months of assuming office, Obasanjo inaugurated a 12-man National Council on privatization and commercialization with the vice president, Alhaji Atiku Abubakar as chairman. The council comprises the leadership of the public and private sectors as well as labor. Its broad responsibilities include approving guidelines and criteria for valuation of public enterprises for privatization and choice of strategic investors. Under a three-phased privatization program, the government will, from this year, sell the bulk of its investments in commercial and industrial firms.
On the block are banks, hotels, cement companies, motor assembly plants and refineries. Others include the national airline, fertilizer companies as well as the electricity and telecommunication utilities.
Mr. Akin Kekere-Ekun, managing director of Habib nigeria Bank and a member of the council on privatization says the government is working to have a private sector driven economy. He adds: "The privatization process will be conducted in a transparent manner. All the information will be made available to everyone".
By early September, the government had published a list of enterprises and the strategic investors interested in them. A number of local and foreign financial and consulting firms have been engaged to prepared the enterprises for privatization. A studied approach to privatization is what Obasanjo has always insisted on. He wants a full and detailed management and valuation audit of the targeted establishments. "This privatization process must be such that it gains and retains the confidence of both nigerians and the international community."
Obasanjo calls for a "massive inflow of foreign investment" while pledging to provide "a stable and secure environment for all those seeking to do legitimate business within nigeria". He woos his compatriots as well: "Rich nigerians at home and abroad must be seen to have faith in the country by investing in long term industrial projects thereby confirming confidence in their own country."
The vice-president told a US delegation led by Deputy Secretary of State for Commerce, Robert Mallet, that the government will privatize 60 companies in all. Assuring that the government is committed to economic reforms he called on foreign investors to seize the opportunity provided by the stable political environment to invest in nigeria. He said the government will provide "not only the right policies but a package of incentives".
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The minister of commerce, Mr. Mustapha Bello told the Deputy Secretary Of State that the government is working towards full restoration of economic and political ties with the US.
He said the two countries will negotiate the renewal of bilateral agreements, restoration of direct air links and the restoration of financial guarantees by such agencies as Export-Import Bank and Overseas Private Investment Corporation. Mallet's response: "I can assure you that the long cold weather that we suffered together is now over. We can now go into dialogue to improve relations".
The president of nigerian — American Chamber of Commerce, Mrs. Priscilla Kuye said with democracy in nigeria, more American investors are showing interest in the country. Her words: "Within the short period that the military left power, there had been renewed interests of foreign investors in the economy. We have been really having inquiries at the chamber, especially about solid minerals and agricultural sectors. We are hoping that the era of civilian administration will usher in new investments and there will be a lot of joint ventures with the Americans."
Americans constitute the most critical segment of foreign investors that nigeria is targeting. They have been quick to vote no with their feet. The high standards of official conduct that their environment insists on naturally clash with a setting of endemic corruption. Besides, a statist economy with the government overextending itself to every area of productive activity is anathema to them. Apart from the oil sector, American firms are virtually absent from this economy. They came on strong in the seventies but left in a hurry in the wake of indigenisation policy that compelled foreign-owned firms to sell substantial shares (40 to 60%) to nigerians. This law was repealed three years ago and a foreign investor can now have 100 ownership of firms in any sector. Some sturdy investors who stayed on regardless are having to buy their shares back and resume full control. John Holt, Nestle and Citibank are some of those firms where foreign investors have upped their stake following the new law. American investors are giving nigeria a second look taking advantage of the bright light beamed by the Washington-based Corporate Council on Africa. In the meantime, companies from Europe and Asia keep gaining tremendous headstart.
The nigerian Investment Promotion Commission estimates that the country will attract foreign investment inflow of $5 billion yearly following investors' renewed enthusiasm in the nation's economy. Apart from oil and gas, the commission sees the following areas as attractive destinations for foreign investment: agriculture, solid minerals, telecommunications, transport, water resources, manufacturing, banking, power and steel.
Chairman of the commission, Mr. Eugene Okwor said his organization will see to increased investment inflows. He adds: "We intend to achieve this through proper co-ordination of investment approvals and incentives and the elimination of bureaucratic red tape"
International businessmen who have been visiting nigeria these past few months have been conferring with the president, his ministers, leadership of the federal legislature and the various state governors. nigeria has rolled out the red carpet for the world business community. Senior vice president of the Coca-Cola company, Mr. Carl Ware told President Obasanjo that his company plans to invest US$ 50 million to build two ultra modern model bottling plants in nigeria following the advent of democracy in the country. The chairman of nigerian Bottling Company Plc, Coca-Cola's sole franchise holder in nigeria, Otunba Adebisi Adesanya said the Coca-Cola Company will fulfill the pledge made by Mr. Ware, during his visit to President Obasanjo, to attract other investors into the country.
Said Adesanya: "The democratic administration will open a floodgate of investments for the country". |
© World INvestment NEws, 1999.
This is the electronic edition of the special country report on nigeria published in FORBES Magazine,
October 18 th issue.
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nigeria
