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NIGERIA
A new business climate |
 Business - Economy - Lean and clean - Core issues - Home truth -
Oil business - Private sector - Banking 
 PRIVATE SECTOR
Operators in the other sectors of the nigerian economy are also gearing up to embrace what positive developments the Obasanjo administration has for them. Mr. Oni of Cadbury sees a new beginning for the economy as a whole as government businesses are privatized and every industry is opened up to competition. "Eventually, we will see the cub of Africa grow into the lion of Africa", he says.
His company, Cadbury has moved from a strategy of import substitution to that of export orientation, which is a path the entire industrial sector must embrace in order to thrive. The benefit include foreign exchange earnings and discipline of international markets.
Cadbury's strategy has evolved to encompass the pursuit of growth in prioritized markets and has the group-wide philosophy of managing for value as a governing objective. The manufacturing sector which contributes only 7% to the GDP has faced poor prospects over the years given low purchasing power of the populace and infrastructure deficiencies. Firms that couldn't make the leap to export markets have faltered.
Says Oni: "This business has taught us that the kind of discipline, the quality standards and the general operating standards that are obtained on the international market are what we have got to work at having".
The Managing Director of nigerian Bag Manufacturing Company Limited, Chief Sikiru Oluwo says his company has penetrated the American market. "Our product was accepted by Chevron, by United DC, packers of polypropylene granules. We were able to convince the American market that we could produce up to their standards".
He says what those in his industry require most is for the government to instill confidence in the economy "on the international and local levels". He wants government to make the environment suitable for industry and investors. Is he confident about the future? "Most definitely, what we need is a benevolent leader who will lead the nation in the right direction", he says.
Mr Jean Louis Chaumeil, managing director of Nestle Foods Plc says: "We think that the climate here in nigeria is favorable". He believes the country will increasingly feature in the calculations of global companies.
Nestle S.A. of Switzerland has engaged the nigerian market for almost three decades. Peter Barbeck, CEO of the foremost Swiss Company says his plan is to keep increasing sales in Nestle's "traditional markets". Nestle nigeria says it follows Nestle worldwide policy in adopting environmentally sound business practices.
Mr. Chaumeil adds: "The positive part of the country is that a lot of money can be generated for the country, which can be invested in infrastructures, agriculture, services and so on. I am sure that we have all the ingredients to make this country successful. We know through the President Obasanjo and the new administration that there is definitely a will". Mr. Chaumeil speaks of perceptions that are changing, of opportunities, of tremendous potentials and of the need "to show the new face of nigeria".
To the managing director of Aviation Development Company Plc, Mr Mfon Udom , nigeria is a big investment area that can create more income for investors than most emerging markets. "It only requires an investor to study the situation and the picture would be very clear", he says. He beckons on foreigners to come and see things for themselves against the background of negative publicity nigeria has had over the years.
He adds: It is important that investors come in to see what is on ground and interact with their counterparts here in order to make decisions rather than stay so many miles away and take a position about nigeria".
Formed by pilots who left the government airline, ADC registered tremendous initial growth that it became the only airline quoted on the nigerian stock exchange. To cope with future growth, the company is looking out for international partnership. Says Udom : "Certainly, it is an option that we are ready to consider being that this is the trend worldwide. We have also in our plan looked at an equity partner that would take some equity in the company. Also we are looking at alliance partner whereby we feed the long haul operation from our regional haul which we intend to keep as Lagos. We only need a few years to provide the infrastructure, get electricity to run properly and get communications and all those things that would make investors comfortable".
Mr. Udom says the business climate is going to be a lot better. "That is the message I believe our president is trying to send to the investing public". He adds that nigeria will create more income for investors than most other emerging markets.
The managing director of nigerian Mobile Telecommunications Limited, Mr. Ismaila Mohammed says the government is trying to urgently develop the telecommunications sector through privatizing the state telecom company and liberalizing the industry. "The market potential in nigeria is enormous", he asserts adding that what is now needed is investment. "The country has changed considerably", he tells potential investors.
M-Tel has been running the country's cellular operations and is introducing GSM in phases. Other companies have been licensed but are not yet fully in operation. Mr. Mohammed expects more as the government continues with liberalization of the industry.
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"I think there must be ways of providing incentives that can attract foreign investors so that they can assist in developing the telecommunication sector. The country has about 120 million inhabitants and for us to be providing 20,000 lines at the moment is grossly inadequate."
The nigerian Communications Commission NCC sees the telecommunications sector which it regulates as a market unexplored. It states: "The current indications are that an investment in excess of six billion US dollars will be required to meet nigeria's immediate requirements". The director general of NCC says the government is irrevocably committed to increasing the number of operators in the industry. The Central Bank reports that communication services in nigeria is improving as NITEL , the government-owned monopoly, proceeds with digitalization of its regional trunk exchanges. A number of local and foreign strategic core investors have shown interest in buying into NITEL.
The minister of communication, Alhaji Mohammed Arzika, says the president has given the privatization of NITEL the needed push. "The decision has been taken and publicly announced that NITEL is going to be partially privatized immediately and simultaneously, we have started the search for a private second carrier which is a competitor to NITEL". He pledges that the government will provide a level playing ground centered on competition, deregulation and liberalization. "We are opening up and inviting everyone to come and participate", he says.
The minister will be at the ITU exhibition in October to meet all major players in the telecommunication industry. "nigeria is planning to go there in a grand way to make our presence and policies clearly known". He adds for emphasis: "My message is that the Obasanjo administration is sincere, we want to open the telecommunications sector to outside investment, that we welcome investors from all parts of the world and that we are going to treat every investment, not only with sincerity but with transparency and with the social justice that is requires. It is going to be open and whatever is said will be faithfully implemented".
The rush for growth in all sectors characterize nigeria's economy under the new democratic government. The minister for solid minerals Alhaji Musa Gwadabe says the resolve of the present administration to run an open, transparent and responsible government has restored much confidence in the nigerian economy. "The new willingness of the international community to do business in nigeria is evidence of this confidence and it is beginning to impact positively on the economy". The government has a anew solid minerals policy with sufficient incentives to attract investors.
Obasanjo is committed to boosting the solid minerals sector: "Our administration will re-examine thoroughly our policies in respect of solid minerals development, with a view to identifying the forces militating against investments in this sector. We will remove such impediments".
The minister of solid minerals says over 450 mineral deposits exist throughout the country. nigeria boasts a reserve estimate of 40 billion barrels of bitumen. The minister says bitumen "could serve as a major driving force in the economy in the next millennium"
The minister's outlook: "Our plan is to work for the emergence of a private sector led solid minerals industry that would earn sufficient revenue to complement earnings from oil, act as the engine of the country's industrial development and create enough jobs for our country men and women".
In addition the country's mining laws and regulations have been reviewed to bring them in line with the laws of other mining countries such as South Africa, Canada, Zambia, Ghana, Britain and China.
According to the minister, the government expects to see increased foreign participation in the foreign minerals sector. He says: "There are opportunities for investors in the mining of coal, gold, tin, and allied products, tantalite, bitumen and lead/zinc. We shall provide all necessary encouragement for investors in this area".
Chief Ojo Maduekwe says his culture and tourism ministry wants the world to recoup lost opportunities by embracing the new nigeria. "We want to let people know that if they have had a fantastic time in other African countries then it is difficult to imagine how much more fantastic it could have been for them if they had been to nigeria. For the simple reason that nigeria is, in terms of bio-diversity, cultural types and vegetation, like five African countries rolled into one. So you get value for your money if you come to nigeria" He identifies eco-tourism, cultural tourism and business tourism that his ministry will work hard to promote.
The real sectors of agriculture, manufacturing and mining are attracting priority attention from the new government. As Dr. Jonathan Long points out, "there is a tremendous agricultural potential which could be developed very quickly". He cites Michelin in rubber production which sees the possibility of the country generating up to five billion dollars of rubber exports per annum.
Saying nigeria should pay more attention to agriculture, Dr. Long adds: "Hopefully, now we've got a head of state who is a farmer".
While inaugurating the National Assembly Obasanjo said: "Our goal is food security". He pledged maximum support to farmers, he will rehabilitate irrigation facilities and encourage livestock production. The Central Bank says agriculture has been a major source of growth of the nigerian economy as well as a damper of inflationary pressures. For all that, agriculture remains relatively disadvantaged. |
© 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
