Henry Uche

The Head of Business Development, Jersey Finance, Allan Wood, who was recently in Nigeria with a delegation from Government of Jersey for a Presentation and Dinner Reception in partnership with the Commonwealth Enterprise & Investment Council, organised to strengthen evolving relationship with Africa and Nigeria, in this interview speaks about opportunities in the Nigerian economy.

Why we’re in Nigeria

Jersey has a lot to offer Nigeria. Our approach to Nigeria is in a way that we can help new capital come into the country to support economic growth and job creation, while also helping corporates, high net worth families and international organisations diversify their wealth. To quantify that, Jersey is a custodian of $1.3 trillion of capital and $500 billion of that is deployed into the United Kingdom, in range of assets that support 250,000 jobs in the United Kingdom, which represents 5 per cent of UK’s FDI. From the European perspective, we facilitate €180 billion into Europe and that supports about 88,000 jobs. The interesting thing is that about $600 billion go into the global market and our challenge is how do we get that capital to come into Nigeria.

Our interest in Nigeria

We are promoting and work ing across these three big economies you mentioned. South Africa already has a strong relationship with Jersey, that dates back 25 years. So, from a South Africa perspective, we have a lot of big brands. For example, Standard Bank, NEDBank, Alexander Forbes, and we have a lot of South Africans living and working in Jersey. We have about $5 billion South African private wealth under management and from a Kenya and Nigerian perspective, I can say Kenya is a market that we have been working with in the last two decades as well. From a Nigerian perspective, we have a fair number of Nigerian clients within the trust companies and investment houses in Jersey in our London network, and we now feel it is time to build on the relationship, which necessitated me travelling down.

Jersey Finance’s portfolio

Today, it is estimated that we have facilitated over $136 billion of assets into Nigeria alone. We are responsible for more than half of the Foreign Direct Investment (FDI) into Africa, but actually Jersey can play a significant role going forward. Why Jersey is important to Nigeria is because as Nigeria companies and fund managers look into accessing western capital, you have to appreciate western investors’ corporate governance structure. So, as time goes on and as Nigeria needs more and more capital, Jersey is going to be a strategic partner.

Partnership with local organisations to support Nigeria

What we are delivering is the structure. So, if you have a fund manager or an entrepreneur in Nigeria that is looking to gather capital, from maybe the western world, then there is a structure that is required to house that. From a Jersey perspective, we have been very successful in Africa with the Jersey Private Fund, which allows up to 50 investors to pool our assets, in a tax neutral environment. The challenge for entrepreneurs here is the foreign investors. What we are doing is that we are creating a platform for that money to flow in.

Setting up operation  in Nigeria

We don’t have any building on the ground in South Africa, Kenya or Nigeria. We were looking at putting somebody on the ground this year, but we decided that we should open an office in the United States, which we have done. So, it is only a matter of time that we can achieve that in Nigeria. My personal opinion that it would probably be Kenya or Nigeria, on the basis that we already have very strong links in South Africa. The Nigerian market offers us huge opportunities going forward.

Doing business in Nigeria

Absolutely. I think investors recognise the demographic dividend that Nigeria offers and its huge opportunities. There are associated risks and I think the big challenge is finding the right partners and investors going forward and I think that is where we can work with the Commonwealth Enterprise and Investment Council to try and bring in that opportunity.

Position on AfCFTA 

I think Nigeria signing that agreement makes complete sense and actually trading with other countries within the bloc also makes complete sense. From a Jersey perspective, I don’t think that necessarily affects us. But what it will do is to create more wealth for the continent and as people become more wealthy, they need to internationalise and diversify their wealth. So, that is where Jersey comes in and where we can support, because Jersey has 200 trusted companies as  partners, 70 asset managers and 28 banks, which is a deep pool of talents, to help and support diversification. Not only will you get access to individuals, you also get investment opportunities in hard currencies.

Exploring partnership with Nigerian banks

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We already have ongoing discussions with some banks. And, while we have 28 banks in Jersey at the moment, which have global footprints and a number of South African banks, we are also very interested in having conversations with Nigerian banks. So, the discussions are ongoing.

Jersey Finance is a non-profit organisation. So, we work in partnership with the government of Jersey to promote Jersey. We work on behalf of our members, who happen to be banks, law firms, private equity firms. We are amplifying the message and there certainly would be investors out there that would be interested in that opportunity. I think one of the things that Nigeria needs to consider is how they amplify opportunities in the country, so that people would get to understand where the investment opportunities are.

Impact of Jersey’s partnership with CWEIC 

The government of Jersey is a strategic partner and one of the things that has been really interesting over the last few years is our relationship in Rwanda, where the Commonwealth Summit would be hosted next year. Rwanda is quite an interesting destination for Jersey because going back a number of decades after the genocide, Jersey started a recovery programme and has assisted about 250,000 Rwandans. So, the relationship between Jersey and the Commonwealth is going to be much broader than just one or two countries. So, we plan to host an event in London in October and that particular event would be focused on how Jersey has been support economic growth and job creation across pan Africa and it would be focused on case studies. We plan to have a number of life case studies with the advisers and clients to attend. So, this relationship is very important to Jersey.

Jobs Jersey created in Africa

I won’t be able to give you the exact number. But we have a significant piece of research which is called Jersey’s value to Africa, which quantifies the need for Africa that needs foreign direct investments. We did a study with Economies in London, which is like a think-tank and they identified the demographic dividend that Africa has. But the reality of that research is that a country like Nigeria won’t be able to raise capital locally without seeking private capital investment from global players. It is difficult to quantify the jobs, but we have facilitated $136 billion capital.

Recommendations on how  to stimulate Nigeria’s economic growth

 I think working with centres like Jersey would help. So, I am delight that one of our officials was in Abuja recently and they are having discussions about potential Double Taxation Agreement (DTA). I think instruments or treaties like that with centres like Jersey, would bring about transparency in the system. We view corporate governance as a significant part of transactions and if that particular treaty was to be explored further, I think that would really help FDI in Nigeria. I am not saying Jersey is the silver bullet, but we want to play our part and increase FDI in the country. I think technology seems to be thriving in Nigeria, which is very exciting. We have seen entrepreneurs come back from the United states and some of them are looking to raise capital and we are working them to see how we can structure funds and help them access the capital they need. So, private investment is a critical component.

Views on DTA

I am not a DTA expect, but it is an instrument by two governments, that they have to discuss and agree on. Ultimately, it gives tax incentive to investors. The other instrument that will be interesting to investors is the Bi-lateral Agreement Treaty, which again gives further protection to investors and all of these helps in de-risking transactions.  So, we are playing our role in ensuring that there are right solutions to structure product.

Are you considering investing in infrastructure

It is obvious that significant infrastructure is required, which includes building homes. So, it goes back to that path that Nigeria having to promote these opportunities with the right people. From our perspective, we are trying to educate those in London, so that they can consider Jersey as the right platform to structure that infrastructure deal. So, if we can play a role, that would be fantastic. I think there is an element of promotional work that is required to achieve that.

Opportunities in Nigerian economy?

It wouldn’t be a strategic market for us if we didn’t believe in Nigeria. One of the challenges I recognise is that while the Nigerian economy is growing at two per cent, the population is growing more and that creates a problem. There is no two ways about it, there is going to be people creating significant wealth here and we believe that Jersey is one of the best centres in the world to help clients in that respect. We also see that there are significant infrastructure opportunities in Nigeria as well as other sectors, that our members are interested about. But one thing that is clear is that you have to be committed to this market for the long-term. I have been travelling down to Nigeria for five years and this is my 14th trip, and I can be saying that as the economy turns around and growth starts to kick-in again, you will see me make more trips to Nigeria. From our perspective, we have a long term view about Nigeria. What we do is to promote the right ecosystem for investment.

Other challenges you see in Nigeria

I think one of the challenges is perception. From people in the western world, the challenge of Boko Haram and oil challenges and these forms of insecurity sort of have effect on investment to a certain degree. So, the challenge for all of us is to get more people that have the capital to travel into Nigeria to see these opportunities themselves. From our perspective, we just see a great opportunity to help a wonderful country that has a huge demographic dividend, when the western world is aging and very exciting future. But a further promotional work is required to let the world know what the sectors are and where people can invest.