Nigeria is one of the world’s largest producers of crude oil, is home to about 44 solid minerals, has an amazing population and in a state of development that makes it a choice investment destination. However recent recurrent events all over the world speak to a down turn in the fortunes of her citizens. At home, he does appear to be fed up with life and away, with incessant harassment, humiliation and even death. One wonders where salvation lies. Does it lie in retaliatory responses like physical attack of foreign business interest?
Reciprocity perhaps but I dare say physical attack however popular in some quarters or approvable by some school of thought, is not the right approach. Consumers suffer the most immediate consequences of the destruction of any amenities servicing them.
So “fire for fire” approach is like trying to eliminate smoke without thinking about the causative fire or perpetually cleaning dust without attention to the invisible but ever present wind. That most definitely cannot work a sustainable solution.
This is where new thinking is needed to revolutionize our investment climate locally to bolster the acceptability and popularity of such home evolved services and companies. The solution may lie in finding ways and means to make consumers in Nigeria to go for services and products with substantially local contents and ownership structures for instance to patronize such services with some local ownership like STARTIMES/NTA; GLO telecommunication and supermarkets operated by Nigerian investors.
What actually causes a people to leave the comfort of their home with all the pride of citizenship and to foray into uncertainties of foreign lands? The truth must be told “man must survive”. The sooner we face the reality the better for us. Unfortunately our concentrations have been on oil, the only industry or sector which appears to actually have a local content regulatory framework. How many Nigerians are employed in that industry? The vast majority of the workforce is employed by small and medium-sized firms which are mostly owned by Chinese, Lebanese, South Africans, Arabians, etc.
No nation of the world is altruistic. No country whose home and priority businesses are all owned by foreigners is economically independent and safe. A country whose small medium industries and macro economy is maximally controlled by foreigners will perpetuate in unemployment and continuously suffer exodus of its most productive labour force, particularly such a country like Father Christmas Nigeria where it takes virtually nothing different for a foreigner to do business than a local. For example besides the requirement of 51% share ownership by Nigerians in case of a foreign company seeking to bid for contract in the oil and gas industry, a foreigner can fully own his company and do business in Nigeria with several tax exemptions and holidays, entitlement to repatriation of capital and interest, etc. It is also easy for foreign interest to equally import their work force from their countries of origin since it is equally easy to secure all applicable permits.
Section 17 of the Nigerian Investment Promotion Commission Act (NICPA) provides that:
“Except as provided in section 18 of this Act and subject to this Act, a non-Nigerian may invest and participate in the operation of any enterprise in Nigeria.” Under section 56 of the Companies and Allied Matters Act (CAMA) a foreign company can do certain businesses in Nigeria without registration. The section provides that:
“A foreign company may apply to the President for exemption from the provisions of section 54 of this Act if that foreign company belongs to one of the following categories, that is‐ foreign government‐owned companies engaged solely in export promotion activities.” One may be excited by the mere mention of “export promotion activities” as basis for granting an exception to a foreign company but one should not be fooled by that.
Of what importance and value is an “investment” of a foreign company which applies its resources in this country perhaps with funds borrowed from its origin where the so-called investor utilizes imported workforce and at the end repatriates all capital and profit and pays interest to its foreign lender? This is perhaps another way to siphon local resources.
We have always talked about ease of doing business as a way of encouraging foreign investment in Nigeria. This is good, no nation is an island. But do we consider the ease of doing business in Nigeria for Nigerians? Countries all over the world encourage local content by all forms of laws and policies but it appears the reverse is the case with “Big Brother” Nigeria that has un-favourable fiscal and financial policies and negative tax regime applicable to her citizens.
This, from the outset, creates an investment market competition imbalance between foreign and local investors, especially where the foreign investor is from a domestic climate with good incentives for export.
Moreover some other major factors greatly discourage local investors: ethno-religious crises, economic inferiority complex besides a very negatively flexible, politically manipulated economic policy where a lot of business investments become victims of political vendetta. These factors account for the sudden disappearances of erstwhile prosperous locally owned businesses.
This clearly points to the herculean tasks before the government and regulatory authorities such as the Nigeria Investment Promotion Commission (NIPC) which is regulatory authority for doing business in Nigeria. The NIPC is established under section 1(1) of the NIPC Act with far reaching functions as stated in section 4 of the Act which provides as amongst others thar:
“The Commission shall encourage, promote and co-ordinate investment in the Nigerian economy and accordingly, shall: Be the agency of the Federal Government to co-ordinate and monitor all investment promotion activities to which this Act applies; Initiate and support measures which shall enhance the investment climate in Nigeria for both Nigerian and non-Nigerian investors;
Promote investments in and outside Nigeria through effective and Non-Nigerian investors. The only exception for a foreigner is as stated in Section 17 of the Act which prohibits investment in the “negative list” which is defined under section 31 to mean production of arms and ammunition, production and dealing in narcotic drugs and psychotropic substances and production of military para-military wears.
It is important for the NIPC to re-organise the Nigerian business climate in the light of present circumstances to favour Nigerian investors. The negative list is not positive to Nigerians either considering the few items listed therein and amount of their contribution to the national gross domestic product. There are more viable industries like telecommunication, the media, consumer goods outlets etc which account for a greater percentage of investment opportunities, greatly affect and almost control the socio-cultural lives of the people and offer better investment returns.
Government policies and legal reforms must redirect in this regard. Equally relevant and worthy of mention is the National Office for Technology Acquisition and Promotion otherwise called the National Office. The National Office is established under section 1 of the National Office for Technology Acquisition and Promotion Act (NOTAPA) to carry out functions with wide ranging effect. Section 4 of the Act provides the functions to include: The encouragement of a more efficient process for the identification and selection of foreign technology;
The development of the negotiation skills of Nigerians with a view to ensuring the requirement of the best contractual terms and conditions by Nigerian parties entering into any contract or agreement for the transfer of foreign technology;
Onwubiko writes from Abuja