Nigeria Economist Conference Summit 2011 Summary


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Nigeria Economist Conference Summit 2011 Summary

  1. 1. Nigeria Summit: Transforming potential into profit Event SummaryThis year’s summit in Abuja focused on what is needed to transform Nigeria’s extensive potential intoactual profit. The need for implementation of policies – rather than policy changes – was a recurrenttheme in all the sessions, as was the major constraint of inadequate power supply.The World in 2012Central Bank Governor Sanusi Lamido Sanusi stressed the need to spread the wealth from Nigeria’s oilrevenues in order to overcome the economic disenfranchisement that underlies sporadic – butincreasingly violent – unrest. Mr Sanusi highlighted the importance of mobile banking, which is not yetestablished in Nigeria, as a way to improve the lot of those engaged in agriculture. Government alsoneeds to trim excessive spending on salaries so as to free up more resources for investment ininfrastructure.Restructuring the nation’s financesNigeria’s new Minister of Finance, Ngozi Okonjo-Iweala, focussed on the government’s determinationto make change happen, citing specific examples of concrete plans that are underway, such as a newprogramme to support young entrepreneurs that has been launched in partnership with Lagos BusinessSchool and the publication of state and federal revenues in local newspapers to develop transparency.Emphasising Nigeria’s strengths – the stable macro-economic environment, vast potential naturalresources outside of the oil and gas sector, and President Jonathan’s strong leadership team – she alsodrew attention to areas where the government acknowledges its need for help: structuring public-privatepartnerships to raise investment in infrastructure and improve service delivery; reforming the educationsystem; and – beyond Nigeria’s borders – cooperation from the international community to ensure thathiding places for illicit funds are flushed out.Ms Iweala, who recently resigned as Managing Director at the World Bank in order to take up her newpost, was adamant that the political will to fight corruption is strong, despite the significant challenge ofvested interests that have enjoyed the status quo for decades at the expense of ordinary people. As sheput it, “Nigerians are tired of vision. They want action.”Reforming Nigeria’s business landscapeOlusegun Olutoyin Aganga, Minister of Trade and Investment, was bullish in his appraisal of Nigeria’spotential, reminding delegates of the country’s 80m hectares of land, a resource base of 33 solid mineralsin commercially viable quantities and the very size of the population, which is the largest in Africa andcounts a relatively large middle-class by African standards. The government, said Mr Aganga, aims toprovide the enabling environment that is needed to drive the economy forward.From revolutionising physical access to the country by facilitating the visa process and installing tradeand investment desks at international airports to launching a crusade for governance – targetinggovernment and businesses alike – Mr Aganga made it clear that the new administration intends to makechanges that will outlive this term of office and break the cycle that has for so long paralysed Nigeria’sprogress. “Implementation,” he said, “is key. And the quality of implementation. There are no newthings to do. Everything is in place – it’s about execution.”
  2. 2. Spotlight on Nigeria’s film industryTwo key issues that dominated the discussion of Nollywood by leading industry stakeholders weredistribution and piracy. Nigeria’s film industry has really emerged against the odds, and governmentsupport is new. This might help the transition to the big screen, but improved distribution networks andaction against counterfeit products are desperately needed if Nollywood is to take its place as the voiceof Africa on the global entertainment stage.Reforming Nigeria’s oil, gas and electricity sectorsThe undersupply of electricity was a topic that emerged in every session. After decades of virtually noinvestment in the sector, Nigeria now faces acute power shortages. The privatisation process is painfullyslow and a key issue that needs to be addressed separately is the low tariff – set by regulators below cost.Nigerian consumers – like consumers elsewhere – will face stiff price hikes once the true cost ofproducing and delivering electricity is factored in. However, with businesses claiming that powerfailures can make up 50% of operating costs, it is more likely to be households that would be hit hardestby better – if more expensive – supply.Other issues raised during the discussion included the need to leverage the country’s gas resources tofuel power stations, introduce pre-paid meters and ensure that renewable energy sources are part of thesolution.Chinese investment in Nigeria: where does it go from here?The free trade zone that is currently under construction in Lekki dominated much of the discussion, withdelegates expressing concern as to whether the policy would work this time given lacklustre results inCross River State. Chen Hao Xing and Sola Owuru reassured attendees that the political will – fromChina, the Federal Government and the State of Lagos – will drive the success of the project.Predictably, delegates raised questions about the quality of construction as well as the extent to whichChinese investment is creating jobs for Africans, not just for Chinese workers. Both panellistsmaintained that Chinese investment creates a win-win situation for investors and recipients alike. Chinahas an interest in producing close to markets and is facing serious wage inflation, enhancing theattractiveness of hiring local workers.