Investors struggle to establish business in Nigeria because of her investment opportunities
By Onu Okorie
When it comes to natural resources, Nigeria, no doubt is well endowed. For instance, apart from being the sixth largest producer of hydrocarbons in the world it also has huge reserve of gas. The country is also blessed with extractive mineral deposits, such as coal, gold, silver, iron ore, bitumen and zinc.
No wonder Nigeria has of recent become the toast of foreign investors, who want to have a slice of the pie in the country's resources. Chief among the countries that have been exploring the investment opportunities in Nigeria is China and the United States of America, USA. But China seems to be smarter with its interests vested in almost every aspect of Nigeria's economy.
According to a Chinese investor and chairman, Hengshul Yahua Communication Equipment Company Ltd, Mr. Liaxi Hue, “We acknowledge Nigeria as a very important investment destination in Africa, which cannot be overlooked given its market size and the strategic position of the country in the West African sub-region”.
Today, the Chinese are honing their skills in almost every human endeavour, making in-roads into different aspects of the Nigerian economy with speed. For instance, a Chinese Telecommunication Equipment Manufacturing Company, ZTE, is one of the leading communication companies in Nigeria now. Recently, the Zamfara state government signed a Memorandum of MOU with Chinese investors for the establishment of agricultural produce processing plant in that state.
There is no gainsaying that the romance between Nigeria and China, is leaving the Europeans and America, which were traditionally the economic and political allies trailing behind.
However with the U.S. renewed drive to grow business between Nigeria and them, it appears it want to reclaims their prime position. Some of the strategies the US have adopted to expand their business interest in Nigeria is what they call Networking U.S.A., NUSA, and the Africa Growth Opportunity Act, AGOA.
According to the U.S. Economic Officer, in the department of commerce U.S. embassy, Mr. Larry Farris, NUSA is a programme developed to help link up Nigerian business men with their U.S. counterparts in order to expand business relations between Nigeria and the US. “Our primary focus is supporting U.S. companies that are looking to export their products and services abroad to link them with the Nigerian companies that are looking for a way to source product servicing know-how and finance from the United States,” Larry said.
According to him, the need arose for such a programme because a lot of U.S. companies are making inquiries about Nigerian companies and partners. Through the programme, they would be able to identify the genuine Nigerian businessmen and women, who want to partner with their U.S. counterparts. The Nigerian companies however have to register and provide information about their background to enable the American co-ordinators to verify it and speak for them when reaching out to the U.S. companies.
Larry told Newsworld that the programme has been very successful. “The programme has been successful in achieving the objectives of expanding the U.S.A. and Nigerian business relationship. We have over 3,500 companies registered with U.S., throughout Nigeria. We use that group of registered partner companies as a basis of all the services we provide.”
Larry also disclosed that one of their areas of focus is the mining sector. For instance, there is a plan underway to send some Nigeria business groups to U.S. to understudy the recent development on mining technology and get first-hand information on new developments in the extractive industry so that they can explore how to invest in developing it.
In addition to NUSA, Nigeria is a member of the Africa Growth and Opportunity Act, AGOA, which is one of the U.S. strategies to improve investment and expanding trade with the eligible AGOA member counties.
AGOA can be described as a success story considering its impact in developing and expanding business relationships between Nigeria and Sub-Saharan Africa as a whole and U.S.A.
Newsworld study shows that U.S. total trade with Sub-Saharan Africa, that is imports and exports increased by 15 per cent in 2007, as both exports and imports grew. U.S. exports increased by 19 percent to $14.4 billion, driven by growth in vehicles and parts for oil field equipment, wheat, non-crude oil, and medical equipment. U.S. imports in 2007 increased by 14 per cent to $67.4billion. Of the top five African destinations for U.S. products, export to South Africa rose by 24 percent, Nigeria by 25 per cent, Kenya, 11 per cent and Gabon by 253 per cent. However U.S. exports to Angola declined by 17 per cent.
The top five AGOA beneficiary countries include Nigeria, Angola, South Africa, Chad and Gabon. Other leading AGOA beneficiaries include Republic of Congo, Lesotho, Madagascar, Kenya, Cameroon, Swaziland and Mauritius.
Given the new drive for a piece of the action in exploring investment opportunities in Nigeria by American businessmen, analysts said it bodes well for the country's economic growth and development.
While welcoming the Networking U.S. programme, an industrialist, Engr. Solomon Nyagba, said the group could be useful in reviving the ailing infrastructure in the country, particularly the transport system in Abuja, the nation's capital city. According to him, “With the traffic congestion gradually creeping into FCT and the rise in the pump price of petroleum, we want to partner with NUSA to develop this concept of park and drive innovation, that is to create huge park where you drive your car and park it and take public transportation, which is quite cheaper” He believes that is an innovation that would certainly make life cosy for Abuja residents and the environs.