Foreign Investors Interest In Nigeria Gladdens Tinubu

By  Lateef Adegbite

Barely two weeks after President Bola, Ahmed Tinubu, who incidentally was a former governor of Lagos state returned from Paris, Capital of France, after the New Global Financing signing Pact, Summit, Nigeria appear to have begun to reap the benefits.

The Lagos state born Nigerian President who was said to have met with some of the movers and shakers of the World economy, including Odile Renaud-Basso, President of the European Bank for Reconstruction and evelopment, EBRD and Prof. Benedict Oramah, the President and Chairman of Board of Directors of the African Export –Import Bank, Afrexim, was said to have   urged them to invest in Nigeria.

He was said to have urged   investors from Europe, Asia and the US, to take advantage of   the Nigerian government removal of subsidy on Premium Motor Spirit, PMS, popular, Petrol and the unification of the country’s multiple exchange rates by bridging the gap between the official and parallel market rates to bring funds into Nigeria to invest.

 Past and present World Bank Leadership had repeatedly said that the removal of subsidy on   fuel importation into the country and unification of exchange rates remain the key to rebuilding the country’s economy. Former President Muammadu Buhari, and embattled Godwin Emefiele, the suspended Central Bank of Nigeria, CBN,governor would not take it. The duo were said to have allowed the naira float in the forex market for fear of losing value.

Encouraged by the response of the International business Community to invest in Nigeria which has given the Nigerian President a big relief may have informed why on Thursday, July 6, 2023, in a bid’’ to create a more conducive environment for businesses to thrive in the country’’ signed four Executive Orders .

President Bola Ahmed Tinubu

Dele Alake, Adviser to the President   on Special Duties , Communications and Strategy,  disclosed that one of the newly signed Executive Orders  is the Finance  Act, Effective Date Variation Order, 2023, from May1, 2023 to September1, 2023 . Giving an insider information, he had said that the Executive Order is to ensure adherence to the 90 days minimum advance notice for tax changes   as contained in the 2017 National Tax Policy, NTP.

The second Executive Order that was said to have been signed by the Nigerian President is the Customs and Excise Tariff (Variation) Amendment 2023. The new Executive Order   was said to have shifted the Customs and Excise Tariff from March 27, 2023 to August 1, 2023, in line with the NTP. 

Tinubu , who appears to be  in a hurry of making Nigeria to be an attractive investment  destination  was said to have ordered  the suspension  of the  5%  Excise Tax  on Telecommunication services which was removed by the forme Katsina state born Nigerian President  in March 2023 but still reintroduced  in May 2023. He was said to have also ordered the suspension of   Excise duties escalation   on locally manufactured products.

FormerPresident Buhari: Exacerbated Suffering Of Nigerians

   Former President Buhari,  had approved  for the implementation of the 2022, Fiscal Policy , measures  made up of the Supplementary  Protection Measures, SPM, for the implementation  of the Economic Community of West African States, ECOWAS,  ,Common  External Tariff, CET, , 2022-2026,  and Excise duties  on non-alcoholic beverages, alcoholic beverages, Cigarettes and Tobacco Products  as well as Telecommunication services  from April 1, 2022.

The Nigerian President may have gladdened the heart of the Leadership of the Manufacturers Association of Nigeria, MAN, who has been at the vanguard for the removal of the newly introduced Green Tax by way of Excise Tax on single use plastics, including plastic Containers and bottles with its suspension.

 He may have issued these  Executive Orders to further ameliorate  the negative  impacts  of the tax  adjustments  on businesses  and  chokehold on households across  the affected sectors of the economy.      The suspension of the business killer Excise duties and Taxes was an indications that the new Nigerian President was not totally in support of the Fiscal policies implemented by the previous Administration refused to give any   advice on the way forward.

Alake, the President’s Media Aide, who could not hide his feelings over the response of foreign investors to the Nigerian President’s call to invest in Nigeria had  that the Administration  will continue  ‘’to give  requisite  stimulus  by  way of friendly policies  to allow  businesses to flourish in the country’’. 

Given the killer business taxes that were introduced by the Buhari Administration which forced some multi-national companies operating in Nigeria to relocate to South Africa and the West African countries of Ghana, Togo and Cotd’Ivoire to do set up their manufacturing plants and take advantage of ECOWAS Trade Liberalisation Scheme, TLS,  to sell their products in Nigeria  because of the large market.    

Until the Nigerian President signed the four Executive Orders to improve the nation’s business environment, he had recently, received a group of joint venture partners made up of UTM FLNG, TECHNIP Energies of France and JGC Corporation of the Asian country of Japan in Abuja, the Federal Capital Territory.

The foreign Joint Venture partners were said to have visited the Nigerian President to conclude the investment discussion for a $5 billion floating   Liquefied Natural Gas, LPG, Project, in Nigeria which they had started in Paris during the New Global Financing Pact Signing organised by President Emmanuel Macron. 

 Julius Rone , the Leader of the delegations  and Group Managing Director of the France based   UTM LNG had said that  a $5bn loan  has been signed with Afrexim  bank  for the implementation of the project  in Nigeria.

 Rone who has broken the cheery news to Tinubu and who was said to have backed the implementation of the multi-billion dollar project in Nigeria has consistently  assured investors of   consistency in  government  policy and removing all forms of ‘’Administrative bottlenecks that had made the country unattractive to investors in the past’’. 

The France based UTM LNG, Managing Director had said that that new LPG plant that would be built in Nigeria and which is expected to come on stream in 2026, was designed to produce 300,000 tons of LPG, annually.

He may have gladdened the heart of the Nigerian President when he declared that the project on its own has the capacity to generate 7,000 jobs. The good news about the sighting of the project in Nigeria, described as a home of gas that are being wasted by   Shell Petroleum Development Company , SPDC and other Multi-national Oil Companies  operating in the Niger Delta region  is the involvement  of an indigenous company in the decarbonisation efforts in the country.

    Recall that Zoe Yjnovic, Global Upstream Director, SPDC, whose Organisation  had divested from the nation’s onshore and offshore  operations  including selling off 45%  of  its  oil and gas  assets in OML 17, to Heirs Holdings , an indigenous  Oil and Gas Company  founded by  one Tony Elumelu, a  multi-billionaire business mongul, in 2021, was the first to wet Tinubu’s apetite of making a U-turn to reinvest in Nigeria,

 The SPDC, Team had told  the Nigerian President  , that they are willing to ramp to ramp up investment  in the country  , particular,  in the areas  of gas and the deep-waters asset  by  pumping  billions of the US dollar into the country.   In apparent response to the heart- warming news, the Nigerian President had said that these investments are needed in the country now more than ever to enable the government to meet its obligations to the citizenry.

Recall that the Nigerian President had told the Royal Dutch company, to do everything within their powers to help Nigeria, particular, in the areas of gas to become competitively favourable to the country in the global market.

 Another Organisation, the Bank of America, BOA, International,  a US, multi-national Investment   bank and Financial  Services Holding Company , believed to be the second  largest Financial  Institution, in the North American Continent , country, which has Bernard Mensah, as the President and his team,had visited Tinubu in the recent time as well.

Former President Buhari was said to have woo the US investors in his eight years in office   including reaching out to the American Corporate Council on Africa, CCA, and the country‘s officials  ministry of Industry, Trade and Investment   but they had turned their back on Nigeria.

The former Nigerian President  was said to have told the US , investors that are ready to bring funds into Nigeria to establish  their business  that they will have ‘’access  to new markets  under the African Continental  Free Trade Area, AfCTA that would connect 1.3 billion people  across the 55 countries  that make up the Continent  and a consumer market that will be worth  over $3 trillion  and a combined  Gross Domestic  Product  at $3.4 billion by 2025’’. He may have been disappointed that the American investors never gave a dam in coming to Nigeria to do business.

The BOA International decision to invest in the Nigerian economy may have opened the door for more US, Companies to bring the much needed forex to invest in Nigeria in the next three years of the Tinubu’s Administration to shore up the country economy.

 The US investors would have to compete with the Asian country of China companies that have investments in all sectors of the country’s economy ranging from Construction, food, beverages, beauty products, assembling plants.

 Note that the Chinese government and some firms from the country are currently into partnership with the Nigerian Ports Authority, NPA, and the government of Lagos state to establish the Lekki Free Trade Trade Zone, where heavy industries are spring up daily  . The Chinese government was said to have taken advantage of its investment opportunities in the Nigerian economy to also reach a deal with the Ogun state government as well  to fund the Guangdong  Free Trade Zone, OFTZ,   in in Igbesa, in the state.

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