Yewande Sadiku, Former CEO, Nigerian Investment Promotion Commission (NIPC): Interview

Interview: Yewande Sadiku

Where can public-private partnerships (PPPs) play a role in boosting Nigeria’s economy?

YEWANDE SADIKU: The government’s Economic Recovery and Growth Plan 2017-20 was designed to bring Nigeria out of recession and boost the economy through diversification. Around 20% of the investment required to implement the plan was meant to be financed by federal and state governments, while the remaining 80% was to be sourced from the private sector. We have seen successful examples of PPPs, the best of which is Nigeria Liquefied Natural Gas (NLNG), formed in 1989 through a joint venture between the government – which holds a minority stake – and four private companies. NLNG leads the harnessing and export of the country’s LNG resources. The company’s contribution to the economy is so substantial that NLNG has its own line in the federal budget. We would like to see more examples of effective collaboration between the government and the private sector to unlock Nigeria’s potential.

What was the impact of the Covid-19 pandemic on investment execution in Nigeria, and what are your expectations for economic recovery?

SADIKU: The pandemic quickly turned from a public health crisis to an economic one that affected investors in Nigeria and globally, with varied impacts across sectors. Not surprisingly, the Nigerian economy fell into a recession in the second quarter of 2020 and had contracted by 1.92% by year end. Despite the generally difficult economic conditions imposed by the new normal that the pandemic forced on life and business, a number of sectors recorded material growth. Telecommunications; motor vehicles and assembly; chemicals and pharmaceuticals; agriculture; and the creative sectors grew by up to 21.2% in 2020, while transport services; textile apparel and footwear; construction; trade; real estate; education; and oil refining declined by as much as 62.2%.

Capital inflow to Nigeria fell by almost 60%, from $23.7bn in 2019 to $9.7bn in 2020, largely driven by investors’ cautionary response to the pandemic. The greatest contraction was in foreign portfolio inflows, which declined by almost 70% from $16.4bn to $5.1bn. The pandemic also affected investment announcements, which fell from $29.9bn across 76 projects in 2019 to $16.7bn across 63 projects in 2020. Nevertheless, we saw increased investor interest in health care, tech-enabled ecosystems and telecommunications. Investor confidence is gradually returning, as reflected in more announcements, although actual capital inflow still lags. Although a return to pre-pandemic investment levels is not expected until after 2022, the economy is projected to grow gradually on the back of government intervention schemes, business environment reform programmes and the resilience of Nigerians.

How would you evaluate the perceptions of foreign investors of the opportunities in Nigeria?

SADIKU: Many investors currently underestimate the scale of the investment opportunities in Nigeria. Some of their assumptions are based on outdated information, or influenced by a poor reputation and the seemingly difficult business environment. In reality, Nigeria stands out for the quality of its entrepreneurial energy, and its strong intellectual, agricultural and mineral wealth.

One of the barriers to foreign investment is limited awareness of the country’s many investment opportunities. We are working to better profile investment opportunities in each of Nigeria’s 36 states, and to present them in a coherent and consistent manner. We want to work with our partners at the state level to identify those investment opportunities and give them greater visibility. This would enable us to provide investors with information that is more specific and customised to their areas of business activity.

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The Report: Nigeria 2022

Economy chapter from The Report: Nigeria 2022

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