Nigerians reluctant to invest in their country

Yawu Miller

Ibrahim Awolo’s detailing of Nigeria’s wealth took more than half an hour. Aside from the petroleum that fuels the West African nation’s faltering economy, there are vast untapped reserves of iron ore, gold, salt, talc, gypsum, coal, tantalite and other minerals.

“Potentially, Nigeria should be one of the wealthiest countries in the world,” Awolo told the 50-or-so Nigerians crowded in a Roxbury Community College classroom Saturday. “But we all know of our management problems.”

The management problems Awolo referred to include many common to former European colonies — a lack of transportation infrastructure, deep ethnic and religious divisions and, as many in the audience pointed out, crime.

“The resources you mentioned are not new to us,” said Ugocha Chimedu. “When I was in elementary school I learned all about our tin and salt. But the issue is not that people aren’t investing. The problem is there’s no security and no roads.”

Nigeria was colonized by the British in 1861 while England and France were competing for domination in West Africa. Like most of West Africa, Nigeria was a key source for the Atlantic slave trade exporting as many as 30,000 Africans a year.

Like many European colonies, Nigeria was used by the British as a source of raw materials. It’s infrastructure was developed by the British with the aim of moving natural resources out of the country. Although there are more than 250 million people in West Africa — a sizeable market — there are few if any road and rail links between the countries in the region.

Perhaps the greatest impediment to Nigeria’s economic development has been a series of military coups that began with the nation’s independence from Britain in 1960. The election of Olusegun Obasanjo in 1999 officially broke the succession of coups.

But poverty has persisted in the country. With a population estimated at 134 million, 70 percent of Nigerians live in poverty. Oil production accounts for 80 percent of government revenue, but little oil wealth trickles down to the Nigerian people.

In the oil-rich Niger Delta region, activists have waged a long campaign against what they say are corrupt practices of the Shell Corporation and the Nigerian government’s failure to share oil resources with the people. Ten years ago, activist Ken Saro-Wiwa and eight others from the Ogoni ethnic group were hanged after a series of non-violent protests.

Although the country has 35 million barrels in proven oil reserves, none of its six refineries is currently working. True to the colonial model, Nigeria still exports raw goods and imports refined products.

When questioned about the lack of security and infrastructure in Nigeria, Awolo pointed to foreign investment as the solution.

“The focus in Nigeria is on investment,” he said, telling the audience that foreign investors can own up to 100 percent of Nigerian companies. Nigeria is offering investors incentives to invest in and create new companies including tax exemptions, exemptions from customs and duties and removals of price controls.

The government is also privatizing industries including utilities, auto manufacturing plants and telecommunications.

But investors face considerable hurdles in Nigeria, according to the audience members.

“You have to convince us — or anybody — that our lives are not in danger,” Chimedu said. “And that if you do die, someone will be brought to justice.”

Awolo said the lack of security and infrastructure in Nigeria is due to the lack of a tax base in Nigeria. He argued that investment would create more jobs and more tax revenues that will enable the government to provide basic services.

He urged investors to take responsibility for the development of the country.

“People should be asking what the private sector can do,” he said. “People say the cost of doing business in Nigeria is high, but that’s because everybody has folded their arms and expects the government to do everything.”

Awalo told the audience they could build roads, collect tolls and help build the infrastructure necessary to promote economic growth in the country. But some in the audience questioned the Nigerian government’s fiscal responsibility.

“In what way has the country made use of the windfall profits from oil in the last two years,” asked one audience member, noting that the government had made spending projections based on estimates of $24 a barrel when the cost of oil has increased to $64 a barrel. Awolo did not provide an answer to that question.

Some audience members seemed frustrated with Awolo’s message. Many said they had come to the meeting, sponsored by the Boston-based Greater Nigerian Society of America, simply to renew their passports. The meeting provided members of the local Nigerian community with an opportunity to meet with officials from the Nigerian consulate in New York.

“You’re telling us to build roads,” said Chucks Okoli. “But the basic foundation has to be there. There has to be infrastructure. There’s no company in this country that’s going to operate of a generator. They need electricity.”