November 2, 2018//-Yewande Sadiku, CEO of Nigerian Investment Promotion Commission (NIPC), talks to Tom Collins of African Business about the positive effect of reforms in the country.
If you had to look over the past two or three years, how has the mood changed in terms of Nigeria as an investment destination and how hard is it to sell it to international investors?
I think that international investor interest in Nigeria has greatly improved now [in April 2018] on where we were two years ago. In April 2016, overwhelmingly, the conversation was about foreign exchange.
There were concerns from investors that it could be difficult to get their money out of Nigeria. There were also some concerns about the clarity of government policies and about how Nigeria was faring economically, especially in the context of the recession, which we were sliding into at the time.
Two years on, I find there is greater investor confidence about the way government is managing the economy. It's reflected in the flows of investments that we've seen, but it's also reflected in the performance of the stock market. I see the stock market as a real litmus, as an almost immediate indicator of investors' views of the market.
How closely do you work with government to ensure the stability that businesses are looking for?
Government is a big entity. The Nigerian Investment Promotion Commission (NIPC) is one agency of government. In reality, if all of government were horses running, we wouldn't have enough reins to hold all of government. So, I will not even give the impression that NIPC has the capacity to stop government agencies from doing things that we don't necessarily believe in.
NIPC has a role defining the Act which empowers us to either initiate or to support initiatives that improve the business environment. Because the business environment is largely led by the private sector, I actually see a real responsibility on the part of the private sector to pull the government agency that is responsible for playing this role into the things they are doing that require advocacy and to work actively.
We're an agency that was set up to encourage, to promote and to coordinate investments. Policy advocacy is an important part of what we do. I don't believe any government agency, however good it may be, has the capacity to drive policy advocacy at a level that the private sector truly needs.
So, my plea to the private sector is that they work actively with NIPC to ensure that Nigerian government policies are consistent with what investors would like to see.
NIPC will be judged by the conducive business environment in the country and Nigeria was ranked one of the top 10 reformers in the 2018 Doing Business index. Are these reforms NIPC driven?
NIPC would be ungracious if it took the credit for that. The reforms are largely led by the work of the Presidential Enabling Business Environment Council (PEBEC), which is chaired by the vice-president. The 24-point improvement was really the work of the PEBEC. NIPC's role is to provide it with the full support that it needs in order to play that role.
Nigeria's Doing Business ranking has improved progressively over the years. My sense is that it got to a point where it was beyond just having one government agency fix it. That's why you had a high-level council like PEBEC that can bring all ministers and government agencies to the table. And these reforms, these achievements would not have happened without that kind of high-powered, focused council's work.
When people speak of investment, they often think of foreign direct investment. But most of the investment in Nigeria is by local entrepreneurs and local enterprises. Are you encouraging domestic investment?
Yes, it's very important to us to encourage domestic investment, as that will encourage foreign investment. So, we actually have an initiative at NIPC that is aimed at improving domestic direct investment, in the same way that we are trying to promote FDI.
In January 2017 we started tracking investment announcements in our newsletter. In the course of the year, we recorded $66.36bn of investment announcements in 112 projects across 27 states and the Federal Capital Territory [see charts above]. There were investors from different countries, but at 16% of the overall value, investments from Nigeria accounted for more than those from any other single country [see middle chart above].
Domestic investors complain that foreign investors are treated in a better way than they are. Are you trying to ensure a level playing field for all investors?
I'm not aware that foreign investors are treated better than domestic investors. There isn't a single tax break that favours foreign investors over domestic investors. I can say this with confidence because NIPC puts together, carefully and diligently, working with the Federal Inland Revenue Service, a list of investment incentives in Nigeria. You can download it from our website. There isn't a single one where there's a discrimination in favour of foreign investors.