Various development experts have stressed the importance of increased investments in the face of current harsh global economic realities. Nigeria’s 53rd Independence Anniversary Celebrations on 1st October, 2013, therefore provides an opportunity to highlight efforts in recent times that has made our nation a prime destination for foreign investment one that ensures some of the highest Return on Investments (RoI) in the world.

The President of the Federal Republic of Nigeria, His Excellency, President Goodluck Ebele Jonathan, GCFR has established an economic team that includes experienced reputable members has announced plans to increase transparency, diversify economic growth, improve fiscal management.

Aside from reports revealing investment commitments of over USD500 billion reports by world industrial giants that projects are at various stages of execution in Nigeria, observers have said that there is obviously a better reputation for Nigeria. This is as shown by the new interest in the Nigerian economy, shown by the continued visits of Presidents trade ministers from advanced economies to Nigeria to explore win-win trade investment relationships.

Gains So far

Recently, Nigeria was ranked as one of the four major investment destinations growth areas in the world. KPMG, one of the world’s foremost audit, financial tax advisory firms, said Nigeria’s newfound status followed the disappointing returns recorded by the BRICS, with the exception of China.

In the same vein, UNCTAD’s World Investment Report 2012, subtitled ‘Towards a New Generation of Investment Policies, released recently, also placed Nigeria as Africa’s biggest destination for Foreign Direct Investment in 2011, quoting total FDI inflows of USD8.92 billion.

According to the report, Nigeria received USD8.92 billion in FDI, which placed it first in Africa. South Africa was ranked next with total FDI inflows of USD5.81 billion.

 

Friendlier Business Environment

There have been a number of efforts for reforming the Nigerian investment climate improving the country’s Doing Business ranking.

Under two years, the Doing Business Competitiveness Investor-Care committees have been revived the One-Stop Investment Centre at the Nigerian Investment Promotion Commission (NIPC) has been repositioned strengthened to pave the way for efficient coordination of investment facilitation between relevant government agencies achieve a 48-hour response target for all enquiries.

The National Competitiveness Council of Nigeria has also been established to drive healthy competition in business. These were all spearheaded by the trade investment ministry.

During the inauguration of a taskforce to check investment policies in Nigeria, the Head, Investment Policy Review for Africa, OECD, Mr. Alexre de Combrugghe, said that the organisation’s decision to partner Nigeria was due to the growing global investment interest in the country. This corroborates similar pronouncements by international experts.

Combrugghe said the economic reforms embarked upon by the Jonathan administration had helped to strategically place the country as a major investment destination.

 

Starting a Business

Registration of new businesses, which used to be so cumbersome, can now be done within 24 hours from Abuja Lagos. There is an ongoing redevelopment of Corporate Affairs Commission (CAC) software systems to enable online registration of businesses. The potential annual savings to investors in this regard is estimated at USD16.3 million.

 

Nigeria’s Trade Position

Nigeria has embarked on a multi-focus trade strategy to tackle the various challenges for domestic, regional international trade based on their peculiarities. This has yielded results.

For instance, the Central Bank of Nigeria in its ‘Nigeria’s External Sector Report 2012, said, “Nigeria’s trade balance improved significantly from USD8.62 billion in Q2, 2012 USD1.60 billion in Q3, 2011, respectively, to USD12.37 billion in Q3, 2012.“Aggregate exports rose by 8.2 per cent, from USD22.53 billion in Q3, 2011 to USD24.37 billion in Q3, 2012 while total imports (CIF) declined by 42.7 per cent to USD11.99 billion in the review period.

The trade balance position improved due to lower imports of goods services increased exports earnings?

 

This shows that the nation is shifting gradually away from being an import-dependent nation. Increasing export implies increased domestic production, job creation wealth generation. all these are invariably correlated to the rigorous implementation of growth-enabling policies in the key sectors of the economy.

There are huge opportunities that Nigeria can tap into to boost Foreign Direct Investment (FDI) from South Korea. For instance, Bonny Gas Transport (BGT), a subsidiary of the Nigeria Liquefied Natural Gas Company Limited (NLNG), has placed an order for six new LNG vessels from Samsung Hyundai Heavy Industries (HHI) both of South Korea at a total cost of about USD3.2 billion.

Other major areas of FDI from Korea where we can leverage the opportunities to building our economy are in the areas of shipyard building such as the Ibaka Deep Seaport, Brass LNG/Shipyard Koo Oil & Gas Complex agriculture mining, iron steel development security construction industry oil gas refinery Petro-Chemical industry, Diaspora fund remittance others.

 

New Investment Promotion Initiatives

Nigeria has commenced the implementation of the National Industrial Revolution Plan. The Plan seeks to increase the contribution of industry to GDP develop priority sectors to top one in Africa top 10 globally reduce dependence on imports create jobs. The aim of the plan is to place Nigerian industries on the front seat of inclusive economic growth development.

 

Nigeria is rigorously implementing the Backward Integration Policy used in the cement industry in other key sectors. It has developed a new Sugar Master Plan / Policy which will deliver about 1.79 million metric tons of sugar 161.2 million litres of ethanol 411 megawatts of electricity 117,000 jobs when fully completed.

It has also designed the Nigerian Automobile Industry Development Plan to provide the environment for the orderly development of the sector. These initiatives, have already laid the foundation for ample job opportunities for those in the working group.

 

According to statistics by the Manufacturing Association of Nigeria, industrial capacity utilisation has risen from 46.44 per cent in 2010 to 48.24 per cent to date. Capacity utilisation in the textile, apparel footwear sector has also significantly increased from 29.14 per cent to 52.01 per cent.

 

The Federal Government’s intervention in the textile industry has, also, resulted in the reopening of moribund textile mills, saved about 8,070 jobs created 5,000 new jobs through the disbursement of the N100 billion CTG Intervention Fund.The Q1 2013 economic report of the CBN also said the Federal Government’s USD1.13billion non-oil sector earnings in the first quarter of 2013 were driven largely “by receipts in the industrial sector?

SME Development

Many activities point to the Small Medium Enterprise sector is being targeted for improved performance. First, the National MSME policy is ready for launch. This is the first time such a policy will be in place.To tackle complaints about non-coordination of the activities of agencies in charge of developing SMEs in Nigeria, Nigeria has developed the National Enterprise Development Programme (NEDEP).

The Bank of Industry has also increased its focus on MSMEs to 85 per cent of its commitments in total. According to BOI, in the last year, there has been a 30 per cent increase in the number of cumulative loans approved, 67 per cent increase in cumulative value of loans 161 per cent increase in jobs created.

 

The government is working toward developing stronger public-private partnerships for roads, agriculture, power. Nigeria’s financial sector was hurt by the global financial economic crises, but the Central Bank governor has taken measures to restructure strengthen the sector to include imposing matory higher minimum capital requirements.

Nigeria clearly has a competitive edge in the international capital market, the country’s economic growth is robust with inflation rate projected to stay within the single-digit b throughout 2014.

The Nigerian economy grew on average above 6 per cent in the last decade is projected to grow by 7.6 per cent in 2014. Total investment as a percentage of Gross Domestic Product was 22 per cent in 2012 is projected to increase by 23.6 per cent in 2013.

The risk of overheating that makes international capital sometimes undesirable is minimal, as the economy possesses deep absorptive capacity especially in infrastructural investments.

In fact, there is a renewed drive for public-private partnership (PPP) as a deliberate policy of government with several incentives. There is also the opportunity for higher returns on investments on account of the interest rate differential between the country most developed countries.

 

Furthermore, the adoption of the International Financial Reporting Stards (IFRS) by all banks would enhance transparency improve comparability in banks’ financial reporting in a global environment. Specifically, the establishment of the As Management Corporation of Nigeria (AMCON) in 2010 had addressed the problem of non-performing loans in the Nigerian banking industry making it more sound effective.

 

Besides, the positive response of investors to the most recent Eurobond issued by the federal government was indicative of the attractiveness of Nigeria’s sovereign debt to the investment community.The interest on the dollar-denominated instrument was buoyed by the relatively high yields the commitment of the monetary authorities to a stable exchange regime.

 

Important reforms in this respect include reductions to the domestic cost of doing business, a functional credit registry, changes to property titling that allows the poor vulnerable sectors of the economy extract value from their capital.

 

Sovereign Wealth Fund

The Federal Government has also established the Sovereign Wealth Fund (SWF) to shield Nigerian economy from adverse global shocks.The fund with about one billion dollars was created to redistribute oil wealth for the benefit of the present future generations.It will also help in providing critical social infrastructure to stimulate private sector investments for economic growth.

Due to the various reforms, the nation’s external reserves had increased from 44.2 billion dollars in December 2012 to 46.9 billion dollars in August 2013. Nigeria had become on investment destination in recent years because of its steady economic growth favourable economic policies.

Total investment on GDP was 22 per cent in 2012 we have a projection of 23.6 per cent for 2013.Inflation rate was 8.7 per cent in July it is projected to remain within single digit b in 2014.

 

The As Management Company of Nigeria (AMCON) is consistently addressing the issue of loan repayments the restructuring of bad debts in commercial banks.This has created a safer less risk-prone banking system in the country.The government is also focusing on public-private partnerships that would drive the economy towards higher returns on investment.

 

The recent unveiling of special banks is to lend money at a low-interest rate to the agricultural sector micro, small medium enterprises to enhance their growth.Nigeria had competitive edge in the global capital economy in spite of the recent global financial economic crises that had adverse effects on major economies in the world.

 

Countries controlling 75 percent of the world’s GDP have issues today they’ have not faced before – large budget deficits, fiscal consolidation, low growth. In Africa, we are now a high-growth environment.

Six of the 10 fastest growing economies are in Africa, Nigeria being one of them. Seven of the 10 fastest growing by 2015 will be from Africa, Nigeria will be one of them.

We are in a very different economic political situation today. Nigeria has grown at an average rate of 8.8 over the last 10 years. When you look at the debt to GDP ratio, it is under 20. Average in Europe is 18.4. When you look at return on investment, we rank at number four globally with an average return of 35.

 

Nigeria is far more stable stronger. We have had unbroken democratic rule for the past 14 years. We have had three changes in government. In 2011 we had an election that was described locally internationally as the freest the fairest in the country ever.

 

When you look at the macroeconomic situation, exchange rates have remained stable. So it is not a surprise that Nigeria, for the first time, was the preferred number one destination in Africa for investors in 2011, attracting USD8.1 billion – 46 higher than in the previous year. In 2012 Nigeria retained that position.

As a country we have done very well in attracting investment. That is not a surprise because the UNCTAD (United Nations Conference on Trade Development) World Investment Report ranks Nigeria at number four globally in returns on investment at an average rate of 35.5 compared to 7 on average rate globally.

Based on those returns, our goal is to be attracting more than USD30 billion worth of investment per annum, because the opportunities there are huge.

In the past, we were satisfied with exporting raw materials buying back finished products, which means exporting jobs. You use the proceeds from the sale of the raw materials to buy finished goods – a wrong policy that we have followed for decades. All that has changed. The game now is industrialization – it’s about adding value.

 

For example, in agriculture we have competitive advantage because we have 84 million square hectares of arable l, only 40 of that is cultivated. We have very good climate for agriculture almost anything everything can grow in the country.

If you look at cotton, it will grow in 23 states in the federation. But it is not about the cotton, cocoa, sugar cane, palm kernel. It is what you do with those commodities. Rather than just exporting the raw material, now it is about industrial processing.

 

Cassava is another example

Yes, we are the number one producer of cassava in the world, but it is not only about producing the cassava. Textiles used to be the second largest employer in the country. Today we are reviving that.

We want to go from cotton to garmenting to fashion, because it is the retail end that actually provides a lot of the jobs. If you look at the industrial sector, among the top ten most populous nations in the world, there are only two that do not have an auto program – Bangladesh Nigeria.

We are determined to get our policy on automobiles right, which is 99 complete today. We have been working round the clock to develop that policy, because I want the likes of Hyundai KIA to come to Nigeria start assembly.

 

In the oil gas sector, we want a vibrant petrochemical refinery that will give rise to local plastic chemical industries. While we will still sell ouroil gas, we will sell it to local people who are manufacturing still get that revenue. That is the another area for foreign investors in Nigeria.

 

Action on Nigeria’s longing power shortage

Our policies are making it very easy for investment to flow into different sectors of the economy. The bedrock of all this will be infrastructure power. The electricity sector reform, which started in 2000 with the issuance of the National Electric Power Policy to unbundle the sector develop a competitive electricity market, has made significant progress with the final acquisition of the power ass in the country.

 

For example, the ownership of 70 per cent of the gas-fired Egbin Power, Nigeria’s largest generating plant (1,320MW), one of her best performing, was sold to KEPCO Energy, a joint venture between the Korean Electric Power Corporation Nigeria-owned Sahara Energy, at a cost of USD407m in February 2013.

The privatisation process has generally been well received, attracting hundreds of bids for the other generating companies.Power China is committed to building 20,000 megawatts of power in Nigeria in the next 10 years.

That is about USD20 billion in investment. Electobras from Brazil has signed an MOU to build 10,000 megawatts of hydroelectric power at close to about USD10 billion. Siemens GE have said the same thing.

 

To make it easier for investors to remove the risk, we have up the bulk trader to buy power from the generators interface with distribution companies.

For power generators, because of the bulk trader it is almost guaranteed income is sustainable over a long time. You cannot lose. Nigeria is also examining laws affecting investment in the country. We have an insolvency bill going to the national assembly.

We have anti-trust consumer protection bills going to the national assembly. So these are some of the initiatives Nigeria is doing to make sure that we have the right environment for investors.

 

Nigeria emerged Africa’s biggest destination

In 2011, Nigeria emerged Africa’s biggest destination for foreign direct investment with FDI inflow of USD8.92 billion, according to the World Investment Report 2012 by the United Nations Conference on Trade Development.

Investment in infrastructure will make sure that Africa remains on a sustainable growth curve. More FDI is likely to occur in countries with good physical infrastructure such as electricity, rail transportation bridges.

Good infrastructure increases the productivity of investments therefore stimulates FDI flows.FDI inflow to Africa has exceeded official development assistance since 2005.While this is a welcome development the rapid rate of urbanisation has led to an increasingly urgent infrastructure gap.

 

Let me therefore chargeour development partners in Korea especially the private sector to play a leading role in our commitment to localization a genuine development partnership.

Government is working hard to modernise harmonise the regulatory environment to become more competitive, more growth-friendly investment friendly. Investor confidence is being sustained strengthened by policy continuity commitment to contracts projects in place.

 

While underscoring the importance of investment security,there is also a strong emphasis on complete transparency, a strong judiciary a good process for adjudication of disputes, law enforcement improved civil society.

 

Need for Korea-Africa Centered Policy

Within 10-20 years, Africa’s annual production value will be between USD 1.5 2.0 trillion. The region has 80-90 of the world’s chromium platinum group metals, 10 of its oil reserves of oil 40 of its gold.

Our continent also has some of the earth’s largest deposits of iron ore, uranium copper. We have approximately 600 million hectares of arable land suitable for cultivation, of which 15 of this is developed. Per capita water resource is 4,600 square meters, this is more than that in Asia.

 

The African story however, is not only about natural resources. A great revival is taking place in our telecommunications, retail, finance other sectors. More Africans are having more disposable incomes, the middle class is expanding, more than 60 million Africans have an income of USD3,000 a year this is increasing to more than 100 million Africans in a couple of years.

s population, are in the middle class. The media, particularly in the West is fixated on depicting Africa as a continent of conflicts natural disasters. This image is definitely not the narrative of Africa today.

More than 90 of countries in Africa have stable democratic regimes at peace with themselves their neighbors. There are fewer armed conflicts now in Africa than ever before, we are taking the lead in ensuring quicker return to stability in countries affected by armed conflict through more robust frameworks designed implemented by the African, ECOWAS, other regional organizations in the continent.

 

Democracy, political economic stability are taking roots in the continent. Our economies are becoming more open, our societies more tolerant, our budgets more balanced. Our debt burdens have declined we are reducing rates of inflation all over the continent.

The results are greater growth rates than ever before. Africa’s doing business rankings, transparency indicators the number of companies in the race to invest in the continent is increasing.

 

Africa is the new frontier for economic growth investment?

We are the worthiest place for investment in the world our consumer markets are growing the consciousness of return the synergies for growth, dignity freedom that this return could bring about are more robust.

 

Whilst there are some remaining challenges, we are in Nigeria, as in many other countries in the continent, moving on to ensuring international best practices in our mineral acts providing fiscal incentives for enterprises in mining, infrastructure, agribusiness, tourism, value addition renewable energy.

 

Since the Republic of Korea the Federal Republic of Nigeria established diplomatic ties in February 1980, Nigeria has been one of the most important friends of Korea in the African continent.

In 2011, bilateral trade volume between the two countries exceeded 3 million US dollars, making it the second largest trading partner for Korea in Africa. Many of Korea’s top enterprises work in Nigeria, including various sectors such as trade, power energy.

Exchanges of high level government officials have been active as well. Since the first visit of then President Obasanjo to the Republic of Korea in 2000, then ROK President Roh Moo-hyun visited Abuja in 2006, followed by the second visit by President Obasanjo later that year.

In 2010, former Korean Prime Minister Dr. Chung Woon-chan visited Abuja as the Special Envoy to congratulate the 50th Anniversary of Nigeria’s Independence the 30th anniversary of establishment of diplomatic relations.

Most recently, President Goodluck Jonathan, GCFR, has visited the Republic of Korea to attend the 2nd Nuclear Security Summit.

In addition to its Embassy, the Republic of Korea has two other important institutions in Abuja: the Korean Cultural Center Nigeria, the Office of the Korea International Cooperation Agency (KOICA).

The former is actively promoting cultural exchanges between Korea Nigeria, while the KOICA Office is serving as a focal point in coordinating Korea’s grant aid implementation in Nigeria under the auspices of the Embassy.

In Lagos, the Republic of Korea maintains a branch office of the Embassy the Office of Korea Trade-Investment Promotion Agency (KOTRA).

 

To check some agreements already entered into between Nigeria some Korean investors in Nigeria strengthen our commitment to sustaining the economic growth being recorded in recent years, the Supervising Minister of Foreign Affairs, Prof. Viola Adaku Onwuyili has endorsed that the 5th Joint Commission between Nigeria Republic of Korea be held in November, 2013 in Seoul.

 

Besides, Nigeria, in her transformation agenda, is also advocating for her firms to invest abroad. In an age of deepening relations between the Korea Nigeria, the low number of Nigerian companies investing in Korea is a cause for concern.

This means the need for innovativeness flexibility in taking advantage of our cultural differences through bilateral cultural exchanges, surmounting the financial political obstacles, in such a dynamic environment.

Deepening relations could arguably promote a better flow of goods, services, technologies, ideas, resources between the two countries unlock their potentially great markets.