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Image Credit: Gas Investing News

After the World Economic Forum (Africa) ended in Abuja recently, our spirits have been reawakened to the need to seriously focus on foreign investments in Nigeria. This is good. However, we have to get it right this time by paying attention to a few more details, because Foreign Direct Investment (FDI) has two stories, of which we have only been listening to one part.

Right now, many of the existing FDI in Nigeria have only engaged in assisting to solve largely short-term problems. This is by providing some kinds of job positions to Nigerians but without transferring vital skills that would assist in emancipating us from dependence on foreign expertise. Take a look at our various industries, and you will see that foreign direct investors have merely used citizens as tools in productions, while trade secrets, and job positions capable of enhancing our human capital development have been largely reserved for foreigners. This way, the country only plays the role of a ‘fertile soil’ where foreigners develop businesses, benefit from bountiful sales, cripple local competitors and yet do not transfer skills to Nigerians in the end. You will agree that if the foreign investors in our extractive industry – Oil and Gas – for instance, should leave the country now, Nigerians will not be able to handle that sector despite the fact that these foreign firms have long stayed in Nigeria.

Don’t get me wrong – FDI is a welcome development as they help create jobs and explore some sectors where we currently don’t have sufficient expertise. But creation of jobs must be sustainable, and should rest in the hands of the citizens in the long run when they have acquired skills and technological know-how from these foreign investors. In that way, we can become significantly more independent and compete in some of the sectors that are currently dominated by foreign investors. But this will not be possible unless we ensure that our citizens are key players in any investment that comes into the country, and not just mere tools that cannot maximise the economic opportunities being created towards realising our full economic potentials. How then could we achieve economic independence in the long run by acquiring the needed skills that we lack?

The answer lies in Joint Venture Partnerships (JVPs). Beyond our willingness to create an enabling environment so as to open doors to foreign investors, and beyond our urgent need to create jobs in all our sectors to cater for our citizens, we should have a bigger picture. That bigger picture is by making sure that we gain twofold – our citizens get employed as well as acquire vital skills, and technical know-how that would help us to be economically self-reliant after a period of time. Many industrial nations used this strategy to get where they are today. This can only be possible with JVPs, whereby it is made a condition that foreign direct investors only get a chance to invest in our economy if they are willing to partner with Nigerians. In other words, Nigerians should have that possibility of approaching foreign investors as partners, and not as employees in job positions where no meaningful skills are transferred to them.

Today, we are privatizing many of our vital sectors. The foreigners are interested, and they are investing. The new private owners are foreigners mainly because they have the needed skills to exploit them, but we forget that we should not continue to cry that we do not have needed skills when the opportunity to do so stares us ridiculously on the face but fail to use it. Where do we expect to practically train our own indigenous engineers, and professionals needed in all our sectors if we do not provide an opportunity for them by striking meaningful deals in form of joint ventures that will position them to gain skills? In other words, Nigerians should be able to occupy managerial positions and other vital positions that ensure skills are transferred right from the time any foreign investment flows into the country. Not to do so would amount to being given fish on a daily basis without any skill on how to do your own fishing. The danger is that any day a foreign investor leaves for another country that probably has better incentives, we will fall back to zero, because we did not learn needed skills to continue on our own.

Furthermore, we need to open doors for investors in our non-extractive sectors, like agriculture, and services. This will make the economy all-inclusive and diversified, while at the same time helping to transfer advanced skills to Nigerians in a more sustainable manner. Too much reliance on the oil sector must be discouraged because, amongst other things, it is the sector that employs citizens the least and therefore cannot achieve the level of massive empowerment the growing youth population in Nigeria needs in terms of skills. Also, oil and gas are finite and depreciate over time in quantity, and in this 21st century where the world is increasingly shifting attention to renewable energy, we must begin to focus on sectors whose importance to humanity is infinite – like agriculture – because inasmuch as we live, food remains a necessity. So skills developed in the agricultural sector are significantly more sustainable.

Lastly, a few words to developed countries that often give loans to African countries regardless of their political and governance structures. It must be realised that politics and the economy are mutually inclusive, and giving loans unconditionally could be greatly abused. There are reasons to believe that most African countries are suffering from what many have described as a resource curse. Having rich resources without transparent institutions to checkmate corruption is dangerous to the overall wellbeing of the people. Most African leaders, especially those who got into power through elections that were rigged do not utilise their resources to empower their citizens. Oftentimes, they run to developed countries for loans because every country has a borrowing power. Now, because there is no transparency in most of our governmental institutions, these borrowed funds end up in private pockets, while keeping us heavily indebted in the future. African countries keep being indebted and paying back in one way or another because their corrupt leaders borrowed them on their behalves and misused them – we do not see any benefits from most of the funds we have borrowed. Therefore, developed countries must continue to place conditions to be fulfilled before these leaders are given funds. The most important conditions are Rule of Law, transparency in governance, and accountability. If these leaders do not demonstrate these qualities, or have not put structures in place, such loans will only end up funding and deepening corruption in Africa, get Africans indebted, and make them poorer. As fallout, some, having been impoverished in their countries, will try to migrate to developed countries to survive, sometimes committing crimes in those countries. Everything in life seems to be interconnected. No one should assist in one way or another in underdevelopment, and hope to be safe in his/her faraway castle.

As the World Economic Forum (Africa) has come to an end, we have to redefine our investment policies, and see how we can maximize what we have to get what we lack.

Iheme,Chima Williams is a lawyer, and currently a PhD candidate in the field of Business Law at Central European University, Budapest/New York. Apart from his interest in business studies, he is actively involved in campaigns for the empowerment of Nigerian youth. He is now a Guest Contributor on Nigerian LawToday.

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Nigerian Law Today

NLT’s mission is to take legal-content writing to the next level in Nigeria by leveraging legal expertise and technology. We publish fresh, original, and insightful articles on areas of law we cover.

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