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In defence of the Nigerian economy, by IMPI

Overview of the Lagos Central Business District, in Marina, Lagos Island

*The Independent Media and Policy Initiative asserts the organisation refrains from a ‘mob approach’ to the use of economy-related data by some corporate advocacy groups and opposition politicians, essentially in the context of nationalism and patriotism

Niyi Akinsiju

We have observed with dismay the seeming congenital amplification of the numbers of companies that had shut down operations in Nigeria, or relocated out of the country by corporate sector advocacy groups and the opposition.

This is noticeably done with derision as they make to cast the country in the frame of a hostile business environment with low scores on business enablement.

By our estimation, the corporate advocacy groups do this as a strategy to compel the government to take a course of policy action or to reverse itself on a policy position.

For the politicians, the mockery of the business environment is to deliberately erode the standing and substance of the incumbent administration in the minds of the larger public. Unfortunately, this untoward harangue of the business climate with data is relative to different jurisdictions and climes.

In other words, data are employed and used for planning purposes by all tiers of governments and other needing bodies.

And usually, since the data are for planning, they come as items on both sides of the ledger that is, the numbers of companies that had shut down and those that had been birthed during the same period.

Compared to the Manufacturers Association of Nigeria’s announcement of 767 companies shut down in 2023, an apparent public revelation to serve as a depression trigger for the country, people and government, the Small Business advocacy group in the United Kingdom (UK) frames the 345,000 business closures in that country as: “More businesses closing down than starting up for the first time in 12 years.”

This, by our consideration, is an objective rendition of data. It is obvious that the 767 companies shut down in Nigeria do not in any way come close to the 345,000 closures recorded in the United Kingdom in that same period.

Neither can the number be compared to the 460,000 companies that shut down every quarter, that is every three months, in China or the 10,655 Micro, Small and Medium Enterprises (MSMEs) shut down in 2022-2023 in India.

As routinely rendered, we are further informed by the Indian data that there were over 11,000 new firms started for every one of the 175 shutdowns in 2022.

Against this background, we require, for instance that while so much dust was raised over the exit of giant drug makers, such as GSK Plc and Sanofi, among others, the data should have also included statistics circulated by the National Agency for Food and Drug Administration and Control (NAFDAC), which indicated that 105 applications for the construction of drug manufacturing facilities have been approved across the country and that 35 percent of the approved applications have completed construction.

This is inclusive of the fact that over 20 newly registered local drug manufacturers have cumulatively invested over $2 billion in the erection and completion of WHO-compliant facilities that manufacture quality pharmaceuticals and essential medicines for Nigerian consumers.

We also note the condescending pretension by the usual suspects, the advocacy groups and politicians, over the news of the relocation of Unilever tea brand production to Nigeria. Ordinarily, this relocation news should not have elicited much excitement because it would have been a strictly business process decision but as it were, such decisions are now politicised and sensationalised to serve the mundane sentiments of opposition elements and corporate advocacy groups.

From the analysts’ point of view, we urge a refrain from this mob approach to the use of economy related data. This is essentially in the context of nationalism and patriotism.

The national economy is pivoted on the volume of Foreign Direct Investment (FDI) in the country. While investors in this cadre determinedly engage in fundamental analysis of a country before making a decision to explore the economic environment.

But often, what determines this is the perception analysis, based on comparative sentiments with other peer jurisdictions.

For this, they rely on the media, and any untoward information about that country raises a red flag for the potential investor. This suggests that what corporate advocacy groups and politicians spew in the public space in the name of engaging the government are, in fact, qualitative data for business decision-making.

In truth, no economic jurisdiction can lay claim to business enablement perfection as shown in the data from abroad as outlined above.

Yet, in the Nigerian situation, based on available data, the objective fact is that there are a lot of positives emanating from the national economic space.

Another jurisdictional contrast will suffice to prove this. While profits at China’s industrial firms fell 2.3 percent in 2023, their second straight yearly decline, Nigeria’s National Bureau of Statistics (NBS) data show that Company Income Tax (CIT) rose by 73 percent year-on-year from N2.82 trillion in the 2022 financial year to N4.89 trillion in the 2023 financial year.

This huge profit difference is recorded despite headwinds that had continued to buffet the economic space.

The indication deriving from this is that whatever may be the challenges inherent in the Nigerian economic space, the country avails investors the best possible opportunities for returns on investment.

This is the kind of economic accomplishment that corporate advocacy groups and politicians should celebrate.

The impressive CIT accruals into the Federation Account are validated by the standing of Nigerian-based companies on the Financial Times ranking of Africa’s 100 fastest growing companies in 2023.

Nigeria’s incredible showing on that ranking manifests in companies based in the country occupying 27 places with two of them – Afex Commodities Exchange Limited and Moniepoint Incorporated – leading the continental pack of 100 companies.

This avails Nigeria 27 reasons to be jubilant despite the challenges the country has had to contend with.

On the aggregate, this speaks to the resilience of Nigeria’s economy, especially when situated in the trajectory of things to happen in the year 2024 coming in the build-up that can be ascribed to the policy deployment of President Bola Ahmed Tinubu.

First of this is the burst of energy witnessed in the growth of the Nigerian stock market as, perhaps, the best stock exchange in terms of capital appreciation in Africa. That momentum has not subsided even with an increase in the yield on offer in the Bond and Treasury Bills.

The Nigeria Stock Market, going forward, is expectant of the listing of market movers like Dangote Foods, which will be formed from the merger of Dangote Sugar, NASCON Allied Industries Plc and Dangote Rice Limited (DRL).

This will lead to the consumer goods giant having a market capitalisation of N1.50 trillion.

The Nigerian National Petroleum Company Limited (NNPCL), which made public its plan to issue its shares by way of an Initial Public Offering (IPO) to investors in 2024 is certain to be another economic space transformative entity.

The IHS Towers, one of the largest independent owners, operators and developers of shared communications infrastructure in the world, made history by becoming the first Nigerian-rooted company to be publicly traded on the New York Stock Exchange (NYSE) 2021.

The company symbolises Nigeria’s immense potential on the world stage, fostering global investor engagement, and playing a significant role in educating international investors on the advantages of investing in the West African country. The company is one of the largest telecommunications infrastructure providers in Africa, Latin America, and the Middle East by tower count, and the fourth largest independent multinational tower company globally. A Nigerian company!

There are still more. The commencement of operation at the 650,000 barrels per day (bpd), $19 billion Dangote Refinery is on course.

The refinery has received its full complement of six million barrels of a mix of Nigerian and American crude preparatory to streaming.

The crude oil in storage will facilitate the initial run of the refinery, as well as kick-start the production of diesel, aviation fuel and Liquefied Petroleum Gas (LPG) before subsequently progressing to the production of Premium Motor Spirit (PMS) otherwise called petrol.

It is Africa’s biggest oil refinery and world’s biggest single-train facility.

The BUA Group is another fully made Nigerian conglomerate. For the group and Nigerians, 2024 is especially a year that would hopefully ignite pleasant expectations because BUA Cement intends to bring additional six million tonnes a year (t/y) of cement capacity online by the first quarter through the commissioning of new lines at its Obu and Sokoto factories.

This, in addition, will increase the company’s total installed production capacity to 17 million t/y.

May & Baker Nigeria is a pharmaceutical manufacturing company, reportedly focused on expanding its production lines to seven new products from a bouquet of 20 products that will be launched this year.

Also, indigenous to Nigeria is Seplat ANOH Gas. The company is expected to reduce Nigeria’s carbon intensity and increase energy supply to the domestic market. Its technology-driven plant will deliver dry gas and condensates.

The APM Terminals in Apapa is the biggest logistics terminal in Nigeria. It is part of AP Moller-Maersk and operates one of the world’s most comprehensive port networks.

APM Terminals took on the concession of the Apapa container terminals in Nigeria about 17 years ago, and has invested over $438 million in facility upgrades in the country’s port system.

In June 2023, APMT received the largest container ship to ever call at the Lagos Port complex, Apapa, the Singapore-flagged Kota Contik, a 6,606 TEU container ship.

In the same business universe is the private sector investors’ funded $1.5 billion Lekki Deep Seaport.

The multi-purpose deep port in the Lagos Free Trade Zone (LFTZ) is the only currently operating deep seaport in the country and the largest seaport in Nigeria and one of the biggest in West Africa.

It is to be expanded to have a capacity of handling around six million TEUs of containers and a significant volume of liquid and dry bulk uncontainerised cargoes. The port is to be equipped with ships able to transport over 14,500 containers.

Another private sector Made-in-Nigeria icon is Air Peace. Currently, the largest airline in West and Central Africa, it is already changing the narrative around the appropriate cost of passengers’ ticket on the very busy and lucrative Lagos-London route.

A growing entity in the financial service sector is the Norrenberger Financial Group. It provides individuals and institutions with a wide range of financial products, including asset management, private equity, development finance, investment banking, pensions, security trading, insurance, and digital banking, among others.

AA Rano is a well-heeled Nigerian oil and gas brand, reputed for retail distribution of PMS, DPK, AGO, LPG, and lubricants. The company has over 600 trucks servicing its over 115 retail outlets across the country and has acquired a vessel, constructed a 56 million-litre tank farm facility, and is also constructing a 20,000-metric-ton LPG plant in Lagos.

AA Rano has a broad plan to build its own 45,000 BPD crude oil refinery in the New Lekki Free Trade Zone area of Lagos State. The company has diversified into the aviation sector with its Rano Air, which has since acquired five (5) EMB145 aircraft.

Just some days ago, the country attracted N23.8 billion in investments from food processors, GB Foods, which opened a N20 billion state-of-the-art tomato processing plant in Kebbi State to reduce the importation of tomato paste in the country.

The GB Foods tomato plant can process 226,300 metric tonnes (MT) of tomatoes each year.

In the technology echo system, Nigerian companies have continued to record big strides.

At least 10 Nigerian startups have been selected among 40 technology firms listed for the $4 million Black Founders Fund. The Black Founders Fund is sponsored by Google for Startups (GfS).

We have, here, profiled some of Nigeria’s companies thriving against all odds as evidence of the country’s innate economic robustness, even if the full potentials of the economy are yet to be harnessed

Our objective submission is that so much remain to be garnered from Nigeria’s abundant human capital and natural resources, but there must be a collective positive outlook by citizens and leaders to foster a national perception of a working economy domestically and in the global context.

*Chief Niyi Akinsiju is Chairman of Independent Media and Policy Initiative.

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