World leaders from 198 countries converged in New York last week for the 78th United Nations General Assembly (UNGA) where the implementation of the 17 Sustainable Development Goals (SDG) took the centre stage. The world has 7 years left out of the 15 years’ timeline to achieve these universally agreed objectives, which include ending poverty, ensuring quality education, promoting good health, and providing access to affordable and clean water. But they all agreed that they were all far behind the objectives meant to be achieved by the year 2030.
However, President Bola Tinubu took his campaign for foreign direct investment to the global meeting. As a strategy to sell his idea, the Ministry of Foreign Affairs in collaboration with First Bank Plc organized an investment luncheon as one of the events on the sideline.
Speaking on why the event was deemed important, Dr. Adesola Adeduntan, the Managing Director of First Bank of Nigeria, on Arise TV said there was no better time to attract investors into the country than now. Excerpt:
What is the purpose of this event and outcome you aim to achieve?
Thank you! The event in our view is one of the strategic sideline events that the Nigerian government put up as an integral part of our engagements with the international community for this year’s edition of the United Nation (UN) General Assembly(UNGA).
As you are aware, we do have a new president, President Bola Ahmed Tinubu, and he has embarked on what he has rightfully described as economic diplomacy, essentially trying to woo investors into our country so that we do have foreign direct investments that can help us to accelerate growth.
You’ll recall that the president has mentioned as part of his 8 points agenda that significant quantum growth in GDP is one of his administration’s objectives.
So, this is our own contribution, working with like-minded entities like Bank of America to put together Nigerian investors, Nigerians in diaspora, to brainstorm with the president in terms of what are those critical policy changes that the government will need to enact to ensure that Nigeria becomes the preferred destination for foreign direct investment and like you mentioned, the turnout today was extremely good, the contributions were quite solid and I believe we all left today’s session feeling very positive and very optimistic about the inflow of foreign direct investment into our country.
How do you see the role of banking sectors in facilitating these investments and economic development in the country?
What we explained again and again as CEO of First Bank, an institution that has been in existence for over 130 years, there is no other entity that is well placed to speak about investments in Nigeria, investment in the continent, better than the First Bank.
So, we basically showcased to the people who attended today’s event, the investment opportunities in Nigeria, how to navigate all the hurdles that they may come across, but, more importantly, the kind of rewards that awaits people who are able to invest in Nigeria. We cited several examples of foreign investors in our country who broke-even, we are the head of their protected broke-even period, and for us, that was quite significant.
We also highlighted the fact that with a huge domestic market, with excess of 200 million with Nigeria being the anchor economy in the West and Central Africa region, you can’t get it wrong with Nigeria. We do not lay heed to this huge opportunity on the back of the fact that we have not created a single African market on the back of the African continental free trade. So, a big investor in Nigeria essentially gains not just access to the Nigerian market, but the entire African market.
When you also look at the projections in another 10 years or so, the population of Africa is expected to be bigger than China. So, just imagine a market that is bigger than China in another couple of years. That is the market that we showcased today essentially to foreign investors and I believe that we’ve successfully convinced them that coming to Nigeria means to come into Africa.
The opportunities are huge, they are quite significant but mostly, they are also coming at a time when our President, Bola Ahmed Tinubu is focused on creating an enabling environment that allows foreign direct investors to come into our country to foster economic growth and development.
The president has been very emphatic, his agenda is about inclusive growth which is quite significant. So, I think the time is right, anybody that finds his way into our country at this particular point in time, in another five years, the person will be smiling to the bank.
What specific incentives do you present to potential investors during the launching?
The banking sector in general and First Bank in particular, our rule is to showcase what is possible, what is available, but, most importantly once those transactions and investments begin to take shape, it is for us to come in as a provider of them to those transactions.
Part of what we took away from today’s presentation is the need for the government to say these are the top 5 or top 10 big projects that we would like to finance. For example, the Brass LNG had been on the drawing board for more than 10 years. So, if we want to put this on the table, that potentially is an investment in billions of dollars. We have a number of moribund steel industries, Ajaokuta has been there, the Delta Steel Company has been there.
Time to revisit them and reactive those against significant investment and these are investments that will spur further investments and they will spur significant growth.
The president has been speaking about building infrastructure. You cannot build infrastructure without steel. For example, you cannot build infrastructure without cement. So, if there’s any takeaway today, it’s for the government to define a couple of top priority areas of projects, where they would like investments to come in.
And if you can just get 2 to 3 serious investors into Nigeria, imagine a world where you have like Ovreal (I’m just bringing it up), the big mining company coming to do mining in Nigeria. It changes the narrative immediately and so on and so forth.
So, on the back of the recent visit of the President to India, Indorama which currently has a Petrochemical plant in Port Harcourt has said they are going to invest additional $8bn, so, those are serious investors. All that is required is to get about 10 of such people. Imagine 8 serious players saying they will put an average of $8bn into this economy in the next 5 years.
We are talking of potential investors, so, therein lies our opportunity to unlock value, push significant economic growth, ‘inclusive growth’ to use the word of our president and then we begin to address poverty. As banks, we do have the balance sheet to support those big ticket transactions.
The Nigerian banking sector had also matured significantly. We also do have structuring capabilities that allow us to lead the fund raising efforts in this kind of transaction and it must definitely spur growth. I’m particularly excited about what the future holds for our country and I’m very optimistic that with this kind of leadership that our president provides, especially in the area of economy, the future is very bright.
