BEFORE me on my table as I am writing this short essay is a couple of media reports on the signing on July 4 , 2012, of a Memorandum of Understanding, MOU, between the Ministry of Power and Daewoo Construction and Electrical on ways Daewoo could help generate 10,000MW in Nigeria, with the South Korean engineering giant taking up 20 per cent equity in new plants.
I am particularly excited at the statement attributed to the Minister of Power, Professor Bart Nnaji, to the effect that Original Equipment Manufacturers, OEMs, like Daewoo would no longer be allowed to just sell finished products like turbines to Nigeria.
The Minister reasons that if OEMs cannot manufacture in our country yet, they should at least begin to assemble here and consequently add value to our national economy. Nigeria, the Minister added, should not remain forever the dumping ground for foreign manufacturers.
As I was reading the reports, my confidence in the Nigerian possibility became rekindled. Prof. Nnaji spoke on the occasion with authority; not the authority of his personal accomplishments which, in any case, can humble practically anyone, but the authority arising from unprecedented international investor confidence in the Nigerian power sector.
In other words, Nnaji is not on his kneels pleading with foreigners to come to Nigeria to invest. The international investors are coming daily in large groups, and for once Nigeria has the confidence to dictate the terms to them—and they are complying enthusiastically!
I am not just a student of strategic studies who follows international affairs with interest, but someone who has been in government at a high level and has seen at close quarters how international investors view Nigeria.
I served as Principal Staff Officer in the Presidency during the time of General Ibrahim Babangida and was appointed the Field Commander of the multinational ECOWAS peacekeeping force in Liberia in the 1990s, only to return to State House under General Sani Abacha years later.
These two positions, among others, enabled me to have a bird’s eye view of how foreigners really perceive Africans, all the more so in matters of long term investments. CitiBank/NIB was for some years about the most profitable bank in Nigeria, but it did not bother to acquire one single property here!
It was in Nigeria for hot money. If anything had gone wrong, CitiBank/NIB would have simply repatriated all its money to New York, together with its expatriate staff.
Now, there are some Nigerians who think all this was happening because our country was then under military rule. Well, they could be right, but only to some extent. President Olusegun Obsanjo, for instance, spent a substantial part of his first tenure of 1999 to 2003 on foreign trips, campaigning for foreign investments in Nigeria. But there was little to show for his dedicated effort.
Let us cite the telling example of Obasanjo’s spirited lobbying of the British telecom company, Vodafone (which is the world’s largest mobile telephone operator) to invest in the Nigerian GSM market in the wake of the liberalisation of the telecom sector and of the restoration of democratic governance in the country. Vodafone turned down Obasanjo’s offer, which included incredible tax reliefs.
The rejection by big telecom firms enabled relatively smaller players like Southern African MTN and Econet to have a field day. It does not matter that the Vodafone chairman, Sir Christopher Gent, was to deeply regret his investment decision.
Against this backdrop, I am, like most Nigerians, over the moon to know that world class electricity companies are taking far-reaching steps to participate, in very concrete terms, in the ongoing power sector in our beloved nation.
General Electric of the United States, the world’s biggest manufacturer of electricity equipment, has signed an MoU to assist in the generation of 10,000MW and invest between 10 and 15 per cent equity in new plants using its equipment. Put succinctly, GE is no longer contented with selling turbines to Nigeria.
In addition, GE is planning to build an assembly plant in the country, the first time it will do so in sub-Saharan Africa. As if in competition with GE, Siemens of Germany has signed an MoU to help generate 10,000MW, build a service station (the first time in West Africa) and sponsor a study for the integration of traditional and alternative sources of energy. Electrobra of Brazil has signed a similar MoU with the Nigerian Ministry of Power.
Just before the MoUs were signed, the United States EXIM Bank signed an MoU last year with the Nigerian Ministry of Power providing $1.2b credit to investors in Nigeria’s power sector using American products and services. This is a very interesting development.
US EXIM’s total credit to sub Sahara Africa the previous year was $1.4b, with only $200m coming to Nigeria. It is worth emphasizing here that the credit to Nigeria’s power sector alone is more than the combination of all the sectors in the whole of Black Africa received in 2010.
I am even informed by my contacts in the US EXIM Bank that the financial institution is willing to raise the facility to $2.5b. It was the same sources who disclosed to me that the chief executive of the American bank came himself to Nigeria to sign the MoU only two weeks after the Minister of Power visited him in Washington, DC, and persuaded the top banker to get involved in Nigeria’s power sector reform.
Gen ISHAYA BAKUT(rtd) was a former governor of Benue State.