Breaking News

Foreign firms carting away Nigeria’s revenues

Nigeria’s foremost industrialist, Aliko Dangote was recently quoted as saying that “Nigeria is the best kept secret in the world. Anybody who does not invest in Nigeria only has himself to blame, going forward. I do not really know of any place where you can make as much money as you make in Nigeria.”

Dangote’s assertion may explain the recent proliferation of foreign firms in Nigeria in every sector of the economy more than ever before. In a slow but steady manner, foreign firms have entrenched themselves into key facets of the Nigerian economy; from Aviation to Banking, to Construction, to Entertainment, and even Telecoms. Foreign companies are making a big onslaught in Nigeria’s lucrative market.

This is not a call to discrimination against foreign firms in Nigeria. At the moment, Nigeria seems to have been lulled into a widespread and deepening surrender. This is a “call to arms.” We must neither ban foreign firms nor impede them. But we must match them with the best. We must also recognize that, wherever possible and necessary, Nigerian firms must be given priority over foreigners. Non indigenous firms should not receive in Nigeria the concessions that Nigerians cannot receive elsewhere in the business world.

Let us take a compass through the Nigeria telecommunications industry. By the estimate of the International Telecommunication Union’s (ITU) Nigeria telecommunications industry remains the fastest growing in the world for more than five years. Little wonder it is still the investors’ preferred destination.

Foreign invasion of Nigeria’s telecoms sector

Since the Nigerian Communication Commission (NCC) issued licenses to certain private operators in 2001, the Nigerian telecommunication sector has been dominated by private participants. What is however observable is the dominance of the sector by Multinational Corporations (MNCs) among the private participants, with very few indigenous participants. There are currently 4 mobile operators in Nigeria- MTN from South Africa, Bharti Airtel from India, Etisalat from United Arab Emirates, and Globacom which is the only indigenous firm in this sector, alongside the newest entrant – Ntel.

According to the statistics released by the Nigerian Communication Commission (NCC), in the first quarter of 2016, the communication market is dominated by MTN with 38.70 percent of subscribers. It is followed by Globacom with 23.48 percent of the market; Airtel with 22.98 percent of the market; while Etisalat accounted for a total of 14.84 percent of the market. The statistics simply reveals that Nigeria ownership only accounts for a paltry 23.48% of the Telecoms sector that contributed about 8.83 percent to GDP in Q1, 2016. The implication of this is that the billions of dollars made by these foreign firms from Nigeria and Nigerians are repatriated to their various local economies.

There is nothing absolutely wrong in reaping the rewards of one’s investments regardless of where the investment is domiciled; after all, Nigerians have multibillion Dollar investments littered across the globe. The bone of contention here is that the foreign firms are not playing on a level playing field with their indigenous counterparts. Non-Nigerians should not be given a head-start vis-à-vis Nigerians in the Nigerian economy, especially in those areas where Nigerians are more than able to make useful contributions. If Nigerians end up being discriminated against in Nigeria, it means we are effectively orphans in our own country.

Lessons from other Climes

It is public knowledge how Chinese telecom equipment manufacturers were barred from operating in America under the guise of national security and data leakage. In reality however, the ban was a disguise to protect competing American companies like, Cisco, Lucent and the likes. The American government largely patronizes made in America products. This is also applicable to China and European governments who only buy indigenous products. While international products are sold in China, there is a minimum local content requirements, which implies foreign companies must build factories there in order to trade.

Nigeria should learn from these countries. Where a local firm can perform just as well as the foreign ones, it should become a matter of policy for public interest to patronize local firms for big government jobs. The fixation on expatriate senior management staff by these big firms who repatriate our hard earned dollars to their countries is also worrisome.

For me, the underlining issue is the fact that the Nigerian government gives these foreign firms preferred treatment over local firms. The clamour for change must start from the top. Government and its agencies must learn to first engage leading Nigerian owned firms for executing national contracts in order to grow and encourage local content and save the economy.

If Nigerians do not buck up and take charge, the country might wake up sometime in the nearest future and discover that, out of indolence; lack of imagination and dearth of enterprise, we have surrendered the commanding heights of our economy to the hands of neo-colonial masters.

At a time the Federal government of Nigeria is clamoring for revenue generation and retention to fund the budget deficit, foreign firms are sucking the country dry and carting away billions of Dollars from Nigeria to their respective economies. Apart from the fact that this has increased the rate of capital flight in the country, it also renders the citizens, who are supposed to be the major beneficiaries of such investment impoverished and wholly despondent.

By Ignatus Omojuwon


Comments expressed here do not reflect the opinions of vanguard newspapers or any employee thereof.