Invest oil revenue in infrastructure, human capital devt —DAVID MACRAE

Dr David MacRae, EU Ambassador*Bureaucracy, corruption hamper businesses

26 May 2014, Lagos – Dr David MacRae is the former Ambassador and Head of European Union Delegation to Nigeria and Economic Community of West African States (ECOWAS) between 2010 and 2013.

In this chat with Financial Vanguard, Dr MacRae, whose involvement with Africa as an economist, aid official and diplomat, goes back over many years, speaks on sundry issues including corruption. He advises that resources from the oil sector should be invested wisely in basic infrastructure and human capital development.
Corruption is said to be one of the greatest problems in Nigeria and many are of the opinion that government is not handling it the way it should. How do you advise that the Nigerian government and people tackle this hydra-headed monster?
Corruption is of course not confined to Africa but it is true that Nigeria has acquired an unfortunate reputation as a country where corruption is especially bad. This perception discourages inward investment, thus reducing development opportunities. It even affects the way Nigerians are viewed by the outside world which is unfortunate when, as those of us who have been living here for some time know, most Nigerians are decent people who deserve to be treated better.

The government has in place an anti-corruption programme which includes community awareness. Effective implementation of this programme would go a long way in dealing with the problem but this requires improvements in the justice system which is a serious challenge. It is important to take measures to improve the effectiveness of the judicial system and to ensure that corruption cases are dealt with speedily and effectively with no prospect of impunity for offenders.

Based on your experiences of living in Nigeria and other places you have lived in Africa, what is your impression about Nigeria’s business environment?
It is expensive to do business in Nigeria. Security costs are high. Power is deficient. Infrastructure is seriously deficient. Businesses can be hampered by bureaucracy and corruption at all levels. The legal system is also seriously defective. Despite these obvious deficiencies, it is a tribute to the inventiveness and skills of the Nigerian business community and businessmen that it has been possible in recent years for the economy to register significant growth year on year.

This is due in large measure to the oil sector. It is highly desirable that a major effort is made to direct the resources from the oil sector into much needed investment in human capital and basic infrastructure, and to open up the economy to international trade and especially to take advantage of the West African market. This is an enormous subject but, in a nutshell, the closer policymakers come to adopting an approach to the management of oil wealth the way the Norwegians have done for instance, the better it will be for Nigerians.

In what way would you encourage investment in Nigeria?
In trying to answer this question, I am not only mindful of the state of the business environment but also the perception of Nigeria to the outside world. These are the challenges.

On the more positive side, I would draw on my experiences as a former ambassador here. Firms from countries of the European Union have been investing in Nigeria over many years making the EU the biggest investor in Nigeria. To draw attention to this fact, and to encourage further business investment in Nigeria, the EU now organises the EU-Nigeria Business Fair each year in Lagos.

This is expected to become increasingly important in future. One of the themes has been to project Nigeria as a SME-friendly country as SMEs are key in developing supply chains and creating jobs.

A market which is not SME-friendly cannot deliver on development. EU-connected SMEs possess high levels of business and technological know-how and are constantly looking for investment opportunities around the world. The Fair not only highlights the riches of Nigeria (its resources, people and market) but also the positive concrete trends which make Nigeria a place of choice.
*Ebele Orakpo-Vanguard

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