Council On Foreign Relations Event In New York

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REMARKS BY HIS EXCELLENCY, PROF. YEMI OSINBAJO, SAN, GCON, VICE PRESIDENT, FEDERAL REPUBLIC OF NIGERIA, DURING AN INTERACTIVE SESSION ON NIGERIA’S ECONOMIC PROSPECTS AT THE COUNCIL ON FOREIGN RELATIONS IN NEW YORK ON MONDAY, JUNE 24, 2019

PROTOCOLS

What happens in Africa in the coming years in at least four important respects will, in my view, for good or for ill, impact the fortunes of the world. The first is population. The second is the environment and climate change. The third is production, especially agriculture, manufacturing, and technology. And the fourth is security and the problems of terrorism, violent Islamic extremism, social exclusion, resource conflicts, etc.

The doomsday scenario is as follows: that Africa’s population grows exponentially, that full production is not able to match population growth, a rise in trans-humans conflicts due to shrinking vegetation and water, lack of jobs and opportunity for a large, poorly educated, youth population, leading to aggressive illegal migration, vulnerability to extremism, and the creation of a convenient breeding ground for extremist groups and a terrorist launch spot to the rest of the world.

That’s a horrifying situation indeed. And it is possible if, in the next three decades, Africa drops the ball on these four indicators. Neither Africa nor the rest of the world can afford to have these scenarios playing out. But the point of the context that I have set is that in each of these four respects, Nigeria’s role is critical. Nigeria is Africa’s most populous nation and its largest economy by GDP. It certainly is no exaggeration to say that as Nigeria goes, so goes Africa—especially with respect to the four indicators that I had mentioned.

But let me say that though the challenges are huge, the prognosis is generally good. And in my view, it presents excellent opportunities for local and foreign participation in this final frontier for groundbreaking investment and innovation. So let’s take population. The mere fact that we’ll become the third most populous nation in the world by 2050, and the fourteenth-largest economy, of course, means a huge market.

When we opened up our telecom sector for private investment about 18 years ago, many thought: Yes, they have a large population, but not a large enough middle class to buy and use mobile phones. They were wrong. MTN and Econet, two telecoms companies from Africa, went in. They invested heavily. And today, market penetration for mobile phones is about 114.9 percent, which technically means that almost everybody has a mobile phone.

Now, we are opening up our power sector. We are asking power firms to come and invest in the end-to-end power supply. Power Africa is a USAID project. And they’ve made a commitment of just over $100 million in the next five years to provide transaction support to the entire value chain, covering gas supply, distribution, and transmission, and generation activities generally. With our population and a market-driven power sector, the next few years certainly promise to be quite exciting.

This is also the case with infrastructure. We’re embarking on the largest investment in infrastructure in our history, and we’re welcoming private investments in construction and projects, railroads, airports, and other infrastructure. And there is agriculture. Nigeria is the ninth-largest stock of arable land. And we’ll become world leaders in cassava. We’re certainly leaders in Yams as well, but in sorghum and millet. And we’re on the threshold of self-sufficiency in paddy rice production.

And we’re seeing a greater interest in agriculture and the agro-allied value chain locally and internationally. There’s no question at all that, aside from the export market, our population presents a massive and lucrative local market. This is an example of a Mexican, Carlos, the largest vegetable farmer in Mexico, who is doing business in Nigeria. He came in essentially to do vegetables for export. But he found that he was making far more money servicing the domestic market than anything that he was going to get from exports.

So it is for manufacturing. We are investing at the moment in the creation of special economic zones. Project MINE, M-I-N-E, which is an acronym for Made in Nigeria for Export, is designed to attract some such industries from more advanced manufacturing economies that are in search of affordable, well-trained labour in Nigeria. At the moment, we are focusing on industries for local manufacture of goods for which Nigeria has a comparative advantage. These include cotton, diamonds, leatherwear, and light industrial manufacturing.

The Nigerian SEZ Investment Company is a public-private partnership. And this is the delivery vehicle for the project. So investors so far include the AFDB, the African Development Bank, the Afrexim Bank, and the AFC, which is the African Finance Corporation. And we have three locations at the moment, which are being developed. The first is called Enyimba City, which is in Aba, in Abia state, southeastern Nigeria. It covers about 9,500 hectares. And there are three international anchor tenants already for phase one. The city will be served by an existing IPP for power, and we are hoping that it will create something in the order of about six hundred thousand jobs when fully completed.

There’s also been the Lekki Model Industrial Park, which is in partnership with the government of Lagos state. Lagos is our major commercial sector, and that’s in the southwest of Nigeria. It is set on about one thousand hectares of land in what we describe as the northeast cluster of the free zone. It has already attracted world-class anchor tenants for textiles, garments, and agro-processing, and light industrial, including the number-one Chinese and the number-nine global textile and garment, the Ruyi Group. But that project is in its early stages.

This is the Funtua Cotton Cluster in Kastina, which is in the Northwest of Nigeria. Funtua has the largest aggregation of cotton ginneries in Nigeria. And the cluster we hope will aggregate cotton for about eight hundred thousand farmers in northern Nigeria, and become the largest integrated cotton ginning, spinning, and weaving complex in sub-Saharan Africa.

Now, how about the environment? And I’m taking, I’m sure you’re probably following, that I’m taking the four indicators I mentioned one after the other. So, how about the environment and climate change? So it is generally agreed that although Africa contributed the least, or contributes, even today, the least to global warming, it is and will suffer the most from its consequences. Indeed, we are already seeing extreme weather events in several parts of Africa. Lake Chad, Africa’s fourth-largest lake, is surrounded by Nigeria, Niger, Chad, and Cameroon. In 1960, Lake Chad covered about twenty-five thousand square kilometers. It has now shrunk to less than 1,350 square kilometers. So the water is provided for irrigation, for fishing, and for livestock is now practically non-existent.

But then there is immense potential, again, for investment, as we aggressively promote a green economy. The objective is environmental sustainability and equitable economic growth at the same time. The cleanup of Ogoniland, an area in the Niger Delta region of Nigeria, known for the egregious pollution of its ecosystem from oil exploration for many years, provides an opportunity for several local and international environmental remediation companies. And the cleanup is funded at the moment by a $1 billion fund pledged by the major companies for the exercise. Several companies are already involved in a remediation exercise. I know there is one or two Americans who are involved in the remediation exercise.

Huge prospects also exist in investments in renewable energy, energy-efficient processes, clean technology, etc. Gas, for example, has been flared for almost sixty years by major oil companies. But in 2017, our government approved the Nigerian Gas Flare Commercialization Program, which is designed to eliminate that gas flaring through technically and commercially sustainable gas utilization projects. The program offers flare gas for sale through a transparent and competitive bidding process.

Solar power is also clearly for us the renewable energy source of choice. And with high radiation almost everywhere, there are several significant investments already in solar installations and several in the queue. With almost twenty million households, especially in the rural areas, without power, the deployment of solar installations in homes and public facilities by private investors is not just critical to tackling our huge energy deficit, but also to creating jobs.

Our potential in technology and entertainment has also been attracting huge attention. The first is the market. At 174 million GSM phone users, we are in the top ten of telephone users in the world, and we have the highest percentage of people who use the internet on their mobile phones. We are also number two in the mobile internet banking scale. Seventeen million Nigerians are on Facebook. And Microsoft, of course, following the money, has announced that it will establish a $100 million African development center in Nigeria.

Second is the ever-growing number of tech startups—young digital entrepreneurs who are creating solutions through a value chain and logistics challenges, and creating thousands of jobs in the process. Andela is a good example of that. That’s a software company that trains software developers for many Fortune 500 companies. They received a couple of years ago a $24 million investment from Facebook and are already doing huge turnover already. The third is our growing investment in Nigeria’s entertainment industry. Our film output today is second only to Bollywood. And of course, Hollywood comes in a fairly distant third. Of course, they are making more money.

The fourth and last challenge and opportunity which is posed thereby is the vulnerability and that of our sub-region to the growth of violent extremism, especially violent Islamic extremism, religious and resource conflicts. And I’m sure many of us are familiar with some of these issues, although Boko Haram terrorists have been largely restricted to northern Borno.

There is some influence in southern Borno. There is a growing threat of the Islamic State in West Africa Province. Our approach has been to collaborate with our West African neighbours and the Lake Chad Basin Commission through the multinational joint task force, which we set up. Both the American and the U.K. governments have helped with training and intelligence.

There are also conflicts over pasture and water between Fulani herders and farmers in the north-central and the northwest zones of Nigeria. There’s also been a rising incidence of attacks on remote villages and kidnappings by Fulani bandits. Sometimes, especially in election cycles, these situations are used to drive religiously or ethnically divisive narratives for political gains. The fact of a large number of people living in extreme poverty, especially the young, uneducated, and unskilled, also offers, as I have said earlier, potentially a recruitment ground for extremist values.

But the government’s response has been the following: One, tackling poverty. We are doing that by providing business and employment opportunities. We have a huge social investment program, emphasizing youth employment and empowerment. And microcredit for about two million informal traders, cash transfers for the poorest one million, and daily school feeding for over nine million children in public-run schools. Second is more effective policing—community policing. We have a central police force at the moment, which is driven from the center. But we believe that the way to go is for more effective policing, whether it is community policing or state policing.

The third is education. Just last Thursday, the twentieth of June, President Muhammadu Buhari announced the enforcement of free and compulsory education in the first nine years of the child’s life. And that’s a very important policy for us because one of the chief reasons why we think that poverty exists, and why poverty may become intractable, is education, and many would say girl child education in particular. Fourth is developing a livestock transformation plan, which is aimed at ending migratory grazing in favour of ranching and other more sedentary methods of livestock farming and dairy. The fifth is fighting against the more dangerous sides of identity politics and populism. And there is a lot of that—a lot of attempts to drive a narrative that is divisive, and a narrative that’s not borne out by the realities or the facts but serves political ends and purposes.

And I think I’ll stop there, and hope I’ll have a bit more time to elaborate on some of the issues I’ve spoken about when we take the questions.

Thank you very much.