Contrary to the ridiculous claim of the Federal Government that Twitter Inc failed to choose Nigeria for its first African office because of negative media representation, the country’s dispiriting investment climate is enough to scare away the most adventurous investor. Hence, the ‘snub’ by the American social media company is not surprising. Ghana has bested Nigeria on many fronts in providing an enabling environment for businesses to thrive and even attracting companies fed up with the suffocating operating environment the latter has offered in recent years.
In June 2018, it was reported
that Google would open an artificial intelligence research centre in Accra,
Ghana, which was the first on the African continent. Ghana likely appealed to
Google because of its high-quality education system and political stability, an
expert in the region told CNBC.
Aside from some local industries relocating to Ghana, between 2006 and 2008,
Nigeria’s only two tyre manufacturers, Michelin
and Dunlop, relocated their
factories to Ghana, citing epileptic energy supply. South Africa retail chains,
Woolworths, Truworths and Mr Price,
have all left Nigeria in the last few years, with Shoprite announcing it is leaving next year. Even exasperated
Nigeria doctors are exiting in droves from the health sector, headlined by poor
funding and decrepit infrastructure.
With only about 4,000 megawatts
of electricity available for a country of over 200 million, the Manufacturers’ Association of Nigeria
said the manufacturing sector spent over N67.38 billion on self-generated
electricity with energy cost alone, accounting for over 38 per cent of
production cost, in 2019.
The snub was therefore not
unexpected, a sad reality the government, unfortunately, seems not to come to
terms with and diligently address. A World
Bank Enterprise survey reported that 322 private firms closed in Nigeria
between 2009 and 2014 owing to stifling business regulations, corruption, and
the political environment. MAN said 196 manufacturing companies shut down
between 2015 and 2017, on the watch of the President, Major General Muhammadu
Buhari (retd.).
Explaining the reasons for
preferring Ghana as the best place to set up shop in Africa, Twitter said, “As a champion for democracy, Ghana is a supporter of free
speech, online freedom, and the Open Internet, of which Twitter is also an
advocate.” This indicts Nigeria seriously, where the security agencies
brutalise the citizens brazenly, and the religious police destroy private
investments and arrest people for not observing Ramadan. Justifying its
investment decision, the company emphasised, “Furthermore,
Ghana’s recent appointment to host the secretariat of the African Continental
Free Trade Area aligns with our overarching goal to establish a presence in the
region that will support our efforts to improve and tailor our service across
Africa.”
Nigeria’s receding influence in
international diplomacy over the years has been telling. The Buhari regime
needs to reverse the worsening operating environment for big businesses, SMEs
and start-ups to make the country more investment-friendly and competitive. For
instance, in the 2020 World Bank’s Ease of Doing Business report, Ghana, at
118, ranks 13 places ahead of Nigeria at 131, out of the 190 countries. The CNN
reports that Ghana, the 13th largest in Africa by population size, attracted
the largest Foreign Direct Investment in West Africa, surpassing the continent’s
most populous country, Nigeria. Its FDI for the first half of 2020 was $785.62
million, representing 90 percent of the total investment in the country, at
$869.47 million for the same period.
According to a report, in the
first quarter of 2020, foreign investment in Ghana birthed 69 projects, with
the services sector capturing the highest by registering 25 projects, followed
by the manufacturing and export trade sectors with 21 and 11 projects,
respectively. Google, Microsoft and Huawei are among international tech giants
that have expanded their operations in Ghana. But in Nigeria, the economy took
a heavy beating from a relentless spike in insecurity, erratic policy choices
in the telco industry and lack of political will by the government.
Unfortunately, the Minister of
Information and Culture, Lai Muhammed,
thinks, rather inexplicably, that the media should be blamed for the snub. “This is what you get when you de-market your own country.
Nigerian journalists were painting Nigeria as a hell where nobody should live,”
he unfairly lamented. This is not only disingenuous but also wide of the
mark. Nigeria’s investment climate has been everything but friendly. Sadly, the
Buhari regime, as signposted by Muhammed’s finger-pointing, is living in denial
of the worsening realities start-ups have had to contend with in Nigeria.
Aside from the policy environment
that most organisations find inclement, the debilitating security challenge in
the country is a huge disincentive to any investor, local or foreign. With a
decade-long Islamist insurgency in the North-East, heart-rending mass abduction
of schoolchildren, banditry and cattle rustling by terrorists in the
North-West, killer herdsmen rampaging in the North-Central and wreaking havoc
as they move southward, as well as piracy in the Gulf of Guinea, country after
country have been issuing travel advisories to their citizens against visiting
Nigeria. In the 2020 Global Peace Index, Ghana ranked as the 43rd most peaceful
country in the world, placing 104 spots ahead of Nigeria, a pointer to the
unfriendly business environment. Money goes to where it is safe. This is no
media creation or representation; instead, it is a scary lived reality to which
the government has not been able to find an answer. Yet, it deludes itself
that, “The natural expectation would have been for Nigeria to be the hub for
Twitter in this part of Africa.”
Indeed, the Buhari regime has
been closing the civic space with its highhanded response to protests and free
speech. There is also a lack of coordination in government operations with
agencies working at cross-purposes, thereby causing uncertainty in the
investment climate. Companies make investment decisions based on tangible and
intangible considerations. Unless Nigeria fixes the intangibles as well, it
will continue to be snubbed by the best of the world in terms of FDI. (Punch)
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