Nigeria has weathered the storm of COVID-19 and the consequent shocks from the international oil market in the disastrous year, 2020 and still emerged Africa’s largest economy. Nigeria is Africa’s most populous nation and the world’s most populous black nation.
Nigeria is more than 50 per cent of the population of the Economic Community of West African State (ECOWAS).
It is not just the most populous nation in Africa, it commands the economic muscle commensurate with its large population. With annual gross domestic product (GDP) of $448 billion, it is incontestably the largest economy in Africa. By GDP ranking, Nigeria is the 27th largest economy in the globe. It is the only African country listed among the first 30 largest economies in the world GDP ranking.
South Africa, the Dark Continent’s second largest economy is a distant number 43 in global GDP ranking where Nigeria remains in the respectable first 30 club.
In terms of internet awareness and use, no one dwarfs Nigeria in Africa. More than 50 per cent of the population of 207 million has access to internet and use it effectively.
Nigeria flaunts an intimidating economic data. Its enormous and youthful population makes it an investors attraction anywhere in the world. However, the underlying current of hostile investment environment makes those data pale into insignificance when foreign direct investors make decision on where to put their money.
Twitter Inc., a leading global social media operator rubbished Nigeria’s intimidating population and enormous economic muscle when it eventually decided to open an office in Africa. Twitter officials made extensive survey of the continent before deciding to open their first office in Africa in little and insignificant Ghana.
Ghana is no match for Nigeria’s population and economic muscle. Ghana’s population of 32 million is just slightly above that of Lagos state. Even with that, there are more cars in Lagos than the whole of Ghana. The amount of petrol burnt in Lagos in a day might be used in the whole of Ghana for a week.
In terms of percentage of patronage, Twitter’s decision to open its first office in Africa in Ghana flies in the face of rational reasoning. But patronage comes second or even third when investors are weighing the options on where to make sensitive investments. The truth is that with technology now converting the world into a global village, an investor could feed a large market with products from an insignificant outpost where investment environment is pretty conducive.
Twitter weighed those options while deciding on where to site its first office in Africa. Nigeria provides Twitter’s largest patronage in Africa. Some 39.6 million Nigerians subscribe to Twitter. That is about seven million above Ghana’s entire population. In fact, Ghana cannot muster more than four million subscribers for Twitter even as it is siting its first office in Africa on its soil.
Several factors mitigate against Nigeria when foreign direct investors are weighing options on where to invest in a highly competitive world. Nigeria has lost to Ghana on several occasions when it comes to foreign direct investments and even diplomatic considerations.
Barack Obama, America’s 44th president snubbed Nigeria during his Africa tour and opted to visit Ghana instead. Right now, Ghana attracts more foreign direct investments than Nigeria because of stable power supply and lower level of corruption.
Twitter’s nebulous explanation for snubbing Africa’s largest market is that Ghana promotes democracy and freedom of expression.
Twitter’s decision goes beyond the promotion of freedom of expression. Nigeria has no history of blocking the social media like China and Russia.
The truth is that Nigeria’s intractable security crisis, fraudulent multiple exchange rate policy, unparalleled level of corruption and seemingly insurmountable power supply problem persistently drive away foreign direct investments. Because of the inhibiting factors listed above, the cost of doing business in Nigeria is three times what obtains in Ghana. The manufacturers Association of Nigeria (MAN) laments that its members spent N67 billion in 2020 generating their independent power.
Twelve years ago, Nigeria lost its two tyre manufacturing firms, Michelin and Dunlop to Ghana for reasons listed by MAN. Nigeria’s power privatization project is a colossal failure. The industry’s generation and distribution arms were corruptly handed over to incompetent, cash-strapped firms hurriedly slapped together by cohorts of those in power.
They have been complaining about inappropriate pricing of electricity. Now Nigeria’s power tariff has been doubled, yet the eternal darkness persists.
Ghana is 13 notches above Nigeria in the World Bank 2020 list of ease of doing business which assesses the investment environment in 190 countries. There is no basis for comparison.
Corruption is another factor that gave the Twitter office to Ghana. The federal government would rather dismiss Transparency International’s corruption perception rating of Nigeria than work to improve upon it. The irony is that such assessments inform foreign investors decisions.
The level of corruption in Nigeria could easily be assessed by its notoriety as the country with the world’s largest number of people in abject poverty. Ghana, a poorer country has a scant poverty rate of 13.3 per cent. Nigeria’s poverty rate is perilously close to 60 per cent. Nigeria’s skewed income distribution system and corruption push six people below poverty line every second.
It has unleashed millions of illiterate and unskilled youth on the country. They now live on banditry, kidnappings and armed robberies. Until someone reins them in, investors like Twitter would continue to pitch their tent with Ghana where they can have peace.
The Central Bank of Nigeria (CBN) takes 60 per cent of the blame for driving foreign direct investors from Nigeria. CBN’s multiple exchange rate is a mammoth fraud.
Foreign investors enter Nigeria at the official exchange rate of N412 to the dollar. When they are leaving, the scarcity of dollars at the official window compels them to buy at the parallel market funded by cohorts of top politicians at N487 to the dollar. They inadvertently lose anything from N64 million for every $1 million brought in.
Ironically no one in the federal government has learnt anything from Twitter’s snobbish posture. Lai Mohammed, the information minister blames the media for de-marketing the country and compelling foreign investors to flee. No one gets things right by shifting blames.
Twitter has inadvertently followed the path of the importers and exporters from land-locked Niger Republic. Niger importers would rather use far-away Ghanaian ports than use nearby Nigerian ports and wade through hundreds of police “toll gates” with their goods. Corruption and insecurity, not the media, scares investors.
