HE Ambassador Shabbir H. Hassanbhai, shares with Nomita Dhar his observations of his first visit to Nigeria since the formation of the new government.
Mr Hassanbhai has been Singapore’s Non-Resident Ambassador of the Federal Republic of Nigeria for the last eight years since the presidency of the 13th Head of State, Umaru Musa Yar’Adua. During his recent visit to Nigeria, Mr Hassanbhai noticed a renewal of vigour amongst his countrymen. With the newly elected President and Commander-in-Chief of Nigerian Armed Forces, HE Muhammadu Buhari at the helm with a strong mandate from the people, he shares his experiences and observations.
“It has been an eye opening visit. I met many in government, in the private sector and even NGOs and one thing came through strongly and clearly - Nigeria is on a new trajectory.”
He elaborated further on what he meant by this ‘new trajectory’, “There is now high expectations by everyone of good governance and reformative changes that Nigeria needs. President Buharai is seen as a catalyst for change. Even though he has taken some time to set up the cabinet, the people whom he has appointed are very credible people, with substantial knowledge of their portfolios. I think they will assist him to bring in this transformative change.” Other major issues the President has focused on includes fighting corruption, boosting the country’s power grid and reducing unemployment.
Nigeria has been hit by the severe fall in oil prices and this has significantly changed the country’s economy. The good news, according to Mr Hassanbhai was that Nigeria had already realised long ago they have to wean themselves of Oil and Gas (O&G) in the long term and find other sources to complement or even substitute O&G for growth.
The Ambassador had a series of meetings there that included calling on the new Vice President of Nigeria, HE Oluyemi Oluleke Osinbajo, senior officials from the Minister of Trade and Industry and Investment who were very eager to learn from Singapore to fast track investment and simplify rules for more investment friendly policies.
“I have also met professional consultants, private equity players, World Bank officials and Nigerian businessmen who are mostly positive about what is viable and potential for growth. Currently the O&G sector is weak but if you have the stamina and willingness to invest in the long term for 10 to 15 years, the returns on investment is promising,” said the Ambassador. He also met Singapore companies there such as Tolaram, Olam, Hyflux, several logistics services, energy and O&G companies, as well as smaller trading and consumer electronics firms. Most brought up issues such as restrictions on import items and repatriation of funds since the devaluation of nira but they all seem confident in the economy - that there are good opportunities here.
He was also pleasantly surprised to learn from financial institutions such as GT Guaranty that they were bullish about the O&G sector; valuations have become very cheap, many are liquidating and there is now a window of opportunity for new entrants in this market.
Low Hanging Fruits
Demographically, Nigeria is very populous, because of this, demand for everyday items, in the food retail sectors, construction, hotels and retail malls is large. “With Singapore’s experience in these areas there is great potential in growth especially if you can find a good, local partner,” said Mr Hassanbhai. He said, companies such as PWC and KPMG consultants can provide assistance in finding these partners. On the other hand, big ticket items like projects building ports, airports and highways are politically sensitive opportunities, are for mainly for the big players.
Agriculture is another great opportunity in this country. “We have companies such as Olam and Wilmar who have done well. IndoMie is a very successful product here. Recently US Kellogg bought a US$450 million 50 per cent stake in Nigerian food distributor Multipro and Kellogg has also inked a joint venture deal with Tolaram to expand in Africa. Companies can also always find a good exit valuation and good opportunities here,” said the Ambassador.
The final parting remarks from Mr Hassanbhai relates to a major trend potential investors should take note of, “The continent has moved away from being resource rich to one of opportunities in FDI, that seeks collaboration in training and education. Technical skills are in great demand and Singapore is doing its part in helping out the African nation with technical development through institutions like the Institute of Technical Education (ITE) for skills training and transfer.”
He encouraged all who are interested to know more of the latest developments to contact organisations such as IE Singapore and the Singapore Business Federation and look out for the biennial Africa Singapore Business Forum in 2016 as the premier platform for growing bilateral trade and investments between Singapore and Africa.
This article first appeared in Opportunity Nigeria 2015 and was reproduced with permission by the publisher Sun Media Pte Ltd.