Nigeria, UK to move closer beyond the corruption war

As President Muhammadu Buhari prepares for his trip to the United Kingdom (UK) for the international Anti-Corruption Summit, the business community wants a resurgence of strong economic collaborations that could herald an upward swing for the country’s faltering economic fortunes. TOPE TEMPLER OLAIYA, the Metro Editor, writes on the expected takeways from this visit beyond the administration’s surefooted war against corruption.

President Muhammadu Buhari will on Tuesday depart for London, United Kingdom to take part in the international Anti-Corruption Summit, which will be held on Thursday at the British capital, and hosted by Prime Minister David Cameron with many other Heads of State and Government in attendance.

A statement issued at the weekend by the presidential spokesman, Mr. Femi Adesina, which described the president as an internationally recognised leader in the global fight against corruption, disclosed that he would play a prominent part in the summit.

Before returning to Abuja on Friday, May 13, the statement noted that the president is expected to have a separate meeting with Prime Minister Cameron to discuss ongoing Nigeria-Britain collaboration in the war against corruption and terrorism, as well as other issues, including trade and economic relations between both countries.

It is a glaring fact that the president is surefooted in his administration’s war against corruption, one of the reasons why he will be playing a prominent role during the summit; but going by facts and figures, Nigeria’s economy is in dire strait. The picture of a robust economy painted which was in the last two years rated as Africa’s largest economy with about $510 billion yearly Gross Domestic Product (GDP), appears to have gone with the wind, because reality checks and outlook have proved otherwise.

There are cogent reasons to be worried. Reason: Economic growth had stalled and taken the downward plunge since the final quarter of 2015 due to the fall in oil prices and the country’s disruptive foreign exchange policy.

The delay in approving the 2016 beyond the first quarter of the year didn’t help much to revive the economy, as the stalemate between the Executive and the National Assembly, which only ended last Friday when President Muhammadu Buhari finally signed the 2016 budget into law, hampered the much-needed economic reforms and investment plans by prospective institutional investors across the world.

The exchange rate is today N320 to US$1 at the parallel market; statutory allocation to federating units has plunged by about 50 percent, leading to delay in salary payments by state governments; and loss of over N4 trillion in foreign direct investment.

The sliding fortunes of the economy was exacerbated by huge losses recorded recently in the capital market, where over N4.5 trillion portfolio investments evaporated in a couple of months. From being the world’s third fastest growing economy, Nigeria recently dropped out of the top 15 in Africa.

In 2014 and early 2015, Nigeria was named the third fastest growing economy in the world by CNNMoney, with China and Qatar, taking the lead at 7.3 percent, 7.1 percent gross domestic product (GDP) growth. For 2016, however, the coast is cloudy, and Nigeria is nowhere near the fastest growing economies in Africa.

According to the International Monetary Funds (IMF) World Economic Outlook for 2016, as revised in April, the fastest growing economy in Africa for 2016 is Cote d’Ivoire and the slowest is Chad, which is expected to record negative growth.

With this undesirable turn of events in the country, key stakeholders, particularly the business community, are worried that the Buhari administration is not giving its due attention to the lackluster state of the economy as against its unwavering fight against corruption.

One of the concerned stakeholders, the Nigerian London Business Forum (NILOBF), wants the president and his team to seize the moment of this trip and reposition Nigeria’s dwindling bilateral relationship with the United Kingdom.

According to the country director of NILOBF, Prof. Chris Onalo, the British community are increasingly worried that in recent times, UK, which is suppose to have greater prominence in the country economic-wise because of its traditional tie with Nigeria, as one of its former colony, is fast losing its place in terms of business and investment to the Asian tigers.

In its recent release by the National Bureau of Statistics (NBS), showing Nigeria’s trade volume with major trading partners, India leads with $16.36 billion for 2015, followed by China with $14.94 billion. Nigeria’s trade relation with Britain stood at $8.52 billion.

Corroborating this figure, the UK Minister for International Development, Nick Hurd, said the trade volume between Nigeria and the United Kingdom stood at about six billion pounds (about N 2.4 trillion) in 2015, noting that the trade potential between the two countries was very huge.

“The trade volume is about six billion pounds, we measure in pounds. It’s an important trading relationship but we think that the potential remains huge and for us in terms of the relationship between UK and Nigeria, it’s such an important one. It’s important because of security, our development agenda and that’s in the interest of both Nigeria and Great Britain going forward, so we are very keen to encourage greater trading links between Britain and Nigeria,’’ he said.

Hurd also said that the trade relationship was balanced and not against Nigeria, noting that: “I think the relationship is well balanced. There is a sort of genuine partnership. I think the foundation is very strong in terms of relationship but I think looking to the future, there is so much where our interests align. We worry about terrorism, Nigeria worries about terrorism. We have a mission to reduce poverty around the world; we’ve made a big commitment to that.”

But Onalo, the highly influential professor of credit management, who is also the Chief Executive Officer of the Institute of Credit Administration (ICA) differs slightly. According to him, the trade balance could be more if Nigeria takes maximum advantage of its strong ties with the UK. “It is a sad commentary that UK that has a definite relationship with Nigeria is not conspicuous with its strong ties binding both countries.

“Giving the global trend of insecurity and terrorism, which reinforces the greater need for collaboration, there shouldn’t be a gap of distance between Nigeria and UK and the only way to strengthen the tie is a greater economic relationship.

“Economic relationship supersedes political relationship because the volume of economic relationship determines policy direction between both countries. But between Nigeria and the UK, it has been so light and fading that they hardly see the need for each other. It is becoming worrisome that the relationship that exists is typically from the lips not from the heart.

“Investors are asking why and answers must be provided especially with the new administration. It is the forces of people and institutional private sector investors that drive bilateral trade,” he said.

In pursuant of deepening the economic ties between both countries, NILOBF will be hosting a UK-Nigeria Investment Summit in London in July 7 – 8, with the Vice President, Prof. Yemi Osinbajo, expected to lead Nigeria’s delegation to the all-important summit.

Already, the UK MP, John Howell, the Prime Minister’s Trade Envoy to Nigeria has confirmed his enthusiasm to inspire british investors for Nigeria in the summit. His counterpart, MP James Dudderidge, the Minister for Africa is also joining John to turn the minds of critical British institutional investors to Nigeria.

NILOBF is the official business chamber and trade association, comprising Nigerian, British and non-British companies doing business with Nigeria and UK, including subsidiaries of Nigerian companies and institutions doing business in the UK.

The NILOBF’s key objective is promoting and attracting bilateral trade and investment relations between the two countries by bringing together business people from Nigeria and the UK, who seeks new investment opportunities, develop long-term business relationships and finalise existing business deals.

The emphasis of the event coming according to Onalo is to break the jinx and remind the two countries of the need to be much more closely related. “Britain gave birth to Nigeria, they can’t throw away their child, no matter how the child behaves. Nigeria must take the advantage to begin afresh and foster a strong tie. It is time for frank talk at the summit. The Commonwealth union places a unique role on the UK to play the mother role to countries once under the British colony.

“The issue of some major restrictions leading to trade imbalance will also come up during the summit, particularly the problem of access to each other. There should be flexibility in the issuance of visa for business people and investors.

“In international politics and diplomacy, the attitude of countries to themselves is driven by the principle of reciprocity. For instance, if Nigerians invest in the UK, it will influence on the attitude of UK government to Nigerians. If UK investment is also much in the country, it will guide UK’s response to issues that concern Nigeria.