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Engaging the United States’ self interest in Nigeria


With population growth consistently exceeding real economic growth by percentage points, Nigeria needs expertise and financial capital in translating its huge economic potential into sustainable levels of high single to double digit real economic growth rate and the United States (U.S.) has the capability to provide the required resources and help build the needed capabilities. But does it currently have the self-interest?

Since becoming the largest global economic power late in the 1800s, no country has become an economic power without relying on American financial markets, businesses, and consumers. China, the latest, strongly leveraged American intellectual capital, technology, businesses and consumer markets to make its great leap forward and continues to rely on America’s innovation capacity, businesses and consumers to sustain growth, as it accelerates its transitions into a more sustainable consumer-led economy.

It is well known that America’s foreign policy prioritises its security and material interest and that American businesses prioritise revenue and earnings in a manner that is largely consistent with the country’s perceived political interest. America has a long history of doing business with violent authoritarian leaders that it also routinely criticises, if it is in its national interest and it is no secret that American firms, do businesses in such countries, if it is in their business interest.

It is also a fact, that outside the oil and gas sector, companies such as Proctor and Gamble and Coca Cola are market leaders in Nigeria. However, the problem is that the production volumes of these companies, are small and create insufficient local jobs relative to demand in Nigeria and more importantly the West Africa sub region and indeed globally. Assuming that Proctor and Gamble makes Nigeria a major export producer, it will have to build global sized facilities, that rival those in China, creating thousands of jobs in the process. The truth is, Nigeria, has to become a massive global exporter of intermediate and finished products to create the tens of millions of jobs required to begin to seriously bend the poverty curve afflicting the country.

Building the political and commercial relationships that encourage America to see Nigeria as a major strategic ally (not the rhetoric but the reality) is the challenge. For this to happen, Nigeria has to be seen as a critical country in the global sense. This means a concerted diplomatic and governance effort to promote the reality that with its strategic location and population, the country is critical to securing peace in West Africa and beyond and to increasing global demand for goods and services. This begins with improved governance, that includes the courage to fight corruption in a transparent manner, that has no respect for anyone, including jail time, elimination of odd policies such as rotation of political offices and zoning and the bow and clap practice of ministerial confirmation in the Nigeria Senate, maintaining the war and defeating terrorism, prioritising the creation of skilled workers, and showing diplomatic leadership in the region.

These are agenda items the country has the capability to deliver. Nigeria was at the forefront of liberating Liberia and Sierra Leone from the clutches of brutal dictatorships, shedding precious blood and treasure in the process. The country is also in the forefront of the war against Boko Haram terrorist and recently led the successful removal of Jameh Saleh from office as the unelected president of Gambia. Nigeria’s hand will be strengthened if it continues to make the material sacrifices required to maintain a political and diplomatic leadership in Africa and steps up in the other areas. This will not be easy, as the country faces its own development needs, and given the political nature of its constitution, resource allocation rules, an intertwined political class – that tends to protect its own – and the prevailing national attitudes and norms.

America can help Nigeria significantly improve its business facing institutions, infrastructure, human capital and general economic environment. American firms can leverage Nigeria’s locational advantage by siting massive global factories that serve European markets in the country. Its business process outsourcing industry, can leverage temporal advantages by siting call centres, software debugging, medical services, data processing, legal services, tax preparation, and other such services, that are over represented in countries like the Philippines and India in Nigeria. Its manufacturing companies can prioritse siting parts and component manufacturing, as well as final assemblyfacilities in the country. Relative to China, America is better positioned to be Nigeria’s strategic growth partner. Indeed, the promise of China has been underwhelming. Though important, China’s direct investment in Nigeria, has never been more than $3billion in any given year, and the pace of constructing, critical infrastructure such as a modern power system and rail roads has been very slow. Indeed, China is executing a game plan, similar to the age-old one of the European colonialists – promise a lot and invest just enough to be seen as a strategic partner, while extracting as much minerals, metals and agricultural commodities as cheaply as possible, creating a market for it products, and creating a psychological victory for its citizens.

It is time for Nigeria to step up its diplomatic game and to make itself really attractive as an investment destination for America, a country with which it has a cultural affinity that goes back to the days the first Africans were brought to that country. Increasing real demand in Africa, will significantly increase global economic growth to America’s advantage and will help to stem the embarrassing flow of people risking their lives across the Sahara and the Mediterranean to reach western Europein the hope of resetting their economic well-being. It will also staunch internecine conflicts, disease and poverty and will contribute to global peace and security. It’s a non-zero some proposition!

Nigeria really has no choice but to seek such truly win-win partnerships, if it wants to move from slow to fast growth.
Ijose is a policy analyst based in the United States.

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