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Favour Afolabi: The apathy by the Nigerian elite to invest in the Nigerian economy

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Favour Afolabi: The apathy by the Nigerian elite to invest in the Nigerian economy

by Favour Afolabi

The Punch recently carried a story about a challenge which the Lagos governor complained of facing:

Fashola, however, said paucity of fund was a major challenge to the speedy development of the seaport and the international airport, adding that availability of funds would determine when the project would be completed.

He said, “I cannot tell you the date the seaport will be finished but work has started at the port and the contractors are on site.

“There are still a few issues in terms of getting funding and commitment from the private sector because clearly both the management and the private sector own the zone. They are not government-owned but government has an enabling role to play in the regulation of the zone.”

I would have imagined that projects like these would be an easy sell especially to the organized private sector at home and the Diasporan Business Community at large – both of whom should naturally be very familiar with the economic implications of these sort of massive infrastructural projects and the attendant opportunities to create jobs and other micro businesses around these due to their international exposure.

Well, here we go again – our Banks have in the last couple of years become “FGN bonds Merchants” for the seeming crazy profits coming from such until lately that the bubble seems to have begun to burst even as their books have been well boosted via these investments. Our base of private jet owners have also increased within this same timeframe; in just the same way that the list of Oil bloc owners and fuel importers have been increasing as well; and in just the same way that the Diasporans have continued to increase ‘the size of Western Union transfers they ship home’ [the usage of which is yet to be particularly manifested in any part of our economy].

There is simply too much duplicity within these climes – our elites would grant interviews to international media houses telling you of everything that is wrong with Nigeria and how South Africa and Ghana are doing bla-bla-bla more than us, but present them with opportunities as these ones to put their monies where their mouth is and you will be met with deafening silence.

Yet these guys own the best homes in the best parts of the world paying ridiculous taxes, levies and all other sort of costs to maintain them; three-quarters of the time not living in these abodes – fees they would never agree to pay in Nigeria either as taxes to government or as salaries to their staffers even for their incorporated companies!

These are the guys that would quickly regale you with stories of how “Richard Branson and Larry Ellison and Warren Buffet , et al met with them at a Harvard session telling them how dah-dah-dah” and how “Dubai and Abu Dhabi have become Heavens on earth in just the space of 20 years.” They are subscribed to the best business journals in the world and can tell you how every major international infrastructural project was brokered; financed; and executed; and they will always quickly tell you when you try to debate them that ‘the problem with you is that you are not well-traveled,’ which makes me want to ask them: “So, why is LASG looking for funds to support the subject projects?”

These are the same set of people who spoke so glaringly for so many years that South Africa with a quarter of the population of Nigeria was already generating 40,000MWs of Power compared to Nigeria’s 4,000MWs and they made sure to constantly remind us of how Ghana just celebrated 20 years of uninterrupted Power Supply. Yet when the FGN via the BPE advertised for the privatization of the assets within this sector, the majority of those who claimed they were interested in buying these assets couldn’t beat the deadline for submission of their bids, only rushing in on the last day to the offices of the BPE to lobby the officials there to please collect their documents on a friendly basis.

This was after this process had been extended on at least more than one occasion; and of course when some of them couldn’t succeed in this regard, they began to blackmail the entire process as being pre-rigged; and even now that that some of them have been pre-qualified to buy up some of these assets, a lot of them except for a few are now running from one finance house to the other to raise the balance of 75% they need to fully pay up for these assets.

While this assertion shouldn’t be automatically interpreted as their inability to pay for these assets, my experience with being glued to CNBC and Bloomberg business channels on a daily basis and the amateurish financial engineering intelligence that I’ve acquired from such sessions doesn’t seem to tell me that this ‘jankara trading modus operandi’ that many of them are currently engaged in towards raising these monies is ‘the international best practices model’ of doing such.

So here are my questions to these guys –

  1. What exactly is the benefit of any intelligence garnered by you over the years – technologically; in financial sciences and engineering; intellectually and exposure-wise when you cannot bring together all of these acquired knowledge to either work solo or with others like yourselves in building your own home economies [at Federal and State levels]?
  2. Why must you sit by and allow Nigeria be re-colonized yet again by others: especially the Chinese and South Africans as they continue to take up key sectors and assets within our economy as you shamelessly join your contemporaries in singing the chorus of we need FDI to develop this economy when you have refused to lead by example in investing in the right way?
  3. For how long really, would you continue to give the now-over-used excuse of “Government needs to first do this and that to create the enabling environment before something happens”; aren’t these same Governments made up of officials that you have direct phone numbers to; who you routinely invite as the Guest of Honour to the weddings of your children, and show off with in Photo-Ops on the pages of Ovation magazine; so is it the “pepper sellers at Oyingbo market” that now have more access to these Governors; and Ministers; and Agency heads than you?

I recall telling a senior manager of the defunct Intercontinental Bank barely two weeks before the “Sanusi Tsunami” that ‘History would not be fair to Erastus Akingbola and most of the other Bank CEOs of his time who frustrated the Soludo-led initiative of 10% Banks’ PBT investments in SMEs’  while selfishly making sure they gave all the excuses in the world of how/why this won’t work while using the same scheme to build big side-businesses for themselves; and their friends; and their cronies yet it seems that five years on, the Venture Capital sector is still largely non-existent within this economy despite the huge combined Intellectual Capital base possessed by those running the Nation’s financial services sector, both at the public and private levels while the sprinklings of Private Equity firms within this economy remain largely a trumped up league of a small cartel of players supported by these same Nigerian elites who use these vistas to support projects that they’d rather not be seen to have invested directly in but for the exception of a few of such of companies.

Well, History continues to take records of the current seasons and the professional players that are the superstars in these premier leagues.

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