Entrepreneurial spirit boosts Nation’s diversification drive
NEW GENERATION IS READY FOR CHALLENGES A MORE STABLE ECONOMY AND TRANSPARENT BUSINESS ENVIRONMENT ARE CHANGING ATTITUDES AT HOME AND ABROAD, NIGERIANS ARE TAKING A MORE ACTIVE ROLE IN SOCIETY AND FOREIGN FIRMS ARE BEING ENCOURAGED TO INVEST, PAVING THE WAY FOR A BREAK FROM DEPENDENCE ON OIL REVENUES

ECONOMIC diversification will reduce the nation’s exposure to volatility in global oil markets
In a politically transformed Nigeria, a new generation is looking to attract increased foreign investment and to develop new international markets for their products.
Given the country’s wealth of minerals, oil, and gas, there is significant potential for
economic development. However, years of military dictatorship hindered economic development, and most observers are only too aware that change will not happen overnight.

Since the return to civilian rule in May 1999, the government of Olusegun Obasanjo, has made considerable headway in stabilizing the economy and creating a more transparent business environment. President Obasanjo was re-elected last month for a second four-year term, and his People’s Democratic Party (PDP) won a majority in the parliamentary elections.

Nigerians have demonstrated their resolve by persevering with gradual reform processes aimed at achieving sustainable economic growth.

Despite a heavy dependence on oil revenues, Nigeria is otherwise a mainly agricultural nation.The challenge now is to diversify the economy and explore its industrial and agricultural potential.
Liberalization is beginning to make its mark. Several industries show promise, including livestock and poultry farming and textiles – which has taken advantage of local cotton production.

The government’s long-term aims can only be achieved by attracting adequate foreign investment. Strenuous efforts have been made at all levels to create the right environment for investors, and new legislation has made foreign involvement easier. A range of incentives are on offer, including the infrastructure to help set up a business and easy access to land.

“We lived under military dictatorship for a long time,” says Dr. Magnus L. Kpakol, Chief Economic Adviser to the President. “People are just beginning to grapple with this huge political transformation and to change their mindset. Today, they realize they can participate in society.”

Several state-owned enterprises are being prepared for privatization. A growing number of domestic manufacturers are eager to expand production and many are seeking joint ventures. The government itself is trying to tackle the three most urgent problems – healthcare, education, and infrastructure – leaving the private sector to run businesses.
“There is no doubt that the image of Nigeria overseas is much better than it was three years ago,” says Dr. Kpakol. “Even Nigerians abroad are interested in coming back.”
IMPROVING education, healthcare, and infrastructure are the government’s three main priorities

He forecasts that the economy should be able to grow by 7% a year, or even higher, if the agricultural sector becomes more efficient. “About 17% of people here live in rural areas and they are very attached to their farms and very dependent on agriculture,” he explains.

“Agriculture contributes about 40% of our GNP (gross national product). It could grow further but we have to provide electricity and refrigeration to rural areas. You have to have electricity and refrigeration in order to create a good business.

“We also want to reduce our exposure to volatility in the oil markets and increase activity in other areas such as manufacturing.”
Finance Minister Jubril Martins-Kuye says the government has been under tremendous pressure to deliver what are called in Nigeria “democracy dividends.” Many of these demands were excessive, he adds.

“Almost every Ministry wants to take up the entire budget of the government, so we have to find ways of staying within the limits approved by parliament. If projected revenues do not come in, then there’s a great deal of prioritizing to do.”
Minister Martins-Kuye says the government is helping to kick-start new industries at a local level and encouraging foreign investment through various initiatives. Foreign investors in unique and innovative projects are granted “pioneer status."

“We have very generous tax waivers – five years for pioneer status companies. Capital depreciation allowances are on a yearly basis and we have tax incentives for specific agro-allied investment,” he says.
“We we are doing everything possible to cooperate with the United States, for example, to ensure that
we strengthen bilateral economic ties,” he adds.

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