Nigeria tries to build new economy without oil, guns and corruption

Nov 06, 2004 01:00 AM

by Carl Mortishead

A sentry box looms over the forecourt of a petrol station on the main road north from the city of Port Harcourt in the Niger Delta. It is an ugly metal crate on stilts with a narrow window, just wide enough to position the barrel of a gun. Fuel is precious and petrol station owners take no chances, the pumps are protected by steel cages.
The price of fuel is soaring in Nigeria and its provision is irregular, creating shortages in a region that virtually floats on oil. The Delta produces almost 2.5 mm bpd of crude, providing the government with a rent that accounts for more than two thirds of its income.

Port Harcourt -- Nigeria’s answer to Houston -- shows little evidence of the oil money. It is a town of hovels, shacks and shebeens. The roads leaving the city are lined with broken lorries, a queue of hulks that could provide a mill with enough scrap metal to keep Nigeria in steel for years, were there energy to fuel the furnaces.
The petrol shortage and stop-start electricity supply is a national scandal and in a desperate and belated attempt to stimulate private investment the Government has raised the price of road fuel by 20 %. In protest, the Nigerian Labour Congress has called a nationwide strike.

The confrontation could be violent and dangerous for the government and ordinary Nigerians. Dangerous stand-offs are not infrequent in this ramshackle country, but this time there is a difference. Nigerians are pointing the usual fingers: the fuel shortage is blamed on political corruption, on the former military government and on shadowy figures, politicians who are said to be profiting from fuel imports and looting the disabled oil refineries. But another mood can also be detected.
There is impatience with the slow progress of reform under President Olusegun Obasanjo, Nigeria’s first democratic leader since the death of the dictator General Sani Abacha. Nigerians are beginning to see that the solution to the crisis is not in the stuff Shell is pumping out of theground.

A small but influential and growing band of entrepreneurs is trying to build non-oil businesses. The country has one last chance to catch the development train and citizens are furious that politicians are still creating confusion and delays and extracting bribes from passengers seeking to climb on board.
Adenike Ogunlesi runs a textile business in Lagos, employing 60 people in her factory. She makes children’s' wear under her own label -- Ruff ’n Tumble -- filling a niche market for American-style kids’ clothes for middle-class Nigerians. But running a business in Nigeria is an infrastructure nightmare, she explains. Power and water are not provided. Most enterprises invest in generators and even drill bore holes for clean water.

In Nigeria, to manage an enterprise of any size is to run a small town. In Aba state, in the Niger Delta, Star Paper Mills is spending $ 20,000 (£ 10,800) per day on diesel fuel to keep the plant going.
"I could build a new factory with the money I spend on fuel," says its CEO. Meanwhile, the flaring of billions of cm of natural gas lights up the night sky of the Delta, fuel that could power electricity generators if the state-owned utility were run as a business, rather than a government cash register. Recruitment is a big headache.
"You have to go down to rock bottom and train people to answer the phone," Ogunlesi explains.

The education of a generation has been lost as the military government shut down universities and colleges. Teaching salaries are inadequate and Nigerians with means opt for the traditional escape route, which just worsens the problem.
"If our leaders could not send their children to school abroad, they would do something," Ogunlesi said. Instead, the government is trying to persuade the children who went abroad to return. The buzzword in Abuja, the federal capital, is repatriation. Efforts to bring back the billions of dollars stashed away by the family of Abacha in foreign banks have had mixed results.

However, the Obasanjo government is hoping that it will be more successful repatriating Nigerians who fled the Abacha quagmire, people whose brainpower is more valuable than a pile of freshly laundered cash. The model is India, which in the space of a decade turned sleepy Bangalore into a humming world of computer servers and cyber-millionaires.
Chief Chukwuemeka Chikelu, Nigeria’s Information Minister, likes to reel off a list of talented expatriate Nigerians, such as Philip Emeagwali whose work with supercomputers played a big part in development of the internet.
"One phenomenon of the last few years has been Nigerians coming back and they are coming with skills," Chikelu says. "For the first time, there is hope."

There are tens of thousands of doctors and medical personnel living overseas, Chikelu says and they have created networks, such as Nipro in America and Nigerians in Diaspora. They have skills and savings, but will they abandon American jobs and air-conditioned comfort to take part in President Obasanjo’s Awfully Big Adventure?
Kayode Odukoya would like to fly them in. He is founder and CEO of Belleview Airlines, a local carrier that has begun services to neighbouring capitals in West Africa and has intercontinental ambitions. Since the collapse of Air Nigeria, there has been no direct flight to America.

If expatriate Nigerians are to return, government policy towards business must be consistent and personal safety is crucial.
"If your passenger can arrive at the airport and get in a cab and feel secure, then he will come back," says Odukoya.
We are not yet there, but anecdotal evidence suggests that expatriates have begun to arrive in Lagos. However, their expectations can be a problem. Repatriated Nigerians find they are no better suited to working in the daily chaos of Africa than are Europeans or Americans. Guinness Nigeria has recruited ten repatriates but Keith Richards, its managing director, admits that some "find it difficult to adjust".

Pinning hopes on the investment power of repatriates may yet prove to be another Nigerian fantasy, an oil boom that turned to bust before the dividend cheque was cashed. Nigeria is not India; it is further behind in basic infrastructure and in education. But some Nigerians are doing the crucial, painstaking job of making it happen at home.
Bunmi Lawson is director of the Fate Foundation, a non-profit, private sector organisation that seeks to nurture entrepreneurs. It provides classes in business skills, but also procures mentors and helps alumni to form business networks.
"Fate is a platform," says Lawson. "Nigerians are not satisfied with being employees. They want to run their own business."

The Foundation makes introductions and opens doors in banks that might otherwise refuse to lend to a start-up. For Etaba Nyambi, one of Fate’s success stories, it wasn’t even money that was a problem when he decided to set up an office-furniture manufacturing business, it was credibility and contacts.
"It wasn’t easy to convince people that I knew what I was doing," he said. He went to the Foundation which provided him with a mentor, an architect who introduced him to his clients and passed on work. Connections are of incalculable value in this patchwork country, divided by religion, tribe and more than 40 languages.

Nigerians will joke that they remain Yoruba, Igbo or Hausa in the airport departure lounge, only becoming full Nigerian citizens when the plane leaves the ground. Yet to other West Africans, these people are a breed apart, with boundless energy and a ruthless pursuit of the main chance.
There is a now chance, accompanied by some small signs, that Nigerians are starting to realise it is their human energy, and not the stuff in the ground, that could make the difference to their future.

Rebranding the branded
Speak no more of e-mail fraud, drug couriers and warlords -- Nigeria is to be rebranded.
President Obasanjo has earmarked 600 mm naira (£ 2.4 mm) to the Nigeria Image Project, a recognition that the countryneeds to present a new face if it is to persuade foreign investors to back it. Gleeful Lagos sub-editors hailed the "Strategy to launder Nigeria’s image", but Chukwuemeka Chikelu, the Information Minister, put a more sober spin on the project, admitting that £ 2 mm would not buy much TV airtime.

The minister talks about Nigeria’s "brand eroders", chief among them the ex-dictator, Sani Abacha.
"We accept we have challenges of development and corruption, but when you look at CNN you get the impression Nigeria is in civil war," he says. He hopes to persuade successful expatriates to take a fresh look at home.
"There is a large untapped market kept away by fear," he says.

Source: Times Newspapers
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