Let me start by thanking the Nigerian-American Chamber of Commerce for sponsoring this event this evening as well as the SME Finance Conference tomorrow and Wednesday. The Embassy tells me that the NACC is a very active voice for business in northern Nigeria and a strong link between the Nigerian and U.S. business communities on many levels. So thank you for the work you do, and for the highly cooperative relationship between the NACC and the U.S. Embassy.
This is the first stop on a trip I am taking to Abuja and Lagos, followed by Dakar in Senegal.
My purpose is simple: to do my part to continue to advance our economic engagement in this region, of which Nigeria plays a vital role. I’m pleased to have the opportunity this evening to reaffirm the strength of our partnership and advance our mutual interests.
I’d like to give you a view of Nigeria from Washington D.C.’s perspective. First, I think it’s accurate to say there is a consensus that Nigeria is at an historic fork in the road, so to speak – choosing between business as usual and a new direction. Nigeria is ready for a new direction and has demonstrated that readiness in largely peaceful elections in which the outgoing President conceded defeat.
There is also consensus that His Excellency President Buhari’s top two priorities are the right priorities – defeating Boko Haram and the insecurity issues in the country, and attacking corruption. Addressing these two issues would have a positive impact on the economy and would be significant in improving the business climate in Nigeria.
Already, President Buhari’s efforts to reform the Nigerian National Petroleum Corporation is seen among outside observers as a welcome development. It is a concrete example of a new direction for Nigeria, rather than business as usual.
There is also an external factor that makes the case for a new direction so compelling: the decline in the price of oil. There is significant interest in Washington in how Nigeria will respond to this new economic paradigm.
And that brings me to one of the main purposes of my visit to Nigeria. Our two countries share mutual priorities not just politically, but economically as well. Those mutual priorities include increasing foreign direct investment and increasing trade, investing in people, creating jobs, and making our societies more prosperous. The choices our two governments take on economic policy will have a direct impact on how far we can go in meeting these priorities. The U.S. Government has already taken steps demonstrating our commitment to increasing trade with Africa. The historic ten-year extension of AGOA signed into law by President Obama provides Nigeria duty-free access to the U.S. market for most goods. One of the best ways for Nigeria to be able to take full advantage of AGOA is to remain outwardly focused and ensure that it is an attractive destination for international companies and international capital.
Broadly speaking, countries posture themselves somewhere on the spectrum between a closed economy (think North Korea) or a wide open economy (think Singapore). Experience has taught us that the more open economies are, the more competitive they become, and the more closed they are, the more they are left behind. I am confident that Nigeria can compete more in the world. I hope that in considering how best to develop its potential, Nigeria will steer in a direction that opens more doors to the outside. Shutting doors to foreign competition, whether through import bans, prohibitive tariffs, or foreign exchange controls, will not make protected domestic firms more competitive. Consumer demand around the world is based on price, quality, and choice. Consumers, whether businesses or individuals, are right, not wrong, in wanting to get the best products in exchange for their hard-earned income. While tariffs on their face may be intended as a means to increase government revenues, when prohibitive or exorbitant, they produce little or no revenue except to those engaged in smuggling and corruption, and hurt the development of formal markets. As Nigeria considers which direction it wants to go, I encourage it to adopt more open trade and investment policies. Among other things, this will help develop more formal markets, which in turn will help set the wheels in motion of a virtual cycle that leads to more jobs and more investment. One of the key lessons from the recently concluded AGOA Forum in Gabon is that businesses are more likely to invest in countries with open and regionally integrated trade.
In addition, I believe Nigeria must focus on intellectual property protections if it wants to keep up with the global knowledge economy. Given the creativity and intellectual ability and accomplishments of Nigerians in literature, film, music, software development, clothing design, and many other areas, it is clear Nigeria has resources, but it will never be able to fully develop those resources unless they can be turned into bankable assets through effective IPR protections. Tomorrow I’ll be meeting with members of government agencies working in that area to see how we might cooperate toward that end. But IPR must be a priority of this government in order to be effective.
In short, we are encouraging the new administration to adopt policies that welcome foreign firms, protect their intellectual property, and allow firms the freedom to use their supply chains as they see fit. I’ll be engaging on these issues while in Abuja, including our concerns over the ICT local content guidelines.
In many ways, Nigeria is an economic giant. With 180 million citizens, a GDP that’s more than $500 billion, and oil production that’s approximately two million barrels per day, Nigeria has Africa’s largest population, its biggest economy, and is the continent’s biggest oil producer and exporter. In other words, it is a leader in many ways, and we believe that leadership should extend to trade and investment and IPR. Nigeria offers abundant natural resources and a low-cost labor pool, and enjoys mostly duty-free trade with other member countries of the Economic Community of West African States.
The potential is clearly enormous and, naturally, the U.S. government is committed to doing everything it can to support the new government’s economic reform plans; as well as it efforts to tackle corruption and reform the energy sector.
In our conversations with political leaders, we will continue to underscore those points. We will also make clear that your robust presence brings benefits in the other direction. Foreign direct investment—in turn—will help Nigeria’s economic recovery and its ability to realize the aspirations of its citizens.
Given the signals that President Buhari has sent out about fighting corruption and working for greater transparency in the energy sector, we feel that there are opportunities for American businesses to form public-private partnerships to support those outcomes. After all, a government cannot effectively fight and prevent corruption alone.
So we encourage U.S. businesses to consider partnering with the Nigerian Government and with organizations such as the Convention on Business Integrity, a Nigerian NGO, led by current Vice President Osinbajo and supported by Siemens and others, that works with public and private partners to combat corruption.
As Benjamin Franklin said: “It takes many good deeds to build a good reputation, and only one bad one to lose it.”
On energy issues, we are also working with the Nigerian government through Power Africa to sustain power sector privatization reforms. As we are telling our counterparts, the objective is to create a more conducive environment for investment in this sector so we can enhance power generation.
I’d like to close with a quote from Desmond Tutu. In a speech at the Nelson Mandela Foundation in Johannesburg, he said: “Don’t raise your voice, improve your argument.”
As President Obama and Secretary Kerry have made clear, Nigeria is our most important strategic partner in the region. Today, our relationship is defined not by what the United States can do for Nigeria, but by what we can do with Nigeria. We just have to find a language and a common purpose that helps us get the prosperity and economic growth that everyone wants.
So with that, I look forward to hearing your thoughts on the challenges for businesses in Nigeria and, more importantly, what we can do together to influence positive changes. By doing so, we can support Nigeria’s efforts to grow to its best potential as a provider of jobs for its people, a friend of outside investment, and a welcoming regional and a global leader.