Appointing a finance minister is pivotal to how attractive Nigeria becomes to investors

ALDERMAN ALAN YARROW the Lord Mayor of the City of London, in this exclusive interview with BusinessDay analyst PATRICK ATUANYA speaks on how U.K companies can assist Nigeria in overcoming its infrastructure deficit, his message to Abuja and his thoughts on the historical relationship between Nigeria and the U.K

Welcome to Nigeria once again could you please share to our readers the purpose of your trip and what you intend to achieve?

The purpose of my visit to Nigeria actually is to see how the UK can support Nigeria in development.

The fact is that we have got a lot of experience in PPPs (Public Private Partnerships), where we have actually evolved a process to help countries who need to spend a lot of money for infrastructure, by looking at some of the cash flows that they can earn from toll roads, ports or whatever infrastructure project it might be.

It means that the average government naira can only go so far when it comes to financing infrastructure.

We find very clearly in our minds that if you look at what happened after the last recession in the West, those countries with a developed capital market came out much quicker, because they didn’t rely on banking finance.

So we want to support and help Nigeria develop its capital markets which is quite young.

How do you think the U.K can assist Nigeria in developing its financial markets and the regulatory side of the equation?

We can help in all sorts of ways.

I have just come out of a Nigerian capital markets meeting where the London Stock Exchange (LSE) will be working very closely with Nigeria on a number of issues that has been very constructive and well thought through presentations that I will describe as the right way of doing things, which is through the private sector.

If you look to see in the next 40 years, there will be more spent on infrastructure than in the last 100 years that means there is going to be a huge competition for international dollars, pounds, Euro to fund these projects.

So Nigeria has to track that because there is a huge deficit in infrastructure in the country.

If you look again at priororities of how things work, one that is most important is rule of law and the judiciary and the fact that people abide by the rules through enforcement.

You saw the recent alleged arrest in London of a former top Nigerian government person.

That is an incredibly important statement to the world.

The new government of Buhari’s approach to anti – corruption is very important; however that is just one area.

We have got to look at transport, power, the skills gap, and these are all things that the Nigerian government cannot do on its own.

The government has to release these to the private sector, which will be much more productive and works better and quickly.

I am actually extremely optimistic and if you look at the FDI coming in its much longer term 15 years to 25 year view of FDI, and it’s looking at the demographics.

The big companies today in the U.K have to be very careful where they operate, because you have the bribery act, they are quite shy of countries where they don’t feel sure of the operating environment.

That is why it is quite important to clean up corruption and attract global money.

Once that is done, sustainability is the feature of today’s companies.

There is nothing more sustainable than helping the farmer in Nigeria with the right fertilizer, modern farming techniques, so they can start to rebuild the agriculture of Nigeria.

But that can’t happen if you don’t have the roads to bring goods to market, so it also goes hand in hand with improvement in infrastructure.

Speaking about UK companies do you think they are missing out of the opportunities here by looking from far, and not really understanding Nigeria or hear some of the negative stories about the country, as opposed to the Chinese or American companies?

I think that Chinese companies are very different from American or Western companies.

They (the Chinese) obviously have a different approach.

When we (UK) get involved with a country we get involved with the grassroots. We believe in stimulating the country itself, rather than coming in and building and then going out.

You can see that with the American company General Electric 9GE), which has signed a memorandum of understanding with the Nigerian government.

So stimulating domestic manufacturing is important.

There is a worry about the foreign exchange and that is because a lot of things are being imported.

I understand you went to the Nigerian capital Abuja, and met some political leaders. What message did you pass along to them?

We let them know that we in the U.K are here to support Nigeria in the next stage of development.

However I have to say I am slightly disappointed with the attitude regarding the foreign exchange market.

I came back with a sense that they didn’t quite understand what is at stake.

The private sector does understand, but I do wonder sometimes whether the government officials understand economic management.

That is why the appointment of a new finance minister is critically important.

It will be pivotal to how attractive Nigeria becomes to overseas investors.

At the moment they have been trying short term measures to solve long term problems.

It needs a deep seated long term, structural change however to solve the problem.

There is a sense that the economic ties between the UK and Nigeria which was a former colony are not that strong or as strong as it should be. Why do you think that is, and what more can be done to strengthen those ties?

Well you say that but however the ligua Franca is English and the legal system is English, those two things are not bad things.

We have got thousands of Nigerian students in the UK in universities. The intellectual academic qualification coming out of the U.K is the best in the world.

We want to stimulate and help Nigeria to come to that process.

I think part of the function of that historical relationship is almost like where Nigeria wants to prove it can do its own thing.

I think there is a lot that Nigeria has gained from the relationship which can be built on.

If you look to see the importance of the city of London to global financial markets: I have done 24 countries in the last nine months, and one thing that comes out of it is how the English systems rule of law makes people comfortable to trade in London.

We do 44 percent of the foreign exchange market.

Investors want to know that if something goes wrong there is a very clear speedy objective judicial system to adjudicate that.

This is something that Nigeria needs to embrace this and our job in the U.K is to help Nigeria to get to a position that investors are more comfortable to invest.

The demographics are wonderful, the entrepreneurship, the energy is already there.