‘GE is investing in Nigeria for the long haul’

Lazarus Angbazo, CEO of GE Nigeria speaks to select journalists on why the company is betting on Nigeria with multibillion dollar investments across different sectors. ISAAC ANYAOGU was there for BusinessDay and reports excerpts of the interview.

Looking through your investment profile in Nigeria, you concentrate on critical areas in Nigeria, what informs your investment decision?

Commercially there is a motivation, this is the biggest country in the continent of Africa, the fifth biggest country in the world by population, how do you operate anywhere in the world without developing a real strategy for Nigeria.

People talk about the corruption and insecurity and what not in the country, we are not blind to these things, but we believe in the long term prospects of the country. We believe that the status quo is going to get better; we believe that the outlook of the country is going to improve. If we believe that, then our commercial strategy has to be aligned with the aspirations of the country.

We want to be a development partner with Nigeria and that is really why it took us a long time to articulate a reason on why invest in Nigeria. We say to the leadership of the country that we are really willing to work with you on your toughest issues if you are willing to work with us. Some of these things we cannot do it by ourselves, but we are a global company with tremendous global expertise and history of experience and track record and we aggregate this in our work.

Nigeria’s challenges presents so much opportunity to make a difference and if we do it right, the country will be better off and GE will be better off for it too.

You have a number of Memorandum of Understanding with the Federal Government across different sectors, tell us more about these?

The MoUs cascades from the country to company agreement which was signed as earlier as the regime of former president Olusegun Obasanjo. When we signed them we had amazing aspirations for the country and I can tell you the sustainability of this country to company agreement over four administrations tells me we really seized the moment in defining what a public corporate partnership could look like.

It was a joint commitment to broadly develop solutions that meet the critical needs of the country as articulated by the country’s leadership. Although the country has had different governments, but the needs of the country has remained the same and that is why we have stayed the course.

The country to company investments was about infrastructure, power health care, oil and gas and transportation and that includes both rail and aviation. GE has invested so much in making sure that the full portfolio of GE is represented in Nigeria. No other country in Africa has the completeness of the GE portfolio as Nigeria does.

Something we are very proud of as a company is that when everyone was de-investing, we doubled down on our commitment in terms of the local supply chain with our Calabar investment.

Can you put a figure on the volume of GE investments in Nigeria?

Let me tell why I can’t give you a number. Some of our investments are multi-year, which means we have to execute them over multiple years and over time the cost go up and come down.

We had a project we set out with a commitment of $250 million of Capex, shortly we announced companion investments in terms of supply chain, local sourcing that will bring that up to a billion dollars. That investment was to give us capability to execute on some of the projects the country wanted to do but you and I know what has happened to the oil and gas sector globally. Projects were cancelled all over the world but we have stayed the course.

We have scaled down cost but we have essentially stayed the course. So I don’t want to talk about numbers prematurely. Some of the projects are not just multiyear but multi projects investments so I think the real issue is a sustainable investment.

Now let’s talk about your recent foray into railways, what sort of work is required?

The amount of proprietary work that needs to happen for an effective rail system capable of moving freight on a big scale to materialise have been humongous.

You have to remember that there hasn’t been a serious investment in the sector for a long time. People need to have a baseline understanding of the amount of work that has to be done to restore the rail line so as to make it an important part of Nigeria’s economic development. So an amazing amount of work is underway and we are far from finishing…

We observed that you seem too concentrated on moving locomotive trains back to the country, with the level of modern rail technology, why are you concentrating on locomotives?

So 90 percent of the track network in Nigeria is narrow gauge and the concession is about the narrow gauge and it is about how to operationalise what we have today. We’ve got about 175 million metric tonnes of freight that goes on the road and less than 0.01 percent of track.

We believe that part of the economic revival of the country is to operationalise the narrow gauge for the purpose of moving freight off the road and getting it on the track. This will be a stimulant for economic growth whether up north or down south in terms of agricultural commercialisation.

This is the focus of the concession which is why we invest in the network, to operationalise it and bring real commercial operation into rail system. So the intent is making commercially viable and sustainable freight operations.

Now we cannot ignore passenger either. Passenger activities is going to be part of it but what makes a rail system sustainable and viable anywhere in the world is the fright. That is what pays for the passenger services.

We said government should continue to develop the standard gauge, the rest of Africa has moved to the narrow gauge, and around the world as well. We believe government should continue to invest in the standard gauge so that we have option.

We need electricity before we start talking about high-speed trains and the locomotives that we are going to focus on are freight locomotives. They use them for passengers here but it’s a complete waste of resources, because the locomotive that GE makes is equivalent to 125 trailers.

So one locomotive should be able to take out of the road, one hundred and twenty-five, and 40 feet container trailers. So the day you start seeing the locomotives running up and down, can you imagine what driving on our roads would be like? That is where I get my inspiration from.

ISAAC ANYAOGU