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| Senate Saraki |
There is usually the belief that investors avoid Nigeria due to lack
of infrastructure. This has led government and many well meaning
Nigerians to always focus their thoughts on building infrastructure.
While it is true that infrastructure facilitate investment, it also aids
economic development. The greatest challenge facing the country in
terms of foreign direct investment is the obsolete nature of Nigerian
laws that do not conform to 21st Century economy.
Investors have long complained of the lack of sanctity of contract
and respect for property right in Nigeria. Nigeria instead of attempting
an overhaul of the legal and judicial system to make Nigeria
investment- friendly, they rather focus on what they have been made to
believe is the problem.
When the Nigerian telecommunication space was opened to private
sector investors, many were deceived by the report the World Bank gave
to them. But MTN, Econet as Airtel was called then, took the risk.
Despite the gloomy picture of lack of infrastructure, telecom
companies are making profit from their investment. It is the same story
with the oil companies and many others that have invested in Nigeria.
The Senate President, Dr. Bukola Saraki seems to have understood the
economic bottleneck the nation is facing and last week, promised the
business community that the Eighth Senate of the Federal Republic of
Nigeria will tackle the problem.
Delivering a speech titled: ‘Macroeconomic outlook for 2016 and legislative perspective’ at
Lagos Business School Breakfast Club end of the year dinner, Dr. Saraki
told the august gathering of key business operators in Nigeria that the
8th Senate is at an advanced stage of carrying out one of the most
far-reaching legislative reviews ever embarked upon by the legislature
in Nigeria with the Doing Business Development project which is
aimed at eliminating obsolete business regulatory laws that have
outlived their usefulness and in their place, provide adequate legal,
institutional and regulatory mechanisms to drive a new modern economy.
He said: “Prior to this, we have strategically utilised formal and
informal meetings with key stakeholders including the NBA, the SEC,
RMFAC, the ICPC, FIRS and many other relevant agencies of government and
critical industry leaders, with a view to using gathered information as
a critical tool to fashioning out what will make Nigeria a favourable
investment destination. For the 8th Senate, we can no longer accept the
placement of Nigeria at 169 of 189 countries on the global ranking of
business competitiveness.
Therefore, the task of modernising the Nigerian economy and providing
the regulatory environment for ease of doing business is for us a task
that must be done in order to set the stage for meaningful economic
growth. As operators, we need your partnership on this important
assignment to ensure that your concerns and views are adequately
captured.”
The question to ask Dr. Saraki is: Will the review be comprehensive
enough to include property right, land use act and sanctity of contract?
Will the National Assembly pass laws that will fasttrack the judicial
process of seeking redress on commercial and trade disputes? Globally,
investors are interested in places where return on their investments is
high. Nigeria certainly qualifies as investors have found out that they
reap higher benefit if they invest in Nigeria. The few that have done so
have found this to be true. Yet, Nigeria is not a haven to foreign
investors.
There must be reasons why they shy away from Nigeria. Many investors
out there who speak privately to Nigerians at investment fora are quick
to point out that in Nigeria, there is no sanctity of contract and
property rights are not clearly defined. Most foreign investors see this
as the most inhibiting factor that scares away would-be investors. They
are not worried about the lack of infrastructure as is always claimed
by those who explain away the Nigerian situation.
Shell, Mobil, Chevron, MTN, UACN and others know too well the
infrastructural deficiency in the country, yet they invested and are
reaping the benefits. The truth is that both local and foreign investors
are wary of investing in Nigeria because the state and its agents have
no respect for property rights and sanctity of contracts.
They are worried that if they invest in Nigeria, their investment can
be taken over by the state. The termination of Lekki Concession
agreement by Lagos State Government, the taking over of private banks by
the Sanusi-led CBN, the revocation of the concession granted to
Bi-courtney are examples of such impunity that scare investors away from
Nigeria.
Property rights, according to Professor Pat Utomi, constitutes a
major part of the constitutional arrangement that makes an economy
advance. Now, until this entity called Nigeria has a philosophical
understanding of what property rights means, Nigeria is not going to
make any major economic progress. To say the least, investors are scared
and skeptical about Nigeria because there is impunity and property
rights are not guaranteed.
Will the Saraki-led Senate give Nigeria legislations that will
resolve all of these? Nigeria will be a better place to do business if
the laws to be reviewed are carried out quickly and include the review
of the land use act and a well defined property rights is enshrined in
the country.
By Omoh Gabriel
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