*Seeks foothold in local manufacturing
After decades of ineffectiveness and dwindling fortunes under government control, Nigeria’s rail system is set for a new lease of life, as General Electric (GE), one of the world’s leading industrial giants, says it will invest in the country’s rail and energy sectors.
As GE moves in this direction, the prospects are that businesses and individuals in Nigeria will have access to much cheaper, less hazardous and more eco-friendly transportation around the country, which would have a positive impact on their bottom lines, while GE would have gained a significant foothold in what is easily Africa’s largest market, by population. Significantly also, hundreds of job will be created in Nigeria’s rail industry.
General Electric brims with cash and optimism as it outlined plans to transform its hitherto largely trading presence in Nigeria into a giant business platform that promotes local manufacturing here and then selling into West Africa and the rest of sub-Saharan Africa.
Jeffery Immelt, GE’s global CEO, told a select gathering of leading CEOs in Lagos at breakfast yesterday that the expected investments will be made in “a matter of months.”
BusinessDay later learnt that the two investments will involve one in the rail components and parts and another in setting up a fairly large modern service shop in Nigeria to maintain the growing array of gas powered turbines for Nigeria’s emerging electricity sector.
“We have chosen to invest in local manufacturing, hire local teams, build a base in Nigeria that allows us to service this market and the whole of West Africa and we are good to go,” added Immelt, who heads President Barrack Obama’s job creation council in the US.
He outlined the opportunities that GE’s investment in Nigeria can bring beyond merely creating jobs. According to him, “We do not need partners for cash, as we have the money. We need partners who know the market and who can help create access to the African market.”
Immelt, who has worked at GE since 1982 and whose father also worked for decades at the company, was quite pointed in his suggestions for job creation in Nigeria, saying that Nigeria will not be successful until she builds her infrastructure.
He drew a lesson from China, which is that when infrastructure is in place, job follows just as night follows day.
He said: “Another lesson is that China has five-year development plans and the interesting thing is that they actually do them. So build roads, power, ports, railway and jobs and competitiveness will follow.”
“Get people to be able to install turbines, give the people opportunity to become welders and there will be more Nigerians tomorrow who are holding jobs,” he further explained.
Immelt also called on leaders of the private sector in Nigeria to be vocal and forceful in demanding for better governance and pressing the government to become more transparent.
He charged his audience to “be an active and consistent voice for change”, adding that GE does not really get bothered about market volatility.
Immelt has weathered many storms since taking over in 2001 when GE’s share price was at a hefty $64 a unit and today, when the price has fallen to $16.
Yesterday, he asked Nigeria to dream big by benchmarking Brazil and then aiming to replicate what that country has done, especially given the potential size of the Nigerian market.
In the intervening period, Immelt has diversified the company and its revenue base and is pulling in as much as 60 percent of his company’s revenues from outside the United States. Africa accounts for about $2 billion of that annually.
It is Immelt’s second visit to Nigeria, but for a man with the entire globe as his focus, he was quick to form impressions about Nigeria and Lagos in particular.
He said of the crying need is for investment in Nigeria’s rail system: “There are too many trucks on your roads and at night you cannot find their tail lights.”
Not one for bogus targets, Immelt, who has been schooled in asset and resource allocation in the most efficient environment, set for Nigeria a goal of adding 10,000mw of power by the year 2020. The government has set for itself a rather ambitious goal of 40,000mw.
Global focus is shifting to Nigeria and momentum appears to be building but after breakfast yesterday, some of the participating CEOs were asking whether Nigeria will use or lose this momentum.