Foreign investment attraction: How friendly is Nigeria’s business climate?

If otherwise, hear what this survey revealed? "Privatisation programme introduced at the beginning of former President Obasanjo's two terms in office are yet to yield results. Electricity supply, running water, sewage services and road, and rail services have not improved. Nigeria is still not able to equip its oil refineries to enable her produce her own petroleum products for domestic consumption."

Transportation infrastructure, according to the Commonwealth Business Council is still poor.

What all these imply is that Nigeria's infrastructure is not business friendly. To this, observers have asked how long would we continue to discourage foreigners from the shores of our land, through our poor business environment?

Speaking on the deplorable state of the nation’s infrastrusture, minister of finance, Shamsuddeen Usman had noted that: "Despite budgetary reforms, government resources are still inadequate for necessary infrastructural investment. Oil revenues and savings are clearly inadequate."

Usman at a presentation to the Economic Associates in Lagos at the Economic Outlook 2008 also stated that Nigeria's infrastructure investment requirements over the next six years is estimated at: Power ($18-20 billion), railways $8-17 billion), roads ($14 billion), Oil & Gas ($60 billion). "This infrastructure investment is critical to achieving the 13-percent plus annual growth targeted."

And as it reiterating the mind of Nigerians, the one pertinent question is, how can Nigeria start to quantify the importance of developed infrastructure with reference to what is obtainable in developed countries. The importance of developed infrastructure in Nigeria goes beyond encouraging foreign investors and to a larger extent in making life meaningful for the citizens whose country is rated among the oil giants in the world.

To this end, the country’s economic watch experts have highlighted key actions points to attract investment and provide a favourable environment for business to include: investing more in infrastructure and utilities, specifically electricity, water and roads. Another point is the implemention of an education strategy to produce graduates for specific industry sectors and a programme to upgrade skills. Others include; the provision of more business friendly tax policies which are applicable at both state and local levels and addressing environmental protection and implementing punitive measures as a deterrent.

In as much as the "Doing Business 2008" for instance recognised that Nigeria is undergoing reforms, the report noted that one of the major reasons for Nigeria’s low ranking is the low ability to enforce contracts and protect investor.

On enforcement of contracts, it became obvious how billions of naira worth of contracts for infrastructure were either abandoned completely or half completed. Roads projects, power projects (councils, state, federal), water projects and others are all evidences we have, to judge the misappropriation of infrastructural development funds.

This therefore, experts have observer go a long way to explain why they disagree with Shamsuddeen's statement that government’s resources are still inadequate for necessary infrastructural investment. Rather they insist that we are faced with the problem of embezzlement of project funds, liaising with contractors to half-complete or even abandon awarded projects.

As we look forward to budget implementation and infrastructural development, this is the time they maintain to recognise the roles our government should play through the Economic and Financial Crimes Commission (EFCC), the Due Process Office, and Independent Corrupt Practices and other related offences Commission (ICPC) more especially, infrastructural projects and contracts that are awarded.

Nigeria has Africa's largest population of 140million. The country depends on oil for foreign currency and government revenue due to the inability of non-oil sector investors to grow their businesses and products to compete at the international level.

One of the major causes of this retarded growth in this sector is poor infrastructure. They readily point at Small and Medium Enterprises (SMEs), that are constantly frustrated by the state of our infrastructure.

According to the CBC 'Business Environment Survey 2007', former president Obasanjo government made great strides in improving business confidence through its determination to reduce corruption and by privatising some infrastructure. "President Yar'Adua has stated his intentions to continue those reforms and turn Nigeria into Africa's financial hub.

The result of CBCs Survey shows that Nigeria is a country which is benefiting from an improved business environment.

"Seven indictors in the survey were rated as improved compared to 2005 survey. All improved sectors except one are business enablers. This reinforces the authorities' commitment to improve the business environment, which has been acknowledged by businesses. Respondents indicated that there is greater awareness of the importance of corporate governance; that there is a lot of support on business regulation from the Nigeria Investment Promotion Commission (NIPC) and small businesses are beginning to thrive. Areas of weaknesses identified by respondents were: effective justice, efficient administration, infrastructure, environmental protection and consistent policies."