“Nigeria is in a fairly good position on economic growth”

by Editor

November 20, 2013 | 12:56 pm
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Ambassador (Dr) ROBIN RENEE SANDERS is the CEO/founder FEEEDS Advocacy Initiative and former U.S. Ambassador to Nigeria and EOWAS (2007-2010) as well as Republic of Congo (2002-2005). In this interview with CHARLES IKE-OKOH and PATRICK ATUANYA, Dr Sanders, who is also Board Chairperson of Songhai Integrative Farms Systems shared her thoughts on global, Africa and Nigeria’s current economic situation as well as her advocacy initiative.


Q:What brought you back to Nigeria?

I worked with bank of industry and western union on helping with small and medium sized enterprises and last year we did a pilot project bringing SMEs and the banks together and it was very successful and so we thought we would do it again this year.
One of the main challenges SMEs complain about is that they don’t have access to capital, they don’t have access to banks and we thought that if we designed this programme to address that main issue that we could play a role in moving growth forward.
My advocacy initiative that I created when I decided to leave government really wanted to focus on areas that will help with economic growth and development and I truly believe that SMEs provide a bedrock of development and so we created this concept of finding a way to bridge this gap that there is between the SMEs and banks and they need to have a forum where they can really interact and banks can get an idea of what is out there, how to design their projects more in tune with SMEs and their needs, but also have an opportunity to meet some bankable SMEs that are doing some really unique things.
On the SME side there was a desire to look at working with them to get into the banks front doors and present business proposals and plans.
Countries like Spain, Greece, Great Britain and other Euro zone economies seem to be in a recovery mode.

Is this another false dawn or are we likely to see a prolonged upswing?
I think we are going to thread water for a little while economically. You can see that in the US where we had a little bit of uptick before the shutdown. The Government shutdown certainly set us back, I guess we will see new growth numbers before the end of the year, but reports are that the 17 days of Government shutdown cut our growth rates almost in half.
It is hard to tell but for the US it certainly set us back. I think what you see in Spain and other parts of Europe is this kind of threading water, I don’t think that growth estimates will be greater than the projections that the IMF and the World Bank have already outlined.
Even for Africa you see that they have pulled back a little bit on their estimates for growth rates. If you look at 2012, the estimated growth rates collectively for the region was near the high 6 percent to 7 percent, now they have rolled it back to the middle 5 percent range.
I think that right now the global economy is threading water and we probably have a couple more years of incremental recovery before we even get back to the 2007/2008 levels.

What would be the implication of all of these for Nigeria?

Nigeria I think is unique in many ways; it survived the economic crises probably better than a lot of other countries. The economic growth rate is still projected to be quite high, the inflation levels are fairly reasonable and the debt to GDP is still quite positive.
I think Nigeria has to determine how other things affect growth. The security issues in the North (how they affect growth), I think you are getting a lot of interest from China also.
One of the things I worked a lot on when I was here was getting US businesses to be interested in Nigeria, and it is really heartening for me to see that that is now taking place even though it has taken quite a few years for that to happen.
Nigeria is in a fairly good position on economic growth, but I think the real challenge is getting that economic growth to trickle down and benefit all of the people. So it is really about job creation, growing the middle class, providing social security, shared wealth and shared benefits for all, down the chain.
That also means education and health services, so that everyone feels a part of this dynamism that is going on in your country.

We have a very young, increasingly buoyant, and dynamic consumer base in Nigeria. What do you see this resulting to in the future?

That directly links to the middle class, and any country that wants to move forward has to have a growing middle class. So things like SME development, supporting the middle class is very important, because if you don’t do those things you cannot have continued positive growth and development. Those are universal norms that any country will have to face including Nigeria.Yes you are having more and more people moving into the middle class, but are the services there for them. You still need to get more people into the middle class; more people with discretionary and disposable income and that truly will be a mark of the way your future is going to unfold.
I think that if you look at statistics for Sub Saharan Africa (SSA), overall there are a lot of programs on financial inclusion and there are 331 million people in SSA in the middle class and when you look at the projected population for the region of 1.5 – 2 billion people, it is not a lot of people in the middle class. So you need to more than quadruple that number to have a robust middle class that can support SMEs, create jobs and provide an enabling environment for entrepreneurs to thrive.
My view is if people do not feel like they are connected someway to the global system, then you are not going to have the shared wealth and job creation.
Even if you are employing 1 – 3 people as an SME, you are giving an opportunity for someone to change their quality of life, their families’ quality of life and for the next generation to have a better enabling environment.
All of these things you talk about feeds right into your developmental initiative. Can you talk us through some of the major landmarks of your initiative
I have spent a lot of my working years in the developing world and working on developmental and policy issues on behalf of my Government. There were several developmental issues I was passionate about and I incorporated them into my work as an ambassador when I was here.
My developmental initiative is called FEEEDS, which encompasses all of the things which are really important to me.
The F is food security because Agriculture and food security both are really important, the three E’s stand for Education, which is broadly defined to include training of entrepreneurs, SMEs, formal educational training and anything that moves you forward intellectually. The second E stands for Environment & Energy, because I think that not enough attention is paid to those two things and they are very much linked.
The third E is Economics, because you have got to be able to have the right regulatory framework on the economics side in order for businesses to survive, and the D is for Development, and the S is Self help.
The Africa initiative focuses on all of those issues. So currently the chairman of the board of Songhai farms, which is a new model recognized by the UN, is working with us and we are focusing on linking the ecosystems of Agriculture land and resource management and the environment and renewable all together.
We have about 4 sites here in Nigeria, the Headquarters is in Benin republic, but I knew them way before I came here and I wanted to work with them to expand what they were already doing in Nigeria.
I also do a lot on development including the SME training program, as well as human rights issues, because I do sit on the global board of human rights watch.
You talk about Economics in your FEEEDS, as one of the E’s. Has the US Federal Reserve lost control of monetary policy and if they have, do they have a responsibility to developing countries like Nigeria for the negative fallout of QE to infinity, especially if and when the taper comes? I think the Fed has been quite responsible and quite effective actually in trying to manage a number of things. The markets sometimes react very heavily to the Fed and sometimes surprisingly do not.
I think that Nigeria is standing on its own, yes you are linked to the global economy but I think you have a really robust economic team here, being led by your co-coordinating minister for the economy, and they know what to do and I think they are doing it.
Fed policy is really focused on the US economy, and it has residual effect of course in the global economy, but each country then is responsible for its own macro- economic management.

Are US companies missing out on the Nigerian growth story?

They are not missing out but they are behind the curve. We tried between 2008 and 2010 to get a lot of US companies here outside of the oil sector, and it was hard because there was always this conception that the environment was not conducive, that the transparency and corruption level was too high for US companies to be able to come in.
At that time the restive area of Nigeria was in the Niger Delta, now it has switched of course. All of those things contributed to people being very cautious on the US side.
We did do a lot to lay the groundwork to where a lot of American companies are coming in now, but they are behind because they came in late.
You have China, India and a whole host of other countries in here really doing FDI (Foreign Direct Investment), really laying the groundwork on infrastructure and they can certainly operate in a way that American companies cannot in most cases, because we have very strong regulations that we all follow.
So countries without those legal restrictions they can do things that American companies are not allowed to do, and I am not advocating that we change that, it is the right thing to do, because in the long term you want a business environment that is transparent and corruption free and that allows a level playing field for all.
So we are behind but we are threading really fast tracks to catch up.
There seems to be from the perspective of a lot of Nigerians an uneasy relationship between the current US administration of president Obama and Nigeria. The president has skipped Nigeria a couple of times on his African tours, but on the other hand the Americans have signaled that Nigeria is a very important country on the African continent.

How do we reset this relationship?

I don’t think the relationship needs to be reset. You have a bi-national commission that meets regularly that has several committees in it. It started when I was here.
There are very few countries in the world today where we have that sustained on-going formal ties like we have with Nigeria. When asked about President Obama skipping Nigeria on his foreign trips I respond by saying what difference does that make strategically?
If you are saying that indeed it would be something nice to happen if president Obama did visit, but how does that change where Nigeria is headed, how does that change the economic growth and development of your country, how does that change the things you need to do, what changes for Nigeria if that doesn’t happen, nothing.
You still need to do the things you are doing, and you still need to correct the things that need to be addressed.
The two presidents had a very robust meeting in the US in September in New York, and there were very few bilateral meetings that my president had, so that was a key indicator of just how important Nigeria is.
In the end it doesn’t change the relationship between both countries, which is very strong and dynamic The bi-national commission affords us the ability to work on a range of issues with Nigeria, from trade and investment to security and Governance to economic development and Agriculture.
Those are the pillars and president Obama coming here for one, two, three, four, five hours doesn’t change the strength and the robustness of the relationship.

Interesting acronym BRICS, are we ever going to get a BRINCS, with the N standing for Nigeria?

I have been advocating since 2010 that the BRICS change to BRICA with the A representing Africa. The reason is because at the time seven of the fastest growing economies in the world were in Africa, but they weren’t getting that headline mention.
So my advocacy was to include any country in SSA that was growing fast. You still have 6 of the fastest growing economies in SSA, and South Africa is not at the top of that growth list.

What is your take on our power sector reforms?

I think the power sector reform has been extremely important. The power Africa reform that came out of president Obama’s Africa trip has pledges of $7 billion to power Africa, and business leaders like Tony Elumelu have already pledged to add $2.5 billion to that, so power is critical for Nigeria to really move forward.
You’ve got to have sustained power for businesses, for people to manage their daily lives. Addressing the power sector and privatising the power sector is really important.
I still think it has a long way to go to get there in terms of actual ability to address the power issues, but at least the initial steps are being taken and privatisation is very critical to addressing some of those power issues.
What I have seen so far is all positive to me because even though it may take a little longer than people want, as long as the right things are being done, and there is transparency in the process, the key now is the future timeline not only for this stage but for the NIPP phase coming later.

What does this tell the West about the opportunities in Nigeria?

I think you can see that by the number of business people that are coming to Nigeria from everywhere and especially the increase on the US side.
It is a realisation that SSA is the place to be and is the next frontier for high return on investment and for just about any sector as a business where you want to have growth.
Even on the Agriculture side I always tell people that there are only two areas of the world where you have the most arable land left, one is SSA and one is in Latin America.
The other thing is where do we have the most water resources? They are in Latin America and Africa. So those are the growth areas together with population growth.
So you are going to have your future consumers here in terms of resources, whether they are land or water resources, extractive industry resources, or the most deposits of proven commodity reserves, and Nigeria is very important to all those things.

What lessons learnt from the USA in terms of SME access to funding that can be applied to Nigeria?

I think that the same struggles that SMEs have here we have in the US. When you talk to SMEs in the US their challenges are still access to credit, whether it is debt, equity, or investment.
I think the challenges for SMEs don’t change depending on where you are, they may be a little harder in terms of getting your foot in the door of the bank here than over in the USA, but the same issues are still there.
The issues of finding access to credit, getting people to have confidence in your business, in order to invest in it as an equity investor still remain. I don’t think the issues change, maybe the magnitude does.
You have an insight on Western oil companies that mostly play in Nigeria and you also have some relationship with Nigerian politicians.

What would you advice as the best way to go about passing the PIB?

The PIB goes way back to when I was here and I must have seen at least 15 drafts of the PIB. It has to be legislation where all the stakeholders agree. It is not going to be successful unless you have a document where all the stakeholders agree in terms of the content.
That means the executive side of the government, the legislative branch and your oil company partners. It will also include the role that civil society would play in overseeing or monitoring the element of the PIB or comprehensive bill that is passed.
Transparency International as well as NEITI here, I think they all have a role in making sure that whatever is passed that it gets monitored so it is being implemented in the right way.
However I don’t think it is going to be useful to have any kind of legislation where all of the stakeholders don’t agree and they haven’t gotten there yet.
I can even use the US as a good example here. Do you know how many US presidents have tried to get an omnibus health care plan passed in the United States, with all the stakeholders that you have in the US?
It certainly predates Clinton and then you saw the first efforts of President Clinton in his first year trying to get that comprehensive health care passed but he couldn’t do it and look at how difficult this has been for Obama care.
When you have these major sector changing legislative bills, It can take many years because all of the stakeholders have to feel comfortable that this omnibus bill that comes out serves everyone well.
For us as taxpayers and observers we find it frustrating to watch, but in terms of real life legislative process, for something that is that over-arching and comprehensive, it is not really that unusual.
Look also at immigration reform in the USA, how long it is has been and we may not even get there in President Obama’s second No, Nigeria will not break up. Look at the USA we are not going to break up either and we have really strident groups now in the US.
The tea party and other extremely right wing conservative or extremely liberal groups who are so far apart, and which is why congress is in this state of standstill right now.
The thing I have always admired about Nigeria is that despite their differences amongst each other, your commitment to being Nigerian is so strong.
Your national pride to me is your biggest asset and I cannot imagine that in the end, particularly since you have gone through a painful civil war in the late 1960s that you would ever want to do that to your country again.
So I think you will continue to have those disagreements, but democracies are messy. They are not neat little packaged things, because everybody has an opportunity to express their ideas.
You have now a history of democracy, and all democracies are not perfect, ours is not perfect.
My favorite phrase in our system is ‘driving to be a more perfect union’, and I think that every country has to do that, because it shows that you are continuing to mature and adjust to the social impacts going on in your nation, and I don’t see a scenario of Nigeria breaking up happening.
What I do worry about though is how you are managing your security situation in the North, and I think that a broader discussion about how that is unfolding needs to happen.
I think you have to look at the bigger picture. What is the long term strategy of dealing with some of the issues in the North and not a short term fix?
If I have to put my strategic thinking cap on and my strategic academic policy cap on, I just said that last week to your future leaders at the Nigerian Defense College that you have to have long term strategic thinking and planning, because if you are in it for the short term, it is not going to happen.

What are some of your other initiatives in Nigeria?

We have a 17 million housing deficit here in Nigeria, but I really want to focus on affordable housing and so I am working with a couple of the federal ministries on affordable housing projects using technology so that the houses can be built in rapid succession. We have a small footprint factory here so it is all foreign direct investment (FDI) that was why I was in Abuja. We had a lot of positive discussions in Abuja on the affordable housing project and so we are in good shape with that working with a couple of ministries and the federal mortgage bank of Nigeria.
We are looking at two and three bedroom homes that are affordable, because I really want to work on something that is for changing people’s lives. As per location for the houses we are looking at three states right now including the FCT.

You are working on a new book. Tell us about it

I have a book coming out in January or early 2014, and it is not about foreign policy or anything you would think. This book is about Nigeria, I am making the case that Africa’s science and symbol systems are awesome information systems and that they are endangered and we all need to be paying attention to them.
I use the case study of one Nigerian symbol system called ‘uli’, which is an Igbo system, and I profiled these eight women that are trying to preserve the endangered system, because when loose that you lose the cultural meaning of those systems.
So I am making the argument that these are information systems, and they tell the story of cultural life of a particular ethnic group in these case I am talking about these villages in South Eastern Nigeria that use that system.
The book is called ‘the legendary uli women of Nigeria’, and it profiles these women that are in their seventies and eighties and how this system was used in their lives growing up and taught to them by their mothers and I am making the argument to the academic community that we need to create an academic discipline for signs and symbols systems worldwide so that they do not become endangered.

by Editor

November 20, 2013 | 12:56 pm
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