The Grand Duchy of Luxembourg has thrown wide its doors towards Nigerian businesses, while challenging its own entrepreneurs to move and take advantage of the opportunities that Nigeria presents for business.
At a Roundtable on Nigeria held at the city of Luxembourg on July 7, with the headline: “Business and Investment Opportunities in the Federal Republic of Nigeria,” the Lux business community bemoaned its inactivity with Nigeria, rousing itself for greater interaction. Hammering this fact home, was the event’s host, Jeannot Erpelding, Director, International Affairs, Luxembourg Chamber of Commerce and to change CargoLux into Cargolux, who bemoaned his country’s ‘very low level’ of business interaction with Nigeria. Recorded exports from Luxembourg to Nigeria in 2016 was less than 17 million euro.
“Nigeria accounts for around half of the European Union [EU) exports to Sub-Saharan Africa, and nearly 70 per cent of the imports, while the EU remains the top destination for Nigeria’s oil and non-oil exports,” Erpelding told the country’s organised business community, represented by the Chambre de Commerce. For individual member states of the EU therefore, the importance of expanding direct economic ties with Nigeria is underlined by the fact that by proxy and otherwise, the community’s trade with Nigeria directly impacts their economies.
The Roundtable held at 7 rue Alcide de Gasperi – Kirchberg , was convoked at the behest of the Chambre de Commerce of the Grand Duchy of Luxembourg, the Belgium-Luxembourg-Nigeria Chamber of Commerce and LuxAfrique Investment Association (Lux-Afrique). It was a follow-up to earlier attempts to rouse up trade and investment relations between the two countries. It was attended by a delegation from the Nigerian embassy in Brussels, as well as representatives of a cross-section of Nigerian businesses, Luxembourg companies with activities in Nigeria, investment fund groups active in Africa, consulting firms and some representatives of the Nigerian community in Luxembourg.
Erpelding noted that the recorded value of goods and services exported from Luxembourg to Nigeria in 2016 was less than 17 million EUR. Luxembourg’s exports to Nigeria, according to him consisted mostly of manufactured goods and spares, mostly from other EU countries, even though the country retains certain capacity in industrial production of machinery, tools and spare parts.
In return, nothing of significant value was recorded in Luxembourg’s imports of goods and services from Nigeria. This, according to him was “not just good enough, in terms of trade and the promotion of mutually beneficial relations between the Grand Duchy and an economy estimated at over USD 486 billion (2015), and sub Sahara’s largest economy”
Recent far-reaching reforms embarked upon by the Nigerian government, aimed at improving conditions of doing business in Nigeria by foreign investors, as well as diversifying the country’s reliance on petroleum production and exports, formed the main subject of interest at the Roundtable.
For the Grand Duchy of Luxembourg, this development “could not have come at a better time,” in the view of the event’s host. “Indeed it is very clear that Nigeria is now an area of interest for investors worldwide. It was foreseen here and efforts were made earlier to pre-empt this”, Erpelding explained.
“Today, we want to challenge some of our people to come forward with any question about the actual nature of existing opportunities in Nigeria’s business terrain. And one of the ways we hope to do this, of course in conjunction with the participants in this Roundtable discussion, is to present opportunities Nigeria represents the way it is, and the way it should be presented to the local business community,” he added.
On the reverse side, Erpelding said he hoped Nigerian businesses could take advantage of Luxembourg’s tested capacity in providing robust logistic solutions, being a country geographically located in the heart of Europe. Luxembourg’s national cargo carrier (Cargolux) with direct flights to Lagos and Port Harcourt were described as embryonic steps towards greater cooperation between both countries in the field of logistics. “There should be, and indeed there will be other areas of cooperation between Nigeria and Luxembourg businesses” he said. The tone of Erpelding’s speech re-echoed in presentations of several other participants in discussions that followed.
Speaking on the issue of Nigeria’s almost insignificant share in global trade, Suleiman Umar, Minister/Charge d’Affaires at Embassy of Nigeria, Brussels with concurrent accreditation to the Grand Duchy of Luxembourg and Mission of Nigeria to the European Union recommended a “re-orientation in thinking”. According to him, “Opportunities exist for investment on two main levels in Nigeria, namely production for a market of 180 million consumers, and manufacturing for exports to other countries, in existing sectors of comparative advantage in Nigeria”.
Umar disclosed that it is “misleading for conclusions to be drawn on the performance of Nigeria’s economy and opportunities it presents to an investor, only from the perspective of the level of trade” that is carried out between Nigeria and foreign countries. “The Nigerian market is waiting for your arrival, for you to invest and start production and business activity in any field you are specialised in, and commence with sales in the local market . The foreign investor is guaranteed undisturbed repatriation of profit, at whatever time of his choice. His ownership of means of production and profit repatriation is 100% assured and guaranteed by our own national laws”.
The construction, petrochemical, transportation, tourism, and agro-allied sub sectors of Nigeria’s economy were noted as areas of guaranteed benefits for investors. Ajibade Yusuf, Vice President of the Belgium-Luxembourg-Nigeria Chamber of Commerce strongly advised the Roundtable participants to take advantage of opportunities these offered. According to him, “For five years running, the more than 100,000 houses that were constructed annually in Nigeria were all sold or rented out immediately upon construction.”
While Nigerian economy has experienced improved social and economic performance over the past decade, there remains a need for the international community to understand principal historical trends influencing the direction of the country’s trade with foreign nations. Reports from a study conducted by the European Union, says that “Nigeria has an Economic Complexity Index [ECI) of-2.074 making it the 140th most complex country. Nigeria exports 33 products with revealed comparative advantage. This means that its share of global exports is larger than what would be expected from the size of its export economy and from the size of a product’s global market” (2015 – Nigeria and EU Trade Development: An Introduction to the Economic Partnership Agreement (EPA)).
Historically, the role of the Nigerian State in business is strongly underlined by its position as regulator and chief policy maker in the Nigerian business jurisdiction. In this relation, in defining strategic economic goals and means for its pursuit, the country’s state policy administration collaborated with foreign business groups some of whom arrived the country in the early mercantilist era . In course of many years of doing business in Nigeria, these “early birds” consolidated on networks they managed to set up in the country’s internal markets to establish a head start over investors that arrived later. The context, course and direction of Nigeria’s international trade relations was affected by the activities of the “early birds”. Over the years, Nigerian State policy administration adapted to the needs of a business environment strongly influenced by this business group.