Hosting World Economic Forum 2014 is positive sign for Nigeria’s economy

By Kelechi Decca

When the World Economic Forum on Africa 2013 came to a close May this year at Cape Town, South Africa, with over 1,000 participants from more than 80 countries, under the theme Delivering on Africa’s Promise, the meeting’s agenda integrated three pillars: Accelerating Economic Diversification; Boosting Strategic Infrastructure; and Unlocking Africa’s Talent.The question on the lips of the participants was no longer “if” Africa will grow, but “how” it will grow. Participants were in agreement that building on recent growth ideally means investing in human capital and economic diversification. Thus, the call was targeted at investment to consolidate and make more inclusive, recent African growth. Inclusivity became the rallying point for African economies. While announcing to the participants that the next Forum will take place in Abuja, Nigeria, the Coordinating Minister for the Economy and Minister of Finance , Dr Ngozi Okonjo Iweala enthusiastically promised delegates that they will surely have an exciting Forum in Abuja come 2014.

Dr Okonjo Iweala reiterated that promise last week  during the World Press Launch for the 24^th World Economic Forum on Africa at Transcorp Hilton Hotel, Abuja. Speaking to journalists on the importance of the event scheduled to take place in Abuja from the 7^th to 9^th May 2014, Dr Okonjo Iweala who was in the company of the Chief Economic Adviser to the President Dr. Dr. Nwanze Okidegbe, and Mr Frank Nweeke Jnr. said that the success of the current economic reforms in the country were the criteria used by WEF to cede the hosting rights to the country.

The choice of Nigeria to host next year’s World Economic Forumon Africa (WEF 2014) was in no way a political balancing act by the WEF, it was not to give West Africa a sense of belonging either.The World Economic Forum being a purely private sector affair arrived at the choice of Nigeria mainly because of the huge business activities that are taking place in Nigeria expecially the vastly improving business environment and Nigeria’s emergence as Africa’s preferred investment destination and one of the fastest growing economies in the world.

Investors are aware of the positive changes that have taken place in Nigeria in recent times, thus they are responding with the outpouring of more investments For the second time in two years, Nigeria has retained its position as Africa’s number one destination for Foreign Direct Investment, according to the global FDI report released by the United Nations Conference on Trade and Development recently.

Specifically, the UNCTAD World Investment Report 2013 subtitled: ‘Global value chains: Investment and trade for development, disclosed that Nigeria recorded FDI inflows of $7.03bn in 2012 to beat other African countries. Nigeria emerged Africa’s biggest destination for FDI in 2011, with total inflows of $8.92bn. South Africa was ranked next with total FDI inflows of $5.81bn, while other African countries such as Ghana received $3.22bn; Congo, $2.93bn; and Algeria, $2.57bn, respectively. There has been an increase in investment inflow into the country in the last two years. For instance, President Goodluck Jonathan, recently inaugurated the General Electric’s $1bn service and manufacturing facility in Calabar, and the country has just privatized its power sector which promises to unleash a very huge investment outlets for anciliary industries.

Nigeria has witnessed tremendous changes in recent times,there has been improvements in road infrastructure projects,the aviation sector is not left out as virtually all airporst have undergone massive remodeling, for the first time in over 30 years, the North South rail link was reactivated and trains now run from Lagos to Kano. The social sectors are not left out as government is investing in capacity building and infrastructure in both health and education sectors.In the area of job creation, over a million jobs have been created recently, but taking cognizance of the army of unemployed, more is being done in this aspect.Almost every known indices on economic growth and a positive investment climate points to the fact that Nigeria is on the right path.
Interestingly, the theme of next year’s Forum is Forging Inclusive Growth, Creating Jobs falls within the Nigerian government’s policy direction as encapsulated by President Goodluck Jonathan’s transformation agenda. It could be recalled that his mantra on Africa’s growth has been that “For Africa to remain relevant, we need to adequately educate our people, as it is through education that we can unlock the potential of our youth to enable Africa to compete globally, and create jobs in the new knowledge economy.”

According to the World Economic Forum (WEF) Africa’s remarkable growth trajectory is projected to remain above 5 per cent in 2014 with West Africa the fastest growing sub-region, representing the continent’s largest business opportunity. Such momentum the WEF say is a welcome and necessary boom to a region whose youthful population offers the prospects of a significant demographic dividend fuelled by growth in consumer industries, manufacturing and business process outsourcing. Nigeria, sub-Saharan Africa’s second-largest economy and most populous nation – with over 160 million inhabitants – already plays a crucial role in advancing the continent’s growth; yet it is also emblematic of the challenges of converting natural wealth into solutions that address persistent social challenges.

As the foremost gathering on the continent, the 24th World Economic Forum on Africa will bring together over 1000 regional and global leaders to discuss innovative structural reforms and investments that can sustain the continent’s growth while creating jobs and prosperity for all its citizens, and this event will provide these leaders a first hand opportunity to see for themselves the transformation that has taken place in Nigeria. Also it will provide the leverage to compare the Nigeria they see with what they read or hear from some sections of the global media. It is not only a great opportunity for the different sectors of the Nigerian economy such as aviation, hospitality  and tourism industry, it will also put Nigeria on the global map for as many people who have never been to this country will have a feel of Nigeria. This is unarguably the largest business cum economic gathering in the global calendar. And the fact that Nigeria is hosting it at this time in its national life says a lot about what this government has achieved so far.

Dr Okonjo Iweala further highlighted that the Federal Government to ensure a successful event, has identified macroeconomic stability, successful implementation of the power  and agricultural sectors’ reforms, sustained single digit inflation rate and other initiatives being embarked upon by the government to ensure sustainable and inclusive growth of the economy as key reasons why the organisers of the Forum picked Nigeria to host the event. She said: “It is very clear the reason why Nigeria has been chosen to host this conference and the reason is that they find it very captivating the developments that are happening in the Nigerian economy. The whole power sector privatisation is one that has never really been seen anywhere and so they are fascinated by that whole process the way it was done openly and transparently, the investors it has brougth in. a lot of foreign companies have invested.
The Minister explained that the event would enable business leaders globally to come to Nigeria and see first-hand what had been achieved under the current administration ‘s economic scorecard with a view to further enabling them to take investment decisions on the economy. Noting that despite the achievements in key performance areas in the nation’s economy, the challenges inclusivity of its growth and that poverty is tackled frontally through jobs remained daunting and required more efforts to be surmounted.

She also maintained that despite the security issue as a result of the Boko Haram insurgence in some parts of the country, available statistics showed that insecurity was not seriously impacting negatively on foreign direct investment (FDI) inflows into the economy as global investors are well informed about the investment opportunities and what government is doing to ensure safety of investments. It could be recalled that Nigeria has been receiving favourable ratings from global rating agencies including Fitch, Also the sign that investor confidence in Nigeria is quite commendable could be gleaned from the 400 per cent over-subscription of the $1 billion Eurobond floated by the federal government in two tranches of $500 million each, interestingly about 80 per cent of the subscribers were investors from the United States of America .
It could be recalled that recently international credit rating agency, Standard & Poor’s, (S&P) affirmed Nigeria sovereign rating at BB- with a stable outlook. The affirmation came at a time  the agency downgraded other sovereigns like the United States due to the current global economic difficulties. The rating agency, while acknowledging the challenges facing the Nigeria, says the economy remains robust with macroeconomic indicators remaining strong.This result confirmed that despite the challenges of crude oil theft, insecurity and gap in basic infrastructure being experienced, the Nigerian macroeconomic outlook remains strong and robust. And this is also a reconfirmation Fitch’s rating in which put Nigerian economy in the positive light. On the fiscal side, the rating agencies acknowledged that Nigeria’s GDP growth remained strong in 2013 through 2016 buoyed by non- oil sector growth.

The Chief Economic Adviser to the President, Dr. Nwanze Okidegbe while addressing the media at the launch said that the President is very determined to ensure a successful event in view of the foreign direct investment potential for the economy, adding that this is why a high-powered public-private sector composed Steering Committee was constituted to oversee all the processes that would  ensure a hitch-free Forum in Nigeria. The Head of Secretariat for the World Economic Forum on Africa( WEF Africa 2014) Mr. Frank Nweke Jr., said that next year’s hosting of the event in Nigeria would be the first by a  West African country and that the country will ensure a world class hitch free event.The WEF he said attracts participants, including heads of governments and statesmen, chief executive officers of global firms, leading financiers and policy development technocrats from about 80 countries.

The steering committee for the World Economic Forum on Africa, Abuja 2014 is made up of some of the ‘heavyweights’ in the Nigerian private sector such as Alhaji  Aliko Dangote, Mr. Tony Elumelu, Mr. Wale Tinubu; Mr. Nduka Obaigbena and the Managing Director of First Bank, Mr. Bisi Onasanya, among others.

There is a lot of enthusiasm on Nigeria and Africa in general. In the words of Børge Brende, Managing Director and Member of the Managing Board, World Economic Forum. “The era of pessimism is over in Africa the African lions are growing even faster than the Asian tigers,” he said. “But if this growth is not invested in human capital and diversifying economies, we will lose out on the opportunity.” Brende concluded: “There is a lot of optimism, but also a lot of realism.”