Abuja, Nov. 24, 2023: President Bola Tinubu’s preference for market driven economy has been consistent, and since assumption of office has steered the Nigerian economy towards greater strides with focus on attracting foreign direct investment into the economy.
Under Tinubu, Nigeria has been undertaking its boldest reforms in decades, scrapping the popular petrol subsidy and unifying the country’s multiple exchange rates as part of measures to improve ease of doing business in the country.
The recent Saudi-Africa Summit was an apt platform to push for collaboration and cooperation in various sectors beneficial to the Nigerian economy.
The opportunity was fully exploited by Nigeria to deepen economic relationship with Saudi Arabia which has the largest economy in the Middle East and is the 18th-largest economy in the world.
Saudi Arabia like Nigeria is a member of OPEC, and both have valuable natural resource reserves in petroleum and natural gas. They have also long years of relationship in various fields.
Thus, the signing of a Memorandum of Understanding (MoU) for collaboration in the oil and gas sector, was a major step in strengthening the relationship between the two countries.
“One of the primary benefits anticipated from this landmark agreement is the facilitation of technological exchange.
“With Saudi Arabia boasting advanced technologies in oil and gas exploration and production, Nigeria stands to gain significantly from this knowledge transfer.
“It encompasses joint research and development initiatives, knowledge-sharing platforms and capacity-building programmes.
“This holistic approach aims to empower local talents within Nigeria’s energy sector, fostering a self-sustaining environment where indigenous expertise plays pivotal role in shaping the nation’s energy future.
“This, in turn, is expected to stabilise fuel prices and enhance energy security, providing tangible benefits to Nigerian households and businesses alike,’’ a statement from the Ministry of Petroleum Resources (Oil) disclosed.
President Tinubu used the forum to underscore Nigeria’s commitment to free economy and protection of investments as the country strives to attract more Foreign Direct Investments.
”Nigeria is committed to ensuring the safety of investments based on the sanctity of the rule of law and good returns on investments in the largest economy in Africa”, Tinubu told the Saudi business community.
He said it was important for the two countries to have a business council to drive investment in key economic sectors agreed in the deal.
“In this regard, the benefit attached to the early inauguration of the Nigeria-Saudi Business Council cannot be over-emphasized,” he said.
“Within the past six decades, our bilateral cooperation, which was initially hajj-centric, has witnessed diversification to cover a number of areas of common interest.”
Tinubu said that both Nigeria and Saudi Arabia have been interacting as members of the UN, OPEC, the International Energy Forum, G77, Islamic Development Bank, and Digital Cooperation Organisation among others.
“My administration has undertaken bold economic reforms by removing wasteful subsidies on petroleum and the merging of our foreign exchange market, among other incentives aimed at improving the ease of doing business in Nigeria.”
In response to the assurances, the Saudi investors pledged to provide funding to revamp Nigeria’s refineries and substantially support the Central Bank of Nigeria in its ongoing reforms of the foreign exchange regime.
Mr Muhammad Idris, Minister of Information and National Orientation, said the Saudi Government would make available a substantial deposit of foreign exchange to boost Nigeria’s forex liquidity.
Similarly, Saudi Crown Prince, Salman, further said Saudi Arabia would invest in Agriculture and Renewable Energy to help Nigeria attain food and energy security.
The Crown Prince said that the investment in Nigeria`s refinery would be led by Saudi Aramco, and the intervention would be completed within two to three years.
The two leaders vowed to work together over the next six months to develop a comprehensive roadmap and blueprint to deliver on the deal.
At the summit, Tinubu said that all impediments to doing business in Nigeria would be removed.
“When I took office, I declared the immediate commencement of bold and fundamental economic reforms. We have executed them, and we’ll sustain the reform process.
“I believe in the full application of free market economics. Your money will flow easily in and easily out.
“The arbitrage around our nation’s old foreign exchange policy regime and the corruption that was associated with it is also gone.
“We took on those bold endeavours from day one in preparation for serious investors like you seated here. The greatest opportunity for any entity to prosper lies in its human capital,” the President told the Saudi business community.
Saudi Arabia’s Trade and Investment Minister, Khalid El-Falih, assured that the business community would respond with new investments across several sectors of the Nigerian economy.
“We know you are ready for business, so we do not want to come to Nigeria for any exploratory discussion. We are coming for implementation. It is an action visit,” Falih said.
“We will prepare well with your team and our investors will align with your officials, beginning now, to develop a concrete work plan of investments in the key sectors for take-off when we meet again.
“We will also use the opportunity to formally inaugurate the Nigeria-Saudi Business Council,” the minister added.
Also, Saudi Commerce Minister, Majid bin Abdullah Al Qasabi, said they would contribute to the soft infrastructural reforms needed to unlock game-changing foreign direct investment in Nigeria.
“We have signed an agreement with the World Economic Forum on the reform of the services sector in Africa.
“In developed economies, the services sector contributes enormously to GDP, but in the developing world, we tend to focus on goods.
”So, we would like to make Nigeria the pilot country in this agreement with WEF to study Nigeria’s service challenges to make it seamless and make the supply chains across sectors streamlined and raised to international standard to enhance Nigeria’s economic and investment viability over the long-term.”
At the Investor Roundtable, proposals were made for tangible collaboration by Chief Executive Officers from several Saudi conglomerates specialising in construction, finance, energy, healthcare, agriculture, mining, aviation, telecommunication, creative arts, and hospitality.
Tinubu assured them that Nigeria was determined to be their partners.
“Nigeria will reward your faith. Our people are ready, and we will not dissappoint.”
He said, “the prospect of the country is yet to blossom to the level that we require.
“It needs hard work and consistent prayers by each and every one of us. We are committed to use our strength to bring out this potential for the benefit of all Nigerians.”
President Tinubu also advanced negotiations for a multi-billion-dollar infrastructure finance facility from the Islamic Development Bank (IDB) to fund a multi-sectoral portfolios of infrastructure projects.
After the discussions witn the Vice-President (Country Programmes) of the IDB, Dr Mansur Muhtar, the bank said “we are ready to work with you. We are ready to support big investments in Nigeria. We agree that if Nigeria succeeds, Africa succeeds. And the world needs Africa to succeed.”
The IDB further announced the provision of 50 billion Dollars of new investments for the African continent from the Arab Coordination Group (ACG).
“As the largest market and the largest economy in Africa, Nigeria will certainly receive a significant share. We look forward to supporting Nigeria’s economic transformation,” Mukhtar said.
Faith Nwadishi, the executive director of the Center for Transparency Advocacy in Abuja, welcomes the Saudi deal.
“Considering the success that Saudi Arabia has made with their refineries and the natural resources that they have, one thing this will be able to achieve is to help Nigeria meet its production quota, help Nigeria resolve some of the conflicts around this issue of subsidy and non-operationalisation of the four refineries that we have,” said Nwadishi.
Emmanuel Afimia, founder of Enermics, a Lagos based oil and gas consulting firm, said the administration “is showing a reasonable level of political will to make things happen.”
Tinubu’s Saudi trip has therefore been a huge success and has set the stage for bigger engagements for the benefit of both countries.
When the Nigeria-Saudi Business Council is inaugurated, the expectation is that it will unlock the funding of several sectors of the Nigerian economy, facilitate access to modern technologies, and growth of telecommunications, energy, oil, gas and agriculture sectors.
Experts believe that Nigeria will attract multi-billion-dollar “immediate” investment flows from the Saudi Kingdom.
It is thus, safe to say that Tinubu has so far shown the strength of character and experience in engaging genuine investors across the globe to revive the Nigerian economy.
The deal with the Saudis is indeed a huge step in addressing the country’s economic challenges.
