While American companies should open their eyes to Nigeria's value, it's up to Nigerians to corral corruption to attract the investment desperately needed to diversify their economy, the U.S. ambassador to the West African country said in Atlanta.
Nigeria has become the most important strategic ally in Africa for the United States and has proven a vital partner in negotiations on sticky multilateral issues in the region and beyond, said Terence McCulley, who visited Atlanta on a roadshow highlighting the country's business opportunities.
But the Nigerian government has been slower to fix a "ruptured social compact" at home caused by decades of corruption that has fueled public mistrust and sullied the country's brand abroad.
"If Nigeria wants the foreign investment to come in, it needs to tackle head on the issue of corruption. It needs to underline a respect for the sanctity of contracts, a level playing field, a judicial system that is independent and that will rule neutrally if matters are brought before the courts," Mr. McCulley said during a Dec. 10 speech at the World Trade Center Atlanta.
Over the decades, Nigerian fat cats have grown rich off oil revenues while formerly productive areas of the economy have atrophied, he said.
This is obvious in distribution of Nigerian exports to the United States, in which crude oil accounts for 99.65 percent of the value. While oil brings cash, it doesn't necessarily benefit the broader society.
"Oil and gas is not going to provide employment opportunities and jobs for the 48 percent of these 160 million Nigerians who are under the age of 15," Mr. McCulley said, adding that more Nigerians should tap into the African Growth and Opportunities Act, a generous U.S. trade regime that gives African countries preferential tariff treatment for many commodities.
A "demographic bubble" - a huge proportion of the population coming into their most productive years simultaneously - was the formula for the breakneck growth of the "Asian tiger" economies of the last 30 years, Mr. McCulley said.
But managed poorly, it could become a source of instability for a country where a yawning wealth gap and regional tensions already breed problems.
A linchpin in Nigeria's economic diversification efforts is improving power generation, a key component of President Goodluck Jonathan's plan to boost his country to one of the world's top 20 economies by 2020.
But there's a long way to go in yet another sector suffering from years of underinvestment, where resources allocated to fix the problem have often disappeared through the sieve of corruption, Mr. McCulley said.
"This is a country which on a good day produces 3,500-4,500 megawatts of power. To give you an example, that would run Times Square for a few hours. It would run a small American city for a day," the ambassador said. He added another staggering factoid: South Africa has one-third Nigeria's population but produces 10 times the power.
All that aside, the ambassador pointed to huge opportunities for U.S. companies, who shouldn't allow the country's tarnished image to drive them away, he said.
During visits to Houston, New Orleans, Orlando and Atlanta to promote the Obama administration's Doing Business in Africa initiative, Mr. McCulley noted that attitudes about Nigeria and the African continent are changing.
"I think people recognize that if you really want to grow your business, this is an exciting emerging market and maybe we need to be there," he said.
While U.S. companies "missed the boat" on Nigeria's shift from fixed-line to wireless telecommunications, they are playing an active role in the energy sector and could do more to drive an agricultural renaissance in a country that once exported food but has become the world's largest consumer of U.S. wheat.
The audience asked the ambassador tough questions on the country's relations with the U.S., seeking explanations for travel warnings and visa rejections, as well as why foreign firms aren't held liable by their home countries for rampant pollution in the oil sector.
Mr. McCulley stood firm, noting that it was up to Nigerians to put in place the institutional framework to deal with such issues, and that starts with ending the "culture of impunity" among the elite.
"It's important to move forward with prosecutions of corrupt public and private individuals demonstrating that Nigeria really is open for business and that the tremendous opportunity that the country represents can be realized," the ambassador said.
In an interview with Global Atlanta, he added that small and medium-sized companies worried about corruption should take advantage of the embassy's annual Nigerian investment climate report and database of more than 4,000 companies and organizations vetted for partnerships with American firms.
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