NIGERIA recently made a foray for investment drive to Asia, specifically to 

South Korea and China. Not that these countries are averse to the idea of investing in Nigeria, in fact they have a considerable presence in Africa’s biggest market. What was at play was a push to add some urgent wind to the sail of the old Nigerian cry for Foreign Direct Investment (FDI) that has yielded little efforts for the past 13 years.    

To achieve this, a 42-man business delegation from relevant sectors - maritime and shipbuilding, energy, power, telecommunications, infrastructure and general services met across the board with Korean and Chinese experts, industrialists and government officials at the instance of the Minister of Foreign Affairs Odein Ajumogobia (SAN).  

In the face of epileptic electricity supply and a collapsing infrastructure back home, the issue of using nuclear power for sustenance of vital sectors of the Nigerian economy gains all the more ascendancy wherever there are any serious bilateral talks between the Federal Government officials and their counterparts from elsewhere.

For instance, senior officials on both sides after meetings with Korean experts at the Korean Hydropower and Nuclear Company (KHNPCO) at Kori as well as the SK Refinery of the KNOC platform and oil storage facility in Ulsan, committed to a strong desire for immediate initiation of cooperation terms without “losing further time” - building on the legal framework already established. 

Nigeria is a signatory to the United Nations Non-Proliferation Treaty (NPT) and its business with nuclear power use can only be for the beneficial purposes mainly for electricity generation and healthcare.

With China, it is more of the need to balance the needs of both sides: Nigeria needs to fix her decaying infrastructure with Chinese assistance while China has energy needs which she hopes Nigeria with her abundant untapped resources, can help meet. China has now displaced Japan as the world’s second largest economy. Trade volume between both countries hit $7.3 billion since 2008. 

Nigeria is expected to access a $500 million soft loan to fund the beginning of its railway rehabilitation programme under the Nigeria-China Forum even as Nigeria has also been cleared to make representation in order to have a share from the $10 billion soft credit now made available by China to African states in aid of African development.  

But Ajumogobia had to first explain to his hosts and anxious Nigerians what the Asian push was all about when he said at a briefing: “We think that one of the things that we have not done effectively is trying to link the private sector in Nigeria with our international friends. We believe that the engine of growth is the private sector…It is absolutely important to try and cement economic ties and that can only be done effectively through private sector integration. My being here gives credibility to whoever comes with me and the feeling by our prospective investors that they are doing business with the right people. I have come basically to douse that fear of the unknown and the unfortunate negatives about it.”

What is regarded as one of the sweeteners of the consultations by the Nigerian team came in the form of a public security system deal by a Chinese firm-ZTE to assist the Nigerian Police in its renewed effort to fight crime.

The Nigeria-ZTE security deal also carries a three-year agreement. The Nigerian negotiation team stressed the need to ensure that the accompanying maintenance component of the agreement is honoured. ZTE further agreed to a stricter maintenance regime, which carries a proviso for the training of Nigerians for the continuous maintenance of facilities to be installed.  

On the political front, Nigeria and China committed to taking their existing bilateral relations to a higher level by tying the strategic end of it to the implementation of subsisting agreements particularly for the development of railway and other infrastructure.

Both countries are also now to work for the quick reconstitution of their bi-national joint commission even though China has been told in clear terms that it must revisit its immigration laws, said be in need of greater flexibility such that consular problems would not continue to be the main irritant of bilateral relations of both countries. This rides on the back of a renewed commitment to fulfill existing pledges made under the Forum for China-Africa Cooperation (FOCAC) and came after conferring with the Chinese Vice Premier Li Keqiang at the Great Hall, as well as Foreign Minister Yang Jiechi. 

Stressing the need for investments and businesses to thrive on both sides with a balanced involvement of both nationals and business concerns, Yang had urged the Federal Government to provide policy support as well as security guarantees in order for Chinese investments as well as others being planned in aid of infrastructural development. 

The firms, which got assurances from the Nigerian team on facilitated legal business environment incentives, include: China National Petroleum Corporation (CNPC), China National Offshore Oil Corporation (CNOOC), Korean Hydropower and Nuclear Company (KHNPCO) at Kori and the SK Refinery of KNOC, Huawei, China State Construction Engineering Corporation (CCEC), Daewoo Corporation and STX.

South Korea and Nigeria are marking the 30th anniversary of their diplomatic relations this year just when total investment volume of the Asian country in Nigeria hit the $1.56 billion mark by the close of last year. Both countries are only now trying to take their political and diplomatic relations into an “upgraded economic engagement” after Nigeria’s former President Olusegun Obasanjo had a reciprocated visit to the country in 2006.  

Interestingly, one of the Korean firms, SK E&C, had disclosed while the Nigerian party was still in Seoul that a feasibility team would be dispatched to Nigeria in less than two months to assess investment opportunities in building a power plant, an oil refinery as well as a petrochemical plant. The Nigerian team met with members of the Korean Chamber of Commerce and Industry. While also addressing chief executives of STX Heavy Industries, it said: “We feel challenged by what you have achieved in South Korea. Nigeria represents 60 per cent of the GDP in the sub-region (West Africa). Now, President Goodluck Jonathan is bringing Nigeria to this point where we are naturally looking up to your industrial concerns for FDI”.

According to the chief executive officer of SK E&C Suk Kyong Yoon, what is being planned for Nigeria runs into billions of dollars but he was not specific on figures. The Nigerian team will also do more wooing business with a visit to the KHNPCO nuclear power plant in Kori, SK refinery Complex, Oil storage base of Korean National Oil Corporation as well as the shipbuilding division of Hyundai Heavy Industries.  

Korea does not produce oil but just one plant at SK refines as much as 840,000 barrels per day while an underground storage capacity exists for up to 156 million barrels per day, while on a daily basis in Nigeria, the Nigerian National Petroleum Corporation (NNPC) is given about 445,000 barrels of oil, which is today sold away as crude and Nigerians await reception/ consumption of same as finished petroleum products!  

On his evaluation of the Nigerian market and economic scenario, Suk said: “With us, this has been a good point to turn. We’ll have to visit Nigeria first to see the feasibility for our investment and I think everything is right for us to invest...The feasibility study will be in less than two months...The power plant, oil refinery and the petrochemical one. These projects can be billion-dollars projects. Yes, we can bring the financing, the agencies together also we can invest ourselves...”

Also speaking to The Guardian in Seoul, Korean Vice Minister for Knowledge and Economy Yu Myung-Hwan stressed that he was pleased with the commitment to the forthcoming elections. “We want to build our economies together. The areas of cooperation include shipbuilding and in food security. We already build the national paediatric hospital in Nigeria at a cost of $40 million as well as the cultural centre. We are doing this to strengthen our relations and to have overall growth”.

Both the Director-General of Nigerian Maritime Administration and Safety Agency (NIMASA), Temisan Omatseye, Director-General Nigeria Chamber of Shipping (NCS) Akerele Ifeyinwa had earlier expressed satisfaction with the level of discussions by both sides.

One major landmark of the economic diplomacy shuttle was the amicable resolution of the dispute between the Federal Government and KNOC as accentuated by the recent court ruling in favour of KNOC, a Korean company that was at loggerheads with the Federal Government over certain aspects of an existing Memorandum of Understanding (MoU) signed by both parties. Ajumogobia had to assure his Chinese hosts that the Federal Government would implement the court ruling as a clear evidence of its commitment to the rule of law and the creation of the necessary economic environment to facilitate foreign investment.

In his words: “I am here on a clear presidential directive, to assure you that the disagreement over OPL 298 will be resolved. In fact we had agreed on a settlement...these two blocks were tied to downstream obligations. Part of the settlement was we agreed to disconnect the downstream obligations from the two blocks and to refund the signature bonus on OPL 298. It has not been signed because of the transition between myself and my successor return the signature…” 

On what is new now about Nigeria’s foreign investment drive Ajumogobia said: “It is not really new, its doing two things at the same time: Reforming the environment to make it attractive for investment and at the same time creating the rapport and the connection between our private sectors. Business people look for opportunities to make returns on their investment. I think that’s slightly different from being an advocate of foreign investment. So we bring credible business people from the Nigerian private sector to meet their counterparts here, forging alliances in various areas and sectors of the economy at this point.”