Prince Adetokunbo Kayode, CON., SAN
India and Nigeria enjoy warm, friendly and deep-rooted bilateral relations. India established its Diplomatic House in Lagos, Nigeria in November 1958 even before our independence in 1960.
Both countries were in the forefront of international anti-colonial, nonaligned and later anti-apartheid struggles. Close collaboration on diverse global issues in international fora was therefore easy. There was a large Indian expatriate community in Nigeria, the largest in West Africa, underscoring our closeness and long-standing relationship. You were traders, industrialists and professionals in various fields, but more importantly, you were teachers.
Of course, we all grew up watching Indian movies the Bollywood. Just like the whole of Africa and maybe the world today is watching Nigeria’s Nollywood, an industry, according to the World Bank, is worth now about US$5 billion per annum. Imagine if Bollywood were to support that sector with capacity training and skills development and financial capital investment. This is one of the things we believe India should be doing. It is good for our relationship. It is also good for business.
The enormous goodwill earned by India and Indians in Nigeria is everlasting.
POLITICAL AND CULTURAL CONTACTS
Suffice to say that Nigerian leaders have, as a matter of course, made a point of our relationship, to meet every Indian leader. Nigerian President, Muhammadu Buhari was in India for the India-Africa Summit in 2015. He met Prime Minister, Narendra Modi. Your Vice President, Hamid Ansari visited Nigeria in September 2016. He had audience with our President and the Vice President, Yemi Osinbajo, providing yet another opportunity to further deepen our bilateral relationship. Vice President Ansari had a CII business delegation which met their counterpart in Nigeria.
As a Federal Minister in Nigeria about 12 years ago, I ensured that I attended every cultural or business event hosted by the Indian High Commission in Nigeria. In the true spirit of “DOSTANA”.
FRAMEWORK AND MECHANISM FOR COOPERATION JOINT TRADE COMMITTEE
Trade Agreement: Moving forward from the 1983 Bilateral Trade Agreement signed between Nigeria and India, our relationship was elevated to a STRATEGIC PARTNERSHIP with a Joint Trade Committee (JTC) in 2017 to review bilateral trade and commercial relations. As part of the commitment, a Nigerian delegation is to be in New Delhi this month for the first JTC meeting. Critical among issues that would be resolved would be the issue of prevention of double taxation. Last week, a Bilateral Air Service Agreement, BASA, was signed. This should open up direct flights between the two countries. These service were being operated 40m years ago. It is high time they are resumed again.
Both the Government of Nigeria and the organised private sector actively supported the launching of the Nigerian Chapter of ASSOCHAM in Nigeria. In 2016, the Nigeria Association of Chambers of Commerce and Industry, Mines and Agriculture (NACCIMA) signed a strategic partnership Agreement with ASSOCHAM. I signed for NACCIMA. And my presence here today underscores the importance we attach to the spirit and the words of that Agreement. And it is a work in progress.
Today over 135 Indian companies operate in Nigeria. They are owned and or operated by Indians or Persons-of-Indian origin (PIOs) like Chanrai family (Agribusiness and automobiles), Dana Group (Pharma, steel, electronics, consumer goods, aviation), Chellarams (consumer goods, foodstuff, financial services, art), Keshwanis (Retail and Construction) and Mehtanis Churchgate Group (Construction and commodities), DUFIL Prime Food Ltd., Indorama and Olam Nigeria Ltd (agriculture).
Other companies include: Bharti Airtel, Tata, Bajaj Auto, Birla Group, Kirloskar, Mahindra, Ashok Leyland, NIIT, Aptech, New India Assurance, Bhushan Steel, KEC, Skipper Nigeria, Dabur, Godrej, Ranbaxy and Primus Super-speciality Hospital actively working (and some say, dominating) critical sectors including health, power, manufacturing and retail, pharmaceuticals, aviation, telecommunications, infrastructure, construction and diverse consultancy services.
Confederation of Indian Industries, CII.
In Nigeria, we are proud to be associated with the Confederation of Indian Industries, CII, a very formidable body with over 300,000 membership. We also key into its INDIA RISE Initiative, RISE, stands for Responsible, Inclusive, Sustainable and Entrepreneurship. We all want to be responsible, inclusive, sustainable and above all entrepreneurial. We have consistently related with CII in a dynamic way. And I say a big thank you to CII. Last year training programs were provided for our top staff in the OPS. We look forward to working closely with CII in the future, and even on this trip, to further deepen Nigeria-India partnership.
BENEFITS OF A GOOD RELATIONSHIP
Today, India is Nigeria’s largest trading partner. And Nigeria is India’s largest trading partner in Africa. India is number one buyer of Nigerian crude oil. The bilateral trade between India and Nigeria during the year 2017-18 increased to US$11.76 billion. Indian exports to Nigeria went up to US$ 2.26 billion in 2018. India’s imports was US $ 9.5 billion in 2017- 18. However the import matrix is narrow. Crude oil and LNG import accounted for $ 9.29 billion out of this. It is also believed and informally estimated that there would be around US$ 10 billion of investment by Indian companies in Nigeria. Most PIOs are funded through Nigerian funding systems.
NIGERIAN ECONOMIC SCENARIO
Up to 2014 we had maintained a sustained economic growth of around 7% but with contraction occasioned by the drop in global crude oil prices in 2016, Nigerian economy officially slipped into recession – for the first time in 25 years.
The Government of Nigeria launched the Economic Recovery and Growth Plan (ERGP) in second-half of 2016 for the period 2017-20 focusing on restoring growth, investing in people and building a globally competitive economy.
Nigerian Central bank had to limit forex lending to importers of 41goods (rice etc.). This restriction had a temporary adverse impact on bilateral commerce. Despite this brief interruption, the positive growth of two-way trade volumes was not really hindered as India continue to enjoy a buoyant and steady overall India-Nigeria trade and commercial relations.
Nigeria started and is still implementing a regime of easing bureaucratic bottlenecks for ease of doing business and creating an enabling environment for business to thrive. The impact is being felt. Nigeria moved up by 24 places in the Ease of Doing Business Rating in 2017. FDI also increased dramatically with US $12.2 billion capital inflow in 2017, 139% higher than 2016.
SMART ECONOMIC RECOVERY
Our economy is now on a northern rebound. We have made a smart recovery, exiting recession in the second quarter of 2017. Inflation came down to 11% in July 2018 from 18.5%. The Exchange Rate has also stabilized. IMF predicts that Nigerian economy will grow by 2.1% in 2018 and 2.5% to 3% in 2019. The foreign exchange reserves of Nigeria increased to US $ 47 billion in July 2018 from US $ 30.3 billion in 2017.
Nigerian Government took steps to diversify the Nigerian economy with focus on agriculture, mining and industrial development. We require more India-Nigeria partnerships and investment in these areas.
NIGERIA AND INDIAN PATRONAGE
The Dangote Group, (owned by Aliko Dangote), the largest business conglomerate in Africa, which is currently developing one of the largest Petro-chemical and fertilizer complexes patronises several Indian companies in project management, construction and plant supply and installation. Engineers India Limited (EIL), Fabtech, Indcon Projects, Skipper, Patels, Airtemp, Temasme, Phils Engg, Techno, Larsen & Toubro, Godrej, Vijay Tanks, ISGEC, Altech, Diamond Engineering, Bharat Bijlee, Thermax and Emmerson etc, to mention a few.
The Indian Oil Corporation Ltd. (IOCL), HPCL and BPCL enjoy crude oil lifting contracts. Sterling and Essar are involved in oil exploration while others are in partnership with Nigerians in the midstream and the downstream sub-sectors of the oil sector. But we can do more. More Nigeria-India partnership and investment, working together are required in the oil to chemical sector. The profit will be huge. As Nigeria is poised to industrialise, more chemicals will be required.
India is traditionally the largest source of pharmaceuticals imports into Nigeria, supplying over a third of the country’s demand. The Indian Pharmaceuticals’ Manufactures and Importers in Nigeria promote the interests Indian pharma sector in Nigeria recording about $500 million revenue last year. Companies active in this sector includes; include Ranbaxy, Cadila, Emcure,. But this may actually represent about a quarter of the actual volume of pharmaceutical transactions since a lot of the business is still being done in an informal way which largely do not go through our Central Bank.
For several years also, the Indian health sector is the recipient of over US$1.2 billion worth of medical tourism business from Nigerians on medical treatment. Again this is mainly heavily under recorded. There are also Indian run health facilities in Nigeria
Nigeria is also a very major market for Indian electrical machinery and equipment. Over 20 Indian companies are engaged in our power sector. Transactions in this sector is expected to grow dramatically as the Nigerian government is poised to radically transform and encourage investment in the electricity sector this year, immediately after the elections. So this is a good time to take an investment position in that sector. Big business is coming.
Nigeria is seeking to achieve 30% electricity generation from solar power. This is also an area that we want India to focus more. In June 2018, ASSOCHAM, the Abuja Chamber of Commerce & Industry (ACCI) and your High Commissioner in Nigeria, Mr Reddy, we organised a highly successful ‘Nigeria-India Cooperation in Solar & Other Renewable Energy Sources Opportunities and Way Forward’ business summit in Abuja, Nigeria. The Indian Renewable Energy Development Authority (IREDA), EXIM Bank, BHEL and Avada Group, Nigerian and Indian companies in Nigeria like Skipper Siel, Simba Group, participated.
When Vice President Ansari visited Nigeria in September 2016 he identified agriculture as an important sector for greater cooperation particularly mechanisation, processing,storage and packaging, equipment, rice and milk production as well animal husbandry
Nigeria’s Federal Ministry of Agriculture, ASSOCHAM’s Nigeria Chapter, Abuja Chamber of commerce, Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA). Indian companies, the Managing Director of the Exim Bank, Chambers of Commerce of the various State Governments, Nigerian Central Bank, Nigerian Investment Promotion Commission, agriculture and farmers associations attended the business forum on the back of that visit.
Indian auto companies, TATA, ASHOK LEYLAND, MAHINDRA (automobiles), SONALIKA, (tractors) in automobiles, Bajaj Auto and TVS are involved in motorcycles, (two-wheelers) TVS and Kinetic (three wheelers) and other utility vehicles and have created a niche in this area. They enjoy a virtual monopoly. Nigeria is one of their largest markets outside India.
Industrial activities in Nigeria is essentially an Indian business. There is an INDUSTRIAL DEVELOPMMENT REVOLUTION policy designed and being sought to be implemented by our government. There will be more opportunities for further investments in agro production and processing, industrial production in household office goods and utilities, processing equipment and spare parts manufacturing. We need to have Nigeria-Indian Industrial Parks, especially in technology, plastics, and polymers (for various industrial use), metal, and recycling industries (and for the new WASTE TO WEALTH Programs driven principally by the Abuja Chamber of Commerce) with the support of our government.
India is a world power in the technology space. Africa wants to share this space with your collaboration and partnership. We have over 150 million Nigerians below the age of 35 years. We all know what that means. We want more exchange and partnership in Indian technology. It is good business. We will all profit.
But in doing all these, we must remember that it is always good business to partner with local businesses. And this is in line with the 10 principles for India-Africa engagement enunciated with great vision, by your leader and the highly respected Prime Minister, Narendra Modi; a vision for India-Africa partnership on a win-win basis. These are his thoughts, his words and Africa is in harmony with that. A great man called Mohandas K Gandhi said happiness is when, what you think, what you say and what you do, are in harmony. Let us be in harmony. Invest jointly, share technology, create and share value and wealth together. The prosperity of Africa, the prosperity of Nigeria is, can and must be equal to the prosperity of India. And this is the only way to do good business.
This is my first time in Gujarat. But will not be the last. Nigeria does over 40% of its Indian business with Gujarat. In fact I should be back in March, to follow up, for myself as well as for members of my Chambers, some of the business opportunities that this Summit has enabled us to open up.
I want to thank the Government of India, the Government of GUJARAT, Chief Minister Shri Vijay Rupani, the Gujarat Chamber of Commerce and our Indian friends for continuing to organise the VIBRANT Gujarat, a truly global Summit. And for your warm hospitality.
BE THE CHANGE YOU WANT TO SEE IN THE WORLD.
PRINCE ADETOKUNBO KAYODE, CON. SAN.PRESIDENT ABUJA CHAMBER OF COMMERCE & INDUSTRY, COUNCIL, MEMBER of NACCIMA made the presentation on behalf of Nigeria at the 9th Vibrant GUJARAT GLOBAL SUMMIT, 2019.