Nigeria's Fading Appeal Spurs Business Exodus To Angola And Kenya
Ezenwa Opara
CIPR UK- Accredited PR Practitioner: Media Professional & Strategic Communication Maven: Committed To Professional Excellence & Continuous Growth.
On May 22, 2024, BusinessDay Newspaper shook Nigeria's business community with the headline "Nigeria on Voicemail as Investors Answer Angola’s Call with $50bn." This marked a significant shift in Africa’s oil landscape, as Angola emerged as a new favorite for international oil companies, challenging Nigeria's once-unquestioned leadership.
Angola's oil sector saw a remarkable 96 percent growth between 2022 and 2023, attracting nearly $50 billion in investments over five years, according to data from Angola’s National Oil, Gas and Biofuels Agency (ANPG). This surge underscores a strategic move by global oil giants towards Angola, leaving Nigeria grappling with its diminishing influence.
Adding to Nigeria's economic concerns, Nairametrics.com reported Microsoft's decision to construct a $1 billion geothermal-powered data center in Kenya, following the closure of its Nigerian facility. This move, in partnership with G42 from the UAE, comes after Microsoft shut down its African development center in Lagos, resulting in the loss of around 200 jobs.
Several factors drive the migration of business investments from Nigeria to Angola and Kenya. Both countries have made significant progress in political stability and governance, crucial for attracting foreign investments. In contrast, Nigeria struggles with insecurity, corruption, and bureaucratic inefficiencies, denting investor confidence.
Angola and Kenya offer more favorable regulatory frameworks, making them attractive to investors. Angola's oil sector reforms and Kenya's proactive stance on technology and innovation have created conducive business environments. Nigeria's complex and opaque regulations pose significant challenges.
Angola's diversification efforts and infrastructure enhancements make it appealing for oil investments, while Kenya's advancements in technology infrastructure position it as a digital innovation hub. Nigeria's inadequate infrastructure hinders business operations and growth.
Persistent security issues in Nigeria, including terrorism and kidnappings, deter foreign investments, while Angola and Kenya provide safer environments. Again, reliable power supply is crucial for business operations, with Kenya's investment in geothermal energy and Angola's energy infrastructure improvements offering more reliable solutions than Nigeria's erratic electricity supply. In addition, high business costs in Nigeria, driven by multiple taxation and complex regulations, deter investors. Angola and Kenya have streamlined processes to reduce costs and improve the ease of doing business.
To regain its position as a prime FDI destination, Nigeria must undertake comprehensive reforms. Strengthening democratic institutions, combating corruption, and improving infrastructure are essential. Simplifying regulations, reducing bureaucratic red tape, and enhancing transparency will attract more investors. Robust security measures are necessary to address security threats and promote economic diversification beyond oil. Also, reducing taxes and simplifying business operations will enhance Nigeria's competitiveness. The government must create a less costly and more efficient business environment.
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President Senator Ahmed Tinubu's government has significant work ahead to revitalize Nigeria's business environment and attract foreign investors, fostering economic growth similar to Angola and Kenya's successes. It's time for Nigeria to awaken and regain its position as a leading investment destination in Africa
Ezenwa Opara
May 24, 2024
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CEO at Global Green Energy LL
5 个月Nigeria could be a leader in attracting investment if they would just clean up their act! Stop telling everyone the investors are coming when in fact they come and then run away. No one wants to invest in an area full of corruption where everyone has their hand out for upfront payments or they won't perform, where lack of law and insecurity run rampant, and the long decision making process and archaic protocols drive investors away. Stop asking for letters that do nothing, or one page business summaries that give no details, and get serious. Why would anyone want to invest in such an environment when they can simply take their money to more safer and secure countries???