Nigeria lies on the cusp of greatness, having natural and human resources in abundance and with an economy that has boomed in the past decade, growing by some 7% annually. This, in turn, means that it has the potential to achieve the Sustainable Development Goals (SDGs) by 2030 thereby lifting millions out of poverty. Provided the private sector steps in now.
Fortunately, this is already starting to happen led by productive private Nigerian businesses which are giving their shareholders attractive returns and spurring the country’s development.
Take the multibillion dollar oil and gas industry as an example, which has seen minimal capacity development since the 1990s. This sector was until recently under the tight grip of an inefficient central government and a small number of rent-seeking private companies which whisked their profits offshore. But all this changed after the passing of the Local Content Act in 2010, requiring international oil companies to increase their reliance on Nigerian staff and services significantly. As a result, the government slowly started welcoming private investors, and we quickly began seeing credible, competent local companies enter the market, exemplified by LADOL.
LADOL and French oil giant Total have completed West Africa’s biggest shipyard, representing the single largest private capacity development in the petroleum sector since 2010. This, in turn, is now attracting more private investors, firstly because the development was completed ahead of schedule at a lower than expected cost. And secondly, because it will generate 50,000 new jobs (directly and indirectly) due to the huge unmet local market demand.
This is an example of how local and international private sector companies can work together to profitably build capacity, grow the market and help meet SDG targets. The project is benefiting thousands of families, promoting Goal 8 (Economic Growth: creating sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all) and Goal 9 (Infrastructure & industrialisation: building resilient infrastructure, promoting inclusive and sustainable industrialisation and fostering innovation).
Additionally, LADOL positively disrupted the offshore oil and gas market through its integrated offshore logistics base. By operating 24/7 and using specially designed facilities and equipment, LADOL has halved the cost of production and drilling support in Nigeria.
All this proves that supporting legitimate local companies is the key to making Nigeria competitive, ultimately helping achieve the SDGs by creating new jobs and opportunities. Despite the success of these initiatives, it is good to keep in mind, however, that at the start they were met with universal, often times heavy handed, resistance. It took both the persistence of a local investor, prepared to keep investing for over a decade, and the passing of the Local Content Act, to ensure the successful outcomes outlined above.
Private indigenous companies are also playing key roles in sectors such as healthcare and education, helping improve people's lives and develop the country while taking advantage of growth opportunities.
A project I ran for an American NGO, Venture Strategies for Health and Development (VSHD), between 2005 and 2007 is an interesting example. The project centred around preventing and treating postpartum haemorrhage (PPH), a leading cause of maternal mortality in Nigeria, which in 2006 was causing 15,000 Nigerian women deaths every year. Meetings held in Nigeria by doctors and stakeholders concluded that progress towards meeting the Millennium Development Goal of reducing maternal mortality by 75% between 1990 and 2015 would be impossible without widespread access to a drug called misoprostol that prevents and treats PPH.
This generic drug was not registered or widely available in Nigeria at the time. Instead hospitals were stocked with an alternative, more expensive drug called oxytocin. But oxytocin is completely unsuitable for the Nigerian environment as it is a liquid, has to be injected and is only effective if kept refrigerated. Since the majority of births in Nigeria take place outside the hospital most women did not have access to it. Misoprostol, on the other hand, is a small white pill that can be stored on a shelf and administered orally or through any other mucosal cavity.
In January 2006, working with VSHD, we successfully registered misoprostol in Nigeria and partnered with a local pharmaceutical company, called Emzor Pharmaceuticals, to manufacture and distribute it across the country. Emzor purchased this drug from a Chinese manufacturer and after five years the company started manufacturing it locally, helping spread its use while making a profit.
Similar projects can be found in the education sector, where entrepreneurs are now increasingly offering private sector solutions for parents keen to pay for their children to have a better chance in life. The private initiatives range from online schools and tutors to teacher training academies.
Positively, private Nigerian businesses’ role in the country’s development has accelerated since President Muhammadu Buhari’s inauguration in May last year. The private sector is now actually being asked by the government to step up its involvement and invest in key infrastructure projects, develop the service industry, and so on. In return, private investors are demanding that the government maintain the rule of law and a level playing field, giving free and fair access to markets for all qualified companies. The government is fulfilling its part of the deal by clamping down on corruption and improving security, though investors are now waiting for more detailed policies to be articulated on economic development.
Despite these developments, the challenges faced by Nigeria are enormous. It still has high maternal and child mortality rates, with a woman’s chances of dying from pregnancy and childbirth being 1 in 13, according to UNICEF. Education does not fare better. Over 10 million primary school age children are out of school, two-thirds of them girls. Children from the poorest 20% of households get just three years of schooling, compared to over 12 years for those in the richest households. Meanwhile, the country’s infrastructure requires urgent investment, in everything from ports and power stations to agriculture.
Local businesses cannot meet these challenges alone - they need foreign investment. But to date Western companies have not taken notice of the opportunities available and are largely shunning the country, except for the traditional petroleum sector. They simply do not understand the broad range of opportunities available in emerging countries like ours, since they are either too scared to get involved in these countries or do not have the right people on the ground. Also, worryingly, they regard sectors like health and education as belonging to the realm of charities or development groups, without any real potential to generate profits, as development organisations and NGOs have largely managed to keep this territory for themselves.
This is the reason why the Business and Sustainable Development Commission, which brings together CEOs from some of the world's most important global corporations and which I joined, is so important. It will quantify the opportunities for the private sector to engage in sustainable development in a major report that will be presented at next January’s World Economic Forum in Davos. Meeting the SDGs is not the primary target for such investors, but by building capacity to service the huge unmet needs in Nigeria these investors will help achieve the SDGs anyway.
The Business Commission is uniquely placed to put these opportunities in language that businesses can understand, identifying the specific needs that can be met by private companies and investors in sectors that have until now been overlooked. This is the optimal time for such an initiative since the global economy is desperately in need of productive growth and real market opportunities, especially as Western markets continue experiencing sluggish growth and limited opportunities.
Nigeria and its population of 173 million people offers huge business opportunities in all sectors of the economy, both for indigenous and foreign companies. Seizing them has the potential to put the country in the path towards achieving the sustainable goals, making a difference to millions of people’s lives and inspiring the whole of West Africa.
So why not grab this historic opportunity?