Nigeria’s Economic Prospects: A Conversation with Vice President Yemi Osinbajo

Monday, June 24, 2019
Afolabi Sotunde/Reuters
Yemi Osinbajo

Vice President, Federal Republic of Nigeria

Michelle Caruso-Cabrera

Contributor, CNBC

Nigerian Vice President Osinbajo discusses Nigeria’s economic recovery, investment and growth opportunities, and the recent general elections.

CARUSO-CABRERA: Hi, everyone. Thanks so much for coming. I’m Michelle Caruso-Cabrera. I’m today’s presider. Looking forward to this event and thank you for coming.

Just wanted to do a very quick introduction. You have his full bio there in front of you. Yemi Osinbajo is the vice president of the Federal Republic of Nigeria. Come on up, and let’s hear your remarks, and then we’ll start taking questions. (Applause.)

OSINBAJO: Members of the Council on Foreign Relations, honored guests, ladies and gentlemen, I will be speaking for a few minutes, I think about fifteen minutes, on Nigeria’s economic prospects. And I am told that I’ll be taking questions right after that.

What happens in Africa in the coming years in at least four important respects will, in my view, for good or for ill, impact the fortunes of the world. The first is population. The second is the environment and climate change. The third is production, especially agriculture, manufacturing, and technology. And the fourth is security and the problems of terrorism, violent Islamic extremism, social exclusion, resource conflicts, et cetera.

The doomsday scenario is as follows: That Africa’s population grows exponentially, that full production is not able to match population growth, a rise in trans-humans conflicts due to shrinking vegetation and water, lack of jobs and opportunity for a large, poorly educated, youth population, leading to aggressive illegal migration, vulnerability to extremism, and the creation of a convenient breeding ground for extremist groups and a terrorist launch spot to the rest of the world.

That’s a horrifying situation indeed. And it is possible if in the next three decades Africa drops the ball on these four indicators. Neither Africa nor the rest of the world can afford to have these scenarios playing out. But the point of the context that I have set is that in each of these four respects Nigeria’s role is critical. Nigeria is Africa’s most populous nation and its largest economy by GDP. It certainly is no exaggeration to say that as Nigeria goes, so goes Africa—especially with respect to the four indicators that I had mentioned.

But let me say that though the challenges are huge, the prognosis is generally good. And in my view, presents excellent opportunities for local and foreign participation in this final frontier for groundbreaking investment and innovation. So let’s take population. The mere fact that we’ll become the third most populous nation in the world by 2050, and the fourteenth-largest economy, of course means a huge market.

When we opened up our telecom sector for private investment about 18 years ago, many thought: Yes, they have a large population, but not a large enough middle class to buy and use mobile phones. They were wrong. MTN and iConnect, two telecoms companies out of Africa, went in. They invested heavily. And today market penetration for mobile phones is about 114.9 percent, which technically means that almost everybody has a mobile phone.

Now, we are opening up our power sector. We are asking power firms to come and invest in end-to-end power supply. Power Africa is a USAID project. And they’ve made a commitment of just over $100 million in the next five years to provide transaction support to the entire value chain, covering gas supply, distribution, and transmission, and generation activities generally. With our population and a market-driven power sector, the next few years certainly promise to be quite exciting.

This is also the case with infrastructure. We’re embarking on the largest investment in infrastructure in our history, and we’re welcoming private investments in constructions and projects, railroads, airports, and other infrastructure. And there is agriculture. Nigeria is the ninth-largest stock of arable land. And we’ll become world leaders in cassava. We’re certainly leaders in Yams as well, but sorghum, millet. And we’re on the threshold of self-sufficiency in patty rice production.

And we’re seeing greater interest in agricultural and the agri-aligned value chain locally and internationally. There’s no question at all that aside from the export market, our population presents a massive and lucrative local market. This is an example of a Mexican—or, the largest vegetable farmer in Mexico who is doing business in Nigeria. He came in essentially to do vegetables for export. But he found that he was making far more money servicing the domestic market than anything that he was going to get from exports.

So it is for manufacturing. We are investing at the moment in the creation of special economic zones. Project MINE, M-I-N-E, which is an acronym for Made in Nigeria for Export, is designed to attract some such industries from more advanced manufacturing economies who are in search of affordable, well-trained labor in Nigeria. At the moment, we are focusing on industries for local manufacture of goods for which Nigeria has a comparative advantage. These include cotton, diamonds, leatherwear, and light industrial manufacturing.

The Nigerian SEZ Investment Company is a public-private partnership. And this is the delivery vehicle for the project. So investors so far include the AFDV, that the African Development Bank, the Afro Ex-Im Bank, and the AFC, which is the African Finance Corporation. And we have three locations at the moment which are being developed. The first is called the Enyimba City, which is in Aba in Abia state, southeastern Nigeria. Covers about 9,500 hectares. And there are three international anchor tenants already for the phase one. The city will be served by an existing IPP for power, and we are hoping that it will create something in the order of about six hundred thousand jobs when fully completed.

There’s also been Lekki Model Industrial Park, which is in partnership with the government of Lagos state. Lagos is our major commercial sector, south—and that’s in the southwest of Nigeria. It is set on about one thousand hectares of land in what we describe as the northeast cluster of the free zone. It has already attracted world-class anchor tenants for textiles, garments, and agri-processing, and light industrial, including the number-one Chinese and the number-nine global textile and garment, the Ruyi Group. But that project is in its early stages. This is the Funtua Cotton Cluster in Kastina, which is in northwest of Nigeria. Funtua has the largest aggregation of cotton ginneries in Nigeria. And the cluster we hope will aggregate cotton for about eight hundred thousand farmers in northern Nigeria, and become the largest integrated cotton ginning, spinning, and weaving complex in sub-Saharan Africa.

Now, how about the environment? And I’m taking, I’m sure you’re probably following, that I’m taking the four indicators I mentioned one after the other. So how about environment and climate change? So it is generally agreed that although Africa contributed the least—or, contributes, even today, the least to global warming, it is and will suffer the most from its consequences. Indeed, we are already seeing extreme weather events in several parts of Africa. Lake Chad, Africa’s four-largest lake, surrounded by Nigeria, Niger, Chad, and Cameroon—in 1960 the Lake Chad covered about twenty-five thousand square kilometers. It has now shrunk to less than 1,350 square kilometers. So the water it provided for irrigation, for fishing, for livestock is now practically non-existent.

But then there are immense potentials, again, for investment, as we aggressively promote a green economy. The objective is environmental sustainability and equitable economic growth at the same time. The cleanup of Ogoniland, an area in the Niger Delta region of Nigeria, known for the egregious pollution of its ecosystem from oil exploration for very many years, provides an opportunity for several local and international environmental remediation companies. And the cleanup is funded at the moment by a $1 billion fund pledged by the major companies for the exercise. Several companies are already involved in a remediation exercise. I know there are one or two Americans that are involved in the remediation exercise.

Huge prospects also exist in investments in renewable energy, energy efficient processes, clean technology, et cetera. Gas, for example, has been flared for almost sixty years by major oil companies. But in 2017, our government approved the Nigerian Gas Flare Commercialization Program, which is designed to eliminate that gas flaring through technically and commercially sustainable gas utilization projects. The program offers flare gas for sale through a transparent and competitive bidding process.

Solar power is also clearly for us the renewable energy source of choice. And with high radiation almost everywhere, there are several significant investments already in solar installations, and several on the queue. With almost twenty million households, especially in the rural areas, without power, the deployment of solar installations in homes and public facilities by private investors is not just critical to tackling our huge energy deficit, but also to creating jobs.

Our potential in technology and entertainment has also been attracting huge attention. The first is the market. At 174 million GSM phone users, we are in the top ten of telephone users in the world, and we have the highest percentage of people who use internet on their mobile phones. We are also number two mobile internet—number two in the mobile internet banking scale. Seventeen million Nigerians are on Facebook. And Microsoft, of course, following the money, has announced that it will establish a $100 million African development center in Nigeria.

Second is the ever-growing number of tech startups—young digital entrepreneurs who are creating solutions through a value chain and logistic challenges and creating thousands of jobs in the process. Andela is a good example of that. That’s a software company that trained software developers for many Fortune 500 companies. They received a couple of years ago a $24 million investment from Facebook and is doing huge turnover already. The third is the growing—our growing investment in the Nigeria’s entertainment industry. Our film output is today second only to Bollywood. And of course, Hollywood comes a fairly distant third. Of course, they are making more money, but hey. (Laughter.)

The fourth and last challenge and opportunity which is posed thereby is the vulnerability and that of our subregion to the growth of violent extremism, especially violent Islamic extremism, religious and resource conflicts. And I’m sure many of us are familiar with some of these issues, although Boko Haram terrorists have been largely restricted to northern Borno. There is some influence in southern Borno. But there is the growing threat of Islamic West Africa Province—the Islamic West Africa Province. Our approach has been to collaborate with our West African neighbors and the Lake Chad Basin Commission through the—through a multinational joint taskforce which we set on. Both the American and U.K. governments have helped with training and intelligence.

There are also conflicts over pasture and water between Fulani herders and farmers in the north-central and in the northwest zones of Nigeria. And cattle rustling also is fairly frequent incidence of that in the northwest. There’s also been a rising incidence of attacks on remote villages and kidnaping by Fulani bandits. Sometimes, especially in election cycles, these situations are used to drive religiously or ethnically divisive narratives for political gains. The fact of a large number of people living in extreme poverty, especially the young, uneducated, and unskilled also offers, as I have said earlier, potentially a recruitment—a recruitment ground for extremist values.

But the government’s response has been the following: One, tackling poverty. We are doing that by providing business and employment opportunities. We have a huge social investment program, emphasizing youth employment and empowerment. And microcredit for about two million informal traders, cash transfers for the poorest one million, and daily school feeding for over nine million children in public-run schools. Second is more effective policing—community policing. We have a central police force at the moment, which is driven from the center. But we believe that the way to go is—for more effective policing—is community policing or state policing.

Third is education. Just last Thursday, the twentieth of June, the president, was then Muhammad Buhari, announced the enforcement on free and compulsory education in the first nine years of the child’s life. And that’s a very important policy for us because one of the chief reasons why we think that poverty exists, and why poverty may become intractable is education, and many would say girl child education in particular. Fourth is developing a livestock transformation plan, which is aimed at ending migratory grazing in favor of ranching and other more sedentary methods of livestock farming and dairy. The fifth is fighting against the more dangerous sides of identity politics and populism. And there is a lot of that—a lot attempts to drive a narrative that is divisive, and a narrative that’s not borne out by the realities or the facts but serves political ends and purposes.

And I think I’ll stop there, and hope I’ll have a bit more time on elaborate on some of the issues I’ve spoken on when we take the questions. Thank you very much. (Applause.)

CARUSO-CABRERA: Thank you, Mr. Vice President, for those illuminating remarks.

OSINBAJO: Thank you.

CARUSO-CABRERA: Your focus here is the economy, so let’s start there. And you’ve talked about providing employment and opportunities. A lot of people here, one of the first things they’ll do if they’re thinking about investing in Nigeria is they’ll go to the World Bank measure Ease of Doing Business. You come in at forty-six out of—you come in at—excuse me. It’s 146 out of 190. And then when it comes to Transparency International’s corruption index, you also score quite poorly, coming in at 144 out of 180. Do you want to address any of those issues head on?

OSINBAJO: Well, I think the first thing to bear in mind is that we moved up in the past two years twenty-four places on the World Bank Ease of Doing Business, the scale to which you refer. We moved up twenty-four spaces—twenty-four places, which, you know, by all accounts, is quite significant. We’re also considered by the World Bank top ten—one of the top ten reforming economies in the world. So there is no question at all about the effort that has gone into making Nigeria an easier place for doing business.

I really look at the major indices, you know, that the World Bank measurements go by. You know, we’re looking, for instance, at the ease of acquiring business registration, registration of companies, et cetera, which is now—which you can now do electronically. So that’s—you know, we’ve been able to deal with that. The ease of registration for tax, that’s also being done electronically. And, you know, several other areas where we’ve moved up—registration of title, et cetera. You know, these are areas which, of course, the World Bank considered when we moved up—so many spaces up.

So we think that as far as the Ease of Doing Business is concerned, you know, we’re doing a lot. There’s also what we do now. We do focus labs where we look at investors who are interested in certain areas of the economy and who may be having difficulties. And we bring them into the same room with all of the MDAs and the government agencies, the regulators that are concerned. And we work through those issues with them and try to resolve this. And for us, I mean, attracting business is existential. So there’s no question at all that we’re going to make it easy as possible for anyone who wants to do business.

CARUSO-CABRERA: What about moving up on the corruption index? What have you done there, and how do you plan to improve that?

OSINBAJO: Yeah, yeah. I think that—I think the corruption index—what has happened is that we’ve basically remained—you know, we haven’t dropped, you know. But I think that the most important issue with respect to that is the work that we’re doing—the anti-corruption work we’re doing. For the—everyone would probably appreciate that the major—one of our major—aside from security and the economy, one of our major plans of our policies is the anticorruption war. And we’ve done, you know, tremendously in that respect, especially with respect to grand corruption, official corruption, et cetera. And this is borne out by the fact that our president was recently nominated as the corruption champion for Africa—the anticorruption champion for Africa.

There’s a lot that needs to be done, you know? And we’re working through especially processes that require, you know, interaction with bureaucrats, you know, and all of that. And we’re working through that. The president recently signed—well, not so recently, almost two years ago—signed executive order one, which basically speaks to the question of timelines for ensuring that a delivery on issues of—whether you are processing documents or whether you are processing approvals and those sorts of things.

Now, part of what we’re trying to achieve is to remove whatever bottlenecks may encourage petty corruption. And that’s why executive order one was signed. And we’re also, you know, looking at how to ensure that there is less interference—or less discretion, which is why we’re doing a lot of stuff. We’re going electronic in so many different things—company registration, approval processes, et cetera. So I think that when we’re next—when we’re next assessed we’re bound to do much, much, much better, especially on the anticorruption index.

CARUSO-CABRERA: Just so I understand it, so when you have things done electronically that eliminates the interaction with the bureaucrat, where the corruption could happen.

OSINBAJO: Yeah, yeah. Discretion, for one thing, yeah.

CARUSO-CABRERA: Any other examples that you can give about that reduction or what’s being done? Is it higher levels of prosecution or interdiction?

OSINBAJO: Oh yeah. Oh, yeah. Yeah. I mean, I think that compared to any—compared to the past ten years even, we’ve almost tripled the number of convictions of especially senior public officials—has almost tripled. And what is more, the—we’ve also been able to ensure that where cases of corruption are reported, they are prosecuted. You know, sometimes because our legal system tends to be slow it may take a while to get to the end of the prosecution. But we ensure that anyone who is accused of corruption is at least taken through the prosecutorial process. And we expect, of course, that at the end of that, where they’re guilty, they are convicted.

We’ve also taken back large sums of money that were stolen in previous years. We’ve taken back large sums of that. For example, recently we took back about almost $200 million from the Swedes. This was money that was taken out of the country by previous regimes, especially the military regime. We’ve claimed that back. We’ve also claimed back quite a bit of money—you know, seized assets of persons who have been involved in official corruption of any kind. And the figures are huge. As a matter of fact, we have a line in our budget for recovered funds, you know, through the years. And that we’ve been doing very diligently.

CARUSO-CABRERA: Could you talk more about the situation when it comes to security. You talked about in the north of the country dealing with Boko Haram that you’re collaborating with neighbors. There’s intelligence sharing with the United Kingdom and the United States. Can you give us more detail on what’s being done? It’s a situation that’s quite familiar to an American audience.

OSINBAJO: Well, let me say first that with respect to Boko Haram, Boko Haram I’m sure many of you probably have heard of Boko Haram.


OSINBAJO: They operated largely in the northeast of Nigeria. You know, and in the northeast of Nigeria, at some point—I mean, in 2014 they occupied about fourteen local governments. Local governments are the provincial authorities. As of today, they occupy no territory whatsoever. So essentially their influence is restricted to a part of the state where—northern Borno. And really they have—in terms of occupying territory, we can say that that’s no longer the case. But of course, we find very many opportunistic attacks. You know, sometimes they’re in search of logistics attack, army camps, especially where they’re in isolated areas and all that, attack villages every once in a while, and all that.

But the major threat for us today is more the ISIS West Africa Province. You know, Islam West Africa Province. And they have been operating mainly in the Lake Chad—the Lake Chad islands. And there, we’ve worked with the Lake Chad Basin Commission—our partners in Lake Chad Basin Commission—Chad, Niger, Cameroon, and all that—in order to prevent them from being operational or having freedom of action in the Lake Chad islands area. And they also operate in some parts of southern Borno.

But, again, because we’re working very closely with our—with the Lake Chad Commission members and with our neighbors, the multinational joint taskforce which we have, we’re able to contain a lot of their—a lot of their activities. But of course, a major concern for us is that we want to ensure that this does not become a situation where ISIS, you know, finds a base in West Africa, which really is the reason why we’ve often, you know, with international partners—the U.S., the U.K. and some European countries—we’ve often talked about how to put in place a system that enables us to not just enjoy intelligence gathering from them, and training, but also perhaps more support in terms of arms and ammunition, especially the ease of purchasing arms and ammunition, which is very, very important for us in prosecuting this war effectively.

CARUSO-CABRERA: I assume this will be a topic of conversation tomorrow with Vice President Pence when you meet with him in D.C.

OSINBAJO: Well, I’m unable to say exactly whether it will be or will not be. (Laughs.) But obviously it will be—this is a very important point for us.

CARUSO-CABRERA: We’re about to take questions from the audience in just a few minutes. Let me get the last question in from me. Tell me about your thoughts about the election, where turnout was incredibly low. In areas where the president received support turnout was very high. In areas where he does not have a lot of support, turnout was very low. Led to credible accusations about voter suppression. Are you satisfied with the results of the election? And can you tell this audience that they were clean?

OSINBAJO: First of all, that narrative is not even correct. I don’t think it’s correct at all to even suggest that in areas where the president, you know, more voter turnout, and in some places there was voter suppression. Not true at all. I think that generally speaking, if you look at the trend of elections in Nigeria, and if you look at the figures of elections in Nigeria, there’s absolutely no difference between this and 2015 elections. In the various places where we won in 2015, we won again, you know, in some cases sometimes lower, sometimes higher. But we won again.

In some of the places where we won in 2015 we lost, in some we won. I’d give you an example, just to say that there couldn’t have been voter suppression. So, for example, in the southwest we lost in Oyo state. We won in Oyo state in 2015. So in the north central we won Benue state in 2015. We lost now. So I don’t think any of that—and you see, the whole problem is that when people lose elections there is a tendency for them to find all sorts of reasons why they lost the elections. You will not find a single state—a single state—where even if you look at—and had to look at the petition of the opposition, they are at the tribunal at the moment.

So they give an example, for instance, of Borno state, which they say, oh, on account of the insurgency in Borno state there should not have been such a high turnout of voters. But in their own figures the turnout is even higher. The figures they give for the same Borno state. So I think a lot of this is not—there’s no truth to it whatsoever. And I think it’s just people just—it’s just sour grapes, frankly.

CARUSO-CABRERA: At this time, I’d like to invite members to join the conversation with questions. Anybody have any questions? Right there at the back. The lady has her hand up. Please identify yourself and your organization. And please questions, no speeches. I’ll cut you off. (Laughs.)

Q: Hi. Rebecca Tuliniva (ph) from Morgan Stanley.

I have a question, Mr. Vice President. Recently we saw Ghana and the Ivory Coast work together to finally set a floor price for cocoa. Does Nigeria want to—you know, plan to spearhead or start trying to work with ECOWAS to start selling and buying as a bloc? Is that—

OSINBAJO: On cocoa?

Q: Not cocoa, but just in general, using—you know, using ECOWAS to buy, sell, do things in a bloc, opposed to singularly country by country?

OSINBAJO: Do I take all of the questions.

CARUSO-CABRERA: No, we go one by one. So if you could answer her question, and then we’ll go on to somebody else.

OSINBAJO: OK. All right. OK. Let me say that at the moment we function within ECOWAS—as you know, ECOWAS is an economic bloc. And we do some—you know, we do a lot of intra-ECOWAS trading. But the African Continental Free Trade Area is one which perhaps offers greater opportunity, you know, for intra-African trade. But we’re naturally cautious about that, because we are the largest market. And we’ve been targets for both smuggling and dumping over the years. So we’re consulting and doing our assessments, especially with local producers. Especially in the areas of agriculture and manufacturing, to be sure that we’re entirely ready for that kind of—for that kind of activity.

But we’re not at the moment working to jointly sell products. It’s more intra-African or intra-West African trade. We’re not looking at jointly coming together to sell any products. As a matter of fact, when you look at both Ivory Coast and Ghana, I think, they still come a very, very poor second and third to Nigeria’s market. So, I mean, Nigeria selling by itself is huge, which is really the point. And we’re not really working to sell together. We don’t have that kind of arrangement yet, no.

CARUSO-CABRERA: Right here in the front. Please state—and a reminder, this is on the record.

Q: Mr. Vice President—

CARUSO-CABRERA: What’s your name?

Q: Tony Carroll. I’m a lawyer in Washington and an investor in Africa.

And we met first with your former boss Bola Ajibola in 1992. And we—I was there for a delegation of the American Bar Association. And we talked about the restrictions on land ownership in 1992, because of the Land Use Act of 1978. Nigeria, your colleague, former Minister Ngozi Okonjo-Iweala talked maybe five or seven years ago about an eighteen to twenty million house unit shortfall in Nigeria. Housing’s a huge crisis in Nigeria. Land reform is still awaiting to occur. You’re a lawyer. You’re a prominent politician. You seem to now, with an election, to have wind in your sails. Can we take on this issue of land reform? Can we loosen up the mortgage market, where it takes sometimes five or seven years to get a mortgage? Is it possible to really bring wealth to Nigeria in a manner of having accumulated wealth of home ownership?

OSINBAJO: Thanks. Thanks, again, good to see you again.

I think that, first, there’s a lot of work that’s going on with land reform. And this is part of our ease of doing business initiatives. We’re working with both Lagos and Kano, which are the big areas, and Port Harcourt, on land reform. And we’re seeing tremendous activity. As a matter of fact, Lagos, with respect to registration of title, we’ve seen vast improvements in terms of registration of title, even cost. So that is, you know, considerably much better than it used to be. Same as Kano. And I want to work with the sub-nationals. As you know, it’s a federation where states have control over their lands. So it’s not a federal thing. We can’t, as it were, simply say: You guys do this. But we’re working with them, with these—with some of the bigger states where the commercial activity tends to be—tends to be more vibrant. And that’s Lagos, Kano, and also Port Harcourt.

So I think that there’s plenty of room for that. As a matter of fact, our—what we call the Family Homes Fund is a one trillion naira fund, which we’re using to—which we hope will push both the mortgage market as well as the housing market. Many of the states have already given up large tracts of land to make this happen. Where we’re experiencing some difficult is, as you pointed out, with respect to the mortgage market. But really, that’s more a matter of funding. It’s really more a matter of funding the mortgage market. But we think that with the potential that there is for housing across the country, and the great need that there is, we think that what we should be able to solve that problem.

Already we have a few takers for, you know, reforming our mortgage market, including the AFDB, the African Development Bank. The AFC is also keen on working with us. So we think that there is plenty of room for activity in the mortgage market. And we’re also looking at our large pension funds. We have about almost seven trillion today in our pension funds. So we’re looking at how to de-risk the pension funds. At the moment, the pension funds are mostly invested in treasury bills and all that, which is safe, you know. But we want to de-risk it so we can use that also in the housing market to deepen our mortgage—the mortgage market. So there are great prospects there.


Q: Thank you. Thank you, Mr. Vice President.

I was recently in Abuja for the Democracy Day, and I also had opportunity to also listen to Mr. President Adevila (ph) during the dinner reception for that. At Eagle Square he did mention—

 CARUSO-CABRERA: And what’s your name and your affiliation?

Q: Oh, my name is Ibe (sp) and I work for C.V. Starr Companies, a $20 billion commercial insurance investment firm based here in New York City. I’m leading the Africa effort, and Nigeria is priority market for us. We play a lot in oil and gas and infrastructure.

And I’m happy that you just spoke about de-risking, because we’re in the business of de-risking investments. So because we play in the infrastructure space, the president mentioned at Eagle Square the importance of power infrastructure for economic development in Nigeria. So my question is, for a firm like C.V. Starr, trying to get into Nigeria, and we are trying to de-risk infrastructure investment, how do we make sure—especially when it comes to transparency of those projects—you know, American firms have had difficulty, especially when it comes to power infrastructure. We want to come in, and we want to partner with the government, but we want to make sure that we actually understand the nature of the risk, because if you don’t understand the risk you’re not going to be able to de-risk it. So issues of facilitation. You know, people want to talk to you, I know, the vice president, and end up knowing the vice president. So it’s a big concern for us. I’m trying to navigate to bring our company into Nigeria. So specifically, concrete actions or your advice to someone like me and C.V. Starr. How can—how we can play in Nigeria market without being a statistic of you can’t do business in Nigeria because of all these issues. Thank you so much.

OSINBOJO: Thank you. So the—so for a company that wants to come into Nigeria, especially if you are looking at the power sector, I think that an easy entry is through Power Africa. Power Africa, again, as I said earlier, is a USAID program which basically seeks to fund all transaction inquiries, transaction costs, et cetera, for the entire power value chain. So that’s for generation, transfer, whichever part of the value chain you want to come into. I think that should offer some comfort for, you know, an American-based—for an American-based company, because that really is the point that Power Africa tries to make. That here they are, ready to be that interface between potential—between potential customers, the power sector, the government, and investors such as yourselves. So I think that makes it easy.

Aside from that, we have the NERC, which is the regulatory commission, headed, again, by an American—former American professor, Professor Momoh, who are able to give whatever support or whatever directions that you may require. So we have NERC as well, which is—you know, which would supply that same kind of information. Then we have the NIPC, the investment promotion commission. Any of these will more than—are more than able to give you whatever information, whatever direction or support that you require.

CARUSO-CABRERA: There’s a lady here, has a question.

Q: Hi. Good—I’m Kemi Osukoya from The Africa Bazaar Magazine. I have some questions, yeah, so.

CARUSO-CABRERA: One. One question.

Q: One? OK. (Laughs.) You mentioned industrial park, that you would be—the government would be building at Lekki and Aba. Can you talk to us about how you plan to fund that park, and also where will your resources come from?

OSINBAJO: Yeah, the parks are already there. So there is no question about how to fund them. They are all private sector funded. The Lekki Industrial Park, for example, is already there. And we have for many of us special economic zones. We have a lot of support from the African Development Bank, Afro Ex-Im, the AFC. These are investors. We set up a company which is called the Nigerian SEZ Company. This is a public-private partnership led by the private sector. And these institutions, as I mentioned, are major investors. They’re also private investors who are involved in this. We have a Singaporean investor. We have Dangote, which was also an investor, and several others. So it’s private-public, but driven largely by the—by the private sector. And we have these SEZ company.

So the investment is not an issue. We are not—government certainly will not have the resources to build all of these SEZs. This is why we’re working with the private sector. For example, the Enyimba City, just as I pointed out, already this is—this is an investment where you have several private sector participants. And it’s there. It’s been set up. We have the anchor tenants. People are already coming in. And we’re already starting to do the business. Our own—there’s no way government does not plan—we’ve never planned or desired to be the funders of any of these things, because our entire budget is 8 percent of GDP. So why should we leave out the 85 percent private sector that makes things happen? For us, it’s private sector.

CARUSO-CABRERA: There’s a gentleman right here with glasses, blue suit, in the middle.

Q: Your Excellency, John Coumantaros, chairman of Flour Mills of Nigeria, PLC. We’re the largest food and agro-allied company in Nigeria, founded in 1960. So we show that over the long term investment in Nigeria patiently developed is a very good business. And we’ve been there for sixty years.

Apart from the very good work that is going on in developing agro industrial value chains in cassava, rice, tomato, soya bean, maize, to develop an agricultural and industrial value chain that is world class and competitive, I know that another area of your focus which is dear to your heart, and we’ve done a lot of effort on personally and through the industrial council, is technology, which is the future—one of the futures, apart from agriculture and industry, of the nation. Entrepreneurial skills are abundant. Know-how skillsets of Nigerians are tremendous in developing apps for Africa. We are the portal to the African continent and eyeballs.

CARUSO-CABRERA: And do you have a question?

Q: Yes. And my question is, could you elaborate a little bit on all the initiatives you’re making in the technological front, inviting perhaps Facebook and Google to help found the Niger Valley in Nigeria—the portal to Africa?

OSINBOYO: Thank you very much, John. We—just as you pointed out, we are, you know, very devoted to the work—to promoting technology and to promoting enterprise in particular and, you know, in technology. We have also had the very enthusiastic cooperation and support of many of the major companies. I had mentioned earlier that Microsoft intends to establish their Africa development center in Nigeria. That announcement was make about three weeks ago, or so. Google is working with us on our broadband infrastructure for all by 2023, where we’re hoping to expand broadband infrastructure across the entire country. And that is work that we’re doing with Google at the moment.

We’re also doing quite a bit of work, especially technology for education which is very important to us, with Cisco and Google is also helping with that. But we’re developing a STEM curriculum, although we call ours STEAM, because we have arts, not just science, technology, engineering, and math. But we also have arts included in that. And we think that there—you know, developing—that the way to—because, you know, when you look at the education, for instance, in Nigeria, you look at the sheer numbers, you know, teacher training—(inaudible)—millions, you know, the number of out-of-school children, making up that deficit, and all of that. The only way to do this is using technology and on scale.

So we’re working with quite a few of these technology companies, and very many local companies as well, to develop so many different innovations, especially with respect to being able to do teacher training on scale and education on scale, especially the first nine years of the life of a child. So our technology is also driven in that—in that particular way.

We’ve also founded our social investment program, which is, you know, giving credit—microcredit to over two million petty traders. That would—you just couldn’t achieve that without technology, and a lot of the local technology companies provided the software and provided the means to reach the two million—not just enumeration, but also payments.

So we’re developing, you know, a very vibrant fintech sector. And as you know, there are so many areas in which just the development of software and the development of apps and all of that is so—there’s so much happening today. And we hope that that is going to continue because we think that this is going to be a major area of growth for us, especially also for jobs.

CARUSO-CABRERA: You mentioned the rollout of broadband across the country. You have a sense of a timetable of that? That would be transformative.



OSINBAJO: That’s our target, yes. Broadband, yeah.

CARUSO-CABRERA: And that—and that reaches what percentage of the population, do you think?

OSINBAJO: That’s all—that’s—


OSINBAJO: We’re hoping that we can go to the entire population, yeah. Already, you know, we have mobile—just as I pointed out, we have mobile, you know, penetration of a hundred and—

CARUSO-CABRERA: —(1)14 percent? Yes, that’s what you said. Yeah.

OSINBAJO: —fourteen percent—.9 percent, yeah.

CARUSO-CABRERA: That means a lot of people have more than one phone.


CARUSO-CABRERA: Yeah. (Laughter.)

OSINBAJO: We have one—(inaudible).

CARUSO-CABRERA: There was a gentleman back there and then we’ll get to you. Right there, the glasses.

Q: Hello. Good afternoon. Kaido Gunro (ph) from Ion (sp) Holdings. Also spent four years working in Abuja to help set up the sovereign wealth fund.

My question for you is also—

CARUSO-CABRERA: In Nigeria. (Laughs.)

Q: Yeah, in Nigeria.

My question for you is, in terms of the sovereign fund with a dual mandate—as a savings fund, as an infrastructure fund—how do you see the NSIA as a tool for national development and also contributing to infrastructure development? As it’s hit some pretty great targets. Thanks.

OSINBAJO: Yeah. Well, the NSIA, which is our sovereign wealth fund, is very important in practically all that we intend to do.

I’m sure you understand the structure of the NSIA. First, you know, again, we’re a federation. There are subnationals. Every one of the subnationals has its own funds, but we agree that the—that the federal government and all the states will contribute towards the NSIA. So all of us in some sense is, you know, equity holders in the NSIA, and everyone is working together. So a lot of the funds for the sovereign wealth fund come from not just the federal government, but also the state government, which makes, you know, it a fairly robust fund.

The other function—the function—the functions we see for the NSIA are in facilitating investments that we think may require some intermediation by a more private-sector-driven institution. So, for example, our infrastructure fund is one that the NSIA is driving, and that’s a very major fund for us because it really is the—is central to a lot of the efforts we’re making in infrastructure investments, which as I pointed out is a major part of our—of our policy. So they—so they help a great deal with that. They are the—you know, they are the custodians of our infrastructure fund.

We’ve also found that the NSIA is—you know, plays a very important role in our housing, for example, in our housing fund. They’re also a major contributor to our housing fund.

They also, at the moment—we’re doing a national trade platform, which is a single—a single window for exports and imports, you know, where we’re behind, you know, several other countries in establishing a single window. Part of the reason why we had some difficulty with that was that there was a very strong view that this should not be government-driven, that it should be as much as possible outside of government, you know, so that we don’t have the sorts of complications you have with bureaucracy, et cetera. So the NSIA came in to hold the special-purpose vehicle that will run the trade platform, the single window.

So we find that the NSIA has been extremely useful not just as a custodian of funds, but also as a financial intermediary for us and interface sometimes with the private sector and with international finance. So those are the—you know, my general points.

CARUSO-CABRERA: Lady right here.

Q: Thank you. I’m Arlene Getz. I’m a journalist, most recently with Reuters.

I’m curious to hear your views on China’s Belt and Road Initiative in Africa, not only how it affects Nigeria but regionally and continentally. Do you—as you know, it’s been—you know, it’s attracted its fair share of controversy, and I would just like to know where you stand on that.

OSINBAJO: Yes. Thank you.

Well, with respect to China’s Belt and Road Initiatives, we of course, as you know, subscribe. We are part of that initiative.

The important thing for us is that, with respect to infrastructure, we want competitive capital. We want to see some competition in terms of the capital that we are—that is, that we use for it. Our preference, obviously, is to have private capital doing infrastructure, especially where they can see an income stream. But what we find is that where that is impossible, then we’re looking for cheap concessional loans, you know, and China offers to a large extent cheap loans for us for infrastructure.

Sometimes there are difficulties with negotiations, because obviously, you know, when you’re offering a cheap loan you also want a few extra conditions here and there. But what we’ve found is that it works for us in the areas where we have—where the Chinese have given us concessional loans. In railways, for example—the Lagos-Kano railway is one, it’s a good example—we think it works for us.

And when we compare with—when we look at what the competition is, especially in areas where private capital doesn’t want to go—so in railways nobody wants to build a railway for you. No private capital is going to do that. They want to take the concession when you build the railway and you put on the rolling stock, you know. So we find that, you know, for us it’s a good option. It’s a good option. But of course, we are also—we also try as much as possible to be as savvy as possible in the—in the negotiations.

CARUSO-CABRERA: What are—what are some of the extra conditions the Chinese ask for in exchange for giving you cheaper capital?

OSINBAJO: Well, for one thing the Chinese would rather, of course, that a Chinese company executed the project, you know.

CARUSO-CABRERA: Typical, yes.

OSINBAJO: And there are good—there are several, you know, Chinese—

CARUSO-CABRERA: And Chinese employees, generally, no? Or is that—

OSINBAJO: Well, no. I mean, we don’t—we insist. I mean, we have an executive order, 5—we call it Executive Order 5 where we insist that unless you cannot find, you know, Nigerian engineers who can do the work, we will not accept engineers from other countries, whatever those countries may be. But what you tend to find, though, is that where you are dealing with fairly, you know, complicated construction work and all that, of course, we will give what we call expatriate quarters to some of their own engineers and all that. But we insist in a lot of our agreements, following Order 5, that we must have the participation of Nigerian engineers.

CARUSO-CABRERA: Can you give me an example of the price competition when it comes to the cheap capital—if you were going to get it from the private sector it would be X, if you were going to get it from USAID it would be this, and the Chinese give you what?

OSINBAJO: Hard to say because it just depends on what sort of—it depends on what sort of (money ?).

CARUSO-CABRERA: One example. (Laughs.)

OSINBAJO: You know, I think that—hard to say. It’s hard to make those comparisons. For example, if you look at generally the sorts of loans you would get, it would most likely be commercial loans if you are not—if you are not going through a multilateral. Very few governments would be like the Chinese, will give us 1.5, 2 percent, you know. So you are most likely going to find something in the region of, say, 7 percent, you know, maybe even higher, you know. But these days, I think, with increasing competition we can negotiate, you know, maybe better concessional loans.

CARUSO-CABRERA: Well, 1 ½ percent’s a lot cheaper than 7 percent or 8 percent, right.

OSINBAJO: Oh yeah. Yeah. When you see the—yeah, it is. It is much cheaper. It is much cheaper. But you also find, you know, again, that if you throw it open to competition, you might be able to get not just necessarily a better deal, but also, you know—depending also on technology, you might find that this is the technology you prefer. You may not be able to afford it, but it’s a better technology and all of that. So there are—there are factors that have to be weighed.

So it’s not always about the cheap money, if you see what I mean. I mean, it’s not always about the cheapest. Sometimes you’re trying to—you say, OK, we might be prepared to pay a little more because this is where we will find the best technology. But by and large if you are offering me good, cheap money, I’m more likely to be friendly.

CARUSO-CABRERA: The current battleground in the world is about Huawei.


CARUSO-CABRERA: Do you use Huawei? Do you use ZTE? Do you have any issues with using Chinese technology in the rollout of broadband?

OSINBAJO: Well, at the moment we—

CARUSO-CABRERA: Or in the rollout of 5G, excuse me, not broadband.

OSINBAJO: Well, we—well, we haven’t rolled out 5G, you know. We haven’t, so we don’t have that complication. But we welcome practically every company that wants to do business with us. Huawei are in Nigeria as well, you know, but again, so are all the other technology companies.

I don’t think—we haven’t come to any kind of point of great decision-making in terms of whether or not 5G or who will do 5G. As a matter of fact, we think that we are going to do the 5G ourselves, our local industry is going to do 5G. (Applause.) I don’t think (we’ll be using Huawei ?). Oh yeah.

CARUSO-CABRERA: Where are you going to get the equipment?


CARUSO-CABRERA: Yeah, where do you get the equipment? You’re going to manufacture it right in Nigeria?

OSINBAJO: We are going to develop—we are going to develop equipment as well. How did the Chinese get the equipment? How did everyone else get it?

CARUSO-CABRERA: Well, that’s a—that’s a long discussion right there.

OSINBAJO: Yeah, sort of like, you know, the software. (Laughter.)

CARUSO-CABRERA: You think the vice president might bring that up tomorrow?

OSINBAJO: Well, who knows? (Laughter.) Who knows? Who knows?

CARUSO-CABRERA: Yes. One final question? Yeah, I’ve already got one, sorry.


CARUSO-CABRERA: If I—this is always my final question if I have the opportunity: What should I have asked you or did you expect me to ask you? (Laughter.)

OSINBAJO: Frankly, I’m not—I’m not certain what you haven’t asked.

CARUSO-CABRERA: OK. Well, thank you very much. It’s been a pleasure having you here at the Council on Foreign Relations, Mr. Vice President. Thank you. (Applause.)


Top Stories on CFR

Latin America

Nationalizing Mexico’s lithium reserves and extending state control over electricity and energy will undermine the region’s prosperity and security.


The West should keep open the possibility of diplomacy with Russia.


Marcos Jr's decisive victory would change the political landscape in the Philippines.