Britain’s Minister for Africa, the Overseas Territories, Caribbean and International Energy, Mark Simmonds, was in Nigeria recently to explore ways of deepening economic ties between both countries. In an exclusive interview with MARCEL MBAMALU, he said the UK would help Nigeria enthrone transparency in managing its oil wealth as well as overcome challenges of theft. Simmonds, among other issues, also spoke about the Petroleum Industry Bill (PIB).
Let’s begin by talking about why you are in Nigeria at this time...
THERE is the need to deepen econmic and trade ties between our two countries. You will probabaly recall that President Jonathan and Prime Minister Cameron agreed, in a communique, that they would double bilateral trade by 2014.
In 2000 and 2012, we increaseed bilateral trade by 40 percent; so, we are making significant progress. But, of course, there is more that needs to be done.
The main driver behind my visit to Nigeria is to find ways to deepen economic trade ties between our two countries and establish which particular economic sector the UK should be focusing on, and to make sure they are alligned to the Nigerian government and Nigeria’s economic priorities.
From what you said, it appears the (trade) growth figures defy the slow pace of economic recovery in Europe...
Yes, trade is definitely improving and has increased by 40 percent since 2000 and 2012. What I want to say is that both Nigerians and the people of UK are doing more business together, particularly, new UK businesses investing in Nigeria, in a whole range of different economic sectors — transport, creative arts, energy sector and agricultural sector.
These are a whole areas where we can do more bilateral trades together but, we also must not underestimate the potential challenges that exist, which is one of the reasons I’m here to see how we can help overcome them.
One of the challenges from the UK side is the absence of visa reprocity; what is the UK government doing to ensure that Nigerians doing genuine businesses in the UK get their visas in the shortest time possible?
We are very keen on not only encouraging UK businessees to invest in Nigeria but on getting Nigerian businesses to invest in the UK as well.
The visa regime is a clog-in-the-wheel; and that is why we put particular emphasis on running a very efficient business system here. We just introduced the new fast-track visa system. It takes five days and costs a little bit more; but it is working quite well.
We deliver a very significant proportion of those visa applications within the time scale that we put down. What I will certainly urge all Nigerian business people to do when thinking of coming to the UK is applying with all appropraite documentation so we can get the appropraite visa through the system as soon as possible.
The E1, E2 visa classification, for instance, would allow Nigerian businesses live, do business and have easy access to loans in foreign currency; how disposed is the UK government to an understanding that could afford such opportunity to local business people?
There are a whole series or different types of visa. Some are short term and some are longer term and what we need to do is to make sure that appropriate visas are given to the appropriate people.
And, clearly, if there is a genuine business need to have a longer term business visa and the appropriate documentation is provided, we expedite action by giving that visa as fast as possible to the relevant business man or woman from Nigeria, because I’m very keen to encourage additional trade and business tie between Nigeria and the UK; and visa is an important part of that.
Recently, there were talks about spending so much money in retaining Nigerian (and African) prisoners in the UK, suggesting something like ‘prisoner swap’; how much of that challenge still exists?
Nigerian government and the UK government are working closely to finalise what is called The Prisoner Transfer Agreement, which is an agreement that will enable Nigerian prisoners who are in the UK to be transferred back to the Nigerian Prisons System.
The Prime Minister, David Cameron, and President Jonathan agreed on that when they met recently (the details of that is being worked out). It is one of the issues that I have been discussing with ministers while I have been here, as to what time scale we might finalise that agreement to enable prisoner transfer to occur.
How much really does it cost the UK to keep such prisoners?
It costs the UK a lot, a significant amout of money. And it is not just Nigeria; there are other nationals who are in the UK prisons as well; and we are working with not just Nigerian government but other African governments to try and put in place this prisoner transfer agreement elsewhere in the world so that we can free our prisons for the UK people.
To what extent is the UK worried over the so-called squandering of Nigeria’s oil revenue by certain governments, as alleged by former Vice President of the World Bank, Oby Ezekwesili; there were talks about inviting the President to the G8 Summit to discuss the issue?
I can talk about the G8 Summit, which will focuse on transparency, tax and trade — all key issues that are relevant to Nigeria as well as broader Africa. I know that the Prime Minister Cameron and President Jonathan have discussed G8 agenda. In terms of invitations for the summit, we are still working on it and the deatils of the agenda will be known in the future.
Do you think that Nigeria has creditably managed its oil revenue in the last 10 years or so?
I think there has been significant economic growth here in Lagos. There are challenges in other parts of Nigeria. What we need to make sure is that the UK and Nigeria work together more appropriately and we are providing support in enabling the revenue that comes from the oil and hydro-carbon sectors to be spent to the maximum benefit of the maximum number of the Nigerian people. And that is something our National Development Departments are helping to do.
An example is the Petroleum Bill now in the Nigerian Parliament, which is a significant, potential positive contributor to that agenda. And there are aspects of that we think, that will still be debated. For example, we think that there need be more transparency to be able to monitor where the revenue strings coming from the hydro-carbon sector are going.
In addition, we have agreed with the Nigerian government that we will work with them to reduce the amount of oil theft that is taking place, because it’s a significant contributing factor to reducing the amount of oil revenue coming into Nigeria from the oil extractive business.
What has become clear is that there is an appetite in Nigeria to ensure the revenue that comes from the oil is used to the maximum benefit of the Nigerian people. We have experiences in building governance capacity to make this happen and it is something we are working on together.
Certainly, the oil theft in the Delta is quite a significant issue and there have been discussions on how the UK government will assist the Nigerian government make a significant reduction in this area.
Africa remains the investment destination for now; how much role do you see Nigeria playing in this direction; is the country prepared to key into the opportunities?
I am an African optimist. I believe the future and potential of Africa is very significant. I also think that Nigeria has a very positive and significant role to play in the economic development of not just the region but, also of the whole of African continent. But, there are still challenges that need to be overcome.
Let me give you two examples, one is, there needs to be more Intra-African trades; and a significaant promoter of that will be to look at reducing tarriff barriers that might get in the way of some Intra-African trade.
I also think there needs to be more cooperation in building regional infrastructure; cooperating in building roads, energy, building other transport infrastructure as well. Once you have the infrastructure in place — your power infrastructure in place — that is when you can start to stimulate economic growth and sustainable job creation.
What other role is the UK going to play in helping the country build this all-important power/energy infrastructure?
It’s one of the main issues I’ll be discussing while I am here. I have discussed with the Nigerian Minister of Trade. We discussed about the energy sector. Well, it is not just the obvious hydro-carbon oil sector that is important.
I think where the UK has a particular expertise is the renewable energy sector, where you have to have a whole range of different energy sources. Renewable will be like solar power or wind power or other renewable energy sources that will make a significant contribution to producing significant energy in Nigeria.
Former President Bill Clinton recently emphasised the need for Nigeria to look the way of renewable energy and sustainable agriculture (he said things about producing ethanol). What challenges do you see in this?
I do agree with ex-President Clinton. Buying ethanol and turning waste into energy, which, of course, will help in other ways as well, could make a very significant oportunity; and the expertise exists in the UK that we can export to Nigeria to help achieve this.
One other key interesting thing I have picked up in Nigeria while I’ve been here — in Kaduna as well as in Lagos — is the importance of driving investment in agriculture (driving agriculture yields, investments in agriculture, technology, as well as not just exporting raw materials but also adding value to agricultural products both for domestic consumption and exports.
All too often, it is just the raw materials and not the added value. And the expertise exists in the UK and it is one of the key areas I’m going to reflect upon when I get back to the UK; how to link businesses in UK and businesses here in Nigeria.
To what extent could insecurity in Nigeria, Mali, Sudan, Somalia and others hamper the Intra-African trade that you talked about?
You are right to highlight the fact that, of course, there are challenges. The challenges that exist in some parts of Africa are still very significant. For example, we have been particularly focused in the UK in trying to put Somalia back on its feet. And while there is a new Somalian government in line with the UK trying to make significant progress, there is still an awful amount that needs to be done, but a big, important, populated nation like Nigeria, with a serious economic power house, could make a really big difference to the regional economy by assisting the countries around it trade with each other. And I think it is an important facet of economic growth and economic development to have inter-regional trade and breathe into the legitimate economy.
Some of that economy are so far at the moment outside of their official statistical calculations because we all know that there are still lots of business that are being done across boundaries and between different ethnic groups.
When people start to trade with each other, some of these tensions and challenges that you talked about start to disappear because it is in the same people’s economic interest to get on with each other and to do business with each other to raise their standards of living.
So, I see it the other way round: The beginning part is the trade and economic development and then the challenges will dissipate over time.
Do you see Nigeria’s financial services sector as being strong enough to drive economic growth?
There are clearly different aspects of the financial services sector but there need to be in any successful market place, a degree of competition to ensure that Nigerian entrepreneurs who have good business models have choices about where they get money, mindful that the cost of money will come down.
One of the discussions I have had here is how we might be able to encourage the banking sector. You are absolutely right that to have a vibrant, dynamic and competitive economy, you have to have a very strong financial services sector. And we think that the financial services sector currently based in London could do more here in Nigeria.
Indeed, the Lord Mayor of London will be leading a financial services trade delegation here in March/April, 2013 for the exact purposes that you are talking about.
On reliable statistics for economic growth
I really think that progress has been made in Nigeria. That is not to say it is finished for adequate data in all areas or fields. But, I think what we have to do now is to learn the lessons of where it has made significant progress and why.
There are two examples: I met with the governor of Lagos. He and his team have made significant progress based on the data collection and creating a link between tax payment and delivery of services. The people are being made to understand that it is a direct correlation for the money which they pay to be seen on the service delivery on ground.
Secondly, I discovered in Kaduna that the Department of Internal Development is working with the State government to give them the basis of statistical data so that they can analyse where the gaps are, to make sure they spend the money that comes into that account for purposes they are meant for.
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