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TEXT OF ADDRESS BY PRESIDENT OLUSEGUN OBASANJO AT THE OPENING OF THE COMMONWEALTH-NIGERIA INVESTMENT CONFERENCE

Abuja, Monday 28 February 2000


I am delighted to welcome you to Abuja and to address you this morning.  It is gratifying that the Commonwealth- Nigeria Investment Conference is being held in this country under a new democratic dispensation.  The theme of the Conference, THE NEW DEMOCRATIC NIGERIA: INWARD INVESTMENT OPPORTUNITIES, is indeed germane to the hopes and aspirations of the citizenry who, after so many years of economic decline and falling standards of living, now expect economic prosperity with visible improvement in their quality of life.  I, therefore, commend the organisers of this conference for their initiative.

Nigeria is a land blessed with vast natural resources, abundant mineral wealth, including huge crude oil and gas reserves, and large deposits of a variety of solid minerals, fertile agricultural lands, educated but relatively cheap labour, a large and vibrant population and a sizeable domestic market.

It is however, disheartening that despite our endowment with all these resources, the Nigerian economy has been in steep decline over the past two decades.  The Nigerian economy is yet to experience the necessary critical structural changes that would guarantee rapid and sustainable human development.  Poverty and unemployment are seemingly endemic.  Educational and health facilities are degraded and the services provided have declined, quantitatively and qualitatively.  The infrastructural facilities are in a state of decay.  The economy remains mono-cultural and depends mainly on the sale of crude petroleum, with agricultural cash crops contributing a small proportion to export earnings.  The prices of all our exports are externally determined, and there is the relentless movement of the terms-of-trade against us.

Nigeria today ranks among the poorest nations of the world with a per capita income of less than 300 US dollars per annum, a sharp and tragic fall from the per capita income of more than 1000 US dollars that we enjoyed in 1980.

The Nigerian economic statistics in the recent past graphically
illustrate the decline. Real Gross Domestic Product (GDP) was cumulatively negative in the 1980's.  More recently it declined from 3.4 per cent in 1996 to 3.15 per cent and 2.36 per cent in 1997 and 1998 respectively. 
Furthermore, it has been estimated that a GDP growth rate of about one percent was achieved by the end of 1999, which is much below the population growth rate of 2.83 per cent.

Regarding the real sectors of the economy, the Agricultural sector
registered less than 4 per cent growth rate, contributing about 32.0 per cent to GDP in 1999.  The manufacturing sector, on the other hand, continued to produce at below 30 percent of installed capacity and contributed less than 5.0 per cent to GDP.

As you are also aware, in the external sector, the overall balance of
payments has remained over the years in persistent deficits owing largely to the impact of the external debt burden.  The external debt stock of the
nation has continued to increase and stood at 28.04 billion US dollars as at the end of 1999.  Our debt service obligations are very high and have
constrained our ability to mobilize resources for essential and critical
social sector investments and other developmental purposes.  The impact of these sad developments on the standard of living and quality of life of the average citizen has been devastating.  The incidence of poverty has increased from 28.1 per cent in 1960 at independence to 48.6 percent in 1985 and to 65.8 per cent in 1996.  In absolute terms, the population of the really poor increased from 35.0 million in 1985 to 66.0 million in 1996.  Also, the 1999 HUMAN DEVELOPMENT REPORT of the UNDP ranked Nigeria as number 146 out of 176 countries, which puts us among the 30 poorest countries in the world.

Your Excellencies, distinguished ladies and gentlemen, this is the urgent challenge before the new democracy in Nigeria.  The citizens demand and deserve early economic success.  We can not achieve this without massive inflows of investment.  And we know we must create the pre-conditions for such inflows.

This administration has taken bold steps to establish the link between good governance and the achievement of sustainable levels of economic growth and development.  We have taken measures to re-introduce transparency and accountability in the utilization of public resources.  It is intended that the Anti-corruption Bill - now in its final stages in the National Assembly - will put in place a new and more stringent legal and institutional framework for combating corruption in public life.  We are resolutely committed to pursuing the rule of law, respect for human rights and dignity, the sanctity
of contracts, the protection of legitimate investments, and the protection of intellectual property.

We are resolved to reduce the cost of doing business in Nigeria.  The large sector of unproductive and inefficient public utilities and other companies which have been a huge drain on the nation's scarce resources over the years, are being restructured and will be privatised - transparently- in phases already announced.  As you are aware, the National Council on Privatisation and the Bureau of Public Enterprises have been re-structured and are vigorously pursuing the privatisation programme.

 The first phase of the privatisation exercise involving companies quoted on the Nigerian Stock Exchange took off in mid-December 1999 and this will last till May, 2000.  The other phases that will involve the privatisation of larger companies and the utilities will be completed before 2003.

This exercise is also an important plank in the Administration's efforts at making the private sector to become the economy's engine of growth.  It is also in consonance with the Administration's principle of promoting a deregulated, private sector-led production and distribution system, which is sufficiently attractive for local and foreign investors alike.

In furtherance of this Administration's determination to put the economy on a path of steady growth and development, the need to provide incentives to investors as well as eliminate bureaucratic bottlenecks and bad practices cannot be over emphasised.  Towards this end, the newly established Nigerian Investment Promotion Council (NIPC) is being strengthened to act as a one-stop clearing house for all investment requirements in the country.  Our missions abroad have been instructed to issue visas to potential investors within forty-eight hours.  Our aim is to turn the bureaucracy into genuine facilitators of business development.

We fully recognise that the Nigerian market conditions must become internationally competitive if we are to achieve our target of attracting at least ten billion US dollars of investment inflows annually.

As you are aware, all legal and administrative constraints to foreign investment have been removed and the process of entry into and exit from the economy by foreigners have been simplified.  We note that in order to secure the confidence of international investors, previous Administrations signed a number of Investment Promotion and Protection Agreements with several countries of the world.  This Administration will not only respect those agreements, we intend to negotiate more of them.

The Government is determined to achieve a lower interest rate regime that is supportive of the real sector of the economy.  The Central Bank of Nigeria and the leaders of commercial banks are fully aware of this objective.  The exchange rate will also continue to be market-driven but with effective measures to prevent the development of any wide premium between the Inter-bank foreign exchange market (IFEM) and parallel market rates. Policies geared at diversifying the foreign exchange earning potentials of the country will be pursued vigorously.

This Administration is fully committed to reducing the country's debt stock through negotiations with our various creditors, particularly the Paris Club.  We are also prepared to introduce appropriate joint-monitoring arrangements to ensure that additional resources released from reduction of debt service obligations are channeled to development purposes and poverty alleviation.

Appropriate monetary and credit policies, complemented with suitable fiscal policy, will also be put in place to moderate the rate of inflation to single digit, while Government pursues policies to reflate the economy in order to stimulate economic growth, the provision of employment and poverty alleviation in our society

It is a priority of the government to provide affordable quality
education in the country in order to make the citizenry more productive.  To this end, the Federal Government, in concert with the other tiers of
Government, has initiated measures to implement the recently launched Universal Basic Education (UBE) scheme.  We are indeed aware that we cannot modernise, become internationally competitive, or improve quality of the life of our citizenry without education for all.  It is therefore the
determination of this Administration that while UBE is being pursued in earnest, programmes for mass adult literacy will also be implemented so that the disadvantaged and the deprived citizens of this country now in rural areas will increasingly be empowered to become more productive in farming and other sectors of the economy.  Similarly, Government will ensure that
secondary and tertiary institutions are well equipped and adequately staffed in order to meet the challenges of the new millennium.

Your Excellencies, distinguished ladies and gentlemen, we are all aware that no meaningful investment can thrive in a situation of high prevalence of crime and violence, which constitute a big threat to security of life and
property.  Our people are generally law abiding but the political and
economic difficulties of the past have drastically undermined our societal value system with attendant increase in criminal activities and corruption at all levels.  Also, tragically, over the years there has been inadequate investment in equipping and training the law enforcement agencies.

This Administration is determined to change all this.  Towards this end, we are taking resolute action to address the grievances of the communities in the oil producing areas.  A new organisation, The Niger Delta Development Commission, will soon be established, under whose auspices more resources will be transferred and major programmes will be initiated to reverse the economic neglect and ecological degradation of the Delta Region.  At the same time, the communities will be fully involved in determining their own developmental needs.

The law enforcement agents are being equipped, and retrained to enable them cope with the challenges of crime and other social crises.  Similarly, the independence of the judiciary is to be guaranteed by the establishment of the Judicial Service Commission - as provided for in the Constitution - and the granting of operational and financial autonomy to the judiciary. 
Improved conditions -of-service have also been introduced for the judicial officers.

Distinguished ladies and gentlemen, I hope that I have succeeded in conveying to you what we are trying to do to create enabling environment for economic prosperity in the new democratic dispensation.  After the rigours of transition, the citizens of this country rightly expect - and deserve- democratic dividend.  Our Administration cannot afford to let them down.  And we are fully committed to using all appropriate means and resources to ensure that every man, woman and child will perceive and reap the benefits of democracy as improvement in their lives, not only as soon as possible but in a manner that is sustainable into the future.

Ladies and Gentlemen, I am hoping to count on you to join us in the
venture to exploit our enormous resource endowments for the mutual benefit of business interests and the prosperity of the people of this Nigeria.

While wishing you fruitful deliberations, let me assure you that we shall carefully consider your conclusions and recommendations.  We expect that such recommendations will also include appropriate commitments by the private sector to which you will hold yourselves accountable.

I thank you.  May God bless you all.