Britain eventually exited the European Union on January 31 this year. It was the climax of a process that began over three years ago. The British people had decided in a referendum that they preferred to leave the economic bloc. The United Kingdom has now moved into another phase of the divorce. Negotiation has begun for favourable tariffs on British exports to the European Union as the grace period will expire on the 31st of December. The European Union is seeking reciprocal concessions on their items of trade too. It is hoped that both parties will agree to a deal at the end of their discussions. Although the United Kingdom may have to navigate an uncharted path in order to sustain its leading position in global economy. The challenges are not insurmountable. So the British should not rue the decision to leave the European Union. There are synergistic opportunities to be explored outside the bloc. There are potential trading partners waiting to be courted for mutual benefits. Nigeria is a leading contender among those potential partners. Why should Nigeria and the United Kingdom have stronger and better economic ties? The United Kingdom with a population of 66.4 million and a Gross Domestic Product of $2.628 trillion is the fifth largest economy in the world; Nigeria with a population of 200 million and a Gross Domestic Product of $376.4 billion is the largest economy in Africa. Hence, if the United Kingdom wants to have a strong footprint on the African continent, Nigeria should be her first choice. Also, Nigeria can double her economic size within the next five years as she draws the benefits of an excellent trade alliance with Britain.
Currently, trades between the two countries have failed to reflect their strong historical ties. Nigeria’s major export partners are India accounting for 30.6% of our exports, the United States 12.1%, Spain 6.6%, China 5.6% and the Netherlands 4.4%. It is apparent that the United Kingdom’s purchases from Nigeria are inconsequential. Meanwhile, an examination of Nigeria’s import partners reveals that the United Kingdom ensures that she makes the top five. China accounts for 21.1% of Nigeria’s imports, Belgium 8.7%, the United States 8.4%, South Korea 7.5% and the United Kingdom 4.4%. The Nigerian Government and the business community must improve on this trade outlook. In view of the critical role that Foreign Direct Investment plays in economic development, Nigeria needs to understudy the United Kingdom on how to attract FDI to her economy. For instance, the United Nations Conference on Trade and Development (UNCTAD) reported that the United Kingdom remained the number one destination of foreign investments in Europe. In 2018, $1.89 trillion FDI flowed into the British economy which was more than the combined amounts that went to Germany ($939billion) and France ($825 billion). Again, Britain’s Office of National Statistics reported that the stock of the United Kingdom’s investment abroad was about $11 trillion in 2017. Similarly, the cumulative stock of foreign investment in the British economy was also $11 trillion in the same period. The Nigerian Government, through the Ministry of Trade, Industry and Investment, should begin to attract substantial FDI from Britain into the real sector of our economy on an annual basis.
British investments in our manufacturing sector will help accelerate the country’s industrialization. Focus should be on the following subsectors: pharmaceutical manufacturing, medical equipment manufacturing, textile and garment manufacturing, footwear manufacturing, production of computers and mobile devices, production of domestic appliances and car assembly plants. The investments are usually accompanied by good manufacturing practices that will ensure that Nigerian-made products meet international standards. In addition, the influence of British investors around the world will make global market penetration easy for our products. Furthermore, Nigeria’s infrastructure can become a big beneficiary of British investments and expertise. British companies should be encouraged to participate in our construction sector. They can help us renew and add to our stock of power infrastructure, road infrastructure, health infrastructure and aviation infrastructure. The quality of infrastructure available in a country is an important factor in the attraction of foreign businesses and investments. Let us get the British to make it happen for us.
Considering the huge economic potentials that are waiting for Nigeria and the United Kingdom, when should the Federal Government commence the process of forging the economic alliance? Carpe diem! Let us seize the day. Nigeria must not get late to the party. The Federal Government must start the campaign for British investments immediately with a view to getting favourable outcomes.Meanwhile, there must be serious efforts to make Nigeria safe for lives and properties if we must succeed in getting the British to come. The Government must redouble its efforts in fighting terrorism. The appropriate Ministries, Departments and Agencies must create a friendly regulatory environment for businesses. The business climate must become more clement. There must be mechanism for monitoring and dealing with public officials who demand bribes from local and foreign businesses. Consistency of policies must not be overlooked by the Federal Government. Let us do things right and Nigeria will be positioned to be a major economic player in the global market. Partnership with Britain will definitely unleash unprecedented economic growth. This will be evidenced by a large percentage of citizens lifted out of poverty, high reduction in unemployment, and considerable improvement in the well being of all Nigerians. The race starts immediately!
Adesuyi is Managing Director, Wealthgate Advisors, Lagos