Nigeria operates uneconomic, illiquid gas, power sectors

Dada Thomas, Managing director of Frontier Oil limited and serving president of the Nigeria Gas Association spoke to business a.m. on the investment climate in the Nigerian gas and power sector, and the myriad of challenges operators face, from pricing to fiscal laws governing operations in the sector, as well as the way forward to make the industry attractive to investors. Bukola Odufade presents the excerpts: 

The country has seen as a lot of increase in the gas industry over the years but not as rapidly as we would hope since Nigeria has the largest gas reserves in Africa. What could be the reasons for the low exploration levels of gas in the country?

You are correct; Nigeria has 192 trillion standard cubic feet of gas which is the largest in Africa but domestically we are not really using that gas as best as we ought to be. But for export, we have done reasonably well with the Nigeria LNG project, which is a world-class company. They claim they pay over $12 billion to government coffers in terms of tax; it is a wonderful company. But domestically, the international oil companies that have been in Nigeria for 60 to 70 years have not been willing or interested in doing domestic gas and the reasons are not far-fetched: Government has always controlled pricing and up until recently the price was very low. Indeed, there was a time it was low as 10 kobo and then N10 naira, which is terrible given the fact that they are compelled to be paid in naira for their gas while they were investing in dollars.

It was just recently that the pricing, still regulated, moved up from an abysmal level to what is now emerging to be a reasonable level, but we are not quite there yet. So, pricing is low.

But even when I say that one needs to be careful. If you talk to the upstream gas producers like Frontier Oil, MD Western, Seplat etc. they would complain gas prices are low but if you talk to people buying gas in Lagos to power their factories, they would scream to high heavens that gas prices are too high because they pay $7:20 equivalent in naira; $7 multiplied by N305 is a lot of money. However, in 2015 they paid the same $7 but at an exchange rate of N170, meaning the price has remained stagnant in dollar terms while gas expenditure by producers has doubled.

Now, in the last few years, especially under the previous regime, the government migrated gas price from a very low level of 10–15 cents etc to initially about $1, then to $1:15 now we are at a $2:50 minimum price for the power sector, which is the largest consumer of gas in Nigeria. At the exit of the processing plant, they are allowed an 80 cents per thousand cubic feet for transportation, that is if you are going to deliver gas to a power plant and depending which distance you would be delivering at, it would be about $3:30 per thousand standard, which is quite reasonable. Though that is not the ideal situation, it is somewhat comparable with international prices and other domestic regions since gas prices have crashed all over the world just as oil price crashed. So pricing has always been an issue, but it is getting better but we are not quite there.

Second issue was that, in those old days, the biggest consumer and really the only consumer domestically was NEPA, that old useless entity. NEPA will take all the gas from the IOCs and never pay for it, not that they may pay, they didn’t pay so there was a huge debt piled up, which was only addressed recently by the last administration and the current government. But even then, there is a lot of backlog of legacy debt that is unpaid. So why would you want to invest in domestic gas when you know that your investment is going to be in U.S. dollars and your receivables in naira, which may not even get paid at all.

Recently, indigenous companies such as ourselves and the likes of Seplat, Frontier Oil, Seven Energy, Niger Delta Western, entered the fray, believing that we should contribute towards building the nation by investing in domestic gas. In fact, we had the options of investing in export but we said no, let us develop the domestic market. But guess what? The situation that has been prevailing for 40 years is still prevailing today, which is making the domestic gas market extremely challenging. And how do I mean? Government is still regulating the prices; I have told you now that the minimum price for gas is $2 fifty cents plus 80 cents per thousand standard cubic feet. But in mid-2015, the central bank governor introduced a monetary policy that said, all transactions in Nigeria must be paid for in naira so whether it is you are sending your child to BIS in Lekki, you must pay it in naira. No more paying for your rents in the highbrow environment in dollars, same applied to gas business. Our gas contracts are actually in U.S. dollars, the invoices are issued in U.S. dollars but now we are been paid in naira, that wouldn’t have been bad if there was not the fact that we are being paid at the CBN rate which is now N305, but when you want to buy dollars to repay your loan you have to go the market and the market rate is N365, so you are losing N65 for every dollar of gas you sold.

In 2016 we lost up to N200 for every dollar of gas sold; remember the market went to 510 and CBN was 305, I was going crazy then because I was losing 40 percent of my income, essentially.

Today we are losing 18 percent of our income that is not a fair thing, so the foreign exchange risk exposure that the gas suppliers are bearing on behalf of the gas to the power sector is not fair. Why should we invest dollars and be paid in naira and suffer an 18 percent value erosion? The fair thing would be that the government would allow us to access dollars at the same exchange rate that which we are paid or make an exemption and pay us in dollars or why don’t you just pay us at the market rate rather than CBN rate. So if I’m paid at N360, I will also go and buy the dollar at N360, so I am not suffering any exposure. We are just saying that we need equity in this transaction that is one, it was there 40 years ago, and it is still there today. Firstly, I have talked about price, and the reason I mentioned was the foreign rate exposure.

The third thing, which is very challenging for the domestic gas market is that 80 percent of the Nigeria domestic gas is used by the power sector. That same power sector that has been privatized but it is sick because of the privatization has not been implemented properly since the DisCos who are the people that all consumers interface with are not getting enough electricity to sell. Again the price at which they are selling electricity is not market-reflective. I don’t like the word, cost-reflective. I prefer market-reflective because if you say cost reflective, that means I can build up my cost anyhow, and then say my cost is this and you have to pay. But market-reflective means you go for efficiency, so there would be 5 to 10 players and you go with the most efficient. So let’s go with a market-reflective tariff, which we know would cover any prudent operators’ requirements. They are not selling enough power and they are not collecting efficiently, which is their fault. Collection efficiency has dropped drastically in Nigeria from 60 percent in the days of NEPA to under 30 percent today, which is bad. And then the price at which they are selling is bad. So, put all these together, which are all negative and reinforcing. Basically, the DisCos are not collecting enough money to send back to the transmission company, to pay the generating companies, to the transportation companies that transport the gas, and to pay me, the poor guy who is the foundation of everything.

So the sector is completely uneconomic and illiquid right now. The impact, therefore, is that the power sector debt which is more than N250 billion as we speak, and growing is killing us. Now the federal government did try to do something about that last year when it initiated what is called the payment assurance guarantee scheme whereby NBET via the CBN will pay power generating companies and the gas suppliers their due, gas invoices starting January 2017 and ending December 2018. So for a 2-year period, we make sure you are paid but they are not addressing the debt before that, and interest is piling on that, so how will that be paid? If that scheme ends in December 2018, what would happen in January 2019, would the power sector issues have been resolved such that electricity tariff is market-reflective? Would collection efficiency have increased? Would the DisCos have rolled out metering so that they are actually improving and they know what to bill the consumer? And would they send back enough revenue to the transmission company, generating companies, gas transportation companies, and gas suppliers? Would they send enough money to sustain the entire sector? So there is great doubt. As we sit, that payment assurance guaranty scheme by NBET and CBN has only paid up to August 2017, so there are 7 months of unpaid invoices, while interest is piling up. I can’t pay my debt, it is not a sustainable model, what should happen is that they should be up to date, they should have paid up to February invoices. If I sell you goods, you have a shop and I have a factory, and I give you 30 days credit, you come and collect my goods, and go and sell it, in 30 days, you sell and put money in my account, you are not doing me a favour by putting money in my account, you are meeting your contractual obligations, which allows me to continue to supply you with goods. That is not what is happening in our sector, therefore, it is very challenging for people to continue to invest in the Nigerian domestic gas market.

On top of that, there is no proper infrastructure for moving gas from where it is produced in Niger Delta to where it is consumed in the south-east region, south-south region, south-west region and the rest of the country in the north; there is not enough distribution of pipelines system to efficiently and cost-effectively distribute that gas. So, we need to invest hugely in gas infrastructure. In a country like this, we are going to need easily 4-5 thousand kilometers of gas pipelines, to truly unlock that 192 tscf. We haven’t got anywhere near that. Therefore we need tens of billions of dollars every year in upstream investments for production and processing just as we need lots of money for transportation to get that gas to consumers. Nigeria hasn’t got that money, which has to come from external investors. Why would they want to come into the country when there is so much uncertainty about the policies, the laws, and regulations? Now the good thing is that on the policy level, that has been addressed, the gas policy was approved as part of the petroleum sector reforms called the 7Bigwins, which started in December 2016 by the president. But policies are not laws, policies are policies and they can change anytime, it is laws that people truly look for when they want to have certainty that they have rights and protection. So that thing you have been hearing about called the Petroleum Industry Bill is critical now, to help consolidate all of this. The original petroleum industry bill which has been in the making for more than 14 years, was broken into 4 by this assembly, they passed the first one called petroleum industry governance bill, which is awaiting assent of the president and we are eagerly waiting for him to sign the bill into law. The remaining three are the following; the petroleum administration bill, the petroleum fiscal bill and the petroleum host community bill. Now of those three, the most important to the investors is the fiscal bill, because it is the fiscal bill that would give him the opportunity to do an economic analysis, and determine whether the risk is worth the rewards. And if it is worth the rewards, he would invest and if it is not worth the rewards, he takes money somewhere else.

If there are enough rewards, he could tolerate the community issues, because, despite all of that, the investor is still making money. So in my view, the national assembly is working to pass the remaining bills at the same time. For me it is unfortunate; I wished they had accelerated the fiscal bill just as they had accelerated the PIGB. But in actual fact, it is good that they haven’t done it. From the discussion between practitioners such as myself, other colleagues, international companies, and local companies, we are not quite happy with the fiscal bill as it is right now. We have run numbers and we still believe that given the business circumstance in Nigeria, the fiscal bill is not good enough to attract investors. Maybe if Nigeria was Utopia and perfect, with no community wahala, you didn’t have to have an army to guard your staff and assets in the field, you didn’t have to run diesel to power your offices, you didn’t have corruption killing everything you are trying to do, no huge delays at the ports, maybe the fiscal bill they are proposing would be enough. But we are dealing with a system, where I just told you, just by monetary policy, you wipe away 18 percent of my income. Do you know what that means when you run your economic analysis, 18 percent of your income means your project is dead on arrival? So, we believe that the fiscal has to be better than it is as we are discussing now. We are engaging with the government at the policymaking level at the ministry of petroleum and at the national assembly who are going to promulgate the law. We are airing our views and they are listening, which is a good thing, and so there has been a shift from where they were and where we were and we are closing the gap. Hopefully, we would close the gap on the fiscal bill at a point where it would be a win-win for the investors who see it as attractive enough because remember the dollar is a global currency, and investors have a global field to play in, if you are not attractive, I’ll go somewhere else. The returns might not be as good as yours but it doesn’t have all they wahala that you guys give me.

So we have to try and have a win-win fiscal bill that would attract investors, and a fiscal bill that will be good for Nigeria, now my viewpoint as the president of Nigerian gas association, and the viewpoint of my association is that fiscal policy should not try to use gas as a source of revenue. They are imposing too much tax on gas development. They should be incentivizing gas investors.

So, have there been incentives provided for gas investors?

There has always been an incentive for gas development in Nigeria as that is the reason we have the NLNG company. There were special acts promulgated in the 80s to get the framework for investors to invest in the NLNG. There was the NLNG act, a special act, there have been AGFA, the associated gas framework agreement, there has been NAGFA, a non-associated gas framework agreement, all of these things were promulgated to make sure that instead of flaring gas, we would harness that gas and monetize it. So NLNG was born out of that incentive, the Chevron gas to liquid project in Escravos was born out of that incentive, West African gas pipeline, all these benefitted from those incentives. But those incentives primarily relied on the fact that you can take your gas expenses, which is a loss making business and write it off on oil, what is why people made the investments; you could take your gas investments once it is not profitable and write it off against oil which is always profitable. And that is one of the major sticking points the fiscal policy that is being designed by the government is bent on eliminating AGFA, the ability to write off your gas expenses against oil. Those who have oil and gas operations don’t want that, and I say to them there is a solution, the grandfather existing agreements; if people have already made investment decisions on the basis of AGFA, leave it alone, ring fence it, but going forward, you the government who is trying to make sure that additional players can come into the game, not just IOCs or some indigenous players, but anybody who wants to invest in the gas project can come in because the gas projects alone by itself is profitable and economic. So therefore, if the government wants to remove AGFA, it should grandfather existing agreements but they should make sure that the standalone gas projects are viable on its own without needing support.

Government has to give us incentives and fiscals, which would allow a gas project to stand alone. So what do I want? First of all, gas has always been taxed at 30 percent company tax, but now, in the fiscals there is something the hydrocarbon tax, for oil it will vary from about 30 to 50 percent, so that would be 30 company tax plus 50 hydrocarbon tax making 80 percent tax depending on terrain, but for gas the hydrocarbon tax is zero so effectively retaining the 30 percent company tax, that is good. I wished they had actually reduced it because I’m talking about incentivizing. Secondly, the government should be granting large tax holidays for gas investors and the reason for this is that a gas investment is easily two to three times larger than an oil investment, and gas income is very low compared to oil projects, internal rate of returns, and MPV are far lower. So gas investment take a long time to pay off; an oil investment may pay off in three to four years, but a gas projects may pay off in seven to 12 years. So we are asking for tax holidays, a period where we pay zero income tax, which would allow us basically recoup our money, as fast as possible, re-invest and attract investments.

We are also asking for any sort of waiver on duties, on materials which are used on gas projects, they should not be subject to import duty and such. Right now, that concession is available for the mid-stream but not for the upstream. We think it should be for the entire value chain because we want to have a gas-based industrialized nation so why don’t we incentivize anything gas related? So ultimately what I’m advocating is that government should not be seeking to make immediate tax revenue from gas but should use gas by not taxing it to develop, give enough gas to generate all the power needed in the country, or a substantial amount. This would galvanize local industries, get them growing, as well as the economy, and that is where we would then get taxes from, the V.A.T, PAYE and so on because more people are being employed. It is not by taxing the source that could have helped to grow the economy. By strangulating the gas industry with taxes, people will not invest and that means we cant generate more than 5 gigawatts of power, and I have a simple equation, more gas equals more power equals more economic diversification. This is closer to the economic recovery growth plan (ERGP) of the government. Power is the core of it, you cant grow a country without power and if you don’t believe me, right now, we generate less than 5 gigawatts but the reality is that Nigerians are generating over 40 gigawatts by themselves, we are our own power generating companies, and everyone is bleeding because substantial monies that could be put into economic use is being wasted, on generators.

So we would like to see that fiscal bill really attractive, to incentivize gas investments so that we can unlock the 192tscf, make it attractive for people to invest in the upstream, in the wells, in the midstream, the processing plants and transportation pipelines, which would deliver gas to your doorstep and to factories. Remember they just awarded the AKK pipeline, going from Ajaokuta to Kaduna to Kano, which would hopefully help to revive all those textiles factories that have closed down in the north. It would help to address all these unemployed young people in the north, who are cannon fodder for Boko Haram.

Lastly, the issue of regulation, this government is very happy about moving Nigeria from the 167th position on the ease of doing business ranking to 146th, but I tell you the reality is that I am more frustrated than ever in doing business in Nigeria. I’m really at a point where I’m saying that what is going on here? It is supposed to be getting easier not harder. My experience right now is that in its quest to fill its coffers, government agencies have gone haywire, in trying to implement laws and regulations and they are putting the squeeze on all the people in their sectors without due regard for the inequity and injustice and the unreasonableness of the way they are acting. I remember Fashola when he was inaugurating the new board of NERC, he said go and do your job and be fair, but businesslike. The key word is fair, what we are seeing in the gas industry is this, if you are unfortunate enough to be selling gas to government owned power plants, they would take your gas and not pay for it, that is why there is 7 months backlog of payments so far, that is why we have all the billions that were accrued before 2017. Now the Department of Petroleum Resources (DPR) is coming around to gas producers and saying that since they have issued invoices, they have to pay royalties immediately, despite the fact that they have not been paid. And secondly, the royalties must be paid in dollars because the invoices were issued in dollars. But gas producers are saying that they can’t pay because federal government-owned power plants have not paid for the gas supplied to them. Also, how can gas producers pay in dollars when they are being paid in naira in accordance with the policies of the federal government, which DPR is an organ of. But they said it is none of their business, and that the law said you must pay in the currency of the invoices. So we are saying that this is not equitable, in the way rules and regulations are being implemented. They are supposed to look at what is happening and ensure that their sectors survive; regulators are not supposed to kill sectors, they are supposed to help them thrive. So, it is unfair of them to demand royalties when we have not been paid and it is not that we have not been paid by the private sector but by the same government, they work for. So it is unfair they are demanding we pay in dollars when they know that by the promulgation and act of the government they are serving that we are paid in naira. We are telling them that the bigger picture is that investors are being scared away because they are looking at this and saying it doesn’t make sense, how can anybody operate in this kind of manner. So the civil servants don’t seem to care about the bigger impact of their actions on this nation, or the impact their actions has on the investors and Nigeria as an investment destination. There are many others but those ones that I mentioned are the key ones that need to be solved.

What we really want is government to be truly open and creative about how we move this forward, collaborative with business, because no country can survive by killing its business, it is businesses that would create the job opportunities that would employ the millions of youths that are roaming the streets. If you walk to the streets of Nigeria, you would see young Nigerians walking around with nothing to do; they are hungry, angry and have no hope. That is why 60 percent of people trying to cross the Mediterrean are Nigerians, 40 percent of them are female and they return back to Benin or somewhere else and they want to go back again. Because they have no hope in their own nation. The only way we can do it is to truly fulfill the aspirations of the government, by turning Nigeria into a gas based industrialized country, which means you have to manufacture goods and services locally, have factories, offices, soaking up the youths and talents and goods would be available for consumption locally and for export. But without gas, this can’t happen, because no gas equals no power equal no economic diversification.

As the president of NGA and also as a stakeholder in the gas industry, this is supposed to be a recurring conversation that you have with the government, so has there been any steps taken by the government to solve all these problems you listed?

It is a conversation that the Nigerian GAS Association even before I became president been having and we intensified it throughout 2017. The primary objective we as NGA have been focusing on and advocating for is engagement with policy makers. The ongoing debate on fiscal policy we are heavily engaged in that too; we are talking to the lawmakers on the same issue too, we engaged with the House committee on gas and the senate committee on gas and working with them. We are ready to always support them and provide them with know-how and knowledge into the laws they are making. We are making progress and that is a consequence of engagement. The good thing is that there has been an engagement approach adopted by this government so the policy makers in the petroleum ministry have been interacting with stakeholders like us, with the NGA, association of indigenous oil and gas producers, which is an indigenous counterpart to the OPTS. And we would keep on this engagement and hopefully out of the engagement will come to a win-win petroleum industry bill, with the fiscal bill being correct and good for Nigeria. It has to be competitive, if it is not competitive, money will not come to Nigeria. So the engagement is being yielding results, we have changes, from the initial document we got from the government to where we are today but there has to be a closure, and what we are finding out in Nigeria today is that speed of policy articulation and implementation is bad. It is at snail pace, the world is moving on, the world is moving so rapidly and we are moving so slowly, and we are losing out on all fronts. In Ghana, just around the corner, they went from having a policy about gas development, to having producing gas systems in five years, the first NLNG in Nigeria took 30 years from actually think about to doing it. The bureaucracy is a Nigerian thing that is killing all of us. In this day and age, we have to move rapidly but efficiently and accurately. We are not there in Nigeria in any shape or form, and we are being left being in every sector, people are moving at lightning speed, and example is our PIB, which has been in the works for over 14 years. So speed is something Nigeria has a nation needs to think about. And of course, we need consistency in policy formulation. The minute another government comes up, they junk that old one and start a new one. It is just value destruction for everyone, because we are going nowhere. There should be a ten to twenty year development plan, with any government following it, no matter who you are. And the key to it is the civil service and the Nigerian civil service has failed Nigerians, because government go, government come, but civil service remain the same, and they have failed Nigeria woefully. Speed is a great problem, it is a killer.

Is government providing any incentives currently to encourage investments from IOCs and indigenous companies to the gas industry?

Government argues that they can’t be partial, in making laws and I say what are they talking about? Let’s look at Japan, when it was developing, people used to look at Japanese goods as trash like Chinese goods are viewed today, the Japanese had a special ministry, I think it was called MITE, which would take a sector or 5 sectors, and develop local champions for these sectors, they would incentivize, that is why they have giant companies like Toyota. Toyota is virtually the largest car company in the world, and when you are talking about quality, it is a quality brand, and that is how they have their dominance in electronics, and other sectors. Because the government took some sectors and some companies and championed them. I think that in Nigeria, we haven’t really understood that and the reason why is because we over politicize everything, so there is no looking at issues on its own merit. Everyone is thinking at sub national levels, and even worse than that, most of the people in the position of authority are thinking at tribal and village levels. We need leadership that thinks at the national levels, we have a long way to go.

According to the government, it makes use of pricing as a social tool, in order to enable Nigerians to have access to power and also LPG, but is this method sustainable?

I believe that government has the responsibility to seek the welfare of all its citizens irrespective of class and wealth but it has to be sustainable. We have to find sustainable, equitable and economic ways to doing things. The reality is that if we take the example of the telecoms sector, government has very little control in that sector, and what government did that was excellent was to privatize and get rid of the monopoly called NITEL, and I can assure that in 1998, a cell phone was N290,000 and the exchange rate was 50 naira to 1 dollar so many thousands of dollars. But today, the SIM is free, they are going to get to a point where other countries have reached, where they give you a phone free because they make their money on airtime and data. All that came about not only because there was privatization but because there was competition. Those are the two elements you need, privatization and competition, the government has no business running businesses. I’ll give you a very good example of this: You must have heard about the Eleme Petrochemical called Indorama Eleme Petrochemical Limited, it used to be a sinkhole where money was just being sunk in by the government, and nothing came out of it. Indorama today bought the plant, it is one of the most successful companies in Nigeria, not only it is producing petrochemicals but they have now built fertilizer plant, which is one of the best in Africa and they are currently building a second train. They make so much money and the communities are benefitting to the extent that you can’t go near Indorama and say you want to do any harm to them. The community will defend them with their lives. The company is producing, employing people, but that it just used to be a black hole that sucked government money. So, the government has no business running businesses, just privatize and ensure competition through healthy regulations, which inevitably, in my view, would allow market forces to deliver value to the people. Today, we are regulating petrol but we are not regulating diesel. Is there any shortage of diesel? No, but there is always a shortage of petrol. The same poor people suffer because the petrol you are complaining that is at N145 per litre becomes N300, you would be begging those roadside boys to sell to you. And then the transporters will also hike their fees and the poor people you are trying to protect will still enter and do what they have to do. I think it is a falsehood for government to be regulating gas prices, on the premise that power sector is the largest consumer and it would impact on the cost of power, studies has shown that gas price is not the major determinant of the price of power. Other factors are; if you double the gas prices, it would barely move the needle of the gas prices. Other factors like the return of the franchise, the investments and so on are the major determinants. So I think that government should get out of regulating commercial price, and should promote privatization and competition such that we are all competing for everyone’s penny. So whether I’m a rich or poor man, I go for the most efficient price. But for that to happen, we have to have that gas distribution network managed by an efficient private sector company not the government, that would allow me to inject my gas here and you to inject there, and you to take here and me to take there, and it is called gas swaps. So, I can have a contract with you in Lagos but I’m actually in Eket producing gas, I’ll just put my gas in and someone close to Lagos puts his or her gas in, and you take his gas and I will give his customer my gas. For that to be effective, we need the infrastructure and regulation called the gas network code. It is a system that would be managed by the DPR and would allow people to inject anywhere and take out anywhere and the molecules that have been injects is the same that the person on the other end would take out. No cheating and loss, there would be total accountability and transparency. And that gas network code has been in the works since 2011, and we have closed it yet, and the DPR says they are suffering from some obstacles, so we are engaging with them, it is a good thing to have, it allows everyone to have trust in the system, and that would be of benefit to the consumers. So what are these obstacles they are facing because they keep mentioning obstacles and we don’t know where they are coming from?

I think they have done the work, we have engaged them that we would like to see what they have done and they haven’t yet agreed to a meeting with us but it takes substantial funds to roll out this problem so I think part of the obstacles may be that they lack the funds to roll it out but it is essential regulation that must be implemented if people are going to get the benefit of moving efficiently.

Lastly, in order to drive growth in the gas industry, what kinds of investments are needed?

We have done some studies and to move from producing 7.5 billion cubic feet of gas daily, most of it for export, and 30 percent is utilized domestically, to about 1.2 bscf, we are going to need to invest about $24 billion in the next three or four years, so that is about $6 billion annually and then after that, we are going to easily need up to $10 billion per annum in upstream and midstream infrastructure. You can see the AKK pipeline, just one pipeline covering 200 kilometers costs $2 billion. So these are substantial figures and I think within the next ten year period, we are going to need and I’m giving you a wide range, between $50- $150 billion to truly get our gas systems working. It is a lot of money and that money doesn’t exist in Nigeria, it has to come from outside and therefore, that is why I’m telling you that the most important part of the PIB is the petroleum fiscal bill. Remember these guys are not Nigerians, they are going to sit in various places like New York and London, Hong Kong and they have the entire planet to invest in. East Africans are more attractive than us because they are friendlier and they welcome businesses. I am not experiencing the new ranking of the ease of doing business in Nigeria. I’m finding that doing business is getting worse on a daily basis, because government agencies are trying to kill businesses. And investors who haven’t got the stamina that I have would not invest since they don’t have to tolerate all that. They look at the sanctity of contracts and whether the countries are hassle free and even if returns are higher but with the hassle, they would prefer going with hassle free.

Culled from Business am.

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