NigeriaBusinessInfo.com
NEWS GOVT & AGENCIES CAPITAL MARKET OPPORTUNITIES ECONOMIC DATA CHAMBERS OF COMMERCE TOURISM SCREENSAVERS
 Home Subscribe
News & Features Section
Quick find? Search 100s of Pages
Nigerian Newspapers
The Guardian
ThisDay
Punch
Vanguard
BusinessDay
Weekly Magazines
Tell
NewsWatch
Other News Sources

<
All Africa.com
Africa Intelligence.com
Others
Corporate Personalities
Classified Adverts
Interactive Homepage
Site Map

Like this site? Fill out and submit the form below to send an e-mail to your friend about it.
Privacy Policy

Your Friend's E-Mail Address:
Your E-Mail Address:
Your Name:
N
B
I
INTERVIEW (Posted 9th Sept, 2001) Tell your friends about this page! Email it to them.

Peter Woicke, International Finance Corporation, IFC, executive Vice President, and a managing director of the World Bank Group, visited Nigeria at the end of August, during a one-week working tour of West Africa. He spoke with one of our correspondents.

What are your impressions of Nigeria on this visit?

Obasanjo became president, he came to Washington I remember distinctly that he asked the WBG for help in having the petroleum sector evaluated, in infrastructure, education and agriculture, and a number of things.

We sat down in Washington and said this is a terribly important country in Africa and we really should put our resources together. I came to Lagos in November 1999, my first visit as a member of the WBG. Whatever people say, I think as a group we have done a fairly decent job.

We have increased our exposure since democracy returned at the bank (WB) from almost nothing to almost $800 million. And an exposure at the IFC of about $200 million. We have made a bigger bet to have the bank (WB) and the IFC work on Nigeriaís Problems together. We were quite instrumental in advising the government on reforms in the telecom sector. We have been pushing very hard for privatisation of other sectors.

I just wanted to come back to see basically what has happened. To see with my own eyes, progress in the country and progress in World Bank affairs.

I spent a day in Abuja, a day in Port Harcourt, and today in Lagos meeting entrepreneurs. I have done a survey on Nigeria among private sector people (and we have done this in many countries as well.) In many countries the complaint by the private sector is mainly government interference, too high taxes, etcetera. In Nigeria, the biggest complaint by the private sector about the country is the lack of infrastructure. So we are pushing very hard about privatisation and had discussions in Abuja about how the privatisation process can be speed up. Clearly, there are some frustrations, some disappointments among the private sector, among international donors, even among the WBG. But I would urge everybody to show a bit of patience. Because we also have to recognise what has been achieved so far. I think the fact that three cellular (GSM) licenses were auctioned off, very, very successfully speaks for itself.

People are disappointed that NITEL (Nigerian Telecommunications Ltd.) has not been yet been privatised. Even if it is postponed, I am pretty sure from what I have heard from people that NITEL will be privatised. I also think this is progress. Because again two years ago, we had discussions with government and there was still a strong sentiment in government then that we cannot sell off our telecom company to some strategic investor. That has changed, I think it is also true that the power sector still has several problems. But the sentiment I am getting from Abuja is that progress would be made. NEPA would be unbundled. You can argue forever about how to do it. Or whether it is the right way to do it the way it has been planned. A year and-a-half ago, if somebody had said NEPA would be privatised or unbundled no one would have believed him.

More progress is needed in privatisation (that is what I heard this morning from entrepreneurs) the government really has to get out of manufacturing, and agriculture. It is very, very clear that in manufacturing and agriculture, government is just not very competitive. And in the near future Nigeria would be much better served if the private sector can do and can take more. The economy would show more growth. And growth is absolutely necessary for poverty reduction.

Again, after three days here, one of the impressions you get as a foreigner which is clearly very superficial after 3 days is that, there is an entrepreneurial class, the capacity is here, and people are willing to invest if allowed to invest. I think it is absolutely clear to all of us that we all need patience. One thing is that the patience is also required on the part of Nigerians. Democracy as a process takes a while. At the World Bank group, we have the patience. I actually think we should increase our presence quite dramatically. We donít necessarily want to lend tons of money to Nigeria, because Nigeria has lots of resources.

We can contribute in terms of providing advice, transferring technology, providing technical know-how.

I think Nigerians have to have a lot of patience with the system. I think there has been quite a lot of progress in this country. And that is what I am taking home.

There is a low level of IFC presence here in terms of projects. Why is this?

Our investment project is now the second largest in Sub-Saharan Africa. If you tell me an investment of $200 million is really not okay for a country like this, is really not big. I am the first one to agree with you.

I am pushing my people very hard to make more investments. One of the issues, which we are facing, is that we are looking for investment opportunities. A lot of our investments in Nigeria right now are through commercial banks. Because we recognise that one of the things entrepreneurs here need is more medium-term financing. Which is not available. So we have focused in our past one and a half years here on providing medium term financing to banks, which they will bank on that to the private sector.

We need to be more active in finding more projects. The issue in Sub-Saharan Africa is that there is not enough private sector investment.

The IFC has been traditionally waiting until projects came to them. And I think in countries that are higher risk than mid-income countries, we need to be more proactive in convincing some of our sponsors with whom we have worked in other countries to come with us to Nigeria.

On micro finance

Which is one of my pet subjects, the DIC has identified a number of institutions today qualified, which have shown to us that they can do micro finance on a commercial level.

I am absolutely in favour of Non Governmental Organisations studying micro-finance. But I think micro-finance at some point has to be turned into a commercial activity. We have now invested in micro-finance in East Europe, Latin America.

We have just started operations in Ghana, helped convert an NGO in Kenya to do micro-finance.

The government has now agreed with banks to take 10 per cent of their pretax profits to finance small-and-medium scale businesses. Some of this money should also be used to establish micro-finance institutions.

Micro-finance is one of the businesses, which affect positively, immediately the poor. And it can be done on a commercial basis. We have seen that in many countries.

Vice President Atiku said today that Nigeria needs more foreign loans. Given Nigeriaís huge debts, would you advise Nigeria to borrow more?

That is a difficult one. I think there are tremendous efficiencies that can be gained in this country if certain industries were run privately. If these could be sold off. If some of the state-owned industries were to be run a bit more efficiently.

I am not quite sure if a lot more money needs to be borrowed by Nigeria. If we can focus a bit more on efficiency more can be achieved. What is needed is more investment by the private sector.

I would encourage Nigerian sponsors to look for the IFC for the medium-to-long term development. In terms of borrowing from the (World) bank for very specific projects, I just signed on behalf of the bank in Abuja for 3 projects. I think they make a lot of sense. One is to help NEPA unbundle and make investments in its transmission. Another $100 million for HIV/AIDS. For very specific purposes. I think Nigeria with its resources, not just talking about oil but also its human resources should concentrate about using them more efficiently.

What about the Nigerian Airways privatisation?

On Nigerian Airways, we saw three options for the airline. One was basically to liquidate and forget about it, declare open sky policy. And let many national airlines serve customers from Lagos or wherever they want.

Second option, there was not much value left in the assets of Nigeria Airways. But there is value in the routes. So, if you basically liquidate Nigeria Airways. and resurrect it and privatise it, and leave the routes to them - Lagos-Frankfurt, Lagos-London etcetera - for 5 years or so, at that value you can sell it.

The third option was resurrect Nigeria Airways, re-capitalise it. And we advised against taking a huge amount of money out of the government budget. Secondly, whether we like it or not the pride in national airlines was a thing of the past Nigeria Airways, Ghana airways to compete today against British Airways, Lufthansa or United Airlines is very difficult. And my personal view (I am German) I donít care whether I ride Lufthansa or not. I want to ride an airline, which is efficient and serves a certain destination, in the best way and a cheap way.

So, we said it was very difficult for a resurrected Nigeria Airways to compete against international airlines.

The competition among international airline is already sky-high. The government opted for our second option, which was valuing the routes. The first thing we learnt was that Nigeria declared Ďopen-skiesí with New York. So, that route was gone. The second one was that there was a dual routing with London, which took a lot of value out of the London route. So, we basically said our role was gone. You in Nigeria had declared open skies to New York, half open skies to London. We are not disputing this might be the right decision. Advising you on selling or privatising Nigerian Airways did not make sense anymore.

Why is World Bank is bigger than IFC in project terms?

Our role as the World Bank group today, there is no question about it. Our mission is poverty reduction. I donít think there is any question anymore that one of the preconditions for poverty reduction is growth in countries. Growth has to be there. We can debate what else is to be done for poverty reduction. If we cannot agree that growth is one of the preconditions then we donít have a debate.

Growth today wherever you look is been driven by the private sector, not by the public sector. And what we are missing in a lot of the emerging markets is that the environment for private sector is not a very good one. So, the World Bankís role, in my opinion, is to help improve the business environment in the developing countries so that the private sector can drive growth.

Second role of World Bank is what we call empowerment of the poor. This is really where the World Bankís role is a lot more important than that of the IFC. Education, capacity building in the poor in developing countries is absolutely important. So that the poor people, who are also hardworking entrepreneurs have a chance to be integrated into the economy.

On anti-agriculture subsidy position, why is Europe and the US are still subsidizing agriculture?

We and the World Bank agree with you 100% on that. I think it is terrible that Europe is subsidizing its agriculture to the tune of $220 billion a year. It is absurd by number. It is bigger than what the United States is doing. The US is also subsidizing agriculture. The World Bank president, Wolfensohn has gone on record to say we can talk about development aid forever if the developed world, the rich countries donít change on the subsidies they give their agriculture, to allow the poor countries to export more to these countries.

Unfortunately, the shareholders of the World Bank over 135 countries direct us on what to do. We do not tell them what to do. It is wrong for Europe to subsidize its agriculture such that African or Latin America cannot export its products there.

We are not totally against subsidies. I am not saying the private sector would do everything. That is very clear.

Experience has shown that in some areas such as public transportation the public sector can do something.

What we are saying is that the government is still involved in things the private sector has proven to be much better at. For example, we are advising Lagos (state) on water privatisation.

It is a fact that where water has been privatised that the poor have better access than before. Yes they have to pay tariffs. What they donít know is that they have to pay 10 times more when they do not have access to water than when it has been privatised. We have seen that in Argentina, Bucharest or Manila.

In infrastructure provision we are learning that a combination of public and private sectors might work.

It is a fact that there are some assets the government would not be able to sell because there are not enough profits for the private sector.

But, for instance, outsource the management to the private sector. For example one of the best-run mass transit in the world is the Paris metro it is owned by the government but the management is outsourced to the private sector.

Editor's Note:  is now know as Power Holding Company of Nigeria, PHCN, from 2005

© NigeriaBusinessInfo.com

Tell your friends about this page! Email it to them.

UP


N
B
I
Our Recent Features

Nigeriaís LNG Company Awards Gas Project Contract

Nigeriaís Power & Steel Minister Speaks on Improving Power Supply

Nigeria's Fuel Bogey

A Peep into 2003 Elections

Nigerians Count Their Blessings

A Nation Rebounds

419:A Festering Sore

Rebuilding A Nation

No Place to Hide for the Corrupt

The Growing Email Culture in Nigeria

 

Submit your comments about this site or something you found on it.
Privacy policy

NAME:

E-MAIL:

Tick to receive updates


Home   News & Features   Govt & Govt Agencies   Capital Market   Investment Opportunities   Economic Data   Chambers of Commerce    News Archive   Tourism & Leisure   Corporate Personality of The Month   Useful Nigeria-Specific Sites   Classified Adverts   Submit your Email for News Alerts   Recommend Us to Someone   Search This Site   Site Map    Link to Us   Legal Notices/Disclaimer   About This Site   Privacy Policy   About Us   Contact Us

   

Copyright © 2000-2001 bROADBASE(UK) Ltd & Broad End(Nig) Ltd. All rights reserved. Copyright © 2000-2001 Nigeriabusinessinfo.com. All rights reserved.