President Bola Ahmed Tinubu has made strategic diplomatic moves to restore investments in the Nigerian economy since he became the president of Africa’s largest market in a highly contested election. The leadership of the septuagenarian seems to be characterised by immense efforts to restore diplomatic ties with other nations and boost investor confidence in Nigeria.
While being sworn in on May 29, President Tinubu pledged to expand Nigeria’s economy by at least six per cent annually, lift barriers to investment, create jobs and unify the exchange rate, while also tackling rampant insecurity. True to this pledge, he made bold moves to remove Nigeria’s fuel subsidy and unify the foreign exchange (FX) market. Although it rumbled the economy and sent shockwaves to consumer spending, the move accorded him an ovation from economic and financial experts on the international scene. That has trickled into investment inflows in critical sectors as some investors regained confidence in the Nigerian market.
Reuters recently reported that Emirates Airlines will resume immediate flight schedules to Nigeria and lift a visa ban on Nigerian travellers, following a meeting between the leaders of the two countries, and the Nigerian presidency. In March, Dubai-based Emirates Airlines vowed never to resume operations in Nigeria following the Central Bank of Nigeria’s (CBN) delay in releasing some of its trapped funds in Nigeria. CNB was yet to make available 50 per cent of the amount approved for clearing within the backlog of the airline’s funds trapped in the country. As of 2022, Emirates Airlines had $85 million trapped in Nigeria and could not repatriate it.
Just last weekend, on the sidelines of the G-20 Summit, President Tinubu moved to broker economic bilateral ties with Germany, Korea, and India, according to details from Nairametrics. In a statement to the German Chancellor, President Tinubu said: “It is not for us only a matter of designing the financial architecture for an expanded economic partnership. It is also about the practicality of aligning the perspectives of your large-scale manufacturers, such as Volkswagen and others, with the reality of the new incentives my government is putting in place for them to come and prosper across multiple value chains and sectors inside of our country.”
While this statement implies creating a financial framework or structure that facilitates and supports a broader economic partnership between different entities or countries, it also suggests that the government would be introducing new incentives to encourage large manufacturers, like Volkswagen, to invest and operate in the country.
Volkswagen has several assembly plants in African countries like South Africa, Ghana, Kenya and Rwanda. Last year, it launched its 5th assembly plant in sub-Saharan Africa in Ghana. It had a plant in Nigeria till mid-2023 when the German car manufacturer decided to pull out of the country due to a lack of policy for the industry, dirty fuel in the Nigerian market and the high cost of servicing warrantees from vandalised vehicles.
While the president discussed with the Korean President, Yoon Suk Yeol, on creating rapidly implementable MoUs across sectors of partnership from telecommunications to technology and oil and gas, he also discussed a proposition with India to strengthen Nigeria’s agricultural and tech sectors. The West African country needs investments in these critical sectors to boost economic development, create employment and reduce its reliance on crude oil.