KEYNOTE ADDRESS BY DR MOHAN KAUL,
DIRECTOR-GENERAL, COMMONWEALTH BUSINESS COUNCIL,
BUSINESS ENVIRONMENT ROUNDTABLE ON THE 2011 NIGERIAN ECONOMIC ROAD MAP
LAGOS, 7 JULY, 2008
I am grateful to the Lagos Chamber of Commerce and Industry for inviting me to address this
prestigious event, and for being such good hosts during my stay. I am honoured to be addressing
this distinguished gathering in Lagos, the commercial heart of Nigeria.
Let me start by praising the Nigerian elections, even Britain’s traditionally negative press could
find little to complain about. Free and fair elections are the hallmark of a modern country, and
HE President Jonathan should be congratulated on his victory and praised for presiding over such
a successful election process.
I would also like to congratulate the Executive Governor of Lagos State, HE Babatunde Fashola,
on his re-election, with, if I am correct, the highest number of votes ever received by a candidate
in any state in Nigeria’s political history.
Let us be honest: in the past, the first impressions of newcomers to Lagos were not all positive:
traffic congestion, the crowded streets and the tightly-packed and inadequate living conditions
clearly visible on the way in from the airport. Many recall negative coverage of the city by their
How different are our views: those of us whose previous visit was five or three years or even six
months ago. We see remarkable progress in redevelopment and urban management. The bus
lanes, the new highways, the expressway, Lekki, the extraordinary developments that have taken
place around us on this island and the greater sense of personal security. Lagos state is now the
5th Largest Economy in Africa, coming behind only nation states.
This transformation has come about largely because of the vision and leadership of Lagos’s
current administration which was without doubt reflected in the result of the Lagos State
What is particularly impressive is the relatively short time in which this advance has been
achieved and the extent to which it has been based on tax revenues, we have seen a significant
improvement in the business and investment environment and the other essentials for business
expansion. On the ground, important improvements in security and the physical infrastructure; in
policy terms, openness to public/ private sector dialogue and partnerships and a commitment to
These challenges to establish Lagos as a secure, sustainable and booming megacity set the
ambition at the right level.
Lagos is now reaping the reward as International Investors sit up and take notice. Indeed only
last month, Hon Henry Bellingham the British Minister for Africa, who visited Lagos earlier this
year, told a meeting of the CBC Africa Business Forum in London that Lagos was now receiving
record levels of commercial enquiry from the UK.
On the Federal level, Success in Lagos State with the greatest financial and business assets in the
country will be critical to the achievement of targets set out in Vision 2020.
“By 2020 Nigeria will be one of the 20 largest economies in the world able to consolidate its
leadership role in Africa and establish itself as a significant player in the global economic and
political arena.” This is the aim set out by the current administration and it is achievable. Indeed,
Goldman Sachs believes that with the right reforms, Nigeria would be the world’s fifteenth
largest economy by 2050. In fact, according to Standard Chartered, Nigeria has the potential to
be the largest economy in Africa by 2013.
It is not only in Africa that Nigeria should be a leader; the county has the capacity, drive and
entrepreneurial spirit to be the next BRICS country.
Now is the time for Nigeria to push for this, there is a will evident from Government, from
Business and from the common Man and Woman in the street that now is the time for Nigeria to
take its place in Africa and the world.
To meet this laudable aim Nigeria needs to tackle some entrenched problems; Infrastructure is
key, particularly Nigeria’s power deficit that is holding back economic success; no entrepreneur
can prosper when he or she cannot reliably power his or her factory or studio.
First I should perhaps explain why the Commonwealth Business Council feels able to take such
liberties in your City and specifically what it can contribute to the achievement of Nigeria’s
The Commonwealth is an association of 54 countries, spanning 6 continents with a population of
over 2 billion people worldwide. The association has people from every major region, and is one
of the most diverse groupings in existence. There are Commonwealth members in nearly every
international grouping including; one third of the African Union, three in the EU, two in the G8,
five in the G20, as well as strong participation in ASEAN, SAARC, CARICOM and OPEC.
Against this background, Commonwealth Heads of Government meeting in Edinburgh in 1997
decided to establish a body, the CBC, which would use the leverage offered by this unique
institution to promote investment and development among member states.
In many ways the 1997 Summit was ahead of its time in acknowledging that, while development
assistance through donor organisations and international financial institutions might be essential
in addressing global imbalances in wealth, the poverty of nations and people could only be
eliminated in a sustainable manner through investment-driven job-creation.
There are over 20,000 listed companies in the Commonwealth and this number is increasing year
on year. Over US$4 trillion in trade happens within the Commonwealth every year and the
Commonwealth has seen over US$ 250 billion worth of investment over the last ten years. Even
given these figures, the Commonwealth represents only 20% of world trade and there is still
enormous potential for economic growth.
The CBC was set up to promote investment in developing member countries of the
Commonwealth. CBC has been working with Nigeria since its inception; we were the first
organization to host an investor conference here following Nigeria’s return to democracy. It was
CBC that introduced MTN to Nigeria, and we are pleased to see how productive a relationship
that has developed into.
I hope on the basis of the CBC’s experience in facilitating relationships between the worlds of
Government and Business, I can offer some thoughts on the way forward and hope that these
remarks will be helpful for this morning’s discussion.
Peace, Safety and Security
At the heart of all sustained and inclusive economic development and growth are Peace, Safety
and Security. The globally recognized and highly praised elections earlier this year have proven
Nigeria’s commitment to Democracy and the Rule of Law. Nigeria is now recognized as one of
Africa’s strongest democracies and as one of its champions across the continent, most recently
witnessed as Nigeria became one of the strongest voices defending the principal of Democratic
Succession in Cote d’Ivoire. Secondly, Nigeria is a far safer place today than it was five years
By making security one of its top priorities, the Lagos Government has made a real difference.
Security goes hand-in- hand with growth and investment and Nigeria is now reaping the rewards.
The IMF forecasts the Nigeria's growth at 7% for 2011, well above the global average. However,
growth alone is not enough, increased prosperity must be shared so that all of Nigeria's 150
million citizens share in the rewards. Oil revenues will continue to be critical to the Nigerian
economy, but diversification is important. There are minerals and natural resources in the North
that are currently untapped, and can provide jobs and stimulation to areas of Nigeria that are
being left behind. His Excellency President Jonathan will lead a delegation to Perth, for the
Commonwealth Heads of Government Meeting and Commonwealth Business Forum at which he
will also chair a round table with Australian Business leaders in the Mining Sector to discuss
ways of accessing and realizing this wealth. I hope that you will join us for this major investment
drive at what will be the biggest business forum in the southern hemisphere this year.
Another sector which needs considerable attention investment in agriculture and the
commercialization of agricultural production
Above all, to ensure sustained levels of growth and development Nigeria must tackle its
infrastructure deficit. The Central Bank estimates that Nigeria needs to invest $100billion (about
N15 trillion) over the next 10 years to fill its deficit.
Given the scale of the investment required the only truly viable way of meeting the need is
though, public-private partnership. Government needs to work closely with business, both
national and international, to ensure that the funding to tackle this deficit is met. Federal and
State Governments will need to work together to attract private sector investment in
Good work is already being done in this area, and as I mentioned earlier Lagos State's success in
tackling this issue can be used as a model for the rest of the nation and indeed Africa.
On a personal note CBC is pleased to have been able to play some small part in Lagos State's
infrastructure success story; CBC was host to Governor Fashola in London back in 2008 for the
First Lagos State Infrastructure Forum. The Forum brought together 150 investors and industry
experts with the Lagos State Government and project holders to discuss the issue and work on
solutions. As a follow up in 2009 CBC Brought 100 international business leaders to the Second
Lagos State Infrastructure Forum this time held here in Lagos to focus on specific projects with
the intention of moving from discussion to implementation.
In October last year the CBC was asked to organize a Presidential Power Retreat for Power
Sector Investors by President Goodluck Jonathan, where shared the details of his Power Road
Map. CBC was able to bring together over 100 investors from the United Kingdom, the US,
Canada, Australia, France, Germany, Korea, Japan, South Africa and of course Nigeria, as a
result over $20 billion in investment has been promised to the Presidents Privatization plans. At
the Presidential Retreat the Central Bank Governor, Lamido Sanusi, made a unique commitment
to aid power development in Nigeria, by offering fixed rate debt financing to power companies.
Other key issues important for sustained economic growth are harnessing domestic savings,
reducing the current account deficit and building depth in the financial sector. I am glad that the
present Government have made these reforms in these areas a priority.
I must also emphasize the role of education & skills. Development can only progress if there is a
deep well educated and adaptable work force. I am impressed with the progress made here in
Education and skills development is an area where government can partner successfully with
business, working together to ensure students acquire the skills needed for business and
combating the ‘brain drain’. And government benefits as higher levels of education lead to
higher levels of investment as business can be more sure of a reliable workforce and a deeper
I should say something about entrepreneurship.
The true wealth of a nation in the developed world derives from the input of SMMEs. These are
the businesses which create the greatest percentage of employment in Japan, the UK, the US and
Continental Europe. In Africa, the maturity of national economies and the essential rise of a
middle class with spending power and skills remains stunted by a wide range of factors which
include the overall deficits in infrastructure and power, but which relate to capacity and skills
development, access to finance and technology and the frequently bewildering regulations which
hinder the essential transition from the informal to the formal sectors. Governments need to get
their act together n SMME development – but so do the bigger corporations, perhaps through
mentoring, capacity development in the supply chain or targeted CSI.
The CBC is proud to have worked with SMEDAN and the Federal Ministry of Commerce and
Industry on programmes supporting SMMEs and we look forward to carrying this process
forward in co-operation with the new Administration and its agencies.
Administrative and physical barriers to trade, both international and among African states is a
significant brake on growth and development. The Doha Round stagnates and with it the fortunes
of many in the developing world and emerging markets. The CBC strongly believes that the free
flow of trade within Africa’s rapidly developing economic communities offers a significant
opportunity for enhances development and economic growth and applauds the efforts of
ECOWAS states in this direction. Nigeria bears a considerable responsibility, given the
dominance of your economy in the region –indeed that of Lagos, with a GDP as big as Ghana’s.
Finally, a large part of Nigeria's future success is underpinned by the need to create a strong and
robust business climate. The good business climate will attract investors and encourage them to
make their investment long term and recurring. Nigeria has some work to do in this area,
Nigeria is currently ranked 137th out of 183 in the world by the IFC's Doing Business Report.
Investors are attracted by a high ranking on the index as it means the regulatory environment is
more conducive to doing business in this country.
It is unfortunate that Nigeria has dropped 3 places in the last year; Nigeria is now only the 17th
best place to do business in Sub-Saharan Africa. This ranking does not match with the
entrepreneurial spirit that those of us that know Nigeria well see in her people nor does it match
Tackling Corruption and Governance issues are a must for Nigeria. Nigeria is currently ranked
121st out of 180 countries by Transparency Internationals Global Corruption Report and for
reference your neighbor Ghana is 67th. Corruption increases the cost of doing business and
deters investors, CBC is working with both Government and Business on this issue though
Business Action Against Corruption programme supported by DFID.
As Governor Sanusi put it at CBC’s Good Governance & Regulatory Leadership Forum in May
2010, ‘Nigeria should be the future of Africa but without governance and risk management there
will not be an adequate financial market, without which the country cannot achieve its potential.’
CBC has recently agreed a joint programme with the Securities and Exchange Commission
(SEC) to launch a corporate governance programme in September aimed at directors of all listed
I hope these remarks will provide some useful background and guidance for today’s discussions.
While there are other areas of importance, I hope I have highlighted some of the issues Nigeria
needs to address as a priority to achieve its aim of being a top 20 economy by 2020.
I would like to thank my hosts, the Lagos Chamber of Commerce for inviting me to the
prestigious event and Governor Fashola for your enduring friendship for CBC.
If you will allow, I will make one final pitch for the CBC and in Particular the Commonwealth
Business Forum 2011, Nigeria will be well represented at the Forum, as I mentioned earlier His
Excellency President Jonathon will be leading the delegation, and we are expecting Governors
from several states to lead roundtables on the opportunities available in their jurisdictions. I hope
you will be able to join us in Perth to represent the commercial heart of Nigeria along with the
Lagos Chamber of Commerce and Industry. I would invite all gathered here to consider traveling
to Australia to see the opportunities the Commonwealth offers.
Thank you once again for your kind invitation to address this event.
Commonwealth Business Council,
7 July, 2011