Feature: Nigerian Private Sector to Invest in the Electric Car Industry

0
59
Advertisement

by Ayo Akinfe

ADVERTISEMENT

Does the failure of the Nigerian private sector to invest in the electric car industry not prove that they are just as intellectually lazy as the government

[1] Today, I want us to focus on the role of the Nigerian private sector and discuss its role in getting us out of our current economic nightmare. Too often, we shout government, government, government when sometimes, the issues at stake are not really a public sector matter. It is not the government that is going to come up with innovative ideas that will double our industrial output. A lot of the time, it is some whizzkid in his 20s

[2] When asked how he thinks the future of Nigeria will pan out, Africa’s richest man, Aliko Dangote always answers that he does not know of any country in the world where foreign investment has lifted its economy out of poverty. He always insists that the task has got to be done by local investors like himself

[3] In a way Dangote is right as foreign investors have a nasty knack of taking off as soon as things get rough. Most multinationals have a Europe, Middle East and Africa (EMEA) structure which regards the Middle East and Africa as on entity. This means that if they have a factory in Nigeria and there are problems, they can easily relocate it to Egypt, South Africa Iran, Jordan, etc. They will only have one manufacturing facility in the entire market, so will not think twice about shutting down and relocating their Nigerian plant once the going gets tough

[4] At independence, Nigeria had no entrepreneurial class, with zero manufacturing taking place in the country. Our few millionaires like Louis Ojukwu were traders who imported goods and distributed them across the country. Now, however, the situation has changed as we have a class of capitalists like Dangote, Otedola, Adenuga, Alakija, etc who have become rich by accessing the wealth of the Nigerian state. It is called crude accumulation in economics and the bitter reality is that it is a compulsory phase a developing nation has to go through to develop an entrepreneurial class of businessmen and women

[5] Now, how do we get the best out of these entrepreneurs as at the moment, I am not convinced there is any direction to their investments. They too appear to just drift along with the tide, investing in high-profile industries like crude oil, gas and telecommunications. They do not appear to have a long-term, vertically integrated investment strategy

[6] Let me give you one classic instance where they have dropped the ball big time. In June 1947, the Swedish company, Saab, produced its first automobile. From then onwards, the company went through several transitions. However, In 1989, the automobile division of Saab-Scania was restructured into an independent company called Saab Automobile

[7] After this happened, the American manufacturer General Motors took out 50% ownership on the company with an investment of $600m. In 2000, General Motors exercised its option to acquire the remaining 50% for a further $125m. Basically, General Motors bought a subsidiary for just $725m

[8] Now, Saab has struggled to compete in the globally competitive automobile market where it is up against the likes of Toyota, Nissan, Peugeot, Volkswagen, BMW, Mercedes, Volvo, Ford, etc. In 2010, Dutch automobile manufacturer Spyker Cars bought Saab. After struggling to avoid insolvency throughout 2011, Saab petitioned for bankruptcy following the failure of a Chinese consortium to complete a purchase of the company. This purchase had been blocked by the former owner General Motors, which opposed the transfer of technology and production rights to a Chinese company. I doubt if they would have objected had it been a Nigerian company that tried to buy Saab

[9] Now, can someone please tell me why a consortium of Nigerian businessmen like Dangote, Otedola, Adenuga, Alakija, etc are not bidding for companies like Saab. Just imagine the gold mine it would open to them. First of all, it would come with technology transfer and skilled manpower. They would then have the entire West African market to themselves and with our low labour costs, import tariffs and the fact that no automobile manufacturer makes cars in West Africa, they would easily produce electric Saab vehicles at a fraction of the costs of its competitors and establish a monopoly

[10] When I look at how Dangote has just invested $15bn in an oil refinery in Lekki, I ask why investing $725m in a car plant should be a problem for someone like him. As you can see, our problem is not just the government. I think every Nigerian should be ashamed of the fact that we do not have some of the basics that make you feel proud of yourselves as a sovereign nation such as our own national automobile manufacturer that can compete with the big boys (although I must give Innoson kudos here), our own national airline, our own battlefield tank, an internationally recognised tourist attraction like Big Ben, the Eiffel Tower, the Taj Mahal, the Brandenburg Gate, the Sydney Opera House, etc and our own equivalent of Harvard, Yale, Oxford or Cambridge. As the world’s largest black nation, these should be minimum goals we set ourselves some 60 years after independence!

LEAVE A REPLY

Please enter your comment!
Please enter your name here