How would you assess the business environment and the investment climate in Nigeria?
I am cautiously optimistic. A number of cabinet members were retained in key offices post-election, which is a sign of stability. What businesses thrive on is stability and consistency, so we can plan better. So, we expect a continuity of policies overall into the new year. One of the reasons for optimism is the Central Bank of Nigeria (CBN), which has gone to great lengths to orchestrate new behaviors in the banking and financial market that will help the real sector. When the central bank insists on banks meeting the loan deposit ratio and putting deadlines, more money will flow into the real sector, which can help propel the desired growth. Nigeria however, continues to face a number of pressures, like the minimum wage issue and the ability to meet those obligations, the volatility in oil prices and how that impacts fiscal policies, and the direction of inflation and exchange rate. As a result of all that, there is reason to be cautious with that optimism. Indeed, looking at the competitiveness of the Nigerian market, the level of confidence needs to improve.
How has your investments in the power sector offset the decline in the growth?
The power sector is faced with many challenges. Restoring the implementation of unbundling the power holding company into generation companies (genco), distribution companies (discos), and transmission companies was fraught with difficulties. In the genco space, where we operate, we lead the advocacy charge and seek to bring the changes we feel are necessary. Not until we deal with these value chain issues will we see the level of growth necessary to orchestrate the development that we need in Nigeria. For us in thermal power, we basically make power from gas, and gas becomes the first spot of call when we talk about losses. Our losses as a result of gas issues are many, and the majority of issues border on commercial issues and pipeline security issues. Commercial issues are a major part. We are expected to pay USD2.50 for gas, whereas gas suppliers have demands for their gas ranging from USD5 to USD7. Why should they sell to me when they can sell it elsewhere for more money? On a positive note, we took two steps in 2019. First, we engaged with stakeholders and ensured we are guaranteed minimum gas volumes. Second, we moved to activate our gas equipment. We will have sufficient gas in the long run to power our assets, so we are not worried about the future. If there are issues, they will be temporary, because we have the ability to control these issues as long as we can produce and generate our own gas. The bulk of the technical issues are around funding.
Can you expand on the hospitality sector?
For the hospitality sector, what is crucial is we continue to enjoy enormous loyalty from our guests. We remain, undoubtedly, the best brand in Nigeria in this space. We have continued to win global, regional, and local awards. As a matter of fact, we were recognized as the leading business hotel in Africa for the fourth year running by the World Travel Awards. Occupancy level has been strong. There are still more business travelers than leisure travelers, and it will remain that way until we can do more in terms of improving the infrastructure for tourism in Nigeria. If we do not deal with perceptions, confidence, and security, it will be difficult for us to promote tourism. The government needs to make certain infrastructure available and team up with the private sector to build this infrastructure. Furthermore, certain policies and incentives must be implemented. Even traditional products like historical sites and museums are not in conditions to compete. That is what is lacking for leisure travel to improve.