Jan. 12, 2015

The Hon. James Duddridge MP


The Hon. James Duddridge MP

Minister for Africa, the Foreign and Commonwealth Office, UK

"The financial sector in particular offers fertile ground for the sharing of UK expertise."


A graduate of the University of Essex, The Hon. James Duddridge was elected as the Member of Parliament for Rochford and Southend East in May 2005. After being re-elected in May 2010 James was appointed a Lord Commissioner and Government Whip with responsibility for the Foreign and Commonwealth Office and Department of Education. In October 2011 James moved departments to become Home Office Whip. He returned to the back benches in September 2012. In August 2014, the Prime Minster appointed James to a ministerial position at the Foreign Office. His responsibilities include Africa, Overseas Territories and Caribbean.

If there is one key message I hear from UK companies in Nigeria, it's that there's a real desire to do more there. As our second largest trading partner in the sub-Saharan region, Nigeria is a vital partner for the UK in Africa—and the close relationship between the two countries presents an opportunity to build real shared prosperity. My first overseas visit as a Minister was to Abuja, and I also visited Nigeria as Chair of the British Parliament's All Party Group prior to joining the UK government. It's a partnership that's close to my heart.

One of our key objectives is to broaden the trading relationship, expanding from current areas of strength, such as energy, into new growth sectors. Oil and gas currently accounts for between 70 and 80 per cent of Nigerian Government and 90% of foreign exchange earnings. Expansion into new sectors will strengthen bilateral trade, making the relationship less exposed to fluctuations in the oil price.

“The financial sector in particular offers fertile ground for the sharing of UK expertise."

The financial sector in particular offers fertile ground for the sharing of UK expertise. The UK Government's Emerging Capital Markets Taskforce is working with private sector partners, such as PwC, Standard Chartered, the Law Society and CityUK, to strengthen ties in Nigeria. The Head of the Taskforce, Sir Roger Gifford, was in Lagos in November 2014 to witness the signing of an agreement between the Nigerian and London Stock Exchanges to support African companies seeking dual listings in both locations. The Nigerian Stock Exchange will also need support to reduce its vulnerability to changes in the oil price and to achieve its target of $1 trillion market capitalization by 2016; but add to this insurance, bonds and the potential for the creation of a derivatives market, and the opportunities are significant.

Meanwhile, the Prime Minister's Trade Envoy to Nigeria, David Heath MP, is targeting other key sectors—agriculture, education, energy and retail - and encouraging more big-name UK firms to seize the chance to cater to Nigeria's growing middle class.

There has been a shift in the way people look at the Nigerian market since the rebasing of GDP earlier this year. We should make the most of the facts: Nigeria is the 23rd largest economy in the world, predicted to be in the top 20 by 2015, and Lagos alone is the 4th biggest economy in Africa.

There are numerous examples of well-known UK blue-chip companies established in Nigeria - Diageo, Unilever and GSK to name a few—giving the lie to any perception that the risks of doing business in-country are too high. However, continued effort to address the challenges that do exist will bolster this message. Nigeria has made progress in many areas, moving up the World Bank's Ease of Doing Business rankings to number 170. However, we must be realistic: the list totals only 189 countries, and the next closest MINT economy, Indonesia, ranks at 114. Nigeria is the second-lowest ranked country in sub-Saharan Africa.

Tackling the basics, such as the electricity supply, will go a long way towards improving this. The need for businesses to generate their own power presents a major cost that, for Small and Medium Enterprise, is not easy to absorb. Yet the country's gas stocks offer the opportunity to revolutionize power supply. So maintaining the momentum in reform of the power sector is crucial. Implementation of this reform, with the support of the UK Government and UK business, will allow the Nigerian Government to mitigate risks and attract more investment.

By 2050, according to some estimates, Nigeria will have the third largest population in the world. To make the most of the opportunities this will bring, it is vital that the country's long term growth is inclusive. Spreading the dividends of diversification is as important as diversification itself. Currently, agriculture accounts for two thirds of employment and almost 27% of GDP, but most workers earn less than $1.25 per day, and the sector has been neglected in recent years. The Nigerian Government is taking action, for example by investing in power and infrastructure. While the planned Petroleum Industries Bill (PIB) must ensure the country's oil wealth is equitably shared, properly invested and that the sector continues to attract international investors.

Maintaining this momentum will be key to unlocking Nigeria's growth in the years ahead. The UK stands ready to be Nigeria's partner of choice.

© The Business Year - January 2015