Doing business in Nigeria gone wrong or land grabbing? By Japheth Omojuwa

Japheth-Omojuwa-ColumnistBefore Dominion Rice and Integrated Farms posted a report on its experience in Nigeria, it had to deal with accusations of land grab in the Gassol area of Taraba State. This issue brings several things to the fore; Nigeria’s anachronistic land laws that disempower local farmers, especially women and place enormous powers in the hands of the government, often a reality that means some powerful public servant from Abuja could suddenly become the owner of large swathes of land anywhere in Nigeria just because they have the backing of government.

The Land Use Decree, later Land Use Act became law in 1978 after a panel set up by the Federal Government made its recommendations. The Act vests all lands in each state in the hands of the governor of each state. At the promulgation of the law, such lands were vested in the hands of military administrators. Lands exempted were those designated for the Federal Government agencies and projects. The Land Use Act of 1978 remains the most powerful law on land use and administration in Nigeria. It is also a major impediment to development. Even though the law was designed to put an end to land issues, land related issues and cases continue to dominate our courts. It was on the basis of this law the Federal Government gave 30,000 Ha of land to Dominion Farms Limited as an incentive for the multinational to come do business in Nigeria.

 The strategic location of the land – between two rivers, other government promises like road development, low interest loans, special import concessions, direct access to the president and the likes had Dominion Farms itself describe the scenario as “too good to be true.” Of course, the issue is back in the news now because of what the company describes as a “calamity of failed promises” in its catalogue-esque rendition on the dangers of doing business in Nigeria. To be sure that that publication was not just an ordinary post on the internet, despite already reading it, a couple of United States based contacts sent the link across for me to see. That publication travelled very far. No matter what defence the Nigerian government intends to put up, the best one would be to drastically improve the doing-business climate in the country.

Whether for locals or foreign investors, Nigeria is such a tough place to do business. Business registration takes months in what remains an archaic way of registering new businesses. We’d not need to travel so far to learn new and better ways; Rwanda is already showing the way. It remains a Herculean task for investors to get visas to Nigeria. We have spent some unjustifiable amounts of money supposedly looking for investors since 1999 but we have failed to lay the foundation that’d make foreign investment flow naturally; what is the point of chasing investors if such investors only end up going through hell to get Nigerian visas? Mind that these visas are often short and in most cases the process riddled with corrupt practices. We are simply not ready! When we are ready for business, the world will pay attention without our leaders jumping on their expensively acquired planes claiming to be in search of foreign investors.

If Nigerians in the Diaspora would afford to send as much as $20bn home every year despite ours being the most expensive place to send money in the world, imagine what would happen if we made the business climate easier for such Nigerians abroad who really are able and willing to invest in Nigeria? Our opaque business environment and our weak laws amongst other unwholesome realities continue to be major impediments. Our property laws are weak; the rich and powerful are often above the law while the poor and weak are often at the mercy of the law as wielded by the aforementioned rich and powerful.

This piece is not a case of whether Dominion Farms was badly treated or not, it is a case of our truly bad business environment. For instance, according to reports, some 45,000 Nigerian farmers will be displaced from the farm the government handed to Dominion Farms except the company finds a way to integrate them. Dominion Rice and Integrated Farms claims the report on displacing farmers is not “remotely true,” but you’d have to wonder what would have been had the plans gone ahead as planned. Had the project gone on as planned, it would have certainly resulted in the displacement of the previous occupiers of the land. You can bet that’d be a legal displacement because the Taraba State Government signed an MoU with the multinational and with the land law placing the ownership of land in the hand of the governor, it was simply a deal between two major parties. The displacement would be an act of government. While the government carried this out, there was no intentional plan in place to resettle or compensate the affected farmers.

This is a case of all that is wrong with Nigeria; government in its desperation to “attract foreign investors,” did not think through its promises and whether it’d be able to meet them, it did not give a thought to the collateral damage that’d be suffered by the farmers and it did not ensure the institutions affected by the engagement are able to ensure the smooth running of its agreements. So you find a government agency operating against the spirit of a contract already signed by the government itself. Bribes made sure to play a crucial part in the story despite the obvious special interest of government to facilitate a major investment. What if the company in question had no government backing?

When will the Nigerian business climate start attracting investors without the name of the President and the mountains he or she would move being thrown on the table as an incentive? Why can’t these mountains just be moved for everyone already instead of a select multinationals having such moved just for them alone? When will the fact that businesses are thriving without the hindrance of multiple taxes and archaic business registration processes and other catalysts for business growth ensure investors naturally see Nigeria as an essential destination for their businesses?

The same government that sought to improve Nigeria’s competitive advantage in rice production and export granted waivers for rice importation. The only beneficiaries of these were cronies of the Goodluck Jonathan administration. This anomaly is currently under investigation by the current government. This is a cycle bound to be repeated if the government continues to make one rule for some and other rules for others. The presence and influence of government in the Nigerian business climate are too overwhelming for private businesses to thrive. As for the Dominion Rice and Integrated Farms issue, our governments – the Taraba State government and the Federal Government – have signed contracts. If Dominion Farms goes to court in Nigeria, will it get fair treatment against the Nigerian government? That would be a place to start the conversation on whether we truly are ready for foreign investors. The reason is simple, no investor dares to invest in a country with weak laws and court systems that are only useful as tools for the connected and the powerful.