Lagos — President Bill Clinton's three-day state visit to Nigeria promises to be a new tonic in reviving a relationship that went sour a few years ago.
Coming a little more than a year after the country returned to civil rule, the visit is now seen as the high point in Nigeria's efforts to reintegrate itself into the global community of nations.
"This is part of our democratic dividend," says Dr. Osita Abgu, a Research Fellow at the Nigerian Institute of International Affairs, the country's think-tank on foreign policy, here in Lagos.
Two years ago, when Clinton embarked on six-nation tour of Africa, Nigeria was out of the picture, despite its stature as a regional powerhouse, both military and cultural. To register America's objection to military dictatorship in Nigeria at the time, the US leader's itinerary skipped the country.
A New Beginning
Today, some 15 months after Nigeria's return to civilian rule, many Nigerians have looked forward to the presidential visit as a new beginning.
"For quite some years, this has not happened because of the governments we have had," says Agbu.
The only visit so far by an American president to Nigeria was in 1977, when President Jimmy Carter visited this West African country. Coincidentally, President Olusegun Obasanjo, the current Nigerian president, was Nigeria's military leader at the time of Carter's visit. Obasanjo became head of state when his predecessor was assassinated and then presided over elections.
This week, Obasanjo again plays host to the world's most powerful president, this time as a democratic leader of Africa's most populous nation.
Since coming into office last year, Obasanjo's government has committed itself to the protection of human rights and the promotion of a free market economy, through, among other things, a programme of privatisation. Under the scheme, numerous state-run firms are scheduled to be privatised or commercialized, with mandates to operate as profitable organisations rather than depending on the state for their survival.
The scope of industries covered in the programme is indicative of the government's determination to curtail state involvement in economic activities: aviation, banking, manufacturing, energy and power, and transportation.
"The attractiveness of these opportunities being offered by the Nigerian government is what has made the United States take a second look at its relationship with Nigeria," says Agbu.
For both countries, the stakes in a renewed relationship are high, and analysts on each side of the Atlantic agree that both will strive to get the best out of the relationship. In trade, information technology, energy and oil and gas, America's interest cuts across the entire business spectrum in Nigeria.
Potential
"We need investors from all over the world, including American companies, that will invest in our energy sector, oil sector, solid minerals, telecom and Information Technology," Agbu says. "These are the sectors that hold "a lot of potential when the government finally decides on the modalities for the privatisation programme."
There is wide agreement that Nigeria needs American investments in many of these critical areas. In energy, for instance, the Nigerian experience is similar to Ghana's at the time of the Clinton visit in 1998. As in Ghana then, electricity generation in Nigeria is currently below half of the national demand, leading to erratic or what many are dubbing "epileptic" --power supply. Total power generation now stands at less than 2,00 megawatts, while the national average demand is about 4,000MW.
And, as in the case of Ghana, many Nigerians believe American investors can play a significant role in reviving Nigeria's power sector. On the day of Clinton's visit to Ghana-it lasted some 10 hours-American power companies signed joint venture project agreements with their Ghanaian counterparts. Today, Ghana's electricity crisis is over.
As many see it, the same can be done for Nigeria. Already, ENRON, an American power company, is involved in a project to generate independent power for distribution to consumers in Lagos State, which has the highest electricity consumption in the country.
The ENRON project would have come on stream before now, but for initial disagreements between the Federal government and the National Electric Power Authority on the one hand, and Lagos State government and ENRON, on the other.
The disagreement centered on issues of pricing and inter-connectivity, as well as sources of power for barges. While ENRON had wanted to use diesel to power the barges, the government insisted that it should use gas, which is cheaper. This proposal has been accepted.
Government has also entered into agreement with other independent power producers, including oil companies, with the aim of boosting electricity generation and transmission in the country. As in the case of Ghana, there are hopes that similar agreements would be signed between Nigerian investors and some of the 1,500 people in Clinton's entourage.
In the same way, American companies are in the forefront of potential investors currently exploring opportunities in the country's telecommunications industry. With about 700,000 telephone lines for a population of about 120 million people, Nigeria has one of the lowest teledensity ratios in the world.
Oil opportunity
American companies are also dominant players in Nigeria's oil industry, which is the heart of the nation's economy. Three American companies: Chevron, Exxon-Mobil and Texaco are among the six joint-venture partners of state-run Nigerian National Petroleum Corporation, NNPC.
The Nigerian government through the NNPC, holds an average of 57 percent equity interest in these joint enterprises, leaving the remaining 40 percent to the partners, who are the operators of the ventures.
President Obasanjo's government has shown its intention to intensify efforts to strengthen the local oil and gas industries. Nigerian last September joined the league of Liquefied Natural Gas exporters. The project started with the expected output of the $3.8-billion project pre-sold to buyers in Europe for an average of 22.5 years. Lately, Nigeria LNG has been able to make two spot sales into the American LNG market.
Clinton's visit could open more opportunities for such deals, and also prompt commitments from American consumers, especially as the NLNG plans more trains at the plant in Bonny Island, Niger Delta. That facility may be the one to fulfill president Obasanjo's promise last year to make revenues from gas dwarf those from oil.
Recently, the Nigerian government announced a five-year development programme for the oil and gas industry that envisages an annual investment of $8 billion, starting from next year.
The government expects a reasonable proportion of this investment outlay to come from foreign investors, including existing oil prospecting and producing companies, among whom are American firms.
But an official at Chevron Nigeria Limited, who prefers anonymity, says President Clinton may be able to convince the Nigerian government to increase its investment in the oil industry. Already, the projected yearly investment in the industry will be a giant leap over current levels. This year, government's contribution to the joint venture projects is just $2.0 billion.
Government has set a target of increasing Nigeria's crude oil reserves to 30 billion, up from the current 25 billion and a daily production rate of 3 million barrels per day by year 2003.
These targets, says the Chevron official, are impossible without increased investment by Nigeria itself. " What the oil companies need, he said, "is commitment from the government."
Part of the investment will go into the development of new oil fields, the allocation of which is currently being worked on by the Department of Petroleum Resources, after bids were taken last July. Bidders for the 22 oil blocks included American companies.
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Largest market
Besides the direct participation by American companies in Nigeria's oil industry, America is also Nigeria's largest market for crude oil exports. While sales to America form the fifth largest source in the U.S. market, on the Nigerian side, the sale of crude to the US accounts for about 95 percent of Nigeria's foreign exchange earnings.
This means that both countries see each other as a strategic market. Thus, one of the issues that Clinton will discuss during his visit will be the conflict in the Niger Delta, the home of most of Nigeria's oil and gas resources. A lingering ethnic crisis in the region, especially since May 1999 when Nigeria returned to democratic rule, has often led to work stoppages and disruptions in the oil industry.
The Niger Delta, observes Ron Van De Berg, Managing Director of Shell Petroleum Development Company, "remains very volatile and the gas and oil operations are exposed to difficult challenges presented by violence and disruptions in the area."
Van De Berg, who spoke recently in Abuja, Nigeria's inland capital, during the signing of a new Memorandum of Understanding between the government and the six joint-venture companies, said the situation in the Niger Delta area had made the security of the region one that needed urgent attention.
Aggrieved youths - and, sometimes elders - frequently attack oil rigs, taking workers hostage and demanding huge sums of money as ransom or compensation for environmental degradation or some other issues.
But Nigerians should not be under any illusion as to the extent of what the Americans-and indeed other nationals-- can do for them. The responsibility of rebuilding the nation still rests largely with the people of Nigeria, a fact that president Clinton himself recognises.
"By coming and going, a bird builds its nest," the American president said in Accra, Ghana, two years ago, at the start of his Africa tour, quoting a proverb. "We will come and go with you and do all we can as you build the new Africa," he explained.
