By KELLY LOUISEIZE
With years of political turmoil behind them where corrupt leaders mismanaged resources, Nigeria is emerging as a promising market for Canadian mining exploration and supply exporters.
The current government has embarked upon a series of regimes, instilling hope on the economic front, says Rizwan Haider, Export Development Canada (EDC) Sub-Saharan Africa regional manager Progress has been made in curbing the corruption and managing public spending.
“They have been successful in renegotiating their debt in the Paris Club and so their economic position has substantially improved,” Haider says.
The Paris Club is an informal group of official creditors whose role is to find solutions to payment challenges experienced by debtor nations.
“ Nigeria’s rating by Moody’s, and Standard & Poor’s is BB-, equal to the rating of Turkey and Mexico.”
In a short period of time, Nigeria has transformed its banking sector from 89 to 25 top rated international banks that are well capitalized, Haider says. EDC has set up a $25 million (US) medium-term lines' of credit with two Nigerian banks and invited six others to Canada for the last week of November to expose them to business opportunities.
They have set up meetings with the Canadian Association of Mining Equipment and Services Export along with other institutions to spur investment opportunities.
“Canada is the biggest source of mining investment for Africa,” says Chris Roberts, vice president of Western Canada for the Canadian Council in Africa .
Nigeria has never really put emphasis on the mining sector, due to the political risks and weak mining legislation, he says.
“It was not very business friendly, nor was it very foreign-direct investment friendly,” Roberts says.
Many of the mining operations were owned by Crown corporations that were run into the ground. Earlier this year, the current government attracted numerous private domestic and international investors to the sector. The next stage will be to establish a mining code that will attract more investment.
Nigeria is just beginning to explore its mineral potential. In the past their entire focus has been on oil and gas reserves, but new mining reform legislation, which is expected to pass before April 2007, is expected to bring invigorated interest.
“The depth of the reform process has created a very strong momentum and nobody in either political side is going to change the course,” Haider says.
Larger mining houses including Anglo American and Barrick Gold Corp. are waiting until the mining codes come into effect before they sink investment dollars into project sites.
Nigeria is the most populated country on the African continent with approximately 150 million people. AIDS is a concern and has the potential of affecting the development of the country, but what is more significant at this time is the upcoming elections.
It will be a crucial test for Nigeria as it represents a real chance to establish progressive leadership with minimal violence. Signs of this will be welcomed by domestic and foreign investors, Haider says.
A recently published book entitled, Doing Business in Nigeria, has a healthy section on mining information, but to obtain more information on the new EDC lines of credit in Nigeria contact Rizwan Haider at HYPERLINK mailto:[email protected] or by phoning (613) 598-3234.