LAGOS(August
7,2008)
- From cocktails with hip-hop stars to sushi with smooth-suited
bankers, it's no wonder Nigerians moving back after decades in New
York or London feel right at home among the high-rolling elite of
Lagos.
This urban sprawl of 14 million people, the chaotic hub of Africa's
most populous nation, may epitomise what many foreigners fear most
about megacities in the developing world: violent crime, corrupt police
and crumbling infrastructure.
Yet legions of young Nigerians, educated at English public schools
and U.S. Ivy League universities, are leaving highly paid careers
with Wall Street banks and City of London consultancies to return
to the Lagos hustle.
The draw?
Not just a pay package that approaches or matches what is on offer
in the United States or Europe, but a dash of patriotism -- a chance
to help fulfil an ambition of building world-class Nigerian businesses
as an example to the rest of Africa.
"In the States, it's an established economy. You can't create
another Apple, you can't create another Microsoft, you can't really
create another Disney," said Michael Akindele, who left U.S.
consultancy firm Accenture to set up his own business investing in
Nigerian media and entertainment.
"I'm stepping away from that salary, that comfortable, stable
environment where you have power all the time, you have water all
the time. But here I can create the lifestyle I want."
Nigeria is the world's eighth biggest oil exporter but its economy
has been hobbled by decades of endemic corruption and unemployment
is high. A power sector crisis, which means much of the country can
go without electricity for weeks or months, has closed hundreds of
factories and cut thousands of jobs in sub-Saharan Africa's largest
economy after South Africa.
Many wealthy Nigerians of Akindele's generation were sent to boarding
schools in England or the United States in the late 1980s and 1990s,
when Nigeria was a military dictatorship with little foreign investment
and a disintegrating education system.
They watched with cautious optimism as it began to return to democracy
in 1999 with the election of Olusegun Obasanjo after three decades
of military rule, and welcomed the reforms he started to push through
after winning a second term in 2003.
When Nigeria used $12 billion of oil savings to pay back debts owed
to the Paris Club of rich creditor nations in 2005, and won the write-off
of a further $18 billion in return, foreign investors and diaspora
Nigerians sat up and took note.
"I was following all this from London and started to believe
now was the time to start planning to come back," said Kayode
Akindele, 28, no relation to Michael, who returned to work for United
Bank for Africa's (UBA) investment banking arm, UBA Global Markets.
ENTREPRENEURIAL SPIRIT
Kayode Akindele, an Oxford graduate who lived in Britain for more
than 16 years, was working on structured derivatives for Lloyds
TSB in London when he was introduced to Tony Elumelu, chief executive
of UBA, two years ago.
Elumelu was looking to build a world-class investment bank in Nigeria
and Akindele's skills were exactly what he needed.
"There was a sense of patriotism. I have always regarded myself
as Nigerian and planned to return to Nigeria eventually," said
Akindele, now a vice president at UBA Global Markets.
Financial sector reforms in 2005 forced Nigeria's banks to consolidate,
creating multibillion-dollar institutions with the capacity to branch
out into sophisticated new markets and pay salaries on a par with
some of their Western peers.
Banks have also seen explosive growth on the back of record oil
prices and a growing middle class among Nigeria's 140 million people,
and have been aggressively raising capital and increasing their
capacity to lend.
Diaspora Nigerians -- with experience in banking but also the cultural
knowledge to navigate the complexities of doing business in Nigeria
-- have been in high demand ever since.
"I think there's a window that will be there for maybe another
18 months to two years," said Chuka Mordi, head of business
development at First City Monument Bank.
"That's the view at the moment, that people moving back understand
exotic products ... but it will percolate to the local sector and
people will learn these things and there won't be any need to drag
investment bankers from New York or London."
Nigeria's $95 billion stock market was one of the best performing
emerging markets in the world last year, attracting private equity
and hedge fund investors from Europe, Asia and the United States.
THE LAGOS HUSTLE
The world of vanilla interest rate swaps may seem a million miles
from the realities of life on the streets of Lagos, where hawkers
selling everything from phone charge cards to electric irons ply
their trade among belching minibuses and moped taxis.
But bankers hope that building strong financial institutions will
help open credit lines to millions of would-be entrepreneurs, allowing
them to develop small businesses and lift themselves out of the
informal sector, which accounts for a major part of the active workforce.
"When you see the hustle on the streets of Lagos, all those
traders selling all those products, you know the street works,"
said Obi Asika, an Eton-educated entrepreneur whose own record label
sells albums through market traders and street sellers.
"You formalise distribution in Nigeria today, it's a billion
dollar business. Because everybody needs distribution. Everybody's
got products," he said.
The idea of making money as a businessman in Nigeria -- long spurned
by some of the elite as inferior to a high-powered job in the public
sector -- is catching the popular imagination, demonstrating to
an ambitious young generation that you don't have to be in the pay
of government to get rich.
It is a point hammered home by "The Apprentice Africa",
a reality TV show co-produced by Michael Akindele's Executive Group
and Asika's Storm Media based on the hit U.S. series, in which aspiring
entrepreneurs compete for a job with a top businessman.
"You get up in the morning and you see all of Lagos on the
move, young boys trying to make ends meet. It's an eye-opener,"
said Isaac Dankyi-Koranteng, winner of the first series, aired on
free-to-view TV in Ghana, Kenya, Uganda and Nigeria.
The government is still the largest official single employer in
Nigeria, and the vast majority of people still live on less than
$2 a day, but the new private sector elite hope that if they avoid
the mistakes of their kleptocratic predecessors, Nigeria may haul
itself out of poverty and corruption.
"There are issues. It's not Valhalla. We're not in Milton's
Paradise yet," said Asika. "But I believe in Nigeria,
I'm positive about this country."
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