XII. Railway Receipts and Expenditures, 1951-55-- 164 XIV. Number and Capacity of Vessels Entering 165 4. Selling Prices: Palm Oil and Kernels, 1953-54----- 33 5. Production of the Cameroons Development Corporation, 1950–55. 6. Hides and Skins Exports, 1954-55.. 7. Timber Operations of African Timber and Plywood (Nigeria), Ltd., 1952-54. 165 8. Production of Minerals, 1951-55.. XV. International Air Freight Traffic, 1950-55 and January through June 1956.. 165 9. Methods of Mining Tin and Columbite Ores in Nigeria 166 10. Tin and Columbite Mine Operators, 1954-55 166 11. Electricity Generated, by Type of Producer, 1954-5612. Principal Railway Statistics, 1953-55. 166 13. Vessels Surveyed and Licensed, 1954. 14. Services of the Posts and Telegraphs Department, 1949-56 167 15. Postal and Telecommunications Facilities, 1949-56- 79 16. Government Medical Facilities, Services, and Expenditures, 1921 and 1953.. 84 167 167 XVI. Internal Air Traffic, 1955-56. XVII. Road Services Operated by Nigerian Railway, 1951-55. XVIII. Number of Licensed Motor Vehicles, 1954-56- Consumer of Electricity Corporation of XX. Installed Capacity, Power Generation, and Distribution of Electricity Corporation of Nigeria, 1954–55_-. XXI. African Population According to Region, XXVII. Imports, by Principal Commodities and 24. Number and Membership of Registered Cooperative Societies, 1947, 1953, 1955- 109 Commodity Groups, 1954-55 and January through June 1956.. 171 25. Federal Government Revenue and Expenditure, 1952-56 and 1957 (Estimate).... 26. Regional Governments' Revenue and Expenditure, 1952-56 and 1957 (Estimate). XXIX. Public Debt, 1950-56.. 175 113 27. Percentage Distribution of Regional Revenue from All Sources for 1957 (Estimate)- 114 XXXI. Distribution of Personal Income Tax, by Gross Income Group, 1954–55. XXXII. Retail Price Indexes, 1954-56.--. 176 176 APPENDIX J, SUPPLEMENTAL ECONOMIC STATISTICS Nigeria as a Field for Investment-Summary and Appraisal Few foreign lands are so little known by the American business community as Nigeria. On the average, fewer than 200 Americans visit Nigeria each year, and they, for the most part, are Government officials, missionaries, or academic researchers rather than private businessmen. Yet Nigeria is the largest, most densely populated and possibly the most important of the British colonial territories. Situated in West Africa, Nigeria embraces an area over one-tenth the size of the United States. Its estimated present population of 34 million persons (of whom less than 20,000 are white or other non-African) makes it the largest single aggregation of Negro peoples in the African continent. At the beginning of the 20th century, Nigeria as a national entity did not exist and it was notable in world commerce chiefly as a supplier of a few tropical products, such as palm oil and spices. During earlier centuries, its commercial history was very largely dominated by the dark pages of the slave trade. In 1956, Nigeria had a combined external trade valued at about £287 million,1 or $803.6 million, and is among the world's leading sources of such primary products as cocoa, palm oil and palm kernels, tin, and columbite. Its exports are remarkably diversified, while its imports are both imposing in quantity and increasing in variety. For instance, it consumes upwards of 4 million imported pairs of boots and shoes of all types annually, at present, while just 6 years ago imports of these items were half as many. The rapid expansion of Nigeria's foreign trade reflects the country's healthy economic growth. Income per head of population in 1953 has been estimated at only £21, but evaluated in terms of total population, income figures become much more imposing. Gross domestic product, estimated at £680.3 million in that year, places Nigeria well ahead of many other countries in this respect and indicates a market of no mean proportion and one possessing considerable growth potential. In the main, the economy of Nigeria is based on the production of primary commodities for export. Favorable world prices for its major exports and Government schemes for marketing produce have enabled the country to achieve sizable export balances and a very strong external financial position. External assets held in London on behalf of official and semi-official Nigerian institutions, which totaled £190.32 million as of March 31, 1953, have permitted both Federal and Regional Governments in Nigeria to initiate development programs on a scale that would have been impossible otherwise. Since 1945, assisted by current revenues and loans and by grants from the United Kingdom, important development programs have been carried forward covering nearly every important phase of Nigerian activity. The Federal Government alone for the period 1955-60 has blueprinted a program envisaging a total capital outlay of £91,336,000 on improvements in basic facilities, such as transport, communications, and power, as well as in various social welfare activities. 1 As used in this report, the symbol £ means the West African pound. The unit of currency in Nigeria is the West African pound, which is maintained at par with the pound sterling and is equivalent to $2.80 at par value. These figures were arrived at after detailed analysis by the International Bank for Reconstruction and Development mission to Nigeria in 1953. More recent, detailed data are lacking, but the Financial Secretary of the Federation of Nigeria in a budget speech March 1, 1957, placed the total at the end of 1955 at £150 million and stated that because of a trade deficit in both 1955 and 1956, these reserves would be drawn down further by about £21.5 million. Although the present estimate of reserves is significantly lower than in 1953, the total is nonetheless still comfortably high. Almost all economic indicators point to a sustained expansion and growth within Nigeria. Present development represents only a bare start towards realization of the country's full requirements or potentialities, yet viewed against the limited progress of the past, the strides taken in the past decade are quite spectacular. Educational facilities have expanded enormously, institutions of higher learning have been established, and a determined attack has been made on illiteracy through a twin program of augmenting teacher training and primary education. Roads, telecommunications, and ports have been improved, new power plants established, and, either as Government or joint Government-private ventures, various industrial projects have been completed or are in process. A large-scale textile mill utilizing local Nigerian cotton has been constructed in Kaduna, a cement factory near Enugu, and a citrus cannery at Ibadan. Under Government or semi-Government auspices, significant projects in plantation cultivation of cocoa, cashew nuts, rubber, citrus and palm produce are under way in the south of Nigeria, while experiments in extensive food production schemes are under way in the north. Although planned economic development has been carried out through the framework of Government or quasi-Government institutions, the role of private enterprise in contributing to the present stage of Nigeria's development must not be underestimated. Aside from the not inconsiderable Nigerian capital engaged in commerce, private enterprise in Nigeria represents the investment of foreign-controlled (expatriate) companies that have been increasingly active, not only in their historical fields of banking, trade, and shipping, but in diversified industrial, mining, and agricultural activities. Large-scale breweries, soap and margarine factories, a sizable cigarette factory at Ibadan, and an extensive veneer and plywood plant at Sapele are among notable recent achievements by private enterprise. SOCIAL AND POLITICAL FACTORS Climatic conditions in Nigeria generally are recognized as a deterrent to permanent white settlement. Moreover, the historical policy of British administration has discouraged such settlement, for under existing land tenure laws of Nigeria land may not be alienated to nonAfricans except on a leasehold basis. As a result of these factors, only a small white population is maintained in Nigeria, composed of personnel in Government service, missionary activities, or expatriate companies' business. The most recent census, the one of 1952-53 placed the total non-African population at 16, 000 as of mid-1953; the estimated total at the end of 1955 is 19,500. In contrast with certain other African countries, no internal racial problem exists in Nigeria, and relationships between the white and negro races have always been cordial and friendly. However, the nearly 34 million Nigerians are themselves separated by broad differences in culture, religion, language, or tribal organizations. The present internal political structure of the country-of a Federal administration superimposed on three Regional administrations-has largely been the consequence of these differences. At the end of 1954, Nigeria achieved under a new Constitution virtual internal self-government, but proponents of either stronger regionalization or centralization have not been fully satisfied, and a new constitutional conference was to be held in London in the spring of 1957 to determine whether powers will be extended to the Central or Regional Governments 3. The constitutional conference is expected to clarify future political relationships between Nigeria and the United Kingdom. Barring unforeseen eventualities it is probable, however, that Nigeria will achieve full self-government in the next several years. The United Kingdom Government is committed to this policy and is placing Nigerians in the civil service at a rapid rate in anticipation of such eventual self-government. While the pace of such "Nigerianization" has varied considerably in each of the three regions, the replacement of trained British civil servants by Africans has led some observers to fear the consequences for future internal administration. There is comment that the force of emotional nationalism, although pushing the country ahead politically, may in effect retard development; that accelerated civil employment of Nigerians will weaken the administrative services; and that widespread corruption may ensue. And there are those who hold that existing sharp cleavages between language and tribal groups, carried over into the political arena once Nigeria achieves full self-government, may Results of the Conference, which took place in London between May 23 and June 26, 1957, were reported officially in a White Paper (Cmd. 207, Report by the Nigeria Constitutional Conference, H.M.S.O., July 1957). While achievements were not as spectacular as some had anticipated in that no actual date was fixed for Nigerian independence, significant constitutional gains were made in the direction of full self-government within the Commonwealth. Nigeria retains its present Federal system of Government without major structural change, but Nigerians will now have greater responsibility for running the Government both on the Federal and Regional Government levels. Nigerian delegates to the Conference had advocated setting a target date of 1960 for independence. The United Kingdom Government was unwilling to commit itself now to a definite date but indicated that if in 1960 the Nigerian Parliament asked for immediate independence such a request would be considered "with sympathy and (Her Majesty's Government) will then be prepared to fix a date when they would accede to the request." (See also chapter III, footnote 4.) contain the seeds for future internal political instability. Political instability or lack of cooperation between the Regions in Nigeria would intensify economic problems and obviously constitute a deterrent to foreign private investment. Yet there is no present justification for pessimism on this score, and political factors should not bar investigation into possible investment opportunities in that country. All Nigerian governments without exception -whether Federal or Regional-are striving to their utmost to improve the material lot of their peoples. They are almost painfully aware of their inadequate stage of economic progress, and most responsible officials recognize the vital role which private foreign investments can play in providing the money, management, and technology needed to accelerate development. There is some African suspicion of foreign investment, stemming out of historical associations with what some regard as the "exploitative colonial period," but the feeling is only vaguely expressed and is directed-where it is evident at all-more to existing old-line British interests associated with the early history of the country than to new investments. The United Africa Company (Nigeria), Ltd.-the successor to the original chartered companyat times has been singled out for criticism, but few responsible politicians would deny the company its just due for the role it has played in the past and continues to play in shaping the economic future of the country. POLICIES ON FOREIGN INVESTMENTS Current Federal and Regional Government policies are aimed at providing a genuinely favorable investment climate for outside capital, and there need be no concern that such policies will be altered as a result of internal or external political developments. Indeed, many observers believe that realization of political independence will in fact lead government to pursue even more vigorous policies of inducing foreign capital to enter the country. American private investment particularly is. favorably regarded, and within the past few years many of the leading Nigerian figuresAfrican as well as British-have visited the United States with a primary or secondary objective of investigating possibilities for expanding United States private investments in Nigeria. As Nigeria is a member of the sterling area, dollar import licensing and exchange controls. are maintained for financial reasons. Foreign investments must be submitted for approval to the Financial Secretary of the Federation Government. Such prior screening, however, is meant only to eliminate speculative ventures which would not contribute directly or indirectly to the economy of the country. Once the initial investment is approved, the Government's stated policy is to permit remittances of current earnings without restrictions. Repatriation of the original capital on approved investment likewise would not be impeded. Business laws do not differentiate in any way between the national origin of foreign investments. The income tax rate on companies is 45 percent, but significant tax concessions are provided for new industries established in the country. The Government has reserved to itself certain activities, such as railway transport and utilities, and in recent years has also gone into direct productive ventures in industry and agriculture. This, however, does not reflect lack of confidence in private enterprise nor a desire by Government to restrict productive areas of operation open to private entrepreneurs. Lack of local private capital and the Government's desire to accelerate economic development, coupled with the fortunate factor of substantial financial resources available to Government for investment, have been primary motivating factors. Many of the ventures by Government have been partnership projects with private enterprise, and, in most cases, the Government would welcome stepping out if invited to do so by private interests. As a matter of policy, both Federal and Regional Governments have recorded an open welcome to private enterprise with the reservation that the "Government may wish to share in certain large enterprises having special significance to the public." However, no suggestion is indicated of majority control by Government or of rigid requirements for Government participation. American investors may often regard unfavorably any intimation of Government participation. However, for an underdeveloped country such as Nigeria, a measure of Government participation may provide compensatory advantages. For example, land tenure laws are very complex. Clear leasehold titles to land sites could, perhaps, be more effectively acquired with the Government sharing in the venture. Moreover, the availability of Government finance for substantial participation might be an inducement to private foreign capital for certain types of investment projects. |