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Nigeria Attacks Fail to Deter Investors, Minister Says

Nigerian Finance Minister Ngozi Okonjo-Iweala
Nigerian Finance Minister Ngozi Okonjo-Iweala. Photographer: Jay Mallin/Bloomberg

Nigerian Finance Minister Ngozi Okonjo-Iweala said increased terror attacks in the country have failed to deter foreign investment as Africa’s largest oil producer presses ahead with plans to sell power companies and keep spending under control.

General Electric Co. Chief Executive Officer Jeffrey Immelt visited Nigeria for the first time last week, pledging to invest in power, health and rail industries, including a locomotive assembly plant, Okonjo-Iweala, 57, said in an interview in Zurich on Feb. 17. San Francisco-based Del Monte Foods Co. is also considering investing, she said.

Nigeria is facing an insurgency in the north by an Islamist group known as Boko Haram that’s claimed responsibility for killing hundreds of people in bombings and shootings since 2009. President Goodluck Jonathan has pledged to invest in power plants and roads to boost economic growth.

At the World Economic Forum in Davos “what CEOs were asking was: Do you have a strategy?” Okonjo-Iweala said. Investors “realize that the terrorism is just focused in one part of the country and as long as they feel we have an approach to deal with it, they are more or less comforted,” she said.

The West African nation is getting help from the U.S., U.K. and France to ramp up security and fight terrorism, she said. Jonathan is willing to hold talks with Boko Haram and is working with state administrations in the north to create jobs and improve education and health, Okonjo-Iweala said.

Christmas Day Attacks

Boko Haram, which seeks to impose Islamic religious rule in the north, claimed responsibility for the Jan. 20 coordinated blasts that killed at least 256 people in Kano, the biggest city in northern Nigeria, according to Civil Rights Congress. It also bombed a church near Abuja, the capital, on Christmas Day, killing 43 people, and is responsible for the Aug. 26 suicide bombing of the United Nations building that left 24 dead.

A roadside explosion outside a church yesterday in Suleja, about 50 kilometers north of Abuja, injured at least five people. Police are investigating and no group has claimed responsibility yet, said Richard Oguche, a spokesman for the police in Suleja.

Nigeria is the fifth-biggest source of U.S. oil imports. Royal Dutch Shell Plc, Exxon Mobil Corp., Chevron Corp., Total SA and Eni SpA operate joint ventures with the state-owned Nigerian National Petroleum Corp. that pump about 90 percent of the country’s crude. Oil accounts for more than 80 percent of government revenue and 95 percent of foreign-currency income.

Naira Currency

The naira gained for a fourth day, advancing less than 0.1 percent to 157.5150 per dollar on the interbank market as of 2:42 p.m. in Lagos, the commercial capital, according to data compiled by Bloomberg.

Europe’s first recession in three years and a slowdown in global demand are putting pressure on Nigeria to make its power industry more efficient and cut corruption, Okonjo-Iweala said.

“What will make reforms succeed is that Nigerians are realizing the world has become very uncertain,” she said. “The emerging realization that the world is not what it used to be is giving us more impetus and support.”

Jonathan, who partially scrapped a fuel subsidy last month, wants to sell six power plants and 70 percent stakes in 11 power-distribution companies to end a state monopoly. The government plans to boost electricity prices by 25 percent to 88 percent for high-income households by April to help attract investors, Power Minister Bart Nnaji said Feb. 12

Power, Corruption

Blackouts are a daily occurrence in Africa’s most-populous country of more than 160 million people, where demand for electricity is double the current supply.

“There has been corruption,” said Okonjo-Iweala. “People will be supportive of anything we can do in the power sector to disband the power authority because it has not proven capable of supplying power.”

Annual inflation accelerated to 12.6 percent in January from 10.3 percent a month earlier after the government reduced gasoline subsidies, boosting fuel prices, the Abuja-based National Bureau of Statistics said today.

Nigeria increased its target for this year’s budget deficit to 2.97 percent of gross domestic product, from a 2.77 percent forecast in December after a weeklong general strike last month forced the government to backtrack on fully scrapping fuel subsidies.

The government plans to cut spending by 100 billion naira ($634 million) on administration, training, transport and other costs to offset spending on fuel subsidies,

“In the 2013 budget we’ll be looking at closing agencies,” Okonjo-Iweala said. “At the moment we’re cutting out all the soft things, all the excess.”

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