Dapo Olagunju, managing director of J.P. Morgan West Africa, says the Central Bank of Nigeria’s professional regulation and recent economic reforms influenced the United States bank’s decision to deepen its presence in Nigeria.
Olagunju said the reforms implemented over the past three to four years had helped shape the investment environment.
He spoke during a panel discussion on attracting investment to Nigeria at the 32nd Nigerian economic summit in Abuja on Tuesday.
“J.P. Morgan coming in at this time also signifies that the impact of the reform that has been put in place in the last three or four years is almost at the same level” as a previous major shift in Nigeria’s political and economic environment, he said.
Olagunju’s remarks come as the bank moves to establish a merchant banking business in Nigeria, following approval-in-principle from the CBN on October 23.
The proposed institution, JPMorgan Merchant Bank Nigeria Limited, is expected to obtain a final banking licence before it can begin operations.
Olagunju said the bank is backing its assessment of Nigeria with action, adding that it is “putting our money where our mouth is”.
He also praised the quality of banking regulation, saying the CBN is “very well professionally run”.
On his part, Jim Swartz, chairman and managing director of Chevron Nigeria and Mid-Africa, said the company has seen an improvement in Nigeria’s investment environment following the passage of the Petroleum Industry Act and presidential directives aimed at encouraging investment.
He said the company is pursuing drilling programmes in shallow-water assets and participating in major oil projects, while preparing to drill additional wells in its Agbami deepwater field.
But Swartz said the government needs to ensure that investment-friendly policies are translated into durable laws, given the long-term nature of oil and gas projects.
“Our investments are not only for the near term… but multi-decade investments, and so knowing that you will have long-term support in the laws is very important,” he said.
He also identified security in oil-producing communities and competitive operating costs as important factors for sustaining investment.
Swartz said improvements in the Niger Delta had helped address security challenges and reduce losses from oil theft, which he described as a longstanding obstacle to operations.
He said local contractors need to remain competitive globally, noting that Chevron had spent an average of about $1 billion annually with local contractors over the past five years.
Culled From The Cable
