I would have written “Three reasons why we should do business with Singapore.” However, Singapore has already reached a developed nation status. Malaysia is still developing (some call it semi-developed, because, absent a few economic indicators, it has all the markings of a developed nation). Therefore, it has more in common with Nigeria. It’s also not Singapore, but Malaysia that has the largest Asian investment in Africa. It’s also Malaysia, not Singapore that sends aids and its people to help Africans. Nigeria will also benefit from how Malaysia is able to keep its cost of living so low; one example, oil prices are 60 percent cheaper in Malaysia than Singapore and Thailand.
Here, I’ve argued three main reasons why the new government of General MuhammaduBuhari should do business with Malaysia.
Malaysia is the largest Asian investor in Africa Yes, you read that correctly. China is not the largest Asian investor in Africa, it is Malaysia! On 25 March 2013, the United Nations released information which put Malaysia ahead of China in the volume of foreign direct investment (FDI) in Africa.
While commenting on this surprising fact, Reuters wrote: “Malaysia is ahead of China in terms of the size of its direct foreign investment (FDI) into Africa and the gap is widening. A survey of foreign investment into and out of the five BRICS countries, published on the eve of their summit in South Africa and while new Chinese President Xi Jinping visits the continent, revealed that China’s march into Africa has lagged behind the flow of cash from Kuala Lumpur.”
That’s not all. In 2011, Malaysia was third largest investor in Africa overall, only behind the United States and France. China came fourth and India fifth.
That’s not all. “France and the United States also have the largest historical stock of investments in Africa,” Reuters reported, “with Britain in third place and Malaysia in fourth, followed by South Africa, China and India.”
India has $14 billion invested in Africa; China 16 billion and Malaysia, $19.3 billion (about 24% of its FDI). By the end of 2011, Malaysia’s total foreign investment globally stood at $109 billion.
The biggest Malaysian spenders in Africa are Petronas, the national oil company, and Sime Derby, a company established in 1910, which trades in five main sectors: plantations, property, industrial, motors and energy and utilities. The conglomerate made 13.4 billion US dollars in revenue in 2013.
On 11 January 2014, I wrote on Petronas, the national oil company. “Petronas, the company which owns the oil and gas sector on behalf of the federal government, is itself, a success story of a public enterprise and an example of how our NNPC should be managed,”
I wrote. “While about four different departments gave different figures concerning how much NNPC was making at a recent hearing in the National Assembly, you can’t accuse Petronas of such deliberate act of confusion in other to pave way for corruption.
“Actually, Petronas has been described by the New York Times has the best managed oil and gas company in the world. The last time I checked, Nigeria was producing more than two million barrels of crude oil per day – to say nothing of the daily theft. Petronas produces only about a quarter of that domestically. Yet, what it owns around the world is a thousand times what NNPC has. It now has businesses in more than 40 countries. In fact, I did my PhD in the university owned by Petronas.
“’We are developing into a global company,’ I quoted what Mohamad Hassan Marican, president of the company said in an interview with New York Times in 1996. ‘We have set a target that by the year 2005, 30 percent of our revenue will be earned from international operations.’
“At that time, overseas business accounted for only 10 per cent of the company’s sale. Three years later, the company increased its profits by 85 percent and earned about the same amount the French oil giant Total Fina Elf SA earned, ‘a far larger company,’ according to New York Times. By 2006, international operations brought 37 per cent of total revenue, seven percent more than what the president forecasted in 1996.”
While Petronas can teach us a thing or two about oil business, Simy Derby could invest in our housing and agricultural sectors. Investments that we direly need. Further, Malaysia already loves Africa and it’s comfortable doing business here. President Buhari must get Malaysians comfortable doing business in Nigeria, the way they are in Mozambique, Libya and more importantly, Mauritius.
I understand they want to come here, therefore, we must facilitate that adventure.