Nigeria’s President Tinubu Seeks to Boost Economic Ties with Saudi Arabia

Nigerian President Bola Tinubu made a rare visit to Saudi Arabia, where he met with top Saudi officials and business leaders, in a bid to boost his country’s economy and diplomacy.

Tinubu’s trip coincided with the inaugural Saudi-Africa summit on November 10 in Riyadh. The following day, he met with the business community in Saudi Arabia at an investment roundtable focused on Nigeria.

Tinubu is looking to attract more investors and business partners from Saudi Arabia, one of the world’s largest economies and oil producers.

“Red tape is gone,” the president declared in an official statement, referring to his bold economic reforms, including the removal of petrol subsidies and the liberalization of the exchange rate, which he undertook shortly after assuming office in May. .

“I believe in the full application of free market economics. Your money will flow easily in and easily out. The arbitrage around our nation’s old foreign exchange policy regime and the corruption that was associated with it is also gone.”

Nigeria, Africa’s biggest economy, has been struggling with low oil prices, currency woes, insecurity, corruption, and poor infrastructure. The World Bank estimates that Nigeria’s real GDP growth was 3.3% in 2022, down from 3.6% in 2021, due to the impact of the Covid-19 pandemic and the decline in oil production. It projects a modest recovery of 3.4% in 2023-2025, assuming crucial reforms are sustained. But Nigeria faces significant risks and uncertainties, such as policy reversals, protracted decline in oil production, insecurity, and climate shocks.

Strengthening ties with investments

Tinubu also wants to strengthen Nigeria’s ties with Saudi Arabia, which share common values and interests as members of the OIC and Organisation of Petroleum Exporting Countries. He met with Saudi Arabia’s Minister of Commerce, Majid Al Kassabi and Minister of Trade and Investment, Khalid Al Falih as part of efforts to attract investments back home. Foreign direct investment (FDI) into Nigeria’s economy declined by 90% from $4.7bn in 2008 to $460m in 2022, according to data from Nigeria’s National Bureau of Statistics.

During the bilateral meeting with Tinubu, the Saudi Arabian government pledged to invest in Nigeria’s refineries, which have been underperforming for years due to a lack of investment and maintenance. The investment is expected to help Nigeria to reduce its reliance on imported petroleum products and boost its refining capacity.

The investment, led by state-owned oil firm, Saudi Aramco, will be used to upgrade Nigeria’s aging refineries and improve their efficiency. The upgrade will be completed within a two to three-year timeframe, according to a press statement.

The Saudi Arabian government has pledged to provide financial support to sustain the Nigerian government’s foreign exchange reforms, which are aimed at stabilizing the country’s currency and boosting economic growth. “The Saudi government will make available a substantial deposit of foreign exchange to boost Nigeria’s forex liquidity,” according to the statement.

This investment is expected to strengthen the relationship between Saudi Arabia and Nigeria, which have been working together to boost trade and investment in recent years. It is also expected to help Nigeria to achieve its goal of becoming a major player in the global oil and gas industry.

Tinubu was accompanied by a high-level delegation, which included some state governors, the ministers of information and national orientation; finance and economy; industry, trade and investment; humanitarian affairs; budget and economic planning, as well as the minister of state for petroleum resources, and a delegation from Nigeria’s business community.