Political risk consultancy, Menas Associates says the $537 million the US is willing to build on its new consulate is a vote of confidence in Nigeria’s future.
The US announced that it will spend $537 million to build a new consulate in Nigeria’s commercial capital of Lagos in what many see Washington’s vote of confidence in the future of Africa’s most populous country despite the growing turmoil.
In its Nigeria Focus, a monthly intelligence report on Nigeria, Menas quoted an embassy statement in Abuja as saying ‘’when completed, it will be the largest US consulate in the world, demonstrating the importance of the relationship between the United States and Nigeria.’’
The new consulate will be on 12.2 acres of prime real estate in a new oceanfront development known as the Eko Atlantic City, in the upscale Victoria Island district. It is to be completed in 2027.
The move signifies a long-term view of Nigeria which will go into the crucial general election next year weighed down by a weak economy, widening inequality, social unrest, and heightening ethnic and religious tensions.
The news was heartily received by Nigerian officials. ‘’It shows the US believes the country has a future. It’s bound to rub off positively on investors looking for signs to give them confidence in the polity’’, a senior presidential adviser responded when contacted for comment in Abuja.
For decades, oil was the key factor in relations between the two countries, with the US buying more than 60% of Nigeria’s output. In turn, Nigeria obtained manufactured goods and agricultural products, particularly wheat, while its citizens fell in love with American pop culture.
As the US ramped up its own oil output in the past 15 years, however, its oil imports from Nigeria fell steeply and it currently buys hardly any.
While companies like ExxonMobil and Chevron were the face of the US during the oil era, they are being eclipsed by technology companies such as Google, Facebook, and Microsoft.
Lagos has become a hub for tech innovation. Several successful start-ups have emerged in recent years. Some of them — such as payment companies Flutterwave and Paystack – have reached unicorn status as privately held start-up companies valued at over US$1 billion, which has drawn interest from US investors.
Nigeria has also represented a pool of talent for the US in many fields, from sports to science and from medicine to engineering. That will probably continue, as Nigerians look up to America as a place to realise their dreams.
At the same time, more US companies appear willing to bet on Nigeria’s youthful population, with half of its more than 200 million people aged 19 and below. That profile is already feeding into the long-term plans of many companies and governments, including those of the US.
Over the years, Washington officials have acknowledged that the Lagos consulate is one of the very few around the world that pays for itself and leaves a surplus from funds generated from consular activities, such as visa fees. The decision to invest on a new building may well be as much a business move as a political one.
Security considerations are also at play, according to senior analyst Cheta Nwanze of the Lagos-based advisory SBM Intelligence. ‘Spending half a billion on a fortress is not exactly a show of confidence, especially given that it will be located in a new area being built as a playground for the rich,’ Nwanze said.
In his view, the US is digging in because ‘Nigeria (or what will be left of it) is too important in the coming geopolitical competition with China.’ Pulling out of the country would be akin to ceding it to China ‘without firing a shot.’