LAGOS (Reuters) - From cocktails with hip-hop stars to sushi with smooth-suited bankers, it’s no wonder Nigerians moving back after decades in New York or London feel right at home among the high-rolling elite of Lagos.
This urban sprawl of 14 million people, the chaotic hub of Africa’s most populous nation, may epitomize what many foreigners fear most about megacities in the developing world: violent crime, corrupt police and crumbling infrastructure.
Yet legions of young Nigerians, educated at English public schools and U.S. Ivy League universities, are leaving highly paid careers with Wall Street banks and City of London consultancies to return to the Lagos hustle.
Not just a pay package that approaches or matches what is on offer in the United States or Europe, but a dash of patriotism — a chance to help fulfill an ambition of building world-class Nigerian businesses as an example to the rest of Africa.
“In the States, it’s an established economy. You can’t create another Apple, you can’t create another Microsoft, you can’t really create another Disney,” said Michael Akindele, who left U.S. consultancy firm Accenture to set up his own business investing in Nigerian media and entertainment.
“I’m stepping away from that salary, that comfortable, stable environment where you have power all the time, you have water all the time. But here I can create the lifestyle I want.”
Nigeria is the world’s eighth biggest oil exporter but its economy has been hobbled by decades of endemic corruption and unemployment is high. A power sector crisis, which means much of the country can go without electricity for weeks or months, has closed hundreds of factories and cut thousands of jobs in sub-Saharan Africa’s largest economy after South Africa.
Many wealthy Nigerians of Akindele’s generation were sent to boarding schools in England or the United States in the late 1980s and 1990s, when Nigeria was a military dictatorship with little foreign investment and a disintegrating education system.
They watched with cautious optimism as it began to return to democracy in 1999 with the election of Olusegun Obasanjo after three decades of military rule, and welcomed the reforms he started to push through after winning a second term in 2003.
When Nigeria used $12 billion of oil savings to pay back debts owed to the Paris Club of rich creditor nations in 2005, and won the write-off of a further $18 billion in return, foreign investors and diaspora Nigerians sat up and took note.
“I was following all this from London and started to believe now was the time to start planning to come back,” said Kayode Akindele, 28, no relation to Michael, who returned to work for United Bank for Africa’s (UBA) investment banking arm, UBA Global Markets.
Kayode Akindele, an Oxford graduate who lived in Britain for more than 16 years, was working on structured derivatives for Lloyds TSB in London when he was introduced to Tony Elumelu, chief executive of UBA, two years ago.
Elumelu was looking to build a world-class investment bank in Nigeria and Akindele’s skills were exactly what he needed.
“There was a sense of patriotism. I have always regarded myself as Nigerian and planned to return to Nigeria eventually,” said Akindele, now a vice president at UBA Global Markets.
Financial sector reforms in 2005 forced Nigeria’s banks to consolidate, creating multibillion-dollar institutions with the capacity to branch out into sophisticated new markets and pay salaries on a par with some of their Western peers.
Banks have also seen explosive growth on the back of record oil prices and a growing middle class among Nigeria’s 140 million people, and have been aggressively raising capital and increasing their capacity to lend.
Diaspora Nigerians — with experience in banking but also the cultural knowledge to navigate the complexities of doing business in Nigeria — have been in high demand ever since.
“I think there’s a window that will be there for maybe another 18 months to two years,” said Chuka Mordi, head of business development at First City Monument Bank.
“That’s the view at the moment, that people moving back understand exotic products ... but it will percolate to the local sector and people will learn these things and there won’t be any need to drag investment bankers from New York or London.”
Nigeria’s $95 billion stock market was one of the best performing emerging markets in the world last year, attracting private equity and hedge fund investors from Europe, Asia and the United States.
The world of vanilla interest rate swaps may seem a million miles from the realities of life on the streets of Lagos, where hawkers selling everything from phone charge cards to electric irons ply their trade among belching minibuses and moped taxis.
But bankers hope that building strong financial institutions will help open credit lines to millions of would-be entrepreneurs, allowing them to develop small businesses and lift themselves out of the informal sector, which accounts for a major part of the active workforce.
“When you see the hustle on the streets of Lagos, all those traders selling all those products, you know the street works,” said Obi Asika, an Eton-educated entrepreneur whose own record label sells albums through market traders and street sellers.
“You formalize distribution in Nigeria today, it’s a billion dollar business. Because everybody needs distribution. Everybody’s got products,” he said.
The idea of making money as a businessman in Nigeria — long spurned by some of the elite as inferior to a high-powered job in the public sector — is catching the popular imagination, demonstrating to an ambitious young generation that you don’t have to be in the pay of government to get rich.
It is a point hammered home by “The Apprentice Africa,” a reality TV show co-produced by Michael Akindele’s Executive Group and Asika’s Storm Media based on the hit U.S. series, in which aspiring entrepreneurs compete for a job with a top businessman.
“You get up in the morning and you see all of Lagos on the move, young boys trying to make ends meet. It’s an eye-opener,” said Isaac Dankyi-Koranteng, winner of the first series, aired on free-to-view TV in Ghana, Kenya, Uganda and Nigeria.
The government is still the largest official single employer in Nigeria, and the vast majority of people still live on less than $2 a day, but the new private sector elite hope that if they avoid the mistakes of their kleptocratic predecessors, Nigeria may haul itself out of poverty and corruption.
“There are issues. It’s not Valhalla. We’re not in Milton’s Paradise yet,” said Asika. “But I believe in Nigeria, I’m positive about this country.”
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Editing by Clar Ni Chonghaile