The latest surge of controversy around moves to reposition the country’s export outlook regarding manufacturing/productivity by Nigeria’s President Muhammadu Buhari seems a storm in a tea cup when whole issues are considered. The hoopla actually triggered by NEZPA, an agency under the Ministry of Industry, Trade and Investment (MITI) has centered specifically upon the president’s move to energize the country’s export processing arsenal, specifically the initiative around Nigeria Special Economic Zones Investment Company Limited (NSEZCO), which is being positioned to champion a new direction in productivity, manufacturing and export.
Let us undertake some foundational clarifications at this point to enable needful elucidation as the essay builds further! About 2017, the Federal Government’s Economic Recovery & Growth Plan (ERGP) identified the development of Special Economic Zones (SEZs) as both needful and strategic to accelerate implementation of Nigeria Industrial Revolution Plan (NIRP). Towards this end, Project MINE (Made in Nigeria for Export), was envisioned by the Federal Ministry of Industry Trade and Investment (MITI) to develop SEZs to world-class standards to superintend the business of exporting Made-in-Nigeria goods and services in sub-Saharan Africa and globally.
In a recent release, Femi Adesina, Special Adviser to President Buhari on Media and Publicity, explained: “Indeed, Project MINE was necessitated by the following factors: Lack of operating competitiveness that limits the growth of the zones, despite the presence of generous fiscal and regulatory incentives. For government-owned SEZs, there were limited Federal budget allocations to make the required investments in infrastructure, operations and management services; the need to develop the skills and experience to operate and manage the zones to world-class standards of efficiency and the absence of a deliberate strategy to attract investors, create clusters or encourage the development of local value chains using SEZs, and therefore the lack of appropriate link between the industrialization strategy of government and the Free Trade Zones.”
MINE, according to Adesina, seeks to achieve the following specific objectives: “Support structural transformation of the Nigerian economy by increasing the manufacturing sector’s contribution to GDP to 20% by 2029; Contribute to sustainable inclusive growth by creating 1.5 million new direct manufacturing jobs in the initial phase of Project MINE; Increase and diversify foreign exchange earnings to at least US$30bn annually by 2029 by increasing manufacturing sector exports; Create local models of global best practice in the provision of world class infrastructure at competitive costs connecting SEZs to international and regional markets with transport links, uninterrupted power, ICT, water, sewage and other services to ensure smooth and efficient operation of SEZ businesses.”
The foregoing, which includes other key objectives, would sound plausible and ennobling, although the workings and operationalization may not be an easy task, involving a broad chain of interests at both public and private levels. Indeed, NSEZCO is a public-private initiative, designed primarily to share the burden, at conceptual and financial levels, of transforming the yet emerging venture. Of course, it is accepted that to locate Nigeria as formidable manufacturing and export hub, as correctly defined by the Buhari administration itself, requires ensuring a value-added manufacturing national mindset, with the raw materials locally supplied. Only by this can millions of jobs be created and a virile economy anchored on productive, rather than consumptive, operational pattern, can be birthed.
NSEZCO is not just real, it is serious business! It is one which seeks to concretize the poetry around manufacturing and productivity to real and actual practicality. The picture of Gross Domestic Product (GDP) contribution being less than 20 percent of total Gross National Product (GNP) earnings for the country seems to have survived too long for the country to make any headway as a serious participant in global competitive market, and the way to go is to jumpstart productivity and manufacturing, and shipping outcomes upon the global market through concrete public-private initiative.
But NSEZCO is neither illegal nor harp-hazard, as clarified in the release earlier referenced, seeking as it were to make funds available through a synergy of private-public efforts, rather than government doing it all alone. According to that release, “In June, 2018, the Federal Executive Council (FEC) approved NSEZCO, with the endorsement of the Economic Management Team, as the holding entity for FGN investments and proprietary interests in existing and future SEZs. The FEC approval also provides that all current and future capital appropriations for Project MINE should be transferred to NSEZCO’s account, as soon as opening formalities are completed.”
It notes further: “With the formalities completed, NSEZCO became the platform through which Federal Government’s capital budget appropriations for SEZs are converted into long term value creating investments. NSEZCO is a public-private partnership (PPP) company to operate world-class standards of governance and management, to facilitate mobilization of capital and other resources from PPP partners, in order to overcome budgetary constraints to the provision of critical infrastructure for SEZs.
Seeming trouble started when the Minister of Industry, Trade and Investment, Dr Okechukwu Enelamah, was queried by a Senator at a sitting of the joint committees of the national assembly that his ministry was duplicating the responsibilities of NSEZCO which was not known to be one of the 17 agencies under the Ministry of Industry, Trade and Investment. The query came consequent upon an earlier presentation by him at same sitting of a booklet containing 2019 budget proposals for the 17 agencies under his Ministry. The sitting had comprised the appropriation committee of the senate, senate committee on trade and investment, appropriation committee of the House of Representatives and house committee on commerce. Although, neither the joint sitting nor Enelamah carried the slightest unwelcome intention, the ‘discovery’ of the so-called ‘illegal’ company led to the rejection of the ministry’s N15.633 billion estimates for this fiscal year by the committee. This was the genesis of trouble. But it should be stressed that the current 8th national assembly have never seen anything from the stable of the Buhari administration that should be embraced.
Enelamah, in his own response, simply told the senate committee that the private company was established through a presidential initiative and approval given it at a cabinet meeting in May 2018, a declaration and disclosure which is true. But NEPZA, one of the 17 agencies under the Ministry at the same meeting had argued that the law which established it had permitted it to carry out the same activities that NSEZCO was being set up to do, adding that the argument that the Authority was not empowered to do so was not correct.
It further maintained that if the federal government preferred that another agency such as NSEZCO was better fit to execute agreed policies and programmes as being already done by NEZPA, it would be better that the enabling law of the Authority be amended to restrict it to pure regulatory functions, rather than including its management and operations, citing India as charting a path in the regard. But apart from India, there is another ready example of the model in the Gabon SEZ Company, a public-private partnership led by Olam (a multinational commodities and food group founded in Nigeria) as operator and manager, with the Government of Gabon and Africa Finance Corporation as co-investors. Currently, Gabon SEZ has mobilized over $400million in shareholders’ investment and attracted about 130 enterprises to set up operations there, creating tens of thousands of jobs.
While NSEZPA is an agency under the direct control of the federal executive council, NEZPA is and remains an agency of MITI. The foregoing, rather than serious post-election angst or politics-laden confrontation, as some elements might want the public to believe, is the light through which someone must see and analyze the seeming tango between the two federal government agencies. Irrespective of positions of oppositions, the reality of concrete efforts being spearheaded and superintended by the administration of President Buhari, as much in the regard of NSEZCO as in quite a lot others, has revealed a readiness to undignified rent and clientelist mentality/mindset for a genuinely productive Nigeria, fortified with operable and operationalized policy moves to redeem images and reassure destinies.
Salawudeen wrote this piece from Abuja
