News Conference with Nigeria’s Minister of Industries, Trade and Investments

By January 17, 2017 Investment News

Dr Okechukwu Enelamah, Minister for Industries, Trade and Investments addressed a news conference recently where he took stock of his, assignment in the last one year. Assistant Editor Nduka Chiejina was there.

How would you assess Nigeria’s economy after a year as a minister and what are the strategic roles your ministry is playing to diversify the economy in the area of trade and investment?

Let me say that when I think about the Nigerian economy, I think in terms of what the Nigerian economy has been traditionally and what the reformed new economy that we want to create would be and what would be different. I think in the past what was good about the Nigerian economy was that we had an economy that had actually started the diversification to some degree if you look at the GDP and the composition. When they did the rebasing, one of the things we found out was that the GDP was no longer what we thought it was. Services, for instance, had grown; people were going into non-traditional services and we found things like telecoms had grown. We found things like trade and other things had grown, manufacturing was about 10 per cent and agriculture was about 20 something percent. Oil actually, in terms of GDP was about 10 percent however when it comes to the revenues of government. We also found out that oil was still about 75 percent or more than even though that reform had started.

Secondly, we found out that the foreign exchange earnings of government (over 90 per cent of it) was also from oil. So when we talk about the new economy that is diversified is that we clearly want to diversify our sources of revenue when it comes to foreign exchange earnings as well as more generally for the government. In order to do that, we need to do a number of things. One is that the sectors of the GDP that are significant but don’t contribute revenue in monetary form need to be better monetised, which means we need to give them the resources they need to be more productive beyond subsistence level, like agriculture. We need to empower our people to do productive agriculture that is profitable so that they can pay their taxes, they can export and do the things that people do versus just producing hand to mouth to eat which is really part of GDP but frankly doesn’t impact the revenue in any form.

It also means the government needs to be more attentive to the people. What do I mean by that? We need to create a more formal economy not because we want to put more burdens on people but because we want to recognise them. When we talk about the formal economy, it’s almost as if they are not there; they are not registered anywhere whereas if you look at the Social Intervention Programme of the government, one of the things we ’ve been telling people is that we just want to know who you are. As a Nigerian, you have a right to be known as a Nigerian say this is what I do, whether you are a trader, a market woman, an artisan. You have a right to be known so as to make that registration non-burdensome; not a burden to the people but of benefit to them. I think you would find out the economy will formalise just like when people talk about formal economy they think in terms of the cost, all the road blocks, the red tape and all the taxes they ask you to pay with no benefits,  It’s really about  a government of the people—what you are trying to do for the people.

That then brings me to the core of the programme, which is how do we diversify the economy from oil?

In order to diversify the economy, we also need to make the other sectors—agriculture, agro-processes, Agric business which is the agriculture value chain, industry and manufacturing, the petrochemicals, downstream that move from oil to all the things and even a sector like auto industry because we consume a lot of cars. We might as well have a very developed industry as opposed to a nascent industry that we just import the cars use them and then sell the tokunbo, at some point. We need to do more than that because this market is large. The good news is that the people who bring these cars are prepared to do more with us because the market is large.

If you look at Nigeria and ECOWAS, it is just that it’s capital-intensive to do it. Those things are the things we are working on as a plan and the Ministry of Trade and Investments has a particularly important role to play because we view ourselves as a key enabler to those that are in industry, trade, and investments.

The good news is that this is what is shared by the entire government right from the president. That was why the president launched the Presidential Enabling Business Council. That’s why it is chaired by the Vice President.

The final thing I will say is that we are also working on the Nigerian Industrial Revolution Plan as a key programme of government that would help to diversify away from oil and most is around agriculture and agro-processing. What we are doing in sugar, food and food processing, fruits and tomatoes and all those, what we are doing in textile and garment, cotton, textile and garment (CTG), auto. What is going on in housing that government is doing almost on an industrial scale. There is so much going on and one of the things why meetings like this are very important is that we need to communicate better so that people will understand better what is happening even if it takes time to get the benefits to come through so that people will understand what is going on which will yield results imminently.

Let’s talk about the road show you went about recently. What is the impact like?

I think what you find is that Nigeria is a country that people are genuinely interested in and I view that as an asset, a blessing. There is no country you go to, no matter how big or small (the president goes along), even at the ministerial level, where they don’t give us the highest treatment they reserve for the most important countries in the world. When we went to Germany, the president met with the president, the Chancellor, and I had a business forum with the elite of the business community and eventually the president came and addressed them. And Germany is interested in working with Nigeria for several reasons. They are very import in auto, in parts, and even the way they built their economy and training people beyond academic degrees with emphasis on vocational training and they expressed interest to work with us.

I think that you find that there are lots of benefits that will come from the Germany trip. They are also interested in investing in all the areas that we are looking at, including renewable power. And we have a very strong Nigerian business association network; trade association that is working with us very actively and we have met with them even after we came back here. Some of their ministers and parliamentarians came to meet with us.

Singapore is interesting because as you know, it is a small country that defied the odds and became a very successful, sophisticated first world country and it was under very good leadership by the former prime minister, Lee Kuan Yew, and the main lessons is that number one; they had a government that provided clear leadership and direction. They had a 30-year roadmap and they achieved it.

Could you tell us how much investments have come in the last one year?

Yes, people are surprised about how big investments inflows are because they have come in large chunks but let me tell you that we have gotten a total of well over $20 billion. You know why because the major infrastructure projects because the one we call an inflow is not just when the money is physically just here but also the commitments that have come. So if you look at the infrastructure projects that we and doing, there is a twenty billion or more infrastructure project with the China EXIM bank, it’s been signed and its now implemented around railways and related infrastructure. There is agreement with General Electric which is about $2billion they have committed in the last one year. There are the private sector investments that talk about Chellarams which sold a major part of their business to Kellogg’s of the United States that deal is maybe a $400 million deal.

There was a deal that was done by Chi with Coca-Cola. That deal is also hundreds of millions of dollars. BUA also sold something to an international player for a substantial sum. However, we want to increase the steady inflow of foreign direct investment across all levels because there are many more people waiting on the sidelines apart from the big people who are doing multiyear infrastructure projects. As you know, NIPC has just appointed a new hand for the private sector. As a government, we want to partner with the private sector; the government doesn’t have all the money it needs to develop the country, therefore, government is willing and committed to partnering with the private sector players and also development capital to develop the country by making sure the capital goes into the right places. So, I think you will find that in investment, things are picking up even in terms of statistics. There is a significant uptick in investment even though some of it has to do with fixed income investment but it’s still capital that we need. Another thing I want to say regarding investment is that the oil companies have reached an agreement that is now being finalised to bring in more money into the oil sector. You will hear more about it from next week. We are just going through the process you know in oil, everybody has a stake in it, the governors. There was a meeting yesterday Thursday) with the National Economic Council and other stakeholders will be briefed but it’s a very important programme to bring in billions of dollars into the country.

They say you need oil to get out of oil and this will improve the oil sector significantly. Minister sir, talking about exports what are the bottlenecks and what are you doing about t?

We have said we want to diversify the economy in terms of foreign exchange earnings and also in terms of revenue and if you think about what that means, it means non-oil exports, to do it, it means we have to do certain things well. My view is that it goes into the enabling environment and ease of doing business the process of exporting from Nigeria is very and not competitive and the Federal Executive Council has actually asked us-myself and the minister of finance, to come and address the council on practical steps to make it easier to export from Nigeria trading across our borders and we are working on it as we speak. The bottlenecks in terms of administrative, bureaucracy, red tape and all the approvals you have to get and all the inspections and all the waiting at the ports that needs to be addressed, people that are serious about export make that a competitive advantage by doing it. Look at Kenya for example. The second thing we need to do is to give more incentives to those that are exporting so that they will prefer exporting particularly value added export. We have met with the exporters to look at Export Expansion Grants and we have told them that we will find a mechanism for making sure they get paid what they are owed. We clearly want to do it not in cash but in kind which was what was happening before. It’s just that we want to de-emphasise imports and emphasise tax because they have to pay tax to the country and say why don’t you use those taxes to offset or defray what we owe you so that there is a shaking of hands. They are looking at that, they have engaged us and we plan to launch that in 2017.

This is why the enabling environment initiative I talked about earlier is a panacea; it’s an important intervention and it has to be the legacy of this government and if we do that, Nigerians will remember the President Buhari government as one that came and walked the talk. This is because every government talks about making it easier for people to do business, it doesn’t mean it’s easy to do. It simply means you’ve to roll up your sleeves. We’ve not put the infrastructure in place, we have an enabling business environment secretariat, headed by a reformer, Dr Jumoke Oduwole. We also have a Presidential Council on it that’s meeting today and I think soon, you’ll start to see the results. We need you the media to help us communicate those results, communicate the initiatives of the government to the people so they’re encouraged and know that we’re a hardworking government. Because if you don’t tell them, they’ll think we’re just sitting down, talking and doing nothing.

Source: The Nation