The Executive Secretary of the Nigerian Investment Promotion Commission (NIPC), Engr. Mustafa Bello, in this interview with Kingsley Alu, talks about the sector-specific investment policies which the commission is working on, efforts to encourage foreign direct investments, and the current level of investment in the country among others.
Government is always talking about stimulating foreign direct investment (FDI); as the agency saddled with that responsibility, what concrete steps have you taken to encourage foreign direct investment in Nigeria?
One is restructuring the organisation. It was apparent that without restructuring, it would become even more difficult to effectively deliver on our statutory mandates.
Initially, before such reforms, more than 60% of staff and activities were in support activities, but we now have reached the stage of about 80% of staff and activities are deployed in core investment promotion and facilitation roles. In fact, at this moment, every officer of the Commission is an investment promotion officer.
Another strategy of restructuring effectively was the establishment of National Council on Investment (NCI) programme. The new structure ensured adequate capacity as investment promotion think-tank with advocacy capabilities and functions.
Yet another strategy is the establishment of One Stop Investment Centre (OSIC) by the Federal Government in March 2006. This move put Nigeria on the right path to attracting FDI, as cumbersome business entry processes were simplified and streamlined from a single portal. The regulatory agencies were effectively coordinated to provide speedy and efficient services in a transparent manner from the OSIC platform
The next strategy is Investment Promotion Partnership (IPP). Strategic collaboration by the Commission has nurtured stronger partnerships with the states on investment promotion. e.g. states OSS, NCI, etc. These partnerships and collaborations with states are critical, since such investment projects are ultimately to be sited in them. We needed to proactively reposition the states
We undertake BIFs (Business Investment Forums) across major regions of the world to showcase opportunities and woo investors to priority sectors as well as where we have comparative advantages. We have also promoted collaborations with major stakeholders in the on/off shore FDI drives.
These innovations included enlarging the core investment promotion mandate e.g. project account teams, etc
What is the current level of investments in Nigeria?
It is encouraging to note that in FDI trends, in spite of persisting global economic downturn and challenges of the local operating environment, Nigeria has continued to record appreciable FDI inflows predominantly in the area of oil and gas, but government is working diligently to diversify into non-oil sectors and this has started to yield dividends.
In general, if you take a cursory look at the FDI data, you will note that, in 2009, total FDI inflow stood at $5,702,888,879.67, and in 2010 it was $5,994,150,018.64 while 2011 presented even a higher average, which has continued to rise in 2012.
The slow rate of investment inflows into the economy could be attributed to policy inconsistency. Presently, your agency is preparing a sector-specific investment policy document which covers all the relevant sectors of the economy. How far have you gone with this project? Has it been passed into law? What are some of the features of the draft document?
The NIPC draft compendium on sector-specific investment incentives policy for Nigeria has successfully gone through rigorous stakeholders’ inputs which will be further incorporated. After consultations with both public and private sectors, a public presentation of the draft document is being scheduled to hold very soon.
Two major steps will be undertaken: one is the submission of the Draft Investment Incentives Policy Document to the Minister of Trade and Investment, and further to the Federal Executive Council (FEC) and the second is the gazetting of Approved Copy of Policy for circulation to members of public. Finally, amendments of relevant legislation in lieu of that may have been affected.
Your agency has repeatedly identified paucity of funds as a major impediment to its efforts at attracting FDI; how have you been able to contend with this challenge?
This is a core concern, as the Commission has sufficiently sensitized government and stakeholders in the advocacy for improved and adequate funding of investment promotional activities.
As you know, we derive major funding from normal budgetary allocations of the federal government. As you are very much aware, our funding is usually through annual federal government budgetary allocation which on approval is released quarterly or monthly.
Experience has shown that proposed budget may suffer downward review and even the budgeted value as finally approved are not released timely for effective utilisation. The rigours of the system before actual release of funds vis-à-vis our organisational timelines and performance benchmarks often cannot easily synchronise.
As funding is the key enabling instrument to attaining set objectives and constitutional mandates of the Commission, we have worked on alternative funding strategy such as setting up investment fund. But, of course, such ought to be an act of Parliament. This will allow NIPC to enjoy statutory deductions from some of investment funds as may be spelt out.
The Commission has incorporated BIFs, PPPs, and counterpart funding options in staging forums and events. This has assisted us in realising some of our set objectives and mandates even during dearth of government funding.
As a step in the right direction, the advocacy for adequate funding was embraced by both the House of Representatives and Senate committees of the National Assembly during recent separate working visits to NIPC and OSIC.
We are further encouraged by the resolve of the present administration, which has shown very keen interest in supporting FDI attraction to upgrade infrastructure, develop critical sectors and generate employment as encapsulated in both the Transformation Agenda and Vision 20:2020. As a result we look forward to improved funding of the Commission’s activities and the One Stop Investment Centre, OSIC.
Some of the bad investment stories about Nigeria have been linked to inappropriate structuring of entry into the market. What kind of cases is your agency working to prevent?
Honestly, I believe this question concerns the reported image of Nigeria on issues of investments based on some experiences of the past. We can tell you that for the facilitation of genuine investments, NIPC, through its activities, relates with all our embassies, missions and tiers of governments, agencies, private sector players and major stakeholders.
Our programmes have gained wider acceptance, and sensitisation levels have actually improved among the international investing community on the potentialities of Nigeria and reform initiatives such as the transparent business entry processes.
As referrals and testimonials by local and foreign investors have shown, the platform of OSIC is a tremendous improvement to the way of doing business in Nigeria. Additionally, the new sector policy incentive document will greatly enhance Nigeria’s investment environment when approved and operational as extant policies.
The One-Stop Investment Centre of your agency has really simplified administrative procedures for the issuance of business approvals, permits and licences and company incorporation, thereby reducing the cost of doing business in Nigeria. What plans do you have to duplicate it in the states, especially in view of the fact that you are targeting 24-hour services, a clear departure from the present 48-hour timeline?
In line with NIPC strategic mandate overview, the states are our critical partners as ultimate hosts to investments, including the FCT. We can also observe that through sensitisation, encouragement, collaborations and specific policy initiatives, the states are gradually yielding to the desire to put in place an efficient One-Stop Shop (OSS) mechanism of their own to address anxieties and bottlenecks faced by investors there. As our own contribution, we have strengthened capabilities to provide leadership and training for particular establishments of the OSS platforms in the states.
The start-up trainings were introduced by NIPC to those states embracing OSS, and we are happy to note that more states are showing the zeal to enthrone the OSS incentive which will surely improve service delivery (target) within the 24-hour timeline envisaged as global standards
What is the outcome of the First Nigerian International Investment Forum which your agency, in partnership with the Commonwealth Business Council, organised in 2010 and what do you hope to achieve with the second edition coming up in October?
The forum was intended to feature the cream of public and private sector professionals and entrepreneurs. At the maiden forum, the first NIIF was a ground breaking event which attracted high networth Nigerian business entrepreneurs and public sector policy leaders, and foreign investors in a business facilitation platform jointly organised in Nigeria by the Common Wealth Business Council and NIPC.
We worked with Messrs Image Affairs limited, our in-house consultant, for the forum. You may recall that, at the time, global economy was at a slow down; igniting foreign investors interests in new emerging markets like Nigeria
The first NIIF was part of the larger strategic initiatives to reposition the competitiveness of our economy through the promotion of effective international business interactive forum. The positive reviews of the progress made from that event were many, but the central attraction was that the forum gave Nigeria’s economy prime opportunity for positive exposure. We earnestly believe that FDI attraction grew from such fertile grounds.
It is therefore logical and makes economic sense to coalesce energy for a second NIIF billed for this year.
This will play a role in our effort to sustain target marketing of the potentialities that abound in Nigeria and create the positive effects of FDI such as greater employment opportunities, technological acquisition, infrastructure upgrade, which underlines the transformation agenda of the economy
Incidentally, too, our research has shown that Nigeria has continued to attract greater foreign investor interests than in the past as captured in the numbers of ‘search hits’ to NIPC website by investors as recently released.
Nigerians at home and the resilient entrepreneurs in other climes are enjoined as a patriotic duty to support economic transformation initiatives and development of our dear country. No contribution in this direction will be too much sacrifice.