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FG Taking Practical Steps To Make Economic Diversification A Reality – Enelamah

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For a long time, oil has been the mainstay of Nigeria’s economy. But the current administration has said it is making practical efforts to diversify the nation’s economy from oil. In this interview with BAYO AMODU, the minister of Industry, Trade and Investment, Dr Okechukwu Enelamah, explains what these efforts are, especially how the ease of doing business initiative will impact the process.

What value addition would the Nigeria Office for Trade Negotiations give to Nigeria’s position in international trade?

The Nigerian Office for Trade Negotiation (NOTN) has just been approved last month by the Federal Executive Council.  The country decided to go in this direction because trade is a very specialized area and it is becoming very technical; we found out that in order to put our best feet forward when it comes to trade, trade negotiation; we need a body of experts, we need good experts to lead our negotiations.

So, the Nigerian Office for Trade Negotiation (NOTN) is just being setup now; it’s being approved and it would be operational in the next few weeks. The whole idea is that it would be led by a chief negotiator and trade advisor. We have a candidate already and then we would also have experts on trade from this ministry and other ministry that would advise the country and the MDAs on trade.

Basically, some of the areas we will be looking at would be thinking prospect.We are looking ahead and we think that the Continental Free Trade Agreement (CFTA) will sort out our relationship with ECOWAS and Europe with the Economic Partnership Agreement (EPA) looking at some of the agreement we’ve entered into already like CET and ETLS. We would also be looking at the relationship with Europe in terms of Brexit and all those things. We will also be looking at some of the so-called Free Trade Agreement, or strategic trade agreement to help create value chains, global value chains, and regional value chains.

What that means essentially is that you are entering into agreements with other countries on how you add value to products that come to them, the way you are part of the total picture for producing finished goods.

At the heart of it is really trying to ensure that we go beyond passive trading to adding value in our trade relationships and I think you will find out that it also ties into all the other policies of government like made in Nigeria or made in NAIJA or buy NAIJA because what you are trying to do is to increase value added in Nigeria.

It also ties into the Economic Recovery and Growth Plan, which is essentially about creating jobs, about agriculture, agro processing, agro value chain and about industrialisation.

It also emphasise on SMEs. SMEs ultimately need help from their countries and their governments to make sure that their products are adding as much value as possible and are getting the best price possible because the price between value added products and raw products is  dramatic.  This is why in Africa, we’ve often suffered from selling raw materials and the commodity circles and the burst boom circles. So, I think the Nigerian Office for Trade Negotiation will be very helpful in addition to what we are doing already.

 

Nigeria has been having trade negotiations and entering trade agreements all the while.  Why is the NOTN important?

We have been suffering what we call the ‘coordination deficit’ which means we are not well coordinated as a country in terms of trade negotiations.  It basically means that the level of coordination has been poor in different MDAs of government when it comes to trade.

Trade is a very wide-ranging subject as you know and different people conduct trade in different shades and forms. As a country, we need to have common positions on trade. Now related to that coordination deficit is this idea of agreeing on what are those common positions and having a repository or a place where they fully understand our strategic positions on key issues, so we can be speaking with one voice as a country.

A country needs to have a strategic direction. Look at the ERGP for instance, what it means for trade is that somebody needs to master that and make sure we enter into negotiations in line with the plan.

The need for expertise makes the NOTN imperative. Rather than trying to reproduce expertise in every agency, every department, there is certainly synergy and it makes sense to have experts, keep training them and helping them to stay current and so on and so forth.

This is not something that is unique to Nigeria, this is why you find out that other countries have done it as well but the important thing is that by so doing, it strengthens our position; it doesn’t weaken it. In the past we’ve had trade agreements that have not really been properly completed and implemented by having people who work with the various operational agencies, department and ministries of government. It is a lot easier to follow through and being able to understand all what our commitments are.

They will also build a data base agreement.  There are several other reasons but these are the more important ones.

 

Will the Office be a pool or you will only train experts and still leave them to remain in their various MDAs?

First of all it is going to be an agency of the government that is focused on trade negotiation; it is called Nigeria office for Trade Negotiation. And we would have a limited number of experts.

 

Some people are of the opinion that Nigeria lacks expertise to negotiate trade agreements in her favour?

The gentleman who is leading these efforts, Ambassador Chidi Osakwe has been at the World Trade Organisation for close to 20 years.  Before then, he spent about 15 years or more in Foreign Service.  He is a trade expert and understands the technicalities and the language of trade.

There are other people who have received similar training and exposure. Part of what we are doing now is to identify them, pool them together.  We will also be undertaking training and equipping others with tools of negotiation.

We are going to be training people and helping them get the necessary exposure and the necessary skills and tools for negotiations.

 

 What is Nigeria’s strategy on the ease of doing business initiative as this administration tries to diversify the economy?

Our strategy as a country is to diversify away from oil.  It is not that oil is not important but we cannot stand on one leg.  We are blessed to have oil.  But we cannot depend on one commodity.  Therefore, in order to diversify away from oil, we need other areas, especially industries, services, SMES to get into different businesses and trade.

Without any iota of doubt, what government has to do to make it easier for people to do business is to create the right environment, to lower the cost of doing business; to make the process of getting approvals easier.  That process is what this whole focus is.

We are saying let us diversify in theory; we are taking practical steps to make economic diversification a reality.

The government has been working on the Ease of Doing Business since last year because the President launched the Presidential Ease of Doing Business Council last year.  It is chaired by the Vice President, with a number of ministers, 10 ministers, the Governor of the Central Bank of Nigeria and the Head of Service.  It has a secretariat called the Enabling Business Secretariat and it has been working on several initiatives on how to ease doing business in Nigeria.

In fact, it came up recently with the 60-day National Action Plan to deal with business registration, construction permit, trading across borders and the like so that we can improve on our Ease of Doing Business rating. This will enable people view our country as a business friendly environment.

The Executive Orders were passed as an extension of this work.  Two weeks ago, the Acting President signed three Executive Orders.  Executive Order 001 was on Transparency and Ease of doing Business.  The purpose of that executive Order is to now make the system wide.  Every agency of government should be very clear on what people need to get approvals in terms of time requirements, fees to be paid and where a person can expect an approval or a rejection.Those should be published on their websites and public places so that people can be aware.

The second leg is on the modalities for approvals.  What it provides for is that for any reason you don’t get back to the people, what it means is that silence is consent, therefore, the onus is on the public servants to tell people why they don’t qualify for something, rather than the other way round where you don’t hear from me, it means you don’t qualify. It is a clear signal to the public that we’re here for you, which means we are here to render service.  It is a clear signal that the government is the government of the people, by the people and for the people.

Number three goes further and deals with the principle of one government.  What that means is that if you are getting an approval from a government agency or department and there is something that is required and the original copies of the document are in another government agency, that original agency should take the responsibility to get it from the other agency because we are all agencies of one government, rather than telling the applicant to go and bring the document.

All you need to do is to provide evidence that such a document exists.  It could be a photocopy or any other thing and the other agency would liaise with the other.  You know when government agencies liaise with each other; they are a lot more supportive of each other.  The whole idea is to make it easier to do business.

 

How is the government really going to ensure that these things are carried out?

Let me start by quoting the Acting President. He said when he addressed the civil servants last week that it is a new day. It’s only a person who is insensitive, inattentive or unwise that will treat these Executive Orders as business as usual. As I speak to you today, there is another session going on with the senior civil servants explaining how the orders will work or operationalize and brainstorming and working on it. These are rules and regulations of engagement of government and the civil servants understand the importance of rules.

Number two is that the reason why we are having meeting like this is that the public is also made aware and the citizens are empowered with information and understanding of their right so that they, in effect can demand those services, because that is what the law says.

The third thing to say is that, if you read the executive orders carefully, they include sanctions and consequences and who is responsible. For instance, it says each authority, the head of that agency would be held accountable and I can tell you that in my ministry, we have already met to talk about how to implement.

There is enabling business environment secretariat that I talked about, who is focused on implementing these executive orders, particularly number one which is on transparency and ease of doing business and enabling environment. I think by far, the most important thing is that as we demand more from our people and there are consequences, for not doing the right thing, you will find that we will change. I am positive that it is not going to be business as usual and the media has an important role to play to keep publicizing the orders and to keep reminding citizens of their right and keep engaging.

Culture change takes time, and we all need to change as a people. We want a better country but we are the people that will change things, both those in government and those outside of government, but I’m positive that we will change because it is positive for us. We will do what is good for us as a country.

 

Can you specifically explain how this ease of doing business will work at the seaports?

I think the first thing to say is that the media especially would need to understand the orders and publicize them. What the executive orders say exactly about ports is that there shall be no touting whatsoever by officials or unofficial persons at any port in Nigeria and all non-official staff shall be removed from the secured areas of the airport. Those are directives, rules, and commands given to people. So if you see somebody who is not an official, already they breaking the rules and you have every right to report it.

Another one is that any official caught soliciting or receiving bribes from passengers or other port users shall be subject to immediate removal, that means you need to start screaming remove, remove, remove. We need citizen activism and it is serious. Our citizens tolerate far too much, why would somebody be extorting money from you against the rule, you know your right, and you can’t even do anything.

It says any official caught soliciting or receiving bribes from passengers or other port users shall be subject to immediate removal from posts and disciplinary as well as criminal proceedings in line with extant laws and regulations; merge departure and arrival interfaces at the airport into a single customer within 30 days without prejudice to necessary backend procedures. It also says, harmonise operations of all MDAs of government physically present at the port into one single interface, meaning station or desk domiciled in one location in the port and implemented by a single joint tax force at all times without prejudice to necessary backend procedures within 60 days. It also says assign an existing airport terminal to be dedicated to the exportation of agricultural produce, within thirty days of the issuance of this directive, then for Apapa port, it shall resume 24hours operations within 30 days as well.

This is about single window and single interface as well, trying to leverage technology to make sure that all the people who have responsibilities in the port can do it electronically, through a portal. I think we mean business and we do need to partner with people like you to implement.

 

Has this order come into operation?

It has been signed, we have started counting already.

 

Could you bring us to speed on CFTA and the Industrial Council?

The CFTA which is the Continental Free Trade Area agreement is a directive of a proposal which came from the AU summit, to increase intra African trade which is roughly now around 10 to 15%, in order to get to the 30s. There have to be modalities on how we trade with each other; we have to make it easier to trade with each other. So the intercontinental free trade agreement is an attempt to put in place protocols and rules of engagement to include trading in goods services and other areas across Africa, which could eventually include ease of doing business including infrastructure and free movement of people and so on. But those negotiations are going on. The AU summit of the heads of state would like to see their first level of agreement by the end of this year, which is why meetings have been happening at a fast pace ; negotiating teams have already met six times and there is another meeting coming up next week.

On the industrial council, the full name is the Industrial Council and competitiveness advisory council or industrial council for short. The council is a body made up of a leadership of the government and the private sector to come together in a public private partnership to address the problem of industry. The council was inaugurated on the 30th of May.

That council includes leading lights in business and key senior members of the government which includes about 9 ministers cutting across all the ministers that interface in areas relevant across the country, the central bank governor, head of the service and secretary to the government of the federation and chaired by the vice president. Minister of industry, trade and investment is the vice chair and Alhaji Aliko Dangote and Mr Atedo Peterside are vice chairs on the private sector side.

That council already had a very successful inaugural meeting and agreed that it will meet monthly, identified the areas it is going to work on and the whole idea is to make sure that it is an implementation body as well that can get things done when cooperation or collaboration is needed between the public sector and the private sector.

 

Can you speak on the Special economic zones?

The special economic zones is an important attempt to solve the problems that are hindering industrialization, and they are important because we believe that one thing to do to encourage industrialization would be to provide the enabling infrastructure for producers to produce competitive products.

Special economic zones would be special areas dedicated for industrial parks and zones where power, infrastructure and facilities are made available for world class production and manufacturing, the government decided because it has an important role to play, it provided infrastructure and land, access in terms of logistics that we would use special economic zones which had been used successfully by other countries and climes. In Nigeria, we do have some but they have not been well ran and they are not up to world class standards, but I can assure you that just yesterday when we met with the minister of power, works and housing, we are collaborating to make sure that this special economic zones would have adequate power. So it is definitely about implementation and it is certainly to aid industrialization and the implementation of the Nigerian industrial revolution plan.

 

Are you looking at Anti-trust laws to discourage monopoly?

I think there are two dimensions to that, one dimension is what we call promoting competitiveness in the economy which is part of the role of this council, the industrial policy and competitiveness advisory council. But there is also, as you are aware, a competition bill that has been approved by the house, it has gone through the final reading in the senate and it is now being harmonized based on trying to address this issue from point of view of making sure that no player stifle competition or the market. The other part to it is also that the country itself is not unfairly treated by the international players because they can also monopolise our market and dominate it if we do not have anti-dumping and protection mechanisms to avoid what you might call unfair trade practices.

So one of the things we are doing is that there is a law that is being drafted to deal with what the world trade organization call safeguard mechanisms, anti-dumping mechanisms, defenses against substandard goods, defenses against unfair practices, every country has to have that, if not, other people will eat your lunch.

 

What is government’s position on EPA?

One of the areas we expect to get advice from the Nigerian office on trade negotiation/technical experts is on how to solve the EPA challenge.

You know if somebody is trying to plan with you based on where you are today when you are planning to move somewhere else, it will be wise to look ahead and make sure that the agreement anticipates where you are going, the problem with the EPA is that it does not anticipate where we want to be as an industrial economy. It sort of assume we bring the raw materials in, we send them to Europe and it says if you bring them in, we will give you access to our market, but then you will have to give them access to the finished goods to come back. That was the trade of the colonial era and the 20th century.

The trade of today is that every country, whether a large country or not needs to be value added in manufacturing, the jobs cannot be exported out so we made that case to Europe and we are engaging. The important thing is to sit down and negotiate a win win agreement, and I believe there is an agreement somewhere there, that is what negotiation is about, it is about agreeing in a way that both sides benefit and frankly it can be done with the required expertise which requires work and engagement.

 

What is the government doing about expatriate quota?

The point is that we have a responsibility to ensure we control influx of people in a way that is responsible without becoming an island nor adversarial especially for countries like China who have indicated very clearly that they want the good of Africa and Nigeria, they say if you do not have funds, we have surplus funds and we will give you, it is an act of friendship and it has to be accepted and that is why the president said that china is friend of Nigeria, because we are trying to rebuild our infrastructure, the infrastructure he met when he was here in the 70s were good and the president’s vision is for us to return or do better than that and if you look at the money involved, you are talking about tens of billions of dollars to build up our railways across Nigeria, our highways and power sector and the Chinese have said they would support that, that is fine, nothing against it.

However, like I said, it does not mean that our own people should not do the work, after all it is not an end on itself, it is to create job, so if the jobs have gone away, so what are we doing, so I think we have a responsibility to do that. The other side of this is that, for those people who should get expatriate quotas, there should be transparency in issuing it that is ease of doing business so that we are not having immigration officers and immigration people basically having unclear rules on who gets what and not, let it be published, let everybody know when you will be qualified or not and I think that Nigeria must become a country of transparency, because transparency empowers the citizens to regulate and ask their government to be more accountable and I say this with all due respect to the organs of government that we owe you a duty to be accountable, because without information, how would you do it, or if I can refuse to give you something you rightly deserve, because somehow, you rightfully criticize me.

To know when you qualify, there have to be rules to know how long it takes for an approval to come out and what you need to provide, so you look through your own checklist and say that I have ticked everything which is why it requires work and work is ongoing,

 

What is the government doing about our export rejects especially to Europe and US?

One of the things about trade export in particular, is that like, we live in a world where you have to be competitive and you have to give the world acceptable products, everybody has a right to export without sort of meeting the baseline, that is one point. The second point is that there is also a lot of gamesmanship that goes on, what they call non-tariff barrels, where they come up with barriers to trade where they come up with rules. We have to be proactive in engagement; trade is about engagement which is why we need our trade experts to engage our markets. Markets are not impassible and they will point out what is wrong, but I believe that it is that engagement that leads to the successes. So I think the thing to understand is that it is more trade engagement, more negotiation, it is not a matter of being passive and the government has some role as well as the quality assurance certification bodies have a role to make sure that what we are exporting meets standards; which is why we are launching some more and there is a lot of work going on in that area.

 

We are yet to see a vigorous made in Nigeria campaign by government

One interesting thing about the order three is that we recently launched the made in Nigeria campaign because it is about consumption and not coercion, to sensitize our people to utilize more Nigerian products, but like they say, charity begins at home. We as a government have to live by example. In living by example, the acting president issued executive order 3 which is on public procurement, which is that 40% of our public procurement of goods and services must be locally produced, and I think that the demand would spur more production let our people have more demand and I have a feeling that production would ramp up to it.  The campaign is still in early days and it is a long one that we want to look back and say that we are proudly Nigerian, because Nigerians are innovative, when you give them the chance, they grow and get better.

 




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