This is a season of mudslinging and utter lies for political positioning and other hidden ulterior motives. A season when some people will rather hold on to threads of lies and falsehood in the face of clear facts. One of such cases is the ongoing misinformation on a Presidential Initiative to accelerate industrial development in the country. In April 2017, the President of the Federal Republic of Nigeria, Muhammadu Buhari, launched the Economic Recovery & Growth Plan 2017-2020 (ERGP), a medium-term national plan and road map comprising sectoral plans for agriculture and food security, energy and transport infrastructure, industrialisation and social investment.
Specifically on industrialisation, the ERGP seeks to accelerate the implementation of the Nigeria Industrial Revolution Plan (NIRP) through the use of special economic zones (SEZs), with an aim to generate jobs, promote exports, boost growth and improve skills.
SEZs is a broad term used to refer to Free Trade Zones, Industrial Parks, Export Processing Zones, and the various other arrangements involving the provision of infrastructure and services for industries and companies within a designated geographic area, with various exemptions and other additional benefits. Nigeria was an early adopter of special economic zones, with the first SEZ designated in 1992.
However, our SEZs appeared to have underperformed due to the following challenges:
Lack of operating competitiveness that limited the growth of established Free Trade Zones, despite the presence of generous fiscal and regulatory incentives.
For government-owned SEZs, the limited Federal budget allocations were insufficient to make the required investments in world-class infrastructure, operations and management services; 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 an appropriate link between the industrialisation strategy of government and the Free Trade Zones.
As President Buhari noted at the signing ceremony for the investment partnership between NSEZCO and its strategic investment partners on February 8, 2019, “When we decided to continue with the implementation of the Nigeria Industrial Revolution Plan of the previous Administration and launched our Economic Recovery and Growth Plan to fast track implementation, we had a vision of Nigeria as the pre-eminent manufacturing hub in Sub-Saharan Africa and a major exporter to our immediate West African sub-region, the rest of Africa and indeed the World. Special Economic Zones have an important role to play in achieving this vision.”
Contrary to insinuations by the sponsors of the misinformation, including some political office holders who feel threatened and sheer mischief makers, the execution of the Presidential Initiative cannot be said to have been done in a closet. It is an open process that involves experts from the public and the private sector.
In response to the need for accelerated industrial development, a Project Delivery Team was set up, led by an Adviser to the Honourable Minister and initially comprising selected staff and advisers in both the Ministry of Industry Trade and Investment and the Nigeria Export Processing Zones Authority (NEPZA). The services of expert consultant, Professor Justin Yifu Lin and the Institute of New Structural Economics, Peking University, China and external leverage consultants from Bain & Company and later Mckinsey & Company, KPMG and Aluko & Oyebode were also procured.
In order to strengthen project governance, a Project Steering Committee was convened under the leadership of the Honourable Minister of Industry, Trade & Investment, comprising top officials of the Ministry and other members drawn from the Economic Management Team and the several related Government Agencies. Also, on the committee were the United Nations Industrial Development Organisation (UNIDO) and Africa Export-Import Bank.
Under the leadership of the Federal Ministry of Industry, Trade and Investment (FMITI), Project MINE (Made in Nigeria for Export) was envisioned and launched to develop and upgrade SEZs across Nigeria’s geopolitical zones to “world-class” standards whilst also creating an enabling environment for sustainable and globally competitive export-oriented SEZ operations. The dream is to position Nigeria as the pre-eminent manufacturing hub in sub-Saharan Africa and a major exporter of ‘made in Nigeria’ goods and services regionally and globally.
Project MINE will achieve the following strategic objectives:
Aid 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 non-oil foreign exchange earnings to at least US$30bn annually by 2029, by increasing manufacturing sector exports;
Create local models of global best practice in 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 operations of SEZ businesses;
Promote the “cluster” effect to be gained by locating similar export-oriented manufacturing businesses within the same locality;
Attract world class investors with strong positions in global supply chains and investors with potential to increase the scale of operations rapidly to set up operations in SEZs;
Create an enabling environment for SEZ businesses, using technology and streamlined processes to facilitate movement of people, goods and capital and easy access to government services, approvals and permits; and
Develop best in class legal and regulatory frameworks.
For Project MINE, several leading Development Finance Institutions expressed keen interest to partner with the Government by co-investing in a well governed and managed entity, to which the Government had demonstrated commitment by making an early investment of funds. However, without exception they all insisted that the process for setting up, governing and managing such a company must conform to the standards in operation in their various institutions and that the board and management should not be controlled by Government.
Studies of the SEZ models in Ethiopia, Kenya, Egypt, Gabon and Morocco showed that the most sustainable approach to rapid and sustained SEZ development is the public private partnership model.
The most compelling case study of this model was 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. Gabon SEZ has mobilised over $400million in shareholders’ investment and attracted about 130 enterprises to set up operations there, creating tens of thousands of jobs.
Nigeria LNG Limited is one of the most successful public private partnerships in the world. It has created a world-class Nigerian company that generates billions of dollars in foreign exchange for the country, taxes for the Government and high-quality jobs for Nigerians. The LNG model was also studied, especially its careful partnership design where the Government of Nigeria invested its gas assets and provided fiscal incentives and a favourable legal framework while the International Oil Companies (IOCs) invested cash and provided management under a world-class corporate governance framework. A broadly similar approach, with amendments to details was used to set up the Nigeria Mortgage Refinance Company Limited, Development Bank of Nigeria Limited and the Family Homes Fund.
– Ademiluyi writes from Osogbo, Osun State
NSEZCO is therefore not a privately-owned company and none of these directors could have had any beneficial interest, directly or indirectly in the shares of the company.
NSEZCO intends to raise $US500million in equity by 2023 from the FGN, the Strategic Investment Partners and other institutional investors. Currently, NSEZCO is executing a Round 1 equity fund-raising programme for $250million, in tranches.
The Strategic Investment Partners participated in a signing ceremony presided over by President Muhammadu Buhari on the 8th of February 2019. Definitive agreements were signed between NSEZCO, Afreximbank, BOI and MOFI, with NSIA signing a Memorandum of Understanding to signify its interest to invest in NSEZCO subject to its internal approval process. AFC and AFDB who are also at various stages of their internal approval processes, were also in attendance.
According to NSEZCO sources, senior representatives of the Strategic Investment Partners have been nominated to the Board of Directors and NSEZCO is currently carrying out the necessary processes to perfect their appointment and registration at CAC.
Pilot projects include Enyimba Economic City, Abia State; Lekki-Epe Model Industrial Park, Lagos State; Funtua Cotton Cluster, Katsina State.
In addition, pre-development studies are said to be ongoing for greenfield SEZs in Benue, Kwara and Sokoto States whilst studies will soon commence in Ebonyi, Edo and Gombe States amongst several others.
In a development that shows global endorsement of Project MINE, Shandong Ruyi Group, the leading integrated textile and garment group in China and one of the largest worldwide, has announced an investment commitment of $2bn to the Cotton, Textile and Garment industry in Nigeria by way of anchor investments in manufacturing facilities in Enyimba Economic City, Abia State, Kano, Katsina and Lekki Model Industrial Park.
On the 28th of March 2019, CCCG Industrial Investment Holding Company (CIHC), a subsidiary of China Communications Construction Group ranked 91st in the Fortune 500 companies and the 3rd largest international contractor globally, signed a Letter of Intent to invest in the Lekki Model Industrial Park Project as a Developer and to be the Lead Investor in a package of external infrastructure projects to serve the entire Lekki Free Zone Area including, power, water, access roads and bridges.
From available documents, one of the oppositionists to Project MINE may have been NEPZA. Cited documents show that the Agency wrote to a letter to the Attorney General on 23rd October 2018, raising the following questions for his advice:
“Whether the establishment of the Nigeria Special Economic Zones Company (NSEZCO) Limited to take over the functions of the Nigeria Export Processing Zones Authority is lawful; and
“Whether it is lawful for funds appropriated in favour of NEPZA for the implementation of some capital projects in the Free Zones under the regulatory mandate of NEPZA can validly be transferred into the account of a private Limited Liability Company.”
In his opinion and advice, the Attorney General of the Federation stated that:
“The presidential Initiative on SEZs to drive national economic growth, the provision of funds in the 2017 and 2018 Appropriation Acts domiciled in NEPZA, and the Corrigendum of the National Assembly by the letter of 23rd November, 2018 in favour of NSEZCO should not be frustrated by NEPZA in seeking to retain such funds on technical interpretation of the NEPZA Act.
“NEPZA should not be found working against the purpose and direction of the policy of this Administration which has not violated any extant law.
“Consequently, the funds domiciled in NEPZA should be released to NSEZCO to enable her utilize same for the Presidential Initiative
Clearly Project MINE is a laudable initiative with great potential to facilitate Nigeria’s industrialization and create jobs for our teeming populace. This attempt to paint the initiative as illegal or corrupt is a depiction of the minds of those who spread the tales. It is not grounded in reality by documented facts. Nigeria, under the leadership of President Muhammadu Buhari, is in a hurry to perform to capacity, and these attempts to derail progress must be resisted by all patriots.
– Ademiluyi writes from Osogbo, Osun State.