Talk of the Town

What Measures is the Ministry taking to reverse or minimize the effects of current industry challenges?

One thing this administration has been able to do is ensure that it takes advantage of the synergies amongst the different ministries, departments, agencies, and parastatals. We are seeing ourselves as one government out there to attain the same objective of serving to ameliorate the challenges facing our manufacturing sector. In terms of fiscal and monetary policies, there are a lot of discussions going on. We are aligning our fiscal and monetary policies for proper impact to be felt, especially by the manufacturing sector. Efforts are also being made to tackle energy issues, credit access, and forex problems. Recently, the Central Bank of Nigeria announced the dedication of 60% of all available forex for the manufacturing sector in addition to the adoption of a flexible forex regime.

What type of incentives does the Ministry of Industry, Trade & Investment provide for international investors?

Nigeria is open for business and our main focus is on improving the business climate by creating a friendly environment for doing business. It is in that regards that President Muhammadu Buhari approved the establishment of the Presidential Council on Ease of Doing Business, saddled with the responsibility of removing all the bottlenecks that impede smooth business operations in the country. We have also signed numerous investment promotion and protection agreements with several countries to fast track investment flow. There are also comprehensive packages of incentives and relief, which are sector specific. For instance, the sugar sector has incentives such as development of free feasibility studies, provision of improved seed cane, long-term land lease of up to 99 years, in addition to the provision allowing all investors to legally repatriate profits. We have several investor attractive incentives such as the Export Expansion Grant, (EEG) and pioneer status (tax holiday for pioneer companies ranging between three and five years), which are currently under review and have been some of the biggest incentives enjoyed by investors. The revised waivers and incentives scheme will be taken to the federal executive council for approval. In the area of access to land and acquisition, discussions are ongoing with various state governments to facilitate access to land.

Many large international industrial companies are in the country, how can the Ministry ensure that those investments translate into maximum benefits for Nigeria?

The Ministry is focused on the implementation of the Nigerian Industrial Revolution Plan (NIRP) and the Nigerian Enterprise Development Programme (NEDEP). These are policies aimed at boosting industrialization and support for the micro, small and medium enterprises and furthermore ensure that the benefits of all investments are fully tapped, especially the provision of jobs for our large young population and improved contribution to GDP. This provides a platform for the implementation of the industrial, trade, and investment policies of the government, on the foundations of macroeconomic stability and fundamental improvements in the enabling environment for doing business in Nigeria. We are currently finalizing the Ministry of Industry, Trade and Investment (MITI)’s diversification and growth plan to: create an enabling environment for industry, trade, and investment; implement the Nigerian Industrial Revolution Plan (NIRP); attract domestic and foreign investment; support MSMEs; and, facilitate market access and integration of Nigerian manufacturers and service providers into regional and global value chains through multilateral negotiations and FTAs.

In Nigeria, there is still a significant informal economy. How is the ministry working to move these SMEs into the formal economy?

Providing support for the MSMEs is a focal pillar in our ministry’s growth and diversification plan. Nigeria is estimated to have about 37 million SMEs right now, of which 36 million are informal. That represents a huge amount of potential that has not been harnessed. We are working toward introducing some concessions to the MSMEs to reduce the informal/formal gap by reducing the cost of company incorporation and other regulatory certifications with some government agencies, e.g. NAFDAC, SON, and CAC. Several interventions have failed to yield the desired results in the past, due mainly to the blanket approach to issues from distinctive business categorizations. The new strategy is anchored on providing tailored interventions in terms of regulations, tax incentives, and waivers for SMEs so that there is differentiation between micro and small, and then small and medium, to facilitate further growth and sustainability. This will encourage the formalization of the informal, and stimulate the reduction of the formal-informal gap by 50% over the next three years. We are also talking with big companies to extend lines of credit to micro businesses with some guarantee by their business associations. This will provide an alternative funding opportunity and build up financial inclusion by encouraging these small businesses to open bank accounts.

What role do you expect the Special and Industrial Economic Zones to play in promoting trade and industry in the country?

The special economic zones will assist in overcoming the infrastructural and logistical disadvantages faced by manufacturing and industrial businesses in Nigeria, principally power and transportation. This will be achieved by promoting the clusters and value chain effects to be gained by locating similar export oriented manufacturing businesses within the same locality. They will also create a large number of jobs through backward integration and provision of industry related services, especially in light manufacturing in addition to improved specialization. On a related note, they are going to help our export portfolio with the much-needed forex inflow into the economy.

Which industries hold the biggest potential for investment in the near future?

Agriculture, solid minerals, industry, and technology have big potential in the future and could play a vital role in our diversification and growth efforts. Cement, for example, with the backward integration policy has moved Nigeria from being leading importer of cement to becoming not only self -sufficient, but also a net exporter. Other sectors in which we are looking to replicate such attainments are fertilizers and leather, considering our vast fertile landmass and abundant animal husbandry. In agriculture, we are looking at massive rice and wheat production and their possible export potential by working on the whole value chain. Nigeria is also rich in a number of commodities like the cashew nuts, shea butter, cocoa, tomato, and many other products that can be exported. We are now working toward building production capacities, quality, and competitiveness.

What should be done to empower and unleash the potential of girls and women in Nigeria and in Africa?

Education is Key here, and girls need to be educated. School enrolment represents the largest component in human capital investment. Education bestows on girls and women a disposition for lifelong socio-economic skills. It is essential therefore that both governments and the private sector encourage and institute scholarships specially dedicated to the promotion of girl child education. Women make up over 60% of SME ownerships and have the highest rate of loan repayment. It is however ironic that this demographic faces the most daunting of challenges in business in terms of access to land and finance. We need to create more opportunities that provide access to finance and markets for women. Businesses and industries should be encouraged to see the importance of employing women in the workplace and the advantages it brings to efficiency and business sustainability. We need to give women more opportunities and roles to play. We need to be challenged the more, and acknowledged for the good and exceptional work that we are doing.

What are your expectations for 2017?

I expect 2017 to be a fantastic year for Nigeria. This administration has worked hard toward laying a solid foundation in the three key focal areas of anti-corruption, security, and the economy. There were challenges with the 2016 budget, and in order to avert reoccurrence, work has already commenced on the 2017 budget with embedded mitigating factors deliberately factored in. Today, the population has an unalloyed confidence in the political leadership of the country being steered by President Muhammadu Buhari; they believe in the potential that Nigeria has, and that belief is very important and central for the success of any development plan. That is why 2017 is going to be a great and exceptional year.