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Govt building future where oil won’t be economic mainstay – Trade & Investment Minister

By Olawunmi Ojo
31 October 2021   |   4:19 am
I think this is a good opportunity to outline what our mandate comprises of so people can better understand how well the Federal Ministry of Industry, Trade and Investment (FMITI) is doing.

Minister of Trade, Industry and Investment, Otunba Niyi Adebayo

In this interview, Minister of Industry, Trade and Investment, Otunba Niyi Adebayo spoke to OLAWUNMI OJO on efforts being made by the federal government to diversify Nigeria’s economic base, ease investment and business operations, and reduce trade barriers in a bid to increase job opportunities for the nation’s teeming population.

Looking at your Ministry’s portfolio of agencies, it wouldn’t be an overstatement to say the ministry is the most critical player in Nigeria’s non-oil economy. How is the ministry positioned to carry out its mandate?
I think this is a good opportunity to outline what our mandate comprises of so people can better understand how well the Federal Ministry of Industry, Trade and Investment (FMITI) is doing. FMITI is one of the most critical actors in the Nigerian economy. Its primary mandate is to diversify Nigeria’s economic base and, through this, achieve our vision of growing the economy, creating jobs and generating wealth.

Our mission is to formulate and implement policies and programs to attract investment, boost industrialisation, increase trade and exports and develop enterprise. In addition to our mission and vision, our mandate is derived from the following: The Nigerian Economic Sustainability Plan (NESP), which aims to prevent or at least limit the recession expected as a fall out of the COVID-19 pandemic, and avert the accompanying prospects of business failures, job losses, and increased poverty; Executive Orders: EO 001 on the promotion of transparency in the business environment; and EO 003 on support for local content in public procurement; and the 9th Sustainable Development Goal, which aims to promote inclusive and sustainable industrialisation and, by 2030, significantly raise industry’s share of employment and gross domestic product, in line with national circumstances, and double its share in least developed countries

These are the guiding inputs that drive our work and we deliver them through our various programmes. We are working to fast track the implementation of the Nigerian Industrial Revolution Plan (NIRP). We have programmes to support the growth and access to markets of MSMEs like the National Enterprise Development Program (NEDEP) and sector-specific plans and programmes like the sugar and automobile backward integration plans.

The Ministry is able to boast of skilled and dedicated staff who are constantly given opportunities to expand their capabilities. We still, however, would not be equipped to deliver on our mandate alone which is why we have agencies under the ministry that specialise in the delivery of different elements of our agenda. The Nigeria Investment Promotion Council, for example, focuses on foreign direct investment whilst SMEDAN’s focus is small and medium sized entities.

FMITI has over such 15 agencies and organisations under its purview that focus on individual elements of the following: creating an enabling environment; building an industrial base, oiling the wheels of commerce, and engendering confidence in economic activities.

I personally sit on a number of inter-agency and inter-ministerial committees that support the objectives of our ministry. I also sit on international committees like the UK-Nigeria Economic Development Forum in a bid to facilitate exports, establish 21st century trade agreements that benefit Nigeria and ensure Nigeria’s voice is recognised in global trade conversations. So, as you can see, we have all that is required to continue to deliver on our objectives.

The president recently held a 2-day ministerial retreat to evaluate the performance of the ministries. How has the ministry impacted on the average Nigerian?
2020 was one of the most difficult years that the current generation has ever faced. The COVID-19 pandemic negatively affected the entire world. In Nigeria, which we all know has the largest population in Africa, it was truly challenging to ensure that the most at-risk populations, who rely on daily work for subsistence, did not fall further into poverty.

The Ministry stepped forward to help at height of the pandemic by setting up an Emergency Operations Centre (EOC) that ensured the availability and free passage of essential items like food and medicine. We also assisted companies involved in the local manufacture of PPE’s, facemasks, ventilators and sanitisers.

As part of the Nigeria Economic Sustainability Plan (NESP), we were charged with the enactment of the MSME Survival Fund Initiative, to help MSMEs respond to the shock caused by the pandemic. We have given payroll support to almost half a million MSMEs, enabling them to pay staff and remain in business. We have also given MSME grants to over 82,000 beneficiaries and 293,000 artisans and transporters. We have successfully provided free CAC company registration and formalisation support to over 240,000 MSMEs that just needed a small amount of encouragement to realise their entrepreneurial dreams.

In addition to being there in times of crisis, our everyday operations have an impact that is strongly felt by both the business community and the general public. The trade policy work we do helps improve business processes; we intervene on behalf of businesses to ease investment and business operations and reduce trade barriers in a bid to increase job opportunities and reduce the costs of goods and services.

Things are not as easy as they were when oil was $107 a barrel and the dollar was N150/$1 but I think that instead of looking at the past, we should concentrate on the future we can build now –a future in which oil no longer has such a stronghold on our economy and hard-working Nigerians can fulfil their potentials.

The media has recently been awash with news of the challenges faced by exporters, especially regarding the time and cost of exports. What are you doing about this?
Supporting exporters is integral to Nigeria’s diversification agenda. I am the Vice Chairman of the Presidential Enabling Business Environment Council (PEBEC). We have made consistent progress in improving the experience of companies trading across borders.

Exporters now benefit from automated export processes and a reduction in the number of documents and processes required to export successfully. We have also ensured that Apapa port now operates 24 hours a day, 7 days a week, a move that has significantly reduced congestion and weekend demurrage costs.

I am, however, mindful that a lot more needs to be done to help improve our export environment. I have given the Nigerian Export Promotion Council (NEPC) a mandate to track and improve the cost and time of exporting certain benchmark commodities. There must be improvements in this area and I will ensure they are made.

NEPC does, however, have a lot of support they currently offer to exporters. Our Export Development Fund provides exporters with financial assistance to cover a wide range of export activities from training, to advertising and marketing in foreign markets to supporting MSMEs with certificates and pre-shipment quarantine issues.

NEPC also oversees the Export Expansion Grant (EEG), a post-shipment incentive designed to encourage Nigerian exporters to expand export volume, value and improve global competitiveness of Nigerian products. This scheme has been fraught with challenges over the years but under this administration, billions of naira in back payments going as far back as 2007 have been paid to exporters through the Debt Management Office. EEG has suffered from funding constraints but a lot of work has been done to ensure all outstanding promissory notes are issued.

My vision for export is one that takes us away from being a supplier of commodities and makes us a strategic supply chain partner for the world’s biggest off-taker nations. Nigeria can strategically position firms to partner with foreign retailers, buyers and end users. International entities should be able to both source from Nigeria and also contract production to centralized production centers. We should be able to build supply relationships with retail chains for not just raw produce but pre-packaged consumer products. My vision moves Nigeria from being a country that exports predominantly raw materials to one in which the manufacturing and export industries work hand in hand to reposition Nigeria as an essential trade partner to the rest of the world.

With the massive unemployment situation in the country, one would expect that the industrial sector would take the lead in addressing the challenge through creation of sustainable jobs. What should we expect from FMITI in solving this potential time-bomb?
I have reflected deeply on the unemployment problem in the country. We need to ensure unemployed Nigerians have access to both technical skills training and access to opportunities. I work hand-in-hand with the Industrial Training Fund (ITF), a parastatal under my ministry, to ensure that as many Nigerians as possible are equipped with practical skills that will allow them to earn a living.

The National Industrial Skills Development Program, NISDP, under ITF, has equipped over 200,000 Nigerians nationwide with the skills they need for various trades. We are working to provide the unemployed with opportunities to either find paid employment or get started as either an entrepreneur or self-employed person.

There are numerous other programmes under ITF and other agencies that offer a wide variety of training that the unemployed can benefit from. Nigeria’s population is exploding, and everyday young people are coming of age and joining the job market. To tackle what you have termed a ‘time-bomb,’ a complete paradigm shift is needed. We are working to reposition Nigeria as a destination that Western countries can outsource their business processes to. Nigerians are intelligent, hard-working people with skills that are highly sought after both here and internationally. The world is changing, and companies no longer require physically present workforces. We are positioning Nigeria as a hub for outsourced services. This is just one of our strategy’s to not only attract Forex into the country but also give young Nigerians the opportunities that many may wish to travel abroad for.

Much was expected from the Special Economic Zones not only as drivers of Industrialisation but also as major sources of non-oil foreign exchange. Their performance has, however, been underwhelming. What is being done to reposition them?
The special economic zones (SEZs) are long-term capital-intensive projects that require a great deal of development. Nonetheless, we realised that the SEZs are underperforming, especially in comparison to our international peers.

Consequently, the Ministry established a committee to review the performance of SEZs and the framework under which they operate. We also seek to address questions of ambiguity between supervising authorities, review the performance of current licensees and recommend the necessary reforms to unlock the SEZs true potential as an instrument of economic growth and diversification.

Earlier in the year, you promised that we would soon have a revamped automotive industry policy. In view of AfFCTA and the imminent competition by well-established players like South Africa and Morocco as well as emerging players like Ghana, what is the outlook for Nigeria?
Automobile production in Nigeria dates back to the 1950s and there was a time when luxury motor vehicle companies like Daimler Benz and Leyland-Land Rover assembled here. Internationally, we are seeing European car manufacturers move their production to Eastern Europe. Africa is a similar distance to mainland Europe and there is now more scope than ever for Nigeria to revive our local automotive industry. The automotive policy will be ready by early 2022. It will support a marked increase in production, driven by vehicle financing and auto-component manufacturing and coupling.

In addition to improving production, FMITI plans to strengthen the implementation of Executive Order 003 to encourage increased purchase of locally produced vehicles. As a country, we need to support the patronage of local vehicles.

A major complaint from companies has been inability to access Foreign Exchange for legitimate operations. What are you doing to address this?
Access to Forex has been a major challenge for business owners and I really do sympathise. As a short-term measure, FMITI helps to obtain concessional forex allocations for high-priority business needs. We are working to be able to support manufacturers who wish to import industrial equipment that are not locally available. All businesses can apply to the ministry for help and then support is provided on a case-by-case basis.

As a long-term solution to the forex scarcity, we are at the forefront of the diversification of Nigeria’s economy, and we are supporting the export community to supply into both African and wider international markets. Increased export volumes will generate forex and drive down high exchange rates.

With an often-quoted figure of over 40million MSMEs, these businesses represent a significant component of the Nigerian economy; yet their development is significantly held back by access to finance. How can this and other SME challenges be tackled to fully unlock their potential?
What we need to understand is that the challenges Nigerian MSMEs face go beyond access to finance. They also have challenges with access to markets, high operating costs and regulatory burdens. Our approach to MSME development strategy tackles all of these challenges in a holistic manner. A lot is already being done to support MSMEs. Entrepreneurs no longer need to be afraid of starting small. We have established a revised MSME policy to drive the growth and competitiveness of MSMEs in the country. The revised policy now includes nano and homestead businesses with a turnover of between N1m and N3m in its classifications. This encourages microfinance banks to lend to businesses in this demographic.

The survival of MSMEs is critical to post-covid recovery and we are committed to providing practical support to smaller companies. We have concluded a landmark USD 1 billion syndicated term loan through the Bank of Industry (BOI). This intervention provides affordable loans of medium to long-term tenor, alongside moratorium benefit to MSMEs. A great deal of agri-businesses are eligible for this scheme. These schemes are in addition to the MSME Survival Fund Initiative, a component of the Nigerian Economic Sustainability Plan (NESP) to help MSMEs respond to the shock caused by the Covid-19 pandemic. SMEDAN is also doing a lot of capacity building, especially in the area of corporate governance.

There are hundreds of moribund industries, which some say is a result of harsh operating environment coupled with government policy somersaults. How can these industries be revived and made viable going forward?
I have noticed that we use this term a lot in Nigeria. Moribund industries are those that are said to be in a terminal decline. It is very important that we look more closely at the factors causing the decline. In some cases, new macro-economic circumstances and the advent of advanced technology have put some companies out of business. This is something that happens and businesses have to remain agile and be aware of when it is time to upskill workers, employ new technology or even pivot to a new business model.

As a country, we must be clear about which industries can generate the most value in terms of job creation, global market share and viability. There are certain industries that are paramount that we cannot afford to let fail. Our textile industry for example used to be the third largest on the continent – following Egypt and South Africa and employing over 350,000 individuals back when all the textile mills were functional. It was one of the largest employers of labour and an area in which I believe Nigeria can once again excel. Nigeria’s cultural capital still remains high with the rest of the continent looking to Nigeria for fashion, style and trends.

The Bank of Industry (BOI) and Central Bank of Nigeria (CBN) are providing both financial and technical support to help revive some of the country’s ailing industries. Some factories and industrial spaces are being revived as brownfield sites. There is a huge opportunity here and we have identified a number of business verticals that we are focusing on for a targeted revival programme. These include auto-components, paper products, metal fabrication, construction materials, pharmaceuticals and beverages. The focus in reviving moribund industries is ensuring that the businesses being revived only went out of business due to factors such as working capital and not because their products no longer have ample demand.

Several analysts have posited that Nigeria is punching well below its weight when it comes to attracting Foreign Direct Investment, as compared to other African economies. What is your view on this?
Well, I wouldn’t exactly agree with this. In 2020, despite the challenges caused by COVID-19, Nigeria was still able to pull in billions of dollars in FDI. If we are comparing our progress to the rest of the continent, we attracted more FDI than South Africa and were second only to Egypt. So, we are still a strong investment destination.

The federal government recently raised the sum of $4 billion through Eurobonds, one billion more than the initial offer. This is a big demonstration of investor confidence in Nigeria, it is one of the largest financial trades to come out of Africa and is an excellent outcome for the country.

The tech-sector is evolving in leaps and bounds and doing a lot to attract FDI. Nigerian tech start-ups are getting strong international attention. In March this year, I was proud to see Nigerian tech Flutterwave raise a landmark $170m with the support of U.S hedge-fund Tiger Global; and we are creating an enabling environment for other small businesses to achieve similar feats.

I am in no way, however, saying that more should not be done though. Recent investments in Nigeria have been predominantly portfolio inflows and not direct investment, which is more stable and can do more to boost the economy.

My strategy supports Nigeria’s drive to attract targeted investment that will help drive measurable real-sector transformation.