Can you tell us the investments that came into the country, which can be trace to the efforts of the Buhari administration in the last one-year?
Yes, people are surprised about how big investment inflows have been in the last one-year, because they came in large chunks. But let me tell you that we have gotten well over $20b. This is because of the major infrastructural projects government is embarking upon. But again, what we call an inflow is not just about the money physically, but also the commitments that have come. So, if you look at the infrastructural projects that we are doing, there is N20b or more infrastructure projects with the China EXIM bank. It has been signed and it’s now being implemented around railways and related infrastructure. There is an agreement with General Electric for which $2b has been committed in the last one year.
There are private sector investments also. For instance, Chellarams, which sold a major part of their business to Kelloggs of the United States; that deal is worth about $400million. There was a deal that was done by Chi- the fruit juice company with Coca-Cola, which is also worth hundreds of million of dollars. There is also a deal, where BUA sold something to one of the international players, which bought a part of that group. Again, it is sizable sum. However, we want to increase the steady inflow of foreign direct investment across all levels, because there are many more people waiting on the sidelines apart from the big stakeholders who are doing multi-billion naira infrastructural projects.
As you know, Nigeria Investment Promotion Council has just appointed a new head for the private sector. As a government we want to partner with the private sector, government doesn’t have all the money it needs to develop the country, therefore government is willing and committed to partnering with the private sector players. Another thing I want to say regarding investment is that the oil companies have reached an agreement that is now being finalised to bring in more money into the oil sector.
Government has talked a lot about diversifying the economy, what role is your ministry playing in this regard?
First, let me say that when I think about the Nigerian economy, I think in terms of what the economy has been traditionally, and what we want it to be with the ongoing reforms. I think in the past, what was good about the Nigerian economy is that the diversification process has started to some degree, if you look at the GDP and the composition. When the National Bureau of Statistics (NBS) rebased the economy, one of the things we found out was that the GDP was no longer what we thought it was. Services, for instance had grown, people were going into non-traditional areas and we found things like telecoms had grown, we found things like trade and other items had grown, traditional manufacturing was about 10 per cent and agriculture was about 20 plus percent. Oil, in terms of GDP was about 10 percent. However, when it comes to the revenues of government, we also found out that oil was still about 75 percent or more, even though that reform has started.
Secondly, we found out that the foreign exchange earnings of government; over 90 percent of it was also from oil. So, when we talk about the new economy that is diversified, what we want is to clearly diversify our sources of revenues in terms of foreign exchange earnings. In order to do that, we need to do a number of things.
One is that the sectors of the GDP that are significant, but don’t contribute revenue in monetary form need to be better monetized, which means we need to give them the resources they need to be more productive beyond subsistence level like agriculture. We need to empower our people to do productive agriculture that is profitable, so that they can pay taxes, they can export and do the things that people do, as opposed to just producing hand-to-mouth to eat, which is really part of GDP, but frankly doesn’t impact on the revenue in any form. It also means the government needed to be more attentive to the people.
What do I mean by that, we need to create a more formal economy not because we want to put more burden on people, but because we want to recognise them. Under a formal economy setting, it’s almost as if they are non existent, they are not registered anywhere, whereas if you look at the social intervention programme of government, one of the things we tell people is that we just want to know who you are, whether you are a trader, a market woman, or an artisan. When people talk about formal economy they think in term of the cost, the entire roadblock, the red tape and all the taxes they ask you to pay with no benefits. One of the things we have to do, is to make sure that it is really about the people. In order to diversify the economy away from oil, we also need to make the other sectors like agriculture, agro-processing, agric-business to become vibrant.
Finally, we are also working on the Nigerian industrial revolution plan as a key Programme of government that would help to diversify the economy and move it away from oil to agriculture.
There was a recent investment roadshow overseas by your ministry. What has been the impact?
It was a successful. I think what you find is that Nigeria is a country that people are genuinely interested in and I view that as an asset. There is no country we go to, no matter how big or small, the president goes along, where they don’t give us the highest treatment reserved for the most important country in the world. When we went to Germany, the president met with the Chancellor, and I had a business forum with the elite in the business sector. The president came and addressed them. And Germany is interested in working with Nigeria for several reasons. They are interested in automobiles. And the way they built their economy is that they train people beyond academic degrees, vocational training and they expressed interest to work with us.
There are a lot of benefits that will come from the Germany trip. They are also interested in investing in other areas that we are looking at, including renewable power. And we have a very strong Nigeria business association network, trade association that is working with us very actively. We have met with them even after we came back here, some of their ministers and parliamentarians have also come to meet with us.
Singapore is interested also because as you know, it is a small country that defiled the odds and became very successful, sophisticated country that became great under the very good leadership of the former Prime Minister, Lee Kuan Yu. Nigerians will get there too.
How far has the government gone with the concession loan coming from China?
China has a deliberate policy of partnering with Africa and has identified Nigeria as particularly important base because of our strategic role in Africa. Furthermore, before this government, China had offered to work with us on our key infrastructure projects. China is one country that’s not afraid to spend serious money in another country. That’s the state they’ve got to. They have the money and they want to put it to work and probably recoup over a long period of time. That’s why you’ll hear about China in rail, airport concession, including remodeling, hydropower projects and many more. A lot of our Nigerian businessmen are partnering with the Chinese. Those agreements are now being implemented at government-to-government level.
Talking about exports what are the bottlenecks and what are you doing about it?
We have said we want to diversify the economy in terms of foreign exchange earnings, and also in terms of revenue generation. What this simply means is non-oil exports. To do it, it means we have to do certain things well. My view is that it goes with creating the enabling environment and ease of doing business. The process of exporting from Nigeria is very tough and not competitive and the Federal Executive Council has actually asked myself and the Minister of Finance, to come and address the council on practical steps to make it easier to export from Nigeria, ensuring that we trade across our borders and we are working on it, as we speak. The bottlenecks in terms of administrative, bureaucracy, red tapes’ and all the approvals you have to get, and all the inspections, and all the waiting at the ports, those need to be addressed. People that are serious about export make that a competitive advantage by doing it.
Source: <Guardian NG>