• Friday, May 24, 2024
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If Nigeria does not progress, countries like Chad, Niger will not grow – NIPC

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 Q:Can you tell us briefly, the origin of NIPC?

A:I think during the late General Abacha administration, a committee was put in place to implement a provision of the industrial Development Coordinating Committee Act, then a Decree. The Committee was made up of all agencies that government then believed had input in generating investment internally. The committee was chaired by the Minister of Industries that time and it was set up to remove bureaucracy faced by investors wishing to do business in Nigeria to have a one stop shop place. There he could get any approval he needed. Unfortunately, that committee never succeeded in doing what was expected of it. So in the wisdom of the then Head of State, he felt we should be transformed into a body to do the job. So an Act, then No 16 of 1995, was promulgated. This Act gave birth to the investment promotion commission.

It was only in 1999 that the commission was fully established, during the regime of Abdulsalami Abubakar to monitor the inflow of foreign investors into the economy. It is also to stimulate the use of our domestic resources into investment in the key primary areas where government see value and benefits. It is also here to help push our local enterprise to look beyond our borders and if you notice, between 2002 and today, we have been able to create some transnational corporations out of Nigeria. Dangote group and Mike Adenuga’s Globacom is another. Our banks and some others are now operating outside Nigeria.

There is now a substantial change from the economy that was leaning on oil to the one that is substantially, have some bit of its weight to help generate inflow of resources into the country.

How do you define the significance of the NIPC in the economic development of this country?

As I said, NIPC exists to stimulate the utilization of domestic resources into investment in areas to help drive foreign direct investment into the key sectors that government prioritizes. This is alternative to having to go and borrow. Before now government mostly go out to borrow money to establish industries like Ajaokuta and others. But now FDI has come as a substitute, without having to borrow, because we are now creating the right climate and environment for the investors to determine whether the environment is right. The NIPC has been able to successfully drive the mandate translating it into the benefits that we can see today.

From the establishment of NIPC to date, what can you see as the major success story?

You know, NIPC is not like any other agencies that can point at this and that and say, it is we who have done it. But, as I mentioned, indicators are what vindicate our efforts. We started in 1999 with a GDP of less than 3 percent, population growth rate estimated at around 3% and contribution of the Agric. sector was about 3% and we had debt overhang, power deficiency with power generation of about 1,800 megawatts for the entire country in 1999, we had a monopoly in the telecom sector; monopoly in the mining sector; so many banks whose capitalization were not up to three banks we have today; so much cases of corruption because of poor pay in the federal civil service; we had no health insurance scheme, consumer credit scheme, no pension fund scheme and mortgage scheme, among others.

All these came as a result of the advent of democracy. In addition to government policies, NIPC was part of the economic team of the Federal Government in 2003 and 2007 and most of the policies that emerged, NIPC was part of them and part of the implementation efforts to see that we improve from an economy that was in distress which could not support three months exports continuously to an economy that is standing alone now with stability in our foreign exchange.

There is a lot of confidence in our economy and over and above that, God Almighty blessed us with the global financial crises and when most of the developing countries were shivering, we have come to discover that it was a bell that was rang for us to know that it is now our time. Our time in the sense that the only continent that can rescue the developed economies is that of Africa and the key countries here are Nigeria, South Africa, Ethiopia, Egypt and some few others that have started to embrace best practices. NIPC has been part of this process.

What are the prospects of investment in Nigeria and what roles are you expected to play in maximizing the benefits of these prospects?

There are certain things every investor must do to attract investment into its territory. You have to look at your competitiveness, you have to have the market or you generate it so that you can attract those investments, you have to look at your resources, both human and natural, you own location and how strategic you have positioned yourself that makes it favourable to you. If you look at these things, you will see that Nigeria has them. Actually, why the countries around us have remained underdeveloped is because Nigeria has not fully developed its full potentials.

Those around South Africa have taken advantage of South Africa to develop. If you look at those in Europe they have taken the advantage of Europe which is closed to them to integrate themselves, those in the Middle East they have taken advantage of Bahrain and UAE, Kingdom of Saudi Arabia and to integrate their economies. Around us we do not have such.

If Nigeria does not move or progress, countries like Chad, Niger etc, will not grow. Benin Republic lean on us if we shut our doors, you will see them crying.

Nigeria has no choice but to ensure the growth of our economy. We have tried to create that right climate for our economy. Now, what are those things that we are doing? First, we saw the need to make it easy for anyone who wants to do business with us.

This place is a one stop shop facility for those who want to do business in Nigeria. The second thing is to show case the opportunities that we have though interactive meetings with different business groups from all over the world, we receive and arrange opportunities for them to meet with relevant government officials whereas in the past, they will have to go through their Embassy which takes longer process. We also make them comfortable.

We also go out to speak from country to country telling them of the opportunities, our market, incentives testimonies of those who are doing business here etc.

Most recently we embark on project that will enhance our own growth and capture our ability to attract more direct foreign investment and it the development of sector specific investments lucky document where we identified about six policies that when implemented, we will see a jump in the way we attract capital and help move up some of our own domestic operators over their current levels.

That document first looked at immigration issue to help remove bottlenecks

We realized that when the investor bring their machinery, they will want to bring in personnel who by their virtue of experience, may not be available locally, and the current regime is such that they go through stringent requirements, from what we get from the Malasyian experience, they made certain minimum number of that expatriate given the quantum of investment from the investor. So if you want to bring in high tech in agric and you are investing 30 million Dollars, you allowed bringing in automatically, three slots you can come in with immediately to help you set up the machines.

If you are coming into manufacturing, we can recommend to government certain number of expatriates, but to check abuse, we borrowed what the Ghanaians are doing which requires that you must employ some of their graduates. We adopted this also. So that you must be ready to recruit between 9 and 15 Nigerian graduates if you want to come with 3 expatriates.

When you want temporary work permit, it is another hell getting approval so we have simplified this by creating wavers for those who were part of the manufacturers of the equipment.

We rather than give you grant for exporting, just like the Indians do, we give you grant to industries to discourage importation. These we have done for the heavy steel industries, petro chemicals, refineries automobile sector, rice, sugar and wheat. If you can invest to produce them locally, you too can be qualified for grant to encourage you, and discourage importation.

Under the new tax regime, investors hoping to operate from states with high infrastructure will get five years tax holiday, while those located in remote places like Kebbi may get as much as 15 years tax holiday.

We realised that government has a regime of corporate tax holiday that is applied across the board on a uniform basis, whether you are in Lagos where there is gas, electricity, good roads, etc, you get five years tax holiday and if you are in a remote corner of Ekiti State, your get the same and we said this is unfair to investors in rural areas with strong infrastructure deficit. We segmented the country into the 774 local governments and then looked at each local government to see how remotely it is, and assign a number of years. So if you are located in that locality, we say these are the number of years of tax holiday you will enjoy. Those in very difficult areas should get more number of years than those in well- developed areas like Lagos.

In that document we also discovered that what the Indians did when they wanted to lift the status of Tata into a state enterprise will be of great benefit to us here in Nigeria and under that document, Government has also proposed State Enterprise Status for wholly Nigerian owned enterprise with net worth of $15 billion United States Dollars, that will attract special benefits for such enterprises.

Chairmen of such state enterprises will enjoy status equivalent to the privileges of a Minister, the CEO, will be entitled to the privileges extended to holders of Diplomatic passport, the Executive Directors of such firms will enjoy privileges extended to all government officials enjoying diplomatic passport, while the company is granted the right to use the seal of the Federal Government of Nigeria, of course carrying the status of state enterprise on it.

Now once you give them that can of status, it means that if he is going to the UK, it means our High Commissioner has to arrange to receive him, if he need appointment with the Prime Minister, our High Commissioners will have to arrange for him to be received by he Prime Minister for his appointment. We avoided issues that are sensitive and these are the things we have developed to grow the economy faster.

What are you doing to ensure competitiveness?

Well, again government actually has seen the need to pay attention to it and now there are global agencies rolling out reports on this, and the reports help you to isolate the indicator. Government has put in place a committee based on our push. They include committee on doing business and the one on Competitiveness.

Now this committee has decided to commit focus on the World Bank doing business report. We isolate the observation as it affects Nigeria. Then we look at other countries asking what they have done to score high and we look at how to gain the capabilities to be able to do what is necessarily to do well or even do better. We have taken time to look four areas and have submitted the reports to our Minister who will process it and forward to government so that we can see improvements. The product of these will affect investors’ opinion on investments.

The Minister of Trade and Investment has also pushed for the establishment of the National Competitiveness Council of Nigeria and that is made up of private sector with very successful people. On top of that, we have the honorary investor’s council which is purely an advisory body. They tell the president on some models that had worked successfully in other countries. When you seen certain moving slowly, it is not the president that does not want to move fast it is the system. The society is also diverse and some may look at issues from the political perspective. As we allow the private sector handle issues, things will move faster.

 

interview with Max Amuchie, Bashir Hassan and Tony Ailemen