DICON Act will save Nigeria’s scarce FX, cut dependence on foreign arms imports – Bem Garba

Nigeria is on course to begin local production of military-grade equipment, thereby reducing the nation’s reliance on foreign imports that have continued to exert pressure on the rather scarce forex.

This Defence Industries Corporation of Nigeria (DICON) Act signed into law by President Bola Tinubu in 2023 will not only turn Africa’s most populous nation into a major manufacturer of defence hardware, but also unlock employment opportunities and allow for more participation of local companies, boosting economic growth.

In this interview, BusinessDay’s Wasiu Alli spoke with Bem Ibrahim Garba, the managing director/chief executive officer of DICON GRAY INSIGNIA (DGI), where he highlighted the plethora of gains the Act portends and ways the government can incentivise for the benefits of the country. Excerpt…

What was your role in the 2023 DICON Act signed by President Bola Tinubu, and what benefits does the Act portend for the Nigerian economy?

As the managing director of DICON GRAY INSIGNIA (DGI), my role was primarily advocacy. The major contributors to this Act include the current Ministers of Defence, the former Permanent Secretary of the Ministry of Defence, their special advisors, and members of the National Assembly. They undertook the substantial work required for this. Officials from the MOD and DICON, along with policymakers, military stakeholders, and industry experts, played a critical role in shaping the Act’s key provisions, ensuring it aligns with modern defence industry standards and supports local manufacturing initiatives. They, along with the president, deserve to be credited for this development. The 2023 DICON Act is transformative for Nigeria’s economy. Establishing a clear legal and operational framework for defence manufacturing opens up opportunities for local production of military-grade equipment, thereby reducing our reliance on foreign imports. This, in turn, saves the country millions in foreign exchange, creates thousands of skilled jobs, and stimulates the growth of ancillary industries such as metallurgy, precision engineering, and ammunition production. Furthermore, the Act positions Nigeria as a key player in the African defence market, with the potential to export defence equipment to allied nations. It also fosters security self-sufficiency, ensuring our armed forces and law enforcement agencies have reliable access to high-quality, locally manufactured weapons and tactical equipment. At DGI, we see this as a significant step towards building a robust defence industrial base in Nigeria that supports national security while driving economic growth and industrialisation.

How is the level of insecurity in Nigeria associated with the shortage of arms and ammunition, and how will this Act bridge the gap?

Nigeria’s level of insecurity is directly linked to the inadequate supply of arms and ammunition to our security forces. The country has faced persistent challenges in acquiring essential military hardware due to international politics, bureaucratic bottlenecks, dependence on foreign suppliers, restrictions on arms exports from certain countries, and other issues. These issues have resulted in delayed responses to security threats and an inability to combat insurgency, banditry, and other criminal activities effectively. The DICON Act will bridge this gap by empowering the Defence Industries Corporation of Nigeria (DICON) to operate as a modern defence manufacturing entity. This will foster the large-scale local production of needed equipment, arms, and ammunition. With a robust legal framework, Nigeria can fast-track the development of a self-reliant defence industry, ensuring that our armed forces and law enforcement agencies have timely access to the weapons and equipment needed to protect lives and property. This act enhances national security by strengthening local manufacturing and mitigates the risks related to overreliance on foreign arms suppliers. It ensures that Nigeria can maintain its security operations without facing disruptions in the international supply chain, embargoes, or fluctuating geopolitical dynamics. Ultimately, this Act establishes the groundwork for a more robust and secure Nigeria by equipping our forces with the necessary tools to combat insecurity effectively.

“At DGI, we see this as a significant step towards building a robust defence industrial base in Nigeria that supports national security while driving economic growth and industrialisation.”

In what ways will it impact the naira and offset the pressure on FX?

The DICON Act will significantly impact the naira by reducing Nigeria’s dependence on foreign arms imports, which currently require large outflows of foreign exchange (FX). By localising production, we can retain more of our FX reserves and reduce the demand for dollars in the defence sector, easing pressure on the exchange rate. As the industry matures, Nigeria can position itself as a regional defence supplier, earning FX through exports to allied African nations. This shift will strengthen the naira and support broader economic stability.

How do you intend to source raw materials to ramp up production? Will they be imported or locally sourced?

Our approach to raw material sourcing will combine local procurement and strategic imports. Nigeria has substantial natural resources, including steel, aluminium, and other key minerals that can be refined for defence manufacturing. We are actively talking with local mining and metallurgy firms to develop a sustainable supply chain. We will initially rely on imports of some raw materials while investing in developing domestic capabilities over time for many specialised components, such as precision-engineered parts, high-grade ballistics materials, and advanced polymer composites. Our long-term goal is to develop a fully localised supply chain, ensuring Nigeria’s defence industry is self-sufficient and globally competitive.

You went to the 2025 SHOT Show in Las Vegas recently. Is this in line with your vision to design and develop tactical training infrastructure within Nigeria? Do you intend to replicate that here?

Attending the recently completed 2025 SHOT Show in Las Vegas was a strategic step towards realising our vision of becoming a Nigerian powerhouse in equipment manufacturing and designing and developing world-class tactical training infrastructure. The exhibition provided opportunities to showcase our current product line and gain valuable insights into the latest advancements in small arms design/technology, tactical training systems, and range technologies. It also allowed us to engage with industry leaders and explore cutting-edge solutions that could be adapted to the Nigerian security landscape.

We intend to adopt the lessons learnt and even improve upon our observations. Concerning training, our goal is to build modern, purpose-built tactical training facilities that meet the current and future operational training needs of the Nigerian military, law enforcement, and the private security sector. The proposed facilities will incorporate state-of-the-art shooting ranges, simulation systems, and scenario-based training environments that enhance combat readiness and operational efficiency. By localising good-quality training infrastructure, we can ensure that our security forces receive the highest training standards without the logistics and financial burden of travelling abroad. This initiative will create jobs, attract foreign investment in the defence sector, and position Nigeria as a regional hub for advanced tactical training.

Are there ways the government is supporting or incentivising the manufacturing of these weapons?

I would say yes. I say this for many reasons. We have seen a significant commitment to putting policy frameworks and strategic partnerships in place to make a change. The recent signing of the DICON Act by President Bola Tinubu is a significant milestone in this regard. The Defence Industries Corporation of Nigeria (DICON) and the government have offered private sector players like DICON GRAY INSIGNIA (DGI) access to industrial facilities within the Military Industrial Complex, tax breaks, and import duty waivers for essential machinery. At DGI, we believe that Nigeria’s defence industry should evolve along the same lines as our oil and gas industry.

The Nigerian government implemented several benefits and incentives for indigenous players in the oil and gas industry under initiatives such as the Nigerian Oil and Gas Industry Content Development Act (Local Content Act) and other regulatory frameworks. Some of these benefits include the Local Content Act/requirements, which mandates that a significant percentage of contracts/procurement and employment opportunities be awarded to Nigerian companies.

This act within our oil and gas industry has ensured the considerable growth of Nigeria’s indigenous oil and gas industry. At DGI, we believe that the government should go further to extend such opportunities to our indigenous defence industry. Other areas where the government should support indigenous companies include fiscal incentives and tax benefits. Similar to what the government did in oil and gas when they created the Nigerian Content Intervention (NCI) Fund, it would be nice for the government to establish a Nigerian Content Intervention (NCI) Fund for the defence industry. Call it a Defence Industry Fund to provide low-interest loans and grants to Nigerian players.

Finally, we believe the government should enforce the mandate on our military, law enforcement, and paramilitary end users to procure their equipment requirements from Nigerian players who can demonstrate the ability to meet these requirements when supported. This level of support is crucial in reducing Nigeria’s dependence on foreign arms imports, conserving foreign exchange, and positioning the country as a key player in Africa’s defence manufacturing industry.

Can you give an overview of the collaboration between DICON and your company, DICON Gray Insignia?

DICON Grey Insignia (DGI) is a Joint Venture (JV) between Grey Insignia Nigeria Limited and the Defence Industries Corporation of Nigeria (DICON) to localise the production of small and light weapons, ammunition, and other military equipment in Nigeria. This partnership aligns with the Nigerian government’s strategy of reducing dependence on foreign arms imports and strengthening local defence manufacturing capabilities. The key aspects of the collaboration are the local manufacturing of needed equipment, infrastructure and industrial capacity development, technology transfer, research and workforce development, revenue generation, and export opportunities. We have found the working relationship with DICON extremely positive.

Through this joint venture, DICON Grey Insignia is contributing to positioning Nigeria as a regional leader in indigenous defence manufacturing while ensuring self-sufficiency, job creation, and national security enhancement. How is DICON Gray Insignia positioned for this new development, given the recent assent by the president?

Are there other partners (local or international) or players in the manufacturing value chain aside from your company?

Yes, there are. A few companies have also entered joint ventures with DICON.

As a long-standing executive leader in logistics and defence manufacturing, how have you been able to switch from these almost dissimilar industries? What’s been the experience like, and where do you see DIG in the next decade?

Passion, training, and orientation. I attribute my ability to work in the logistics and defence manufacturing industries to strategic leadership, adaptability, and cross-industry expertise. Although these industries seem different in many ways, they share key elements such as supply chain management, operational efficiency, regulatory compliance, and strategic partnership management. Logistics is integral to defence manufacturing, as it involves the movement of raw materials and finished products. If you consider this critically, you will see that managing a manufacturing operation involves managing supply chains. Strong regulations also exist. The logistics industry, particularly shipping, has very strict laws and regulations. To be successful, one must be very compliant. The defence industry is similar in this regard, with strong local and international laws. My time in shipping has prepared me extensively for this and would be very valuable.