Our strategy is to have creative alternative financing model for our projects — Governor Mbah

Peter Mbah, the governor of Enugu State, is an astute entrepreneur with strong footprint in the energy sector of the Nigerian economy. In this interview with select journalists on the sideline of the state’s recent Investment Roundtable, he spoke on his strategies to move the GDP of the largely civil service state from the current $4billion to $30billion in eight years. Mbah believes that to achieve this, there must be disruptive innovation, paradigm shift, quantum leap and leap-frogging, assuring investors that, with a free and secure environment, Enugu is open and ready for Business. CHUKA UROKO was there. Excerpts:

You promised that during your campaign that in your 100th day in office you would do this Investment Roundtable; so far so good; but how has it been with your experience in this journey?

It’s been quite an exciting journey. Nothing has happened that has taken us unaware because we did an extensive study of the situation and we knew what we were coming into. When we made promises to our people, we gave timelines. The reason we backed our promises up with timelines was because we were aware of the things we needed to deal with.

We knew the timelines we committed to were sacred and we are not going to derail from it. We did promise we were going to have an investment forum or roundtable within 100 days of our swearing in.

It is not just about the symbolism of making a promise and keeping it, it is essentially the substance and the fact that there are huge take-away and success from what we have done today. You recall that we got the mandate of the Enugu people entrusted into our hands on the basis of all the promises we made. One of them was to grow the economy from $4 billion to $30 billion dollars in eight years.

“We are not reckoning with the current financial model, it won’t work. We have to be creative, innovative and positively disruptive. That’s why we are talking about massive infrastructure development, the massive investment inflow it will attract, and growing the economy exponentially.”

We also said to them that the growth would be driven by the private sector and would be enabled by government. We were deliberate because we knew that, for us to tackle unemployment and generate wealth, we need private investments. It’s not going to come from the public sector.

For private sector to invest, they need the government to do certain things. You heard a lot about derisking investment. It’s not just about ease of doing business which involves providing infrastructure, security and the ease of gaining business, construction and property permit. It is beyond all that.

To have an understanding of how projects are structured and made attractive for private sector to come in, you need to identify the aspect of the project they need to derisk; whether it is the technical or commercial risk. Businesses are more than happy to take financial risk, but they are not interested in political, technical and commercial risk. Some businesses can embrace such risks but, because we want this state to become a destination for business, investments and tourism, we have to go the extra mile which is what today’s event underscores.

A suggestion was made during a panel session for you to narrow and set out priority areas because the project about to be carried out is big; what are the priority areas you want to focus on? And talking about private investment, are you also thinking about the bond market as in other states?

Our strategy is to have creative alternative financing model for our projects and that is quite broad. Creative alternative model means that, firstly, the current financing model which focuses on revenue from the federation account is sub-optimal. That is not going to work with this current model.

We have agreed this current model cannot serve us if we want to intervene across critical sectors of our economy. The question we ask ourselves is, what are the other financing models you have to deploy? You have to look at what you have control over. You have control over mobilizing your domestic revenue and so you need to identify how to optimize internally generated revenue.

Read also: Seven investment opportunities in Enugu – Mbah

What are those impediments that are stopping you from collecting revenues optimally from the business-enabled MDAs or expanding your tax net and we have done that within the last 90 days?

What we have done in our revenue enabled ministry is to firstly elevate the service levels to meet the collection of payment and the services received. You can from the comfort of your home access whatever service you need, especially with land administration and management. We have automated the systems there. You can, within 72 hours, apply for your C-of-O and obtain it. You can access all the services needed within the Lands Ministry—whether it is research or registration, etc.

For your registration and construction permit, we have regulated those systems and it has shot up our revenue because we are able to fast-track services and payments which are no longer collected in cash. You have to access and pay online and it goes to the state treasury account. There are a lot of things we have to do to mobilize domestic revenue. For the projects we have outlined, they are very deliberate and, of course, time didn’t permit us to do some detailed analysis on them.

Tell us those projects you have outlined so that the private investor gets a clearer view of your drive.

In agriculture, the areas we have focused on are those we have almost four times factors of productivity. So, our productivities in those areas are four times better than any other state. We have identified those areas of comparative advantages and those are the areas we are focusing on. On the value chain, we are not just focused on scaling up our production, we must get involved with processing and that’s why we are talking about Agric processing zone, which we intend to do about three in the three zones.

In terms of harmonization of our land administration, our plan is to derisk access to land completely. As an investor you have absolutely no business worrying about interfacing with the community. We have marked out 300,000 hectares of land for agriculture and we are providing access roads to those lands.

There are multiple initiatives we have deployed in the areas of ease of doing business. We only mentioned one. In infrastructure, we are doing a lot because we know businesses have to make profit; we will not burden them with provision of road, light and water bill. As entrepreneur and business owners, we understand and know what it takes to invest so we make sure the ground is well watered.

Political risk is an issue in our environment. In the next eight years we will have another person as governor here. Given that the private sector operates long term, how do you ensure that someone who keys into this project will feel comfortable after eight years? How do you ensure there won’t be policy summersault that will affect his investment negatively?

One of the three strong strategic actions we have taken is strengthening of our institutions. We are not building this around us as individuals. We are building these institutions as policies that will outlive anyone.

At the end of the day, if you have strengthened the institution through policy framework, it will not be easy for anybody to reverse it because it is entrenched. We are strengthening our public sector by ensuring that a lot of what we are doing have regulatory framework and they are all embedded.

We get the buy-in of members of the House of Assembly to this. We hold retreats and workshop with them. We get them to understand the policy direction of government and build systems around it. That makes it almost impossible for any one person to reverse it.

What other things are you doing to derisk or improve the business environment for investment?

We are doing things that are bigger than us and will outlive us. For instance, in the education sector, we are doing 260 basic model schools. These schools are designed to provide world class education for our young people. Any child that’s up to age three years must be part of this. We have interactive board in classrooms; there is access to ICT at that tender age, which means nobody will come in after our eight years to shut down the schools or systems because it’s already embedded.

Today’s event showed your background as a private sector operator. But we have seen people like you come into government with brilliant policies and, somewhere along the line, they seem to lose focus. How courageous are you going to be to step on toes to get done what you want to do?

Talking about courage, we need to peep into my background. I came into a sector where we were regarded as late entrants. Fast forward 14 years after, we became the market leader, having 23 percent share of the market with the next company having just 5 percent.

The sector we are talking about is a matured one. It is a market already dominated by strong players. We came in as late entrants in 2008. Now, we were the market leaders. This would have taken only courageous execution of strategies. You don’t go from starting point zero to taking a strategic position in the market space without courage.

When I was going about talking to the people of Enugu about my plans, I used words like disruptive innovation, quantum leap and leap froging. That is essentially what we are here to do; we are going to disrupt the status quo.

We need about N2 trillion in the next four years to achieve the sort of infrastructure development and cutting edge social services that we want to provide for our people. If you look at the revenue from federation account, even if you took everything to do capital project, it’s not up to N400 billion for the next four years. Out of the money being received, a good junk of it is dedicated to recurrent exposure.

We are not reckoning with the current financial model, it won’t work. We have to be creative, innovative and positively disruptive. That’s why we are talking about massive infrastructure development, the massive investment flow it will attract, and growing the economy exponentially.

We know the diversity and political interests in this state. How do you mobilize the ordinary Enugu man to key into what you have in mind? What are the key pillars you will be looking at going into the Enugu Diaspora (stakeholders buy-in) forum?

Our people are increasingly becoming interested in good governance and our politicians are no longer sitting on the fence. The young people are now all aware that they must demand from their leader good governance. Good governance is felt. Electricity, water, and good road. These explain good governance. So, you have to always know that there is a world of difference between politics and governance. So, the minute you are done with your election processes, you need to focus on governance.

Governance must be inclusive; it has to be able to impact all sections of the state because you are essentially governor of the state. We believe that the people should see and know that there is a huge change. It is our hope therefore, that there will be a whole lot of interest.

In the past, what had happened was that the Diasporas had invested in this economy but it had largely been on consumptions. All the remittances flowing from the Diaspora community into our state and other parts of the country have largely been used for consumption.

Our view on that, which is why we are interested in having this forum, is that we can actually set up a project that could attract Diasporas to invest in. They can look beyond just sending money for consumption. They can also identify some social impactful projects which would also give them good returns on investment.