Trade Ministry clarifies status of NSEZCO
… says Ministry of Finance is a shareholder
Federal Ministry of Industry, Trade and Investment have made clarification against the backdrop of reports about the status of Nigeria SEZ Investment Company Limited (NSEZCO), also known as Nigeria Special Economic Zones Company Limited.
The NSEZCO, the Ministry said, was incorporated as a special purpose vehicle to deliver Project MINE (Made in Nigeria for Exports), a Presidential initiative.
The Ministry in a statement last week stated that the Federal Government’s Economic Recovery and Growth Plan (ERGP) identified the development of Special Economic Zones (SEZs) as a major strategic tool to accelerate the implementation of the Nigeria Industrial Revolution Plan (NIRP).
Project MINE, against this backdrop, was envisioned by the Ministry of Industry, Trade and Investment to develop SEZs to world-class standards and position Nigeria as the pre-eminent manufacturing hub in sub-Saharan Africa and a major exporter of made in Nigeria goods and services regionally and globally.
Project MINE was necessitated by lack of operating competitiveness that limits the growth of the zones, despite the presence of generous fiscal and regulatory incentives. It was further necessitated by the absence of a deliberate strategy to attract investors, create clusters or encourage the development of local value chains using SEZs, and therefore the lack of appropriate link between the industrialisation strategy of government and the Free Trade Zones.
Recall, in June 2018, the Federal Executive Council (FEC) approved NSEZCO, with the endorsement of the Economic Management Team, as the holding entity for FGN investments and proprietary interests in existing and future SEZs. The FEC approval also provides that all current and future capital appropriations for Project MINE should be transferred to NSEZCO’s account, as soon as opening formalities are completed.
NSEZCO, as a result became the platform through which Federal Government’s capital budget appropriations for SEZs are converted into long-term value creating investments.
NSEZCO is a public private partnership (PPP) company to operate world-class standards of governance and management, to facilitate mobilisation of capital and other resources from PPP partners, in order to overcome budgetary constraints to the provision of critical infrastructure for SEZs.
By aggregating and harnessing Federal Government’s investment in a strong corporate special purpose vehicle, NSEZCO will facilitate the mobilisation of additional capital from development finance institutions (DFIs) and private investors.
Ministry of Finance Incorporated (MOFI) is the shareholder, holding the Federal Government’s interest of 25 percent in NSEZCO. The balance of 75 percent is currently held in trust on behalf of other prospective shareholders, pending completion of investors’ diligence and documentation and approval procedures.
On February 8, 2019, NSEZCO signed investment agreements with three development finance institutions: Afreximbank, Bank of Industry, the Nigeria Sovereign Investment Authority (NSIA) and Ministry of Finance Incorporated for their investment in NSEZCO at a ceremony presided over by President Muhammadu Buhari at the Presidential Villa.
Africa Finance Corporation and African Development Bank who are still in the preliminary stages of their internal approval processes were also in attendance as observers.
President Buhari said at the signing ceremony: “When we committed to the implementation of the Nigeria Industrial Revolution Plan and launched our Economic Recovery and Growth Plan to fast track implementation, we had a vision of Nigeria as the pre-eminent manufacturing hub in sub-Saharan Africa and a major exporter to our immediate West African sub-region, the rest of Africa and indeed the World.”
Already, NSEZCO is a PPP, mobilising capital from the Federal Government and the development finance institution shareholders for the development of SEZs across Nigeria.
Pilot projects in the first phase are Enyimba Economic City, Abia State, Lekki Model Industrial Park, Lagos State, and Funtua Cotton Cluster, Katsina State. In addition, pre-development studies are ongoing in Benue, Kwara and Sokoto states, while studies will soon commence in Ebonyi, Edo and Gombe states, among several others.