The federal government of Nigeria on Friday signed investment agreements with three Development Finance Institutions – Afreximbank, Bank of Industry and the Nigeria Sovereign Investment Authority (NSIA) – for the development of special economic zones in the country.
With the signing, President Muhammadu Buhari, who presided over the ceremony at the Council Chambers of the Aso Rock Villa, declared that the investment company in the special economic zones (SEZ) will become operational.
“Today, we are here to witness the signing of investment agreements, following which the Nigeria SEZ Investment Company Limited will become fully operational,” he said.
The federal government set up NSEZCO Limited as a vehicle for participating in Public-Private Partnerships involving federal and state governments and local and foreign private investors to develop new Special Economic Zones all over the country, offering world-class infrastructure and facilities at competitive costs.
The projects in the pilot phase include Enyimba Economic City, Funtua Cotton Cluster and Lekki Model Industrial Park.
The three DFIs are among the five to partner with NSEZCO and the Ministry of Finance Incorporated. NSEZCO intends to raise at least $500 million in equity over the first five years in order to execute its ambitious strategy of becoming a leading investor in special economic zones in the country. The other investment partners are the African Development Bank (AfDB) and Africa Finance Corporation (AFC).
Called Project MINE (Made in Nigeria for Exports) the development of special economic zones under the direct supervision of the President Muhammudu Buhari, is a presidential special priority intervention aimed at using the zones to attract substantial foreign and domestic investment for the development of world-class facilities dedicated to export-oriented manufacturing in a range of industries across Nigeria.
Project MINE seeks to position Nigeria as the pre-eminent manufacturing hub in sub-Saharan Africa and as a major exporter of made in Nigeria goods and services regionally and globally; as well as boosting manufacturing’s share of Gross Domestic Product to 20 per cent; generating $30 billion in annual export earnings; and creating 1.5 million new jobs all by 2025.
Muhammadu Buhari [Photo: Presidency]
Speaking at the signing ceremony, President Buhari said the federal government set up the Nigeria SEZ Investment Company Limited as a vehicle for participating in Public-Private Partnerships involving federal and state governments and local and foreign private investors to develop new Special Economic Zones all over the country. He said, the projects in the pilot phase include Enyimba Economic City, Funtua Cotton Cluster and Lekki Model Industrial Park.
The president said the federal government is implementing a comprehensive plan including: “The invitation of experienced Special Economic Zone developers and operators to partner with us to upgrade the federal government owned Free Trade Zones in Calabar and Kano, to offer world-class standards of infrastructure and facilities. Whilst we await the completion of the process of bringing in these investors, the Federal Executive Council has approved the award of contracts in excess of N19.45 billion for the needed investment in Calabar and Kano Free Trade Zones and work is currently ongoing. This is the highest amount of capital investment ever in the history of these zones.”
He said: “We have allocated substantial funds to upgrade the capabilities of our people and the systems in the Nigeria Export Processing Zones Authority to strengthen it as a regulator of our Special Economic Zones; and
“We are allocating substantial resources to the provision of “outside the fence” infrastructure to ensure that our Special Economic Zones are connected to global, regional and domestic markets.
“We are reviewing our incentive framework to ensure competitiveness relative to the other countries with whom we are in the race to attract export-oriented global manufacturing investment.”
He added that the federal government will extend the early successes achieved in Ease of Doing Business to the areas critical to globally competitive export-oriented manufacturing operations.
He thanked the investment partners for their “strong demonstrations of support for the important initiative.”
Okechukwu Enelamah, whose ministry, Industry, Trade and Investment is implementing Project MINE, recalled President Buhari’s choice for special economic zones to hasten industrial development and the mandate to the ministry to attract investors to participate in the project.
“This is the reason we are here today. The investors have all agreed to partner with us,” he confirmed.
He said the initial projects such as the Enyimba Economic City are underway, while a feasibility study is going on in eight states.
The signing of the agreement was done by Benedict Oramah, President of Afreximbank; Kayode Pitan, Managing Director of Bank of Industry and Uche Orji, Managing Director of NSIA.
Femi Edun, a director of NSEZCO and Bakari Wadinga, Director, Ministry of Finance Incorporated, signed on behalf of the company.
Speaking separately, they all thanked the federal government for the opportunity to participate in the project and said they are happy to be partners because they believe in it and are confident of its success.
Project MINE seeks to achieve the following specific objectives:
· Aid structural transformation of the Nigerian economy by increasing the manufacturing sector’s contribution to GDP to 20 per cent by 2025;
· Contribute to sustainable inclusive growth by creating 1.5 million new direct manufacturing jobs in the initial phase of Project MINE;
· Increase and diversify foreign exchange earnings to at least $30 billion annually by 2025, by increasing manufacturing sector exports;
· Create local models of global best practice in the provision of world-class infrastructure at competitive costs connecting SEZs to international and regional markets with transport links, uninterrupted power, ICT, water, sewage and other services to ensure smooth and efficient operation of SEZ businesses;
· Promote the “cluster” effect to be gained by locating similar export-oriented manufacturing businesses within the same locality;
· Attract world-class investors with strong positions in global supply chains and investors with the potential to increase the scale of operations rapidly to set up operations in SEZs; and
· Create an enabling environment for SEZ businesses by instituting best in class legal and regulatory frameworks, using technology and streamlined processes to facilitate movement of people, goods and capital and easy access to government services, approvals and permits.
President Muhammadu Buhari has boasted about the economic policies of his administration, saying they are meeting the desired target.
The president stated this in Lagos on Saturday in a meeting with the Lagos business community, adding that the impact of the policies can be seen in the gradual growth of the nation’s economy in the last three years
According to President Buhari, he had kept his promise to boost the economy, through blocking leakages in government finances, increasing capital expenditure and inflows, and implementing the Economic Recovery and Growth Plan (ERGP), among others.
‘‘I firmly believe that our economic policies are beginning to make the desired impact. Economic growth has resumed and is continuing to improve.
‘‘Growth was higher in 2017 than in 2016, data even from external sources shows that it will be higher in 2018 than in 2017. I am confident that as we stay the course, it will be better still at the end of 2019.
‘‘Inflation is coming down steadily, there is stability in the exchange rate and foreign exchange is readily available for genuine business. Foreign reserves are adequate and growing; capital inflows have increased and the trade balance is positive.
‘‘We are paying off debts that were not even publicly acknowledged before now, including those owed to States, the electricity sector, oil marketers, exporters, backlog of salaries of workers and pensioners, amongst others.
‘‘I am happy that the results of the priority we have placed on this sector are beginning to show.
‘‘Our commitment is reflected in the resources that we are providing for infrastructure. In 2016 and 2017, capital expenditure was up to N2.7 trillion while over N800m has been released under the current budget.
‘‘This has been complemented by the inception of the $650 million Presidential Infrastructure Development Fund which will focus initially on the Lagos-Ibadan expressway, the Second Niger Bridge, the Abuja-Kano expressway and the Mambilla hydropower plant,’’ he said.
The President also highlighted completed and ongoing projects in the transport and aviation sector, expressing delight that the rail projects are generating excitement across the country because it would help local businesses to grow.
‘‘The Abuja-Kaduna railway is up and running. The Itakpe-Warri line is being test-run before going commercial. The completed portion of the Abuja light rail project is facilitating movement to the airport.
‘‘The Lagos-Ibadan railway is nearing completion with people already taking test rides on the completed portions. We are determined to work at the same pace on the Coastal Railway Line and the line from Port Harcourt to Maiduguri.
‘‘We completed the repairs to the runway in Abuja in record time, and just a few weeks ago, I commissioned the Baro Inland Port. All these achievements will help Nigerian businesses to grow,’’ he said.
“On future plans to sustain the positive economic outlook, the President said the Federal Government would raise more revenue to boost the economic fundamentals and increase the level and quality of government services in support of the private sector.
‘‘I recently inaugurated a Technical Advisory Committee to identify new sources of revenue in this regard. This is also to ensure that Government at all levels have the resources to pay the new national wage, which we are indeed committed to paying.
‘‘Our economic fundamentals are strong and, in the next four years by the grace of God, we are determined to stay the course in terms of partnerships with the private sector; support to the real sector; helping small businesses, providing infrastructure and an enabling business environment,’’ he said.
President Buhari further informed the gathering that his administration has also stimulated growth in the economy by adopting and implementing new strategies to deal with the security situation in the country and tackling rampant corruption.
Mining has always been an industry that enables human progress.
Whether it is through the precious metals and minerals that make modern life possible, or mining’s direct economic contribution through royalties, taxes and employment, mining plays a part in all our lives.
Like every economic sector, mining is evolving.
Technological innovation is fundamentally changing the nature of the industry.
With technology that is available today and others that we are developing, we can now imagine mines with smaller physical footprints, using more precise extraction techniques that enable us to mine only the most valuable ore, thereby reducing waste, using a fraction of the energy and drawing almost no fresh water.
These will be mines where people will be out of harm’s way, so everyone goes home safely at the end of each day.
In a world of diminishing ore grades, constraints on water and energy, and the resulting increasing costs, the changes are not just an opportunity, they are a necessity if mining is to be truly sustainable – in every sense.
These changes are a non-negotiable for a mineral-rich country like South Africa to compete for capital and grow its mining industry.
While these changes are exciting and aligned with society’s rightly increasing expectations of us as an industry, some may feel unsettled about what role they will play and what it may mean for jobs.
The reality is that no one knows exactly. What we do know is that mining is not alone – what some refer to as the fourth industrial revolution is upon us.
So, in considering the implications, we will need to work in partnership with governments, labour, other industrial players and civil society to capture and responsibly manage the enormous opportunities that we see.
At its most basic level, think of a truck driver. They won’t necessarily need a driving licence and be physically in a truck to drive it.
As autonomous trucks become the norm, the driver will instead control the truck from cutting edge operation centres, utilising digital skills and technology to optimise efficiency.
These shifts are well under way across the global industry including in South Africa, opening up employment opportunities to a far greater diversity of people.
The nature of work is changing, the type of employment may change and the relationship between mines, their host communities, and governments is likely to change.
We must all be ready and repositioned for a future that embraces, and manages, this change responsibly. Together we must build our “social licence to innovate”.
This may mean a new social contract for mining in South Africa, one where innovation is seen as an enabler for mining’s sustainability as a business activity and one where economic opportunities in mining communities are not so reliant on mining.
To thrive in this new world, we must focus on education and training that is targeted to the skills required for mining’s (and other industries’) future, reskilling our employees for broader opportunities and higher paying jobs.
We must also collaborate with government on sustainable job creation programmes and creating a modern and agile regulatory framework that fosters innovation and supports mining’s contribution to society.
Forging this new approach will require a concerted effort by mining companies, governments, labour and communities to imagine a different future for the mining industry.
Ultimately, mining’s contribution to regional economies will continue and grow, but it will inevitably look different.
While Anglo American doesn’t have all the answers, we recognise that we must act. One of the ways that we are doing this is by turning the traditional model of socioeconomic development on its head.
This innovative approach – or collaborative regional development as we call it – starts by identifying socioeconomic development opportunities that offer the greatest potential in a region, using spatial planning and analysis.
Imagine a mining community that embraces innovation and benefits from the rich mineral endowment beneath its feet, while new economic activities such as 3D printing, agri-business opportunities like biofuels or game ranching begin to develop to build on mining’s contribution.
In essence, long-term economic prosperity is achieved on the back of mining, but not entirely reliant on mining. This is a safer and more sustainable model and one that we encourage everyone to embrace.
The substance of the model is important, but the process is critical to its success.
We can only do this in collaboration with regional and municipal governments, other mining companies and industries, non-governmental organisations and our communities – each bringing their own expertise, commitment and resources.
It requires deep partnership and trust to help us map out a developmental path for mining communities to navigate this evolution in a sustainable way.
At Anglo American, we see the transition to modern, sustainable mining both as a necessity and as an opportunity to realise.
South Africa cannot afford to be left behind. To thrive, we must all embrace innovation. Doing so will unlock long-term opportunities for this great nation and all her people.
With 60% of arable land globally and a projected demographic dividend of more than one-quarter of the world’s total under-25 population by 2030, Africa is set to become the future bread basket of the world and the largest contributor to the global workforce.
Despite this, one thing that was clear at this year’s World Economic Forum (WEF) in Davos was that the continent had moved to the periphery in the face of rising concerns about advanced world economy issues, including climate change, data governance issues and geopolitical tension.
Climate change and its related effects were the major themes for this year’s WEF. Of the top five global risks outlined in this year’s Global Risk Report, released prior to the commencement of the forum, three related either to climate change or negative weather-related effects.
Although climate change has featured at previous Davos meetings, its severity and resulting effect was brought home by natural historian Sir David Attenborough. In his acceptance speech at the Crystal Awards Ceremony for individuals who have excelled in various fields, Attenborough related his personal experience of how nature had changed over the years, including more extreme weather patterns, increased pollution in the oceans and a dramatic decrease in biodiversity.
Technology was also a key theme, both as a risk to jobs and a source of progress to the business community, government and individuals.
Data governance, however, remained a critical issue, along with information security.
The adoption of three different and far-removed approaches to data management by Europe, the US and China highlighted the gap that had manifested as a result of the destruction of multilateralism.
Through highly regulated data protection laws that came into effect last year, Europe had taken a strict stance in terms of privacy laws.
By contrast, the business-led US approach was more practical and pragmatic, looking at what the data would be used for to determine how it would be protected and stored.
On the other hand, China’s approach was that data was a public good with no requirement for protection.
More importantly, a significant takeaway from the conversations was that Africa’s data was stored outside the continent, raising pertinent questions about ownership, storage, right of access and privacy.
It became clear that there was no centralised architecture for governance over this data, which had accelerated and multiplied at a rate that had left the continent lagging behind on governance and the protocols on which all the protection mechanisms could be delivered.
The need to avert future data breach crises was real and the absence of global governance structures and institutions that were relied on in the past to lead the way in the creation of global governance standards was concerning.
There was great concern about decelerating global trade, with the business community particularly anxious about the US-China trade war and the self-inflicted Brexit quagmire.
Contestation of leading the next technological revolution was seen to be a factor that might prolong the spat between the two nations.
Closer to home, Africa continued to encounter challenges implementing the Continental Free Trade Area agreement signed last year, particularly on the creation of value and benefit for the signatories.
Although infrastructure remained a major obstacle to Pan-African trade, the focus had been on tariff barriers. Making our way into the fourth industrial revolution implied more interconnectedness and serious considerations about education, including introducing technology and being technologically savvy at a young age.
From an investment perspective, compliance burdens continued to plague South Africa and were a serious concern for investors, including crime and, to a lesser extent, black economic empowerment.
But, with the immediate challenges, there were upsides – including showing how South Africa was tackling various issues, such as Eskom, governance failures in state-owned enterprises; and serious efforts to tackle corruption. We did not convince anyone that we had a magic wand to transform the economic status quo and it was regarded that there remained a lot of work to be done, especially around regaining investor trust and confidence and where we saw economic growth coming from.
It could be argued that the WEF demonstrates a disconnection between the global elite and the general population. But it could be a good platform to take stock of what plagues the world, and to explore how business and government working together could tackle those issues and be a force for good.