Nigeria Signs $30 Billion Export-Financing Deal To Boost Economy

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Nigeria’s federal government reached an export-financing agreement with investment partners to bring in as much as $30 billion from products manufactured in the country and sold abroad.

The Made in Nigeria for Exports project accord was signed Friday with the African Export-Import Bank, Africa Finance Corp., the African Development Bank, Bank of Industry and Nigerian Sovereign Investment Authority, the newspaper said.

Africa’s biggest oil producer is looking to increase the manufacturing industry’s share of gross domestic product to 20 percent, generate $30 billion in annual export earnings and create 1.5 million jobs in the next six years, ThisDay cited President Muhammadu Buhari as saying in a signing ceremony speech at the Council Chambers of the State House in Abuja.

The Nigeria SEZ Investment Co., set up to run the project, will start off a pilot phase with special economic zones in Enyimba Economic City in Abia state, Funtua Cotton Cluster in Kastina and Lekki Model Industrial Park in Lagos, the newspaper cited the president as saying.

The federal government 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.
Minister of Trade and Investment, Okechukwu Enelamah

“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.

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Godwin Okafor is a Financial Journalist, Internet Social Entrepreneur and Founder of Naija247news Media Limited. He has over 16 years experience in financial journalism. His experience cuts across traditional and digital media. He started his journalism career at Business Day, Nigeria and founded Naija247news Media in 2010. Godwin holds a Bachelors degree in Industrial Relations and Personnel Management from the Lagos State University, Ojo, Lagos. He is an alumni of Lagos Business School and a Fellow of the University of Pennsylvania (Wharton Seminar for Business Journalists). Over the years, he has won a number of journalism awards. Godwin is the chairman of Emmerich Resources Limited, the publisher of Naija247news.