Economy: “Naira fall challenges our creativity” – Minister for Industry, Trade, Investment

Speech by the Minister of Industry, Trade and Investment, Dr Okechukwu Enelamah, at his inaugural press briefing, on Thursday February 18, 2016

Lagos, Nigeria.

Introductions.

Protocols.

It has been three months since I was sworn in as Nigeria’s Minister of Industry, Trade and Investment. In that time I have engaged various stakeholders, seeking first to learn and understand as much as possible, while leveraging my experience, gained over the last three decades, mostly from the private sector. I’ve held and attended several meetings with local and foreign entrepreneurs, business executives, industry groups, and Trade Missions. I have met and discussed with fellow members of the Federal Executive Council. I have met with the Chief Executives of all the Parastatals under the supervision of our Ministry. I have accompanied the President on some of his foreign trips, engaging in discussions around business and investment in Nigeria. One of my first official outings as Minister was to represent Nigeria at the World Trade Organisation Ministerial Conference in Nairobi, Kenya; and discuss Nigeria’s place in the global multilateral trading system. On one of our recent trips, to the United Arab Emirates, I was privileged to sign, on behalf of Nigeria, an important bilateral agreement on Trade Promotion and Protection.

In my three months as Minister of Industry, Trade and Investment, I have come to appreciate a number of things, which can be used to frame the conversation about Nigeria’s present and future, from an economic point of view:

One: These are extraordinary times, for Nigeria as a country, for its citizens, and for us as a government. Oil prices, on which we depend for 75 percent of government revenues and 90 percent of foreign exchange earnings, are down 70 percent since mid-2014. Coupled with this are the knock-on effects from changing conditions in the world’s two largest economies: the end of the era of Quantitative Easing in the United States and availability of higher returns to investors in that country, and the slowdown in China. These are also accompanied by a net outflow of investment from Emerging Markets. The negative impact of all these on our economy – everything from government’s finances to investment flows to currency valuation – has been significant. Last year our GDP growth dropped to under 3 percent – the lowest in fifteen years – from an average of more than 6 percent in the decade between 2005 and 2014. Our foreign exchange reserves are down to their lowest levels in more than a decade.

Two: The crisis I outlined above, which we find ourselves dealing with, is but one side of the narrative; one aspect of a complex and nuanced story. The flip side of the crisis is the opportunity it presents; to create something new; to develop new attitudes and appetites. Fully convinced that this crisis is too good an opportunity to waste, the administration of President Buhari has started the difficult but rewarding task of “taking the current now that it serves”, by breaking free from our traditional dependence on oil and gas and in its place developing a diversified export base and a solid base of domestic manufacturing.

Three: There continues to be a great deal of investor interest and attention on Nigeria. This is good news given the difficult macroeconomic environment in which we find ourselves. I am however also convinced that we should never take this interest and attention for granted, and that we should see it as a timely opportunity to carry out a fundamental reform of our economy.

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Four: The entrepreneurial energy and zeal of our people is one of the reasons I’m confident we will overcome our current challenges. We see this energy everywhere – from small businesses to large ones, from aspiring entrepreneurs to long-established ones; in formal and informal settings. Having acknowledged this, we must find ways to harness these energies. We recognise that unless we enable these everyday heroes to fulfil their potential and achieve their ambitions, we stand the grave risk of producing a frustrated and disillusioned population. Just like the interest from outside, we cannot afford to take the enthusiasm and energy of our people for granted.

Five: The Ministry of Industry, Trade and Investment (MITI) is strategically positioned to play a critical role in the Nigerian economy, especially at a time when as a country we’re determined to diversify our economy away from oil in a sustainable manner. The remit of MITI is an expansive one: covering everything from business registration to intellectual property protection, product quality and standards, consumer protection, MSME support, and the promotion of investment, exports and industry. As you know, MITI oversees the following agencies:

Bank of Industry (BOI)
2. Consumer Protection Council
3. Corporate Affairs Commission (CAC)
4. Industrial Training Fund (ITF)
5. Financial Reporting Council of Nigeria
6. Nigerian Commodity Exchange
7. Nigeria Export Processing Zone Authority (NEPZA)
8. Nigeria Export Promotion Council (NEPC)
9. Nigeria Investment Promotion Commission (NIPC)
10. National Automotive Design and Development Council (NADDC)
11. National Sugar Development Council (NSDC)
12. Oil & Gas Free Zone Authority (OGFZA)
13. Standards Organisation of Nigeria (SON)
14. Small & Medium Enterprises Development Agency of Nigeria (SMEDAN)
15. Lagos International Trade Fair Complex Management Board
16. Tafawa Balewa Square Management Board

The last three months have also afforded me and my team the opportunity to begin to define and articulate our Vision for the Ministry of Industry, Trade and Investment (MITI). I will start out by listing the four Pillars of that vision, and then go on to flesh them out:

CREATE an Enabling Environment for Industry, Trade and Investment in Nigeria.
IMPLEMENT the Nigeria Industrial Revolution Plan (NIRP)
CHAMPION the cause of Nigeria’s MSMEs, as a means of creating jobs and achieving inclusive growth.
ATTRACT proactively long-term local and foreign investment
I will expand on these pillars, starting with the first. CREATE an Enabling Environment for Industry, Trade and Investment in Nigeria. We are working to position MITI as an Enabler and Facilitator of business and investment in Nigeria. We would like Nigerians and the world to regard MITI as the ‘Ministry of Enabling Environment’.
When we say ‘Enabling Environment’, we mean one in which it is progressively easier to do business, policies are predictable and consistent, the government acts as a partner to business and investment, not a competitor or adverse regulator, and in which there is macro-economic stability.
In the weeks and months ahead we will be unveiling a number of important initiatives aimed at addressing Nigeria’s consistently poor performance on various Global Competitiveness and Ease of Doing Business Indices. These concrete initiatives will focus on dismantling the many obstacles that stand in the way of business and business innovation in Nigeria.
In our estimation, the singular most important enabler of business in Nigeria – i.e. investment, entrepreneurship, and industrialisation in Nigeria – is infrastructure.
I’m delighted to mention that work is already going on within the government to create a dedicated Fund to tackle the Infrastructure deficit. This is apart from the fact that the 2016 budget proposes to spend on infrastructure projects, three times as much as the 2015 budget, despite the tough economic times we are in.
I must add at this point that infrastructure refers, not only to ‘hard’ infrastructure like transport networks and reliable power supply, but also ‘soft’ infrastructure like transparent regulation, policy consistency, the rule of law, and a culture of efficient collaboration and synergy among various government agencies and offices.
Also connected to the idea of being an Enabler, is developing a culture, within the Ministry and all its parastatals, of Responsive and Supportive Service to all our stakeholders and target audiences. MITI will foster an attitude of ‘service’ to entrepreneurs, MSMEs, businesses and investors. We will constantly ask the question: ‘How can we help’? To make this easier, we are establishing multiple channels and mechanisms of engagement with the public, and would welcome feedback on all our policies and programmes. In the months ahead, we will be holding forums and meetings with a wide range of players and stakeholders. To tap into the opportunities for engagement provided by the Internet, we have created social media accounts – @TradeInvestNG on Twitter, and ‘FMITINigeria’ on Facebook – and we are also currently revamping MITI’s official website. All of these efforts are geared towards affirming that MITI, like Nigeria, is open for business.
IMPLEMENT the Nigeria Industrial Revolution Plan (NIRP): Regarding Industrialisation, there is no doubt that Nigeria is long overdue to make the shift from being primarily an exporter of commodities and raw materials, to being an industrial economy. Manufacturing currently contributes only a tenth to our Gross Domestic Product, much lower than it does in other emerging market economies. Our Industrialisation ambition is hinged on the Nigerian Industrial Revolution Plan (NIRP), launched by the previous government in 2014. It is now time to move that comprehensive document from Plan to Action. It is now our duty to implement that Plan in light of current realities, taking into consideration the lessons learnt in the two years since it was unveiled. We are focusing on identifying and supporting a select number of industrial sectors in which Nigeria has comparative advantage. We have seen success in our backward integration policies in the cement industry; and sugar is currently trying to replicate that success. In the Automotive, and Cotton, Textile and Garment (CTG) industries, we are continuing discussions with players and stakeholders to see how we can better implement an industrial policy that creates jobs, profits and prosperity.
CHAMPION the cause of Nigeria’s MSMEs, as a means of creating jobs and achieving inclusive growth: MSMEs are the unsung heroes of our economy, currently contributing about half of Gross Domestic Product, and possessing the potential to be even more productive, given the right incentives. Working through agencies like the Small and Medium Enterprises Development Agency of Nigeria (SMEDAN), the Bank of Industry (BOI), the Industrial Training Fund (ITF), and the Nigeria Export Promotion Council (NEPC), and in collaboration with other Ministries and Agencies of government, we will be rolling out programmes and initiatives focused on supporting MSMEs with financing, infrastructure, technical support and training. As part of the Federal Government’s 500 billion naira Social Protection programme for 2016, over two million traders, farmers and artisans will receive micro-credit, through a fund to be managed by the Bank of Industry.
ATTRACT proactively long-term local and foreign investment: One of the fundamental questions facing us as a government is: how do we increase the levels of domestic and foreign investment in Nigeria, especially for the purpose of closing our massive infrastructure gap. These challenging times we find ourselves in call for the deployment of innovative financing solutions, targeted at unlocking capital wherever it might be found. And we are well aware that this capital is available, within and outside Nigeria – in private equity and venture capital, Pension and Sovereign Wealth Funds, and so on – and like I pointed out earlier investors are also interested in investing in Nigeria. Our approach to attracting investments will be driven by a ‘Public-Private Partnership’ (PPP) agenda. Considering the scale of our infrastructure deficit, and the limits of government’s resources, Partnering with Private Capital is clearly the most sensible approach to financing our substantial ambitions. I must at this point add that the size and type of financing Nigeria requires suggests that our preferred partners will be those who show evidence of a commitment to a long-term partnership.
The overriding goal of this government, and that includes MITI, is the achievement of inclusive growth and shared prosperity that touches every corner of Nigeria. None of these – Creating an Enabling Environment for Industry, Trade and Investment in Nigeria, realistically and decisively implementing our industrial policies, championing the cause of Nigeria’s MSMEs, proactively attracting long-term local and foreign investment – is an end in itself. The only true measure of impact will not be seen in the eloquence of our plans, or the enthusiasm with which we reiterate them, but in the lives and stories of our entrepreneurs, traders, business owners, and intending and existing domestic and foreign investors. At MITI we will say what we mean, and mean what we say.
The journey ahead will not be an easy one. There will be no shortcuts or silver bullets. But our commitment to achieving an appreciable and sustained diversification of Nigeria’s economic base and export revenues, and creating the right environment for business and investment to thrive, should not be in doubt. Some of our efforts as outlined above will require policy and legislative backing. We have already started looking at our existing policies and laws to see what interventions are possible and necessary. It is also very heart-warming that the National Assembly has already started work in this regard, highlighting a number of critical infrastructure and investment-related laws it will be revising in the months ahead.
Clearly, the remit of our Ministry is interconnected with and interdependent on that of other strategic Ministries, Departments and Agencies of government – like the Ministries of Finance; Agriculture; Power, Works and Housing; Solid Minerals; the Nigeria Customs Service (NCS), the National Agency for Food and Drug Administration and Control (NAFDAC). This means that the only way we can succeed is by collaboration. We are assured of support for our agenda from the highest levels of government. We will also ensure that all stakeholders are carried along on this journey, and that our work is underlined by a sense of openness and transparency. We welcome all available insight, feedback, and constructive criticism. We will listen, we will learn and we will work hard to deliver on our vision.