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Tag: Olusegun Aganga

  • Tambuwal, Fashola, Aganga for group’s lecture

    Tambuwal, Fashola, Aganga for group’s lecture

    House of Representatives Speaker Aminu Tambuwal; Lagos State Governor Babatunde Fashola (SAN) and Minister of Industry, Trade and Investment, Mr Olusegun Aganga, are among dignitaries expected at the second edition of the lecture series of January 9 Collective (J9C).

    The theme of the event, will hold tomorrow at the Sheraton Hotel, Ikeja, Lagos, is: Nigeria beyond Petrodollar: A Realistic Perspective.

    Tambuwal will deliver the key note address while Fashola is the host governor and chairman of the lecture.

    The lecture will feature key presentations by officials of the Federal Ministry of Industry, Trade and Investment and the Lagos Internal Revenue Service.

    The group’s Chairman, Percy Ademokun, noted that with the fluctuating global prices of crude oil and the advent of innovative technology, there was need to start exploring other economically viable avenues to reduce the nation’s current over dependence on oil.

    Oba Adedokun Abolarin, the Orangun of Oke-Ila Orangun, is the royal father of the day.

    The event will also feature panel discussions by seasoned professionals and a communiqué will be issued at the end of the deliberations.

    A statement by the group’s Publicity Secretary, Wole Olagundoye, said J9C was formed on January 9, 2012, in the wake of the anti-fuel price hike protests (Occupy Nigeria).

  • More knocks for Fed Govt over auto policy

    Can opposition to the Federal Government’s automotive policy, seeking to increase tariff on imported vehicles by 70 percent, frustrate the policy? SEUN AKIOYE asks

    Minister of Industry, Trade and Investment, Olusegun Aganga, has found himself walking the tight rope again. In less than two weeks, the new automotive policy championed by his Ministry and approved by President Goodluck Jonathan has come under severe criticism by industry stakeholders and trade union organizations.

    The Nigeria Labour Congress (NLC) yesterday joined the ranks of opposition to the new policy, describing it as “lamentable” and capable of inflicting severe pains on Nigerians. The NLC President, Comrade Abdulwahed Omar who spoke in Kaduna at the Unions’ ongoing 12th Harmattan School 2013, specifically berated the Federal Government for its penchant for initiating policies capable of inflicting pains on the working people in the country.

    The federal government made public the controversial policy on October 2, 2013. And if implemented, the policy would encourage local manufacture of vehicles, reduce foreign exchange demand by vehicle importers (which currently stands at about N550 billion) and create jobs, said its promoters. Under the new policy, as unveiled by the government, the deadline for the establishment of Form Ms for importation until February 28, 2014, under the old tariff was October 3rd. Until October 3, those wishing to import Fully Built Units (FBUs) passenger cars paid a duty of between 20 and 30 percent duty while that of commercial vehicles attracted a flat rate of 10 percent.

    Also, under the new policy, the duty on passenger and commercial vehicles were upwardly reviewed to 70 and 30 percent respectively. What this means is that all importers who opened a letter of credit after the policy deadline of October 3 would pay a higher duty, while those privileged to have opened on or before October 2nd would pay the old rate.

    Immediately the policy was approved by the Federal Executive Council, FEC, some stakeholders including the nation’s top auto dealers including: Elizade Motors, Globe Motors, Coscharis Nigeria Limited, CFAO Motors, SCOA, and Toyota Nigeria Limited, acting under the Auto Manufacturers’ Representatives Group in Nigeria have protested vehemently against the new policy as approved by FEC. The group had sent a petition to President Jonathan accusing the Aganga of acting unilaterally without recourse to those who will be affected by the policy.

    More worrisome was the group’s allegation that one of the auto dealers, Stallion Group of Companies, had prior knowledge about the content of the policy and had used its fore-knowledge to have an undue advantage over its competitors.

    The group had alleged that Stallion Group made use of its privileged information to open letters of credit to the tune of $382 million, which covers three years of import for 20,000 cars. The group also alleged that the speed with which Stallion Group opened the letters of credit on October 2nd while the FEC was still deliberating on the policy indicated it did so to beat the deadline and gain unfair advantage over others.

    “It is obvious from this that the proposed automotive policy has been compromised and has resulted in providing undue advantage to one single group whose track record as a business entity has been monumentally notorious and whose owners have been deported twice in the last 10 years for economic sabotage,” the group said in the petition.

    While calling for a review of the policy, the petitioners warned that if the policy is allowed to stand, Nigeria will lose about N134billion in revenue due to the leak in the information regarding salient portions of the policy.

    The gathering storm

    While the government came out strongly to defend its policy and the potential economic benefits, more storms seemed to be gathering for the government over the policy. Currently, concerns are being raised over the government’s commitment to fight corruption and bring accountability to governance.

    For the NLC President, the announcement of the new tariffs barely few weeks to the commencement of its implementation further confirmed people’s fear that the Minister of Finance was merely implementing IMF programme in the country. Omar said raising tariffs without providing an alternative would merely put the Nigerian people at the mercy of unscrupulous car dealers who would exploit the situation to create artificial scarcity with its attendant effects on transportation.

    But Omar was not alone in casting doubts over the President’s vaunted fights against corruption in the country. The Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA), condemned the policy describing it as “harsh and not well thought through.”

  • Industrialisation 101

    Only when Nigeria is conceived as one giant laboratory of costly, sometimes implausible experimentations can one begin to make sense of official activism ostensibly designed to galvanise the citizens towards some assumed national cause. Nigerians would most probably recall the much hyped cassava-bread initiative, first championed by the Obasanjo administration, later revived under the Jonathan administration, under which the erstwhile producers of the wholesale wheat delicacy was threatened with oblivion even before millers expected to midwife them could understand what they were supposed to do.

    Then, the dandy Agriculture Minister Akinwumi Adesina was ecstatic that the treasury would be saved more than N315bn (about $2.1bn) annually if bakers would adopt 50 per cent cassava flour inclusion in wheat flour. More than a decade after, the achievement of the goal is highly debatable. The same goes for the policy on rice under which foreign imports are already slated for outright ban by 2015, even when the tribe of local Fadama farmers haven’t begun to see their seedlings sprout from the ground.

    We are apparently back on that familiar course of in which the policy cart is positioned before the horse. Another wing of the activist club in the Jonathan presidency, led by Minister of Trade, Industry and Investment Olusegun Aganga, and with the active support of Finance Minister and coordinating minister for the economy, Ngozi Okonjo-Iweala, has since found a new rally in the National Automotive Policy to anchor its own creed of economic nationalism. They have since put in place an ambitious New Deal for local automakers: a range of new tariffs designed to halt the so-called dumping of foreign – new or used – vehicles in the country supposedly to boost the activities of local assembly plants.

    It starts with a hefty combined duty/levy of 70 percent on imported passenger cars – up from the old duty rate of between 35 to 40 percent; up also goes the duty on imported commercial vehicles to 30 percent as against the previous 10 percent. For prospective local automakers, the package comes with the abolition of duty on Completely Knocked Down (CKD) parts; semi-Knocked Down components meant for local operations would henceforth attract a mere five per cent duty without levy. This, the federal government’s reasoning goes, would discourage the vehicle trade on one hand, while stimulating local assembly, on the other.

    What’s the matter with policy which aspires to be something of a roadmap into the future of the auto industry? Let’s start with all that is right with the policy.

    For something that has as its core, the stimulation of local value addition, it is – at least on the surface – a sound policy. Even without the penchant by our policy wonks to count their chicks before they are hatched, and their self-serving hype about the savings to be made on the annual $3.5 billion spent on vehicle importation, the merits of the quest in terms of the jobs to be created, the harvest of skills in the long run and the countless other linkages in the short and the near term would seem self-evident.

    Undeniably also is that the new tariff has basis in sound economics deriving as it were, from the age-long but nonetheless persuasive “infant-industry argument”; borne of the need to protect against unfair competition – most of which is self-created anyway – and the vicious waves of globalisation over which local firms have little control.

    Let me also acknowledge the throng out there who see in the new measure as the next best step to take in the quest for the so-called Nigerian car. As the reasoning goes, the local firms need all the protection they can get to play the catch up!

    My view of course is that the quest is not only wishful at this time, but smacks of the typical obsession with being seen among those on the big league even when objective conditions say otherwise.

    Let me be clear: The craze for the Nigerian car is not necessarily a bad thing. Unfortunately, it would not come by mere wishes. And more importantly, our insistence on building from the roof would certainly not help!

    Of course, there is a palpable lack of discernable method in the quest; so also the tendency to lapse into time warp, all perhaps in the misguided belief that the hands of the clock can be rolled back to pre-1980s. Nigerians, Unlike the Indians whose famed love for their simple but functional Ambassador brand of autos is legendary, Nigerians are even more now, unlikely to be persuaded to switch to some low quality contraptions just to prove how nationalistic they are when all they see daily on the highways are the gleaning imported armoured SUVs of their officials.

    Now, I haven’t even begun to examine in detail a measure which typically picks on the usual soft target – the mass market of fairly used cars. Can anyone imagine the ordeal of those folks already battered by the harsh living conditions being called upon to either shell out some 250 percent more in duty to have their dream automobile? And this in the unlikely situation that he will ever be able to afford the alternative presented – the Nigeria-assembled duty-free auto? That obviously would be some real good news to the neighbouring ports of Cotonou and Togo!

    Again, to be clear, I haven’t quite denied the possibility of local auto manufacture. My problem is what appears to be our government’s limitless faith in protectionism which, from experience, has proven to be neither helpful to the industries nor beneficial to the consumer.

    My main point is that there is a lot in the industry’s low hanging fruits waiting to be harnessed. This is even more so in the industry’s value chain. What is required obviously goes beyond the make-believe, feel good psychology of hyped activism. A deliberate policy designed to explore the opportunities in direct outsourcing of auto-components would seem infinitely better to secure competitive advantage in the long-run, than the current obsession with being jack of all trades. Yes, it would also cut down on the volume of imports with possibility of exports provided the quality is world class. Isn’t that what the Indians have taught with their record earnings estimated at $60 billion from global outsourcing?

    The point that needs to be borne in mind is that the key to the long-term sustainability of not just the auto industry, but any industry at all remains the twin factors competitiveness and effective demand. Protectionism would not make the economy any competitive any more that it would bolster citizens’ disposable incomes. The key is to unlock the treasures of the economy through investment in infrastructure and human capital. The former holds the key to competitiveness; the latter, effective demand. There is no in-between.

  • Nigeria attracts N205.4b investment

    Nigeria attracts N205.4b investment

    Nigeria has attracted investments of about N205.4billion ($1.3billion) into the retail sector within the last two years.

    Also for the first time in eight years Nigeria is set to overhaul it’s national trade policy, through the review of her trade facilitation, import restrictions, tariffs, trade agreement, interagency coordination of export promotions.

    These disclosures were made by the Minister of Industry, Trade and Investment, Mr. Olusegun Aganga, yesterday during the inauguration of the Retail Council of Nigeria, orgainsed by BusinessDay Media.

    According to Aganga, “over the last two years alone, the Nigerian retail market has attracted over US$1.3 billion in investments into the formal retail space. The pace of developments within Nigerian retail has really been breath-taking.”

    The minister, who noted that the retail sector was a major driver of economic growth, job creation and wealth generation globally, stressed that Nigeria had great opportunities for existing and new investors to take advantage of.

    Aganga said Nigeria has started “a journey to strengthen and deepen one of the most important segments of the Nigerian economy. The retail sector is the glue that binds economic activity together, by connecting the final consumers, to products from the producers. The impact of retail in Nigeria cannot be over- emphasized because anywhere in the world, it is a major driver of the economy.”

    He noted that globally, retail trade accounts for 27 per cent of the world’s GDP, which translates to about $19 trillion of retail sales each year. Also retail businesses employs 17 percent of the global workforce, which is about 800 million people.

    The Trade and Investment minister noted that “if retail is the sector to grow, then Nigeria is the market to be. There is simply no better retail market right now than the Nigerian market.” He described Nigeria as a retailer’s delight. “With a population of 167 million people (the 7th largest in the world), consumer spending well in excess of $100 billion a year, and a fast growing middle class, this is definitely the most promising market on the continent.”

  • Aganga defends govt’s automotive policy as Stallion tackles giants

    Aganga defends govt’s automotive policy as Stallion tackles giants

    Minister of Industry, Trade and Investment, Olusegun Aganga yesterday defended the integrity of the new automotive policy of the government.

    He also dismissed the allegations that members of the auto dealers’ group were not carried along in the documentation of the policy.

    Also, sources close to the minister said the announcement of the policy was not a surprise as the group would want the public to believe but stakeholders have known and participated actively in the formation since it was first mooted in November last year.

    “The ministry was involved in a participative process of formulation, with active involvement of industry players and consultants from South Africa, wherein a similar policy was successfully implemented,” a source said.

    Aganga also confirmed that Chief Michael Ade Ojo of Elizade had been to his office to discuss the plans of Toyota to assemble a plant in Nigeria right after the announcement. “When the policy was eventually approved on October 2, Chief Ojo was in my office on October 4, to intimate me of the plans he has with Toyota to set up an assembly plant.”

    However, there appears to be a gathering of support for the policy which is expected to generate more than 70,000 jobs in direct employment. According to the Director-General, National Automotive Council (NAC), Mr. Aminu Jalal, said the policy has been endorsed by many global automotive manufacturers, saying Toyota, Nissan, Renault and General Motors are already making plans to key into the policy.

    “At full capacity, the Nigerian automotive industry has the potential to create 70,000 skilled and semi-skilled jobs along with 210,000 indirect jobs in the SMEs that will supply the assembly plants. 49,000other jobs will also be created in the raw materials supply industries.”

    Another stakeholder, Chief Innocent Ifediaso Chukwuma, chairman of Innoson vehicles Manufacturing Company Limited while commending the initiative also said the step will greatly encourage the local manufacturing plants.

     

     

    Vice-President, Namadi Sambo soon after the announcement said government would not go back on the policy despite the challenges. Also, Aganga said he was not surprised that some car importers were resisting the automotive policy saying he would block the groups’ action “with every ounce of his being.”

    It is unclear if the ‘rebel group’ would be able to muster enough argument to convince President Goodluck Jonathan over what it has alleged as Stallions’ unfair advantage. It is unclear also if an inquiry would be ordered into the allegations of the group. But from the views of other stakeholders, the policy may just be what President Jonathan needs to rejuvenate the already crippling economy.

    It was conceived with the intention of reducing Nigeria’s dependence on importation of new and fairly used vehicles which currently mops up over N1trillion from the Nigerian economy, but the new automotive policy may have run into troubled waters as giants in the car importation business are over allegations of favoritism and insider trading.

    Six auto dealers including; Elizade Motors, Globe Motors, Coscharis Nigeria Limited, CFAO Motors, SCOA and Toyota Nigeria Limited acting under the Auto Manufacturers’ Representatives Group in Nigeria have protested vehemently against the new policy which was approved by the Federal Executive Council ( FEC) on October 2.

    In a petition sent to President Goodluck Jonathan which has been generating interesting permutations among the stakeholders, the group accused one of them, Stallion Group of Companies, of having unfair access to the contents of the policy ahead of the announcement thereby creating an unfair competition over others.

    According to documents made available to The Nation, the group have warned that if the new policy is allowed to take-off in its current form, the country would have lost about N134billion in revenue due to a leak of information in the new policy which allowed Stallion Group of Companies to use the knowledge of the content of the policy to its advantage.

    On October 2, 2013, the federal government made public a new automotive policy which if implemented, would encourage local manufacture of vehicles and reduce foreign exchange demand by vehicle importers which currently stands at about N550 billion and create jobs.

    Under the new policy as unveiled by the government, the deadline for the establishment of Form Ms for importation until February 28,2014, under the old tariff was October 3rd. Until October 3rd, those wishing to import Fully Built Units (FBUs) passenger cars paid a duty of between 20 and 30 per cent duty while that of commercial vehicles attracted a flat rate of 10 per cent.

    But under the new policy, the duty on passenger and commercial vehicles were upwardly reviewed to 70 and 30 per cent. What this means is that all importers who opened a letter of credit after the policy deadline of October 3rd would pay a higher duty, while those privileged to have opened on or before October 2nd would pay the old rate.

    In the petition written by the group, they alleged that Stallion Group made use of its privileged information to open letters of credit to the tune of $382 million which covers three years of import for 20,000 cars. The group also alleged that the speed with which Stallion Group opened the letters of credit on October 2nd while the FEC was still deliberating on the policy indicated it did to beat the deadline and gain unfair advantage over others.

    It also alleged that the action was inconsistent with the usual practice of Stallion Group which it was learnt usually opens such credit to the tune of $100million annually. “It is obvious from this that the proposed automotive policy has been compromised and has resulted in providing undue advantage to one single group whose track record as a business entity has been monumentally notorious and whose owners have been deported twice in the last 10 years for economic sabotage,” the group said in the petition.

    The group warned: “ The federal government will be committing a grave error if such a group is giving monopoly over the automotive industry in Nigeria,” while also urging that a fair and level playing field be provided for all the importers to compete.

    To that end, the group wants a review of the policy, the inclusion of representation from stakeholders and the federal government to review the policy and report within six months. They also want to the policy deferred for two years so that stakeholders can continue their on-going feasibility studies into establishing motor assembly plants in Nigeria.

  • Nigeria, Singapore partner on direct air links, others

    Nigeria, Singapore partner on direct air links, others

    Nigeria and Singapore have sealed deals on opening up air links between both countries.

    They have also agreed to collaborate in areas such as medical tourism, capacity development, skills acquisition and enterprise development, among others.

    The agreements were reached at a meeting between the Minister of Industry, Trade and Investment, Mr. Olusegun Aganga, and his Singaporean counterpart, Mr. S Iswaran, during the Nigeria-Singapore Business and Investment Forum in Singapore.

    Aganga said direct air services between Nigeria and Singapore would boost business, provide favourable trade and investment relationship for both countries.

    Iswaran said: “Once we open up the links, the people will follow and businesses too. Nigeria is a large country in its region and there are a lot of opportunities. Singapore is also an important gateway in this region. If we explore these advantages, the two countries will be better for it.”

    The Ethiopian Airlines would start direct flights from Nigeria to Singapore in December, this year, it was learnt.

    The Nigerian Investment Promotion Commission has signed a Memorandum of Understanding with the Enterprise International Singapore Board in five areas, namely, collaboration in the growth sectors of the economy, sharing information and best practice, mutual support in business missions and capacity development facilitation.

    Iswaran, however, noted that the Double Taxation Agreement talks had reached an advanced stage, adding that provision of investment guarantee would create more comfort for businesses.

    Aganga, who said an agreement had been signed to develop a mini-Singapore in Abuja, urged Singapore to take advantage of opportunities in the Free Trade Zones, for investment.

    Earlier, the Managing Director of the Nigerian Export Processing Zones Authority, Mr Gbenga Kuye, said the scheme was being reformed.

     

  • Fed Govt cuts costs of registering businesses

    Fed Govt cuts costs of registering businesses

    TO encourage local and foreign investors, the Federal Government has slashed the cost of registering businesses by half.

    The Minister of Industry, Trade and Investment, Mr. Olusegun Aganga, told the Brazilian Deputy Minister of Development, Industry and Foreign Trade Mr. Richardo Schaefer, who led a 19- man delegation to his office yesterday that the new registration regime took effect from October 1.

    Aganga said the Corporate Affairs Commission (CAC) had reduced by 50 per cent equity registrations of N500 million or lower, and by 25 per cent for equity registrations of N500 million and above.

    He said: “The rationale behind the reduction in the cost of business registration is in line with the ministry’s investment climate reform programme aimed at strategically repositioning Nigeria as the preferred destination for both local and foreign investments.

    “Following the directive from the president, the CAC has since October 1, 2013, slashed fees for business registration by 50 per cent.

    “Under the new regulations, capital registration fees for companies (under Part A) have been reduced across board. While capital registrations below N1million will retain a flat fee of N10,000; all registrations between N1 million and N500 million are reduced by 50 per cent; and all registrations above N500 million are reduced by 25 per cent.

    “By this action, Nigerian companies will now save well over N2 billion per annum, which can be used to sustain their businesses, hire more staff, and expand operations. The new regulation has been deliberately set up to ensure the bulk of these savings go to smaller businesses, which need the lower fees more.”

    He said the signing of a Memorandum of Understanding (MoU) with Brazil would make it possible for agencies responsible for skills development , industry and development finance in both countries to work together to deliver better services for their citizens.

    “The aim of the MoU is to strengthen the economic cooperation between the two countries at the bilateral and multilateral levels; to increase and promote bilateral trade of strategic items of mutual interest, and support cooperation between institutions of both countries responsible for the promotion of trade and investment and official financing such as Banco Nacional do Desenvolimento Economico e Social (BNDES) and the Bank of Industry.

    “Also, we are looking at areas where Brazil can support our industrial, skills development and the growth of our Micro, Small and Medium Enterprises (MSMEs) in the country. Therefore, this MoU will bring together our MSMEs promotion agency(SMEDAN) and Servico Brasileiro de Apoio Micro e Pequenas Empresas (SEBRAE) , Servico Nacional de Apredizagem Industrial (SENAI) and the Industrial Training Fund (ITF) to drive the initiative.”

    Schaefer said the MoU would provide a framework for both countries to explore and increase trade and investment opportunities.

    He said: “We have signed a MoU today to deepen the trade and investment cooperation between Nigeria and Brazil. We need to deepen our cooperation in several sectors of the economy. Our governments, through this agreement, will evaluate, step by step, the different projects that are mutually beneficial to both countries. The MoU is an important tool to make things happen faster.

  • Fed Govt calls for flexibility in protecting local industries

    Fed Govt calls for flexibility in protecting local industries

    The Minster of Industry, Trade and Investment, Mr. Olusegun Aganga, has called for flexibility in the adoption and implementation of trade liberalisation policies in order to protect local industries and deepen industrialisation within the continent.

    Aganga noted that while Nigeria was committed to working with other member countries of the Economic Community of West African States (ECOWAS) to achieve regional economic integration, there was need to design and adopt a tariff regime that would support industrialisation and ultimately reduce member countries’ dependence on imports.

    The Minister spoke during the ECOWAS Trade Ministers’ deliberations on the adoption of the Common External Tarriff and the Economic Partnership Agreement, in Abuja, assured that ECOWAS has achieved political integration.

    He said: “Within the ECOWAS, we have achieved political integration but we need to also achieve economic integration through trade. To be able to achieve this, Nigeria recognises the need to work together with other ECOWAS member countries.

    “But while negotiating the Common External Tariff and the Economic Partnership Agreement, we also have to take into cognizance the need to industrialise our country in order to create jobs for our people.”

    According to him, Nigeria has huge potentials, given her huge population and natural resources which the government intends to leverage on to industrialise and grow the economy, especially in the areas where she has comparative and competitive advantage.

    “This is in line with our Industrial Revolution Plan, which is based on areas where we have the potential of becoming number one in Africa, and top 10 in the world.

    “So, we cannot just pull our walls down and allow the importation of everything into our country when we have the ability to produce them. We need to design a CET that will be driven by a vision for industrialising the region in the nearest future through reduction of our dependence on import. The country would canvass for flexibility in the implementation of CET to enable member states to successfully carry out their ongoing industrialization plans,”he said.

    Aganga added that Nigeria is seeking a transition to CET, stressing that the principle is to give some additional flexibility to member states to pursue ongoing industrial plans within a time frame.

    He said a specific period is required and within a cap of four per cent instead of 2.5 per cent as currently proposed, adding that without adequate flexibility in the tariff regimes for these sectors, there is a risk that these industries may go into distress despite government’s support over the years.

    “The specific period will be for a maximum of 10 years depending on the sector instead of five years as currently proposed. Article 3(2) concerning the temporary Import Adjustment Tax should accordingly be amended. Similarly, the Maximum Supplementary Protection Tax should be 70 per cent in addition to CET applied rate and not including the CET rate, to protect nascent industries and attract investment in the value chain and be in harmony with the supplementary protection tax proposed rate.

    “Besides the regulation, Nigeria seeks to redress the wrong classifications on some over 200 tariff lines, including the issue of pharmaceuticals. These lists have been collated and we look forward to discussions with ECOWAS at the appropriate time to enable them to be incorporated into the CET.

  • Nigeria, China to boost investment, says Aganga

    Nigeria, China to boost investment, says Aganga

    A strategic move to boost trade, investment and reappraise level and quality of trade between Nigeria and China began yesterday.

    The Minister of Industry, Trade and Investment, Mr. Olusegun Aganga, made this known in Bejing, China yesterday.

    He told a select group of reporters that Nigeria’s current position as the number one investment destination in Africa had put the country in a good position to attract more local and international investments across all sectors of the economy, especially in the areas where the country had comparative and competitive advantage.

    He said: “If you look at the latest report from the United Nations Conference on Trade and Development (UNTAD), which was released two weeks ago,  Nigeria was ranked Africa’s number one destination for Foreign Direct Investment (FDI) in Africa for the second time in two years.

    “According to the UNCTAD’s report, Nigeria’s FDI inflows stood at $7.03billion, while South Africa recorded $4.572billion; Ghana, $3.295billion;  Egypt, $2.798billion and Angola, 6.898billion. This shows that despite the global decline in FDI, we have remained at the top of the ladder for two consecutive years as the preferred destination for FDI inflows into Africa.”

    Experts say the Nigeria-China Business Forum could not have come at a better time than now as it would provide a veritable platform for the government and organised private sectors of both countries to strengthen their economic partnership, especially in the critical sectors of the economy.

    A high-level business and investment forum, organised to leverage on the strengths of both countries for win-win trade and investments positions, will be declared open by President Goodluck Jonathan on Thursday in Beijing.

    The Business Forum, which is expected to attract top Chinese and Nigerian companies and Investors, is part of President Goodluck Jonathan’s  four-day official visit to China and is being organised by the Ministry of Industry, Trade and Investment.

    Nigeria and China have maintained a long standing trading relationship, which has resulted in significant increases in  the volume of trade between both countries.  In 2012, the  bilateral trade volume between Nigeria and  China stood at N276billion.

    Nigeria’s export to China include liquefied gas, bituminous minerals, sesame seeds rubber, while imports from China include machinery, chemical products and unglazed ceramics, among others.

  • Policy inconsistency and FDI myth

    Policy inconsistency and FDI myth

    IN a speech at the closing of the 8th National Conference on Investment (NCI) recently in Abuja, Nigeria’s minister of trade and investment, Dr. Olusegun Aganga made a projection of $16 billion revenue from foreign direct investments (FDIs) in 2013 alone. According to the minister, the $16 billion revenue, if realised, will be utilized to create more jobs and wealth for the nation’s teeming population. Expectedly, some Nigerians would share Aganga’s optimism. But the stark reality of the business climate in Nigeria points to a different year-round investment intake result altogether. In fact, for most discerning analysts, the minister’s projection of FDIs into the country in 2013 was a mirage. This skepticism stems from the very obvious: an inclement business atmosphere in the country largely beclouded by a thick cloak of government inconsistency in policy formulation and implementation. It is a noticeable fact worldwide that in any nation where there are periodic policy reversals and somersaults the growth of the economy of such a nation is bound to be disrupted.Undoubtedly, competitiveness in the contemporary global business environment is enhanced by the establishment of certain basic rules and frameworks by national governments. Such rules and frameworks define the terms and conditions for smooth operations by various players, thereby creating the clement atmosphere that guarantees efficiency and success of all businesses. In this vein, the private sector is allowed to take the driver’s seat in running the economy.

    A survey conducted by the Intelligence Unit of The Economist on the challenges and opportunities faced by public sector officials and corporate executives around the world, made so many profound revelations with respect to policy implementation. For instance, the report of the survey of 211 public and private sector respondents, which was conducted in July and August, 2009, showed that “policy implementation-and its ongoing application-is important because inconsistency in both the public and private sectors can result in regulatory non-compliance, exposing organisations to legal problems”.

    Instructively, however, inconsistency in policy formulation and implementation in Nigeria is so glaring today that is has been reckoned with as a major obstacle to the growth of the nation’s economy. The report of a World Bank’s assessment of the business environment in Nigeria published late last year, revealed how the Federal Government has periodically altered the rules and frameworks for businesses, thereby impeding effective business operations and resulting in usavoury consequences for many business organisations. The report titled “Nigeria: An Assessment of the Investment Climate in 26 states”, also noted how the government’s periodic policy somersaults create critical constraints that impede the development of the non-oil sector of the nation’s economy.

    Similar revelations as in the World Bank report have been made at various times by experts and other renowned public servants who are obviously deeply disturbed by the trend. A former Chief Economic Adviser to the President, Chief Phillip Asiodu, while speaking at the 52nd annual conference of the Nigerian Economic Society, identified inconsistency in policy implementation by successive governments as the bane of the country’s growth and development. Barely three months ago, the Governor of Kwara state, Abdulfatah Ahmed handed down a similar verdict at the closing of a two-day interactive session between his government and the Organised Private Sector.

    This gloomy state of affairs is further compounded by the rising tide of killings, bombings, kidnappings, as well as widespread corruption that has permeated all strata of government in the country. The ugly wave of bombings and killings by militant groups, especially across northern part of Nigeria has reportedly claimed at least 3,000 lives since 2010 when the insurgents intensified their campaign of violence in various parts of the country. The violence, coupled with the heightening of kidnappings in the South-east, and lately the South-west have serious implications for businesses, and also for foreign direct investments. For instance, the 2011 World Investment Report of the United Nations Conference on Trade and Development (UNCTAD) revealed the lull in business activities cause by insecurity in Kano State alone has cost the Nigerian economy at least $6 billion (about N1.3 trillion).

    The decrepit infrastructure all across Nigeria is no less a drag on successful business operations in any part of the country. In fact, many household names in the business circles in Nigeria such as Michelin and Dunlop, Virgin Atlantic Airways, Woolworths, British Gas – BG Exploration & Production (including massive sale of assets by oil majors and threats of departure due to inconsistencies in the provisions of the Petroleum Industry Bill) had to close shops due to poor infrastructure, and other encumbrances to economic activities nationwide.

    Regrettably, the few resilient companies, especially the multinationals that make significant contributions to the growth of the nation’s economy, are also being put at great risk by the multifarious consequences of the rising tide of corruption in the country, which has recently been acknowledged in the international community. Various companies have in recent times complained openly about series of maltreatment by public office holders, especially officials of Federal Government agencies. In some cases, the companies, particularly the multinationals are crying out over blackmail and other forms of mischief, once they refuse to submit to the unceasing demands of some top government officials for bribes. In fact, there are even cases of harassment of some of the big companies that refuse to coddle the bribe-seeking government functionaries, through the instrumentality of the police and some corrupt courts officials.

    Beyond the negative consequences of corruption on businesses in Nigeria is another prohibitive demon called multiple taxation. This is also a huge impediment to successful businesses in Nigeria as all three tiers of government across the country compete to squeeze the life out of the few companies that have braved the odds to operate under the harsh investment climate.

    What all these point to is one fact: that Aganga’s prediction of a whooping $16 billion (about N4.2 trillion) of FDIs coming into Nigeria in this financial year is clearly a myth. However, for the Nigerian government to make this dream come to fruition, and possibly surpass that target in the years ahead, it must retrace it steps by showing much more commitment to creating a conducive business climate in the country. This can easily be achieved through a number of factors: avoiding zigzags in policy formulation and implementation; taking decisive steps to curb corruption, investing massively in infrastructural development, and checking multiple taxation of the business entities that have shown resilience to the odds in our business environment.

    It is perhaps significant to draw the government’s attention to the position strongly canvassed nearly three months ago by Director-General of the Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA), Dr. John Osemede. The NACCIMA DG said at a forum in Lagos that: “The Federal Government should work to make the private sector to run the economy, while it focuses on making and enforcing economic policies and collection of taxes. The private sector seems to operate consistently but the regular government changes makes policy inconsistency and implementation challenges prevalent”. This surely is the way to go, if the Federal Government is committed to ensuring that its Transformation Agenda delivers value to Nigerians.

    •Shekarau, former Vice President (North) of the Nigerian Guild of Editors, is a Communications Specialist and Public Affairs Analyst.