Acting managing director of the Nigeria Export Processing Zones Authority (NEPZA), Terhemba Nongo, an engineer, tells Adetutu Folasade-Koyi and Walter Ukaegbu how President Muhammadu Buhari has expended almost N100 billion to rejuvenate the agency, as well as how Nigeria is sitting on an export goldmine, if the right infrastructure is provided for free zones.
This is the third time you would be acting NEPZA MD. Is it by accident or design?
It is by design. As a Christian, I believe that was how God designed it.
President Muhammadu Buhari has pumped money into NEPZA to, in turn, generate money and contributeto the country’s GDP.
When the President got into power in 2015, after having contested for about three times, he really prepared himself for leadership. He knew the sector that could turn the economy of this country around. He knew what could create jobs for the teeming youths and one of the first trips he made when he won as President was to the People’s Republic of China. He met the Chinese President, Xi Jinping, who told him what transformed the Chinese economy. It was the free zone scheme, free trade zones, nations and what made China what it is today.
The free trade scheme will allow nations from all parts of the world to come and invest in your country. They will bring in their investments, set up factories, manufacturing, attracting the top brass in the manufacturing world, Gucci, Fendi, Apple, etc. Most of these products are made in China and they are made from free trade zones. Initially, it may be for local consumption but, after some time, they export to other parts of the world.
Will you replicate that in Nigeria?
Of course. That is what we are working on.
Is that your agenda for NEPZA?
That is my mandate. We want to create a conducive environment for export manufacturing and we also want to attract the top brass to Nigeria; world-class investors. We want them to know that Nigeria is safe and conducive for business, manufacture here and then export to other parts of the world. The Federal Government has done extremely well. President Buhari has done extremely well; between 1992, when NEPZA was created, and 2015, when President Buhari got to power, NEPZA had never got its budgetary allocation up to N20 billion but, in the 2017 fiscal year, we were allocated N50 billion, although not all was released to us. That proved to us that the President was set to achieve something.
In 2018, we had the same thing. In 2019, we had about N40 billion. In this year, we are also working on N40 billion budget. So, the President is really keen on funding this sector. It is left to us (and), if we don’t provide infrastructure, if we don’t provide the world-class investment, we should be held responsible. It is public funds and we must account for it. We are accountable.
How have the free trade zones been faring?
We have two federal government-owned zones, the public ones: Calabar and Kano. Calabar has some infrastructure but we don’t have steady power supply. Without electric power supply, there is no way you can do manufacturing. We have made efforts to bring in the private sector to provide us with power and recoup their investment through public-private partnership but it did not really work. So, we are thinking of having our independent power supply in Calabar and Kano. Government is providing the funds for us.
We are into some manufacturing, we are into some export, jobs creation, and we are also earning a lot of money for government. In 2018, the Nigeria Customs Service got almost N28 billion from our activities, as duties. We generate about N3 billion annually as our IGR, which we hope that, by the time Calabar and Kano zones start functioning effectively, and the private trade zones, some of which are being provided infrastructure, become operational, we will make a lot of money for the country and pay back government’s investments in the free trade zones. Basically, the free zones are to create jobs and make money for the country.
Have you liaised with the Manufacturers’ Association of Nigeria on this?
No, because government is providing funds for us. To generate one megawatt of power, it costs about $1 million.
Do you have that kind of cash in NEPZA?
I would say we have but not yet. We are trying to tie it into this year’s budget. We are thinking that, for a start, let’s provide 15 megawatts worth of power for Calabar and Kano free trade zones each. That is about N4 billion to N5 billion. We want to make it very competitive so we can get value for money.
Do you think Calabar and Kano should be the country’s premier free trade zones?
Yes!
What is NEPZA doing to achieve that?
As I said earlier, we are upgrading the infrastructuret here: power, road network, water supply. The roads are about 30 years old and we have to resurface almost all the roads.
The free trade zones are also meant to create jobs. How many have NEPZA generated?
Through our activities, for now, we have created about 8,000 direct jobs for Nigerians. That is minimal, because of the challenges we have, power has been a huge challenge. When optimal, each of these zones should employ, at least, 50,000 Nigerians directly.
How much has NEPZA contributed to the economy and, by extension, the GDP?
We are still working on that. We are working with the National Bureau of Statistics and the Central Bank of Nigeria. We want to be sure, exact, about our input to the economy and the GDP. But the FDI we have attracted, till date, is $16 billion and N276 billion (local investment) in our free zones, from1993 till date.
Which zones are active and NEPZA’s success story?
That would be Lekki/Guandong Free Trade Zone in Lagos State, LADOL, they are many. We are ready to showcase our free trade zones to the world, to attract world-class investment. Lekki/Guandong already manufactures trucks, pipes (for the oil industry as well as for water consumption), insecticides and many more. I just met (on Tuesday, September 24) with the management of Lekki/Guandong trade zone. They want to invest more, establish another free trade zone along the Lekki corridor.
What happened to the free trade zone in Ogun State?
Establishment of the zone was between Ogun and Ondo states. The Federal Government gave approval but the two states could not readily provide funding and so the zone really did not take off. It is a beautiful location, just by the Atlantic Ocean. Dangote is eager to take over and we are trying an arrangement between Dangote and the Ogun State government to have a PPP, so that the zone can take off. The deal is still on. Nigeria is in a better location when it comes to free zones.
How much do you expect to generate there?
It is more of petro-chemicals.
Are there free trade zomes in the South-East?
Yes, there are. President Buhari approved seven new free trade zones recently and one is in the South East, which is in Ebonyi State, but we are yet to get land. There is also one in Abia, a private one, in partnership with the state government. So, South-East has about three. We gave all state governments licences for free zones but some have financial crises, which we all know. We are talking to them. We will try and get it done through PPP. Some of them don’t want to do that and those who don’t want to, we will revoke their licences. We gave one to Imo State, it was to be Imo/Guangdong but there were some issues and that was why Guangdong moved to Ogun State, in the form of PPP, and they are doing extremely well. About two months ago, Imo State Government came that they want to revive the free zone, and they are quite serious. We need the states and their support.
How much is Nigeria expecting from the free trade zones at optimal capacity?
We project to have about 30 FTZs fully operational and we get $1 billion from each, from exports, and also to generate our own revenue we are looking at $30 billion yearly, while NEPZA would get just 1 per cent from that. That is what NEPZA would earn, without computing what other government agencies, including Customs, FIRS and others would also earn. NEPZA should get about $300 million yearly.
Do you think that is possible?
Well, if I’m still here, at least, by December, I’m very positive it can be achieved.