The bid by the Federal Government to set up Special Economic Zones featuring projects such as the Eyimba Economic City in Abia, the Lekki-Epe Model Industrial Park and the Funtua Cotton Cluster has run into a controversy that could torpedo its actualisation. The decision to set up a limited liability company tagged the Nigeria Special Economic Zones Investment Company (NSEZCO) with the Federal Government holding 25 percent of its shareholding while the remaining 75 percent is held by institutional investors such African Development Bank (ADB), the African Finance Corporation (AFC), Bank of Industry (BOI), AFREXIMBANK and the Nigeria Sovereign Investment Authority (NSIA), has stirred up a storm following the allegation that the entire scheme is a plot to defraud the Federal Government and enrich some individuals.
This unfortunate allegation arose out of the fact that three directors of some government institutions involved in the execution of the scheme were named as interim directors of the Nigeria Special Economic Zones Investment Company (NSEZCO), to oversee the interest of the government in the company at its formation stage, pending the constitution of its board. The listing of the names of these senior public officers as directors in the investment company is based on the Public Private Partnership (PPP) model adopted by the government for the scheme, as has been the practice in many developed and developing countries where the model is used to set up special purpose vehicles to achieve government objectives.
The objective of the Federal government, in this instance, is to rapidly develop some of the nation’s widely recognised special economic production centres along their areas of competence and boost the production of local goods for export under the Made-in-Nigeria goods for Export (MINE) Project. For instance, Abia is a hub for industrial production in the country. Funtua is well known for cotton production while many other parts of the country such as Ebonyi, Sokoto and Benue States are proficient in one economic activity or the other that could be fully developed to increase production, create jobs and generally boost the economy. It is a well known fact that our industrial sector is underperforming and any support that the government can give to it in terms of infrastructure, services and the establishment of Free Trade Zones will go a long way in helping it to attain its full potential.
The NSEZCO mandate is to deliver the Made-In-Nigeria goods for Export (MINE) Project and raise five hundred million dollars in equity from the Federal Government and the participating institutional investors by 2023. The government officials named as directors in the company are said to be government representatives charged with driving the project and, hence, non-beneficial directors with no financial interests or personal shares in the investment company.
It is, therefore, important that the Special Economic Zones initiative is not undermined or destroyed. It is important to ensure the smooth take-off and operation of the company to ensure that the much needed fillip is given to industrial production. If the nation’s economy is to expand to engage our large number of unemployed youths and generate the funds needed to maintain public infrastructure and social services, the government will need to do all that it can to boost productivity in all sectors of the economy. Nigeria should no longer be a dumping ground for all manner of low quality imports while our own factories are moribund and our youths, jobless and idle.
The controversy over NSEZCO came to light when the Minister of Industry, Trade and Investment, Mr. Okechukwu Enelamah, presented the ministry’s 2019 Budget to the appropriate Senate Committee and a controversy arose over the naming of three public officers as directors of NSEZCO and the allocation of about N42 billion to the company even when the Federal Government holds only 25 per cent of its shares.
The entire controversy has been linked to the tussle by the management of the Nigeria Economic Zones Authority (NEPZA) to be in charge of the N42 billion earmarked for the development of the Special Economic Zones by NSEZCO. The regulatory agency had, indeed, taken the government up on the matter of NSEZCO and the Attorney General of the Federation had advised that NEPZA, as a regulatory authority, could not also be the sole implementation agency for the Special Economic Zones Projects.
The NSEZCO is a presidential initiative for the industrial development of the country under the Economic Recovery and Growth Plan 2017-2020 (ERPG) launched by President Muhammadu Buhari in April 2017. It comprises sectoral plans for agriculture, food security, energy and transport infrastructure, industrialisation and social investment. Essentially, the ERPG has the objective of accelerating the execution of the Nigeria Industrial Revolution Plan (NIRP) through the establishment of Special Economic Zones, featuring Trade Zones, Industrial Parks and Export Processing Zones that would be provided with the necessary infrastructure and services required to promote their performance.
With the explanation that NSEZCO is a special purpose company set up by the president to ensure the country’s rapid industrial development, it behooves the public to support the initiative in its effort to change Nigeria’s poor industrial production story for the better. Tussles within government agencies to control the funds for the execution of projects under this scheme should not be allowed to slow down the take-off of the scheme and the realization of its objectives. This is one scheme that requires the hands off all those who want to change the Nigerian narrative on deck.In this wise, the Senate should not allow itself to be deceived into derailing the investment company by those who are only interested in laying hands on its funds. The senators and, indeed, all Nigerians, should not allow a situation in which international financial organisations and other institutional investors such as the African Development Bank (ADB), the African Finance Corporation (AFC) and AFREXIMBANK will lose confidence in the initiative, for which they are expected to come up with 75 per cent of the required funds.
This is also one issue on which Nigerians must not allow undue politicization so that the funds required for industrial development can come in. A number of foreign companies have already indicated their interest to invest massively in Nigeria under this initiative. Named among these companies is China’s largest cotton, textile and garment company which intends to commit two billion dollars to Nigeria’s cotton and garment initiatives in Kano, Lagos and Abia under the Special Economic (Free Trading) zones. Also, one of the world’s largest contracting firms based in China has reportedly signed a letter of intent to invest in the planned Lekki Special (Free Trading) Economic zone, especially in the fields of power, energy, access roads, bridges and water.
We must all be careful not to jeopardize these exciting initiatives. The overall objective of rapid industrialisation of the country should be uppermost in our minds. Let NSEZCO and Project MINE live.