Aganga, Minister for Industry, Trade and Investment
Since his appointment as the Minister for Industry, Trade and Investments, Dr. Olusegun Aganga has not shied away from government’s commitment to revolutionise Nigeria’s real sector in line with its vision 20:2020. The sector, under his leadership, has witnessed some landmark policy initiatives geared towards making the country to regain its proper position in the comity of nations.
Despite its prime position, Nigeria’s real sector has remained the lowest contributor to the Gross Domestic Product (GDP) with approximately four per cent input. But following the ongoing revolution in the sector, that contribution to GDP has moved to about six per cent and it is hoped that this will rise to 10 per cent by 2017. Many still believe that Aganga’s tenure has also breathed new life into the Micro, Small and Medium Enterprises (MSMEs,)
Excerpts:
Success story
I came into the ministry and discovered that there are a lot to be done. The first thing I did was to change the name of the ministry from Commerce and Industry to Ministry of Industry, Trade and Investment. Well, there was nothing wrong with the former name but I felt there was need to expand the operation of the ministry beyond commerce and industry. We are now talking of investment proper which was not there before. Everyday you can see a lot of foreigners coming into the country for one investment or other in various sectors of the economy. The huge investment we are witnessing in the telecommunication, manufacturing, power and many others would not have come without the importance we placed on investment.
Several times, I had to travel abroad to have discussions with some investors and I always tell them that Nigeria is the best place to invest. Some that took advantage of investing in Nigeria came back to me to say “thank you.” This is the only country where you invest and you are sure of getting returns on your investment. The market is huge. With the population of over 160 million people, there is no product produced here that does not sell. Buyers are on ground to purchase such products. So, that was what I did when I first came into office to attract foreign investors to the economy.
Another important thing I did was to overhaul all the agencies within my ministry so that they can work in the same direction and target what they are set to achieve. For instance, the Bank of Industry (BoI), Standards Organisation of Nigeria (SON), Industrial Development Training Fund (ITF), SMEDAN, were all restructured and repositioned. These agencies worked on common goals to achieve set targets in my administration.
We are still working very hard to see that the manufacturing sector starts contributing hugely to the GDP of the economy. As you know, the current GDP is low when compared to other parts of the world. There is no reason the manufacturing sector should not be contributing 50 per cent of the total GDP to the economy. It is this gap that my ministry wants to bridge to make the manufacturing sector contribute more to the country’s economy.
Training another strategic plan carried out by the ministry was the introduction of the training and retraining of staff of the ministry. When I came in, I discovered that the only way to move the ministry forward was to train and retrain staf to equip them to work in the same direction with me. The success of the ministry will not be complete without the mention of the staff of this ministry because they contributed a lot to its growth. Let me also add that journalists have made my work much easier with their reports. The best people I must say, I have worked with is the media. That is to say, the media has contributed to my success story in these past four years.
Challenges
I see every challenge as an opportunity to do something differently. The only challenge I had was how to make the staff to key into the set goals at the initial time when I came into office but as time went on it was not difficult because my set goals were made very clear to everyone in the ministry. Immediately they understood where I was going, it was easy for them to key in. As I’m working, the members of staff are also working.
I must tell you, no single agency within my ministry that has not been overhauld. I feel this is the way to move the ministry forward to achieve President Goodluck Jonathan’s Transformation Agenda. I made sure that the Organised Private Sector (OPS) was carried along in every programme initialed by Federal Ministry, Industry, Trade and Investment (FMITI). This has helped in many ways. Today, because of this, there are a lot of investments in all sectors of the economy.
Backward integration policy
This policy has always been there before my coming as a minister. The policy is so important in our quest to be among the biggest 20 economies in the world by 2020. We had to commence the implementation of the Backward Integration Policy (BIP) in the sugar industry, cement industry, among others. We looked at our competitive advantage, which is sugar and created Sugar Master Plan. The target was to generate about 170,000 new jobs across the country, ensure self-sufficiency in sugar production and conserve about $350 million yearly in foreign exchange. We also targeted the industry to produce about 1,797,000 tonnes of the commodities yearly, while about 161.2 million litres of ethanol to be produced will generate 400mw of electricity, among others.
Another important BIP was in the cement industry. The story in this industry has changed as Nigeria does not only produce enough to meet local demand but also can now export cement to other parts of the world. This is the first of its kind for this country to export cement to other countries of the world. Our consumption of cement does not depend on cement importation again. All these were achieved because of our sincerity to transform this country into an industrialised nation.
Apart from our bold ambition to revamp local production of the auto industry, we have moved from limestone dependence for cement production, just as UNCTAD recognised Nigeria as the fourth globally acclaimed country with the highest return on investment (ROI) profile. Our cement export will hit 39 million metric tonnes attracting about $88 billion with 1.6 million jobs created at various levels.
Nigeria is now self-sufficient in cement production with Dangote Cement. The sector has grown by over 17 per cent to contribute more than 17 per cent (N79.9 billion).
Smuggling
This is a serious problem as a nation but we have positioned the Standards Organisation of Nigeria (SON) under FMITI to tackle this. It has been doing a lot to curtail this menace in the system. There has been a lot of reduction in influx of imported goods, which has encouraged local production of goods. We have introduced various policies to encourage buying of made-in- Nigeria goods. Many Nigerians are now encouraged to buy locally produced goods instead of imported ones.
Government introduced the buy made-in-Nigeria goods policy to encourage local manufacturers and discourage smuggling into our country. The rate of smuggling has been cut down to 40 per cent, unlike what it was before. SON has been restructured to handle this and success has been made in this direction.
Food and beverages
In our desire to make Nigeria the industrial hub for Africa, we have encouraged the food and beverage sector to grow. It has grown 60 percent between 2007 and 2011. In 2012, the industry comprised over 30 per cent of the Nigerian manufacturing sector with a number of large foreign-owned facilities.
When you look at Nestlé, which invested over N2.2 billion in local operations with the GI of tripling Nigerian sales in the next 10 years; while P&G broke new grounds on a multi-billion naira factory, its second in Nigeria, in mid-2012 (the multi-billion naira plant opened in Agbara, Ogun State); South African firm, Tiger Brands, recently purchased a controlling stake in Dangote Flour Mills, a producer of flour and pasta and one of Nigeria’s fastest growing conglomerates.
The food and beverage sector is among the most vulnerable to the country’s poor distribution networks exposed to fragmented logistics and a high risk of spoilage, but it none the less benefits from limited fluctuation in demand and a market of over 160 million people. As income continues to inch up in line with headline growth, demand and purchasing power are set to grow. All this was achieved because of our industrial plan to take the manufacturing sector to the next level in this country.
Automotive industry development plan
For us in the Federal Ministry of Industry, Trade and Investment (FMITL), the automotive industry development plan is an important policy. The introduction of auto policy by the ministry was to discourage the importation of cars and encourage local manufacturing of vehicles, which would also gradually phase out used cars, popularly known as Tokunbo.
Nigeria and Bangladesh are the only countries in the top 10 by population without a developed automotive industry. With our current population and economy, our potential vehicle market is about a million vehicles a year. This is more than sufficient to support an automotive industry. We also have the following advantages, which include being the 7th most populous economy in the world, a growing middle class (about 38 million) and a potential vehicle market of one million vehicles annually; annual spending on vehicle import is over N550 billion and growing, making it the number two user of foreign exchange in 2012 after boiler, machinery and appliances; Nigeria has not bound its tariff on vehicles at WTO, except for ECOWAS and we expect the auto industry to be within the common tariff exclusion list; regional potential into West Africa and Central African market and availability of a large and trainable workforce.
The auto sector is a key component of the Nigerian Industrial Revolution Plan (NIRP). The NIRP is a five-year programme developed by my ministry to diversify Nigeria’s economy and revenues through industry and increase manufacturing contribution to GDP from the current 4 per cent to 6 per cent by 2015, and finally about 10 per cent by 2017. Within the NIRP, the automotive sector has been identified as a strategic industry group due to its large domestic market, labour intensive characteristics, strategic industrial linkages, existing installed base and export potential into ECOWAS.
The economic benefits of this sector cannot be over emphasised. It is able to generate large employment opportunities for Nigerians. Major auto manufacturers typically produce 30 per cent of over 2,000 parts that make up a car. The remaining is bought from SMEs. There are therefore huge opportunities for SMEs. The industry has the potential to make Nigeria become the auto-manufacturing centre for the ECOWAS sub-region. The only way Nigeria, as a country, could become competitive with other global automobile giants was to review its automotive policy and give priority to local companies that desire to develop the sector.
Auto companies operating in the country should start looking towards setting up assembly plants for the production of made-in- Nigeria vehicles to enable government justify its desired objective to develop the transport sector.
That is why the Federal Government, through my ministry, has been investing heavily in the transport sector and recently, we came out with a blueprint on how to develop the Nigerian automobile industry. And I’m happy to tell you that most of the manufacturers are supporting the policy. I wish to use this medium to call on others that are yet to buy into the idea to support the policy and start preparing to open assembly plants in Nigeria. We have done it in the telecommunication sector, we are doing it in the power sector and the automotive sector is on the line now.
The gains of having functional and standard assembly plants in the country cannot be quantified because of the enormous potentials awaiting Nigeria at the international auto stage as one of the producers of vehicles.
Now, the onus lies in the hands of auto-dealers to convince their foreign partners to key into the government’s aspiration for the industry because the new auto policy provides the platform for Nigeria to become a truly giant of Africa and an industrialised nation.
Apart from the abundant employment opportunities in the automotive industry, it is the government’s objective to see in the near future that local vehicles dominate the country’s highways, thus elevating the country’s status at the international stage as one of the auto making nations.
We have worked very hard to make sure success is achieved in this important sector of the economy, for we know that the new automobile policy was the only way out for Nigeria to be recognised at the international stage as an automobile manufacturing nation if well implemented.
Positioning of NEDEP in Nigeria
This is our new baby – the National Enterprise Development Programme (NEDEP) – in order to reposition the Micro, Small and Medium Enterprises (MSMEs) as a major driver of job creation and wealth generation.
If we must develop as a nation and turn our quantity advantage into productive advantage, one of the most important sectors we have to focus on is the MSMEs sector. When you look at other developed economies on the world, you discover that they rely heavily on MSMEs for job creation, wealth generation and inclusive economic growth.
If you also check the history of this sector in Nigeria, it may interest you to know that this important sector has not received proper attention by past governments. This is the reason my ministry has deemed it right to introduce NEDEP. As I talk to you now, the sector currently contributes about 75 per cent of Nigeria’s GDP and employs more than 45 per cent of our people. The survey we carried out in 2010 shows that there are about 17.28 million MSMEs in the country, employing more than 32 million people. However, if you look at the mix of the 17.28 million MSMEs, about 96 per cent of them are actually micros. If you go deeper, you will discover that only four to six per cent of their funding is from organised lenders. This simply means that most MSMEs, lack access to affordable finance. Also, most of them don’t have the skills required to run businesses. So, it is a big opportunity that they have been missing for many years and that is what NEDEP wants to address.
This programme is spearheaded by my ministry and the three parastatals under my ministry – the Bank of Industry (BoI), Small and Medium Enterprises Development Agency of Nigeria (SMEDAN) and the Industrial Training Fund (ITF). I must confess that this is the first time these three parastatals under my ministry are coming together to develop and implement a programme that will revolutionise the growth of the MSMEs sector in the country. It is expected that with two years of implementing the programme it will generate 3.5 million jobs and an estimated five million direct and indirect jobs in the country.
SMEDAN will provide business training and support, ITF will provide the skills required for specific or specialised businesses while BoI will provide the funding.
As we talk now, we have the support of 17 state governments that have been working with BoI, ITF and SMEDAN in the area of MSMEs development, skills training and acquisition as well as business services development. With NEDEP, we will have the National Steering Committee, State Government Steering Committee and Local Government Steering Committee. In all these, we have involved the state and local government, the private sector, development banks, agencies and private individuals so that NEDEP will not be only government show alone. I strongly believe that after my exit as minister for Industry, Trade and Investment, NEDEP will continue to exist because of the structure on ground. With the involvement of the three tiers of government and the private sector, it will not go down like other government programmes.
We are looking at one local government, one product, based on the areas where we have competitive and comparative advantage. This was what was done in Asia and some African countries and it proved successful. If these models could work in these countries, I believe they can work in Nigeria. We want to see that every locality in Nigeria has skills manpower. We have found out that the major challenge facing us as a nation is that there is skills’ gap. We will form the skills manpower into cooperatives and Self Regulating Organisation (SRO), so that each of them will, in their trade, have a yellow book. If, for instance, you are looking for a qualified electrician, you can pick up the yellow book to find out all the electricians that are qualified and registered within your location, so that the issue of quack electricians will be ruled out in the system. I believe this programme will work in Nigeria and provide the needed answers to improve the economic development of this nation.
Just today, before coming to Commerce and Industry Correspondence Association of Nigeria (CICAN) Gala Nite/Award, President Jonathan inaugurated SME Council comprising the federal, state, local government and the private sector. This is what other countries of the world have done to have a structured approach to the development of MSME.
My target when I assumed office
Well, like I said earlier, my major target when I came into office was to make Nigeria an industrial hub in Africa. And gradually, we are achieving this. Of course, it is to get the Nigerian story out as much as possible, which is what we are doing here and we have done it successfully; investors are responding. As you know, Nigeria was voted number one destination for investment in Africa for the second year running; our department of investments is huge, much more than we have had as a nation.
Experience has shown that no country has been able to move from being a poor to a rich nation by relying on exporting raw materials only, without a strong industrial services sector. So the idea is to help diversify our economy and rein in resources by having a strong, comprehensive, ambitious, industrial plan, which was why we commenced that. In 2012, we started the implementation of this plan, which was launched by President Jonathan. Ever since then, there have been a lot of activities going on in this ministry with regards to investment and industrial development. We have got Nigeria on the path of industrialisation and I am very happy with this. We have reduced the level of unemployment in the country today.
Present administration’s industrial policy
I give kudos to President Jonathan for his Transformation Agenda. For the first time in the history of Nigeria, this is the only administration that has paid much needed attention to the development of our industrial sector, especially in the area of manufacturing.
Just look at Nigeria’s privatisation, it is one of the most successful anywhere in the world. In the rail sector, goods and services are now being moved from the North to the South as expansion and revamping of the sector are in high gear.
Under industrialisation, we are being guided by seven competitive factors including affordability, provision of finance for local investors, skills acquisition, among others. We have a lot of jobs to keep people busy but the problem is in skill acquisition. Skill development is a major investment factor. In auto production, for example, we want to produce and export spare parts for the African market. It is a comprehensive strategy. We will get banks to back up the plan; we need to raise bonds in the capital market to develop the business sector so that the SMEs, for example, can access capital for development. Short-term bank deposits and other short-term funds must reverse in favour of long-term funds. The Micro, Small and Medium Enterprises (MSMEs) can now smile as government has paid much needed attention to it. So from my judgment, this administration has done a lot to industrialise the country.
Since his appointment as the Minister for Industry, Trade and Investments, Dr. Olusegun Aganga has not shied away from government’s commitment to revolutionise Nigeria’s real sector in line with its vision 20:2020. The sector, under his leadership, has witnessed some landmark policy initiatives geared towards making the country to regain its proper position in the comity of nations.
Despite its prime position, Nigeria’s real sector has remained the lowest contributor to the Gross Domestic Product (GDP) with approximately four per cent input. But following the ongoing revolution in the sector, that contribution to GDP has moved to about six per cent and it is hoped that this will rise to 10 per cent by 2017. Many still believe that Aganga’s tenure has also breathed new life into the Micro, Small and Medium Enterprises (MSMEs,)
Excerpts:
Success story
I came into the ministry and discovered that there are a lot to be done. The first thing I did was to change the name of the ministry from Commerce and Industry to Ministry of Industry, Trade and Investment. Well, there was nothing wrong with the former name but I felt there was need to expand the operation of the ministry beyond commerce and industry. We are now talking of investment proper which was not there before. Everyday you can see a lot of foreigners coming into the country for one investment or other in various sectors of the economy. The huge investment we are witnessing in the telecommunication, manufacturing, power and many others would not have come without the importance we placed on investment.
Several times, I had to travel abroad to have discussions with some investors and I always tell them that Nigeria is the best place to invest. Some that took advantage of investing in Nigeria came back to me to say “thank you.” This is the only country where you invest and you are sure of getting returns on your investment. The market is huge. With the population of over 160 million people, there is no product produced here that does not sell. Buyers are on ground to purchase such products. So, that was what I did when I first came into office to attract foreign investors to the economy.
Another important thing I did was to overhaul all the agencies within my ministry so that they can work in the same direction and target what they are set to achieve. For instance, the Bank of Industry (BoI), Standards Organisation of Nigeria (SON), Industrial Development Training Fund (ITF), SMEDAN, were all restructured and repositioned. These agencies worked on common goals to achieve set targets in my administration.
We are still working very hard to see that the manufacturing sector starts contributing hugely to the GDP of the economy. As you know, the current GDP is low when compared to other parts of the world. There is no reason the manufacturing sector should not be contributing 50 per cent of the total GDP to the economy. It is this gap that my ministry wants to bridge to make the manufacturing sector contribute more to the country’s economy.
Training another strategic plan carried out by the ministry was the introduction of the training and retraining of staff of the ministry. When I came in, I discovered that the only way to move the ministry forward was to train and retrain staf to equip them to work in the same direction with me. The success of the ministry will not be complete without the mention of the staff of this ministry because they contributed a lot to its growth. Let me also add that journalists have made my work much easier with their reports. The best people I must say, I have worked with is the media. That is to say, the media has contributed to my success story in these past four years.
Challenges
I see every challenge as an opportunity to do something differently. The only challenge I had was how to make the staff to key into the set goals at the initial time when I came into office but as time went on it was not difficult because my set goals were made very clear to everyone in the ministry. Immediately they understood where I was going, it was easy for them to key in. As I’m working, the members of staff are also working.
I must tell you, no single agency within my ministry that has not been overhauld. I feel this is the way to move the ministry forward to achieve President Goodluck Jonathan’s Transformation Agenda. I made sure that the Organised Private Sector (OPS) was carried along in every programme initialed by Federal Ministry, Industry, Trade and Investment (FMITI). This has helped in many ways. Today, because of this, there are a lot of investments in all sectors of the economy.
Backward integration policy
This policy has always been there before my coming as a minister. The policy is so important in our quest to be among the biggest 20 economies in the world by 2020. We had to commence the implementation of the Backward Integration Policy (BIP) in the sugar industry, cement industry, among others. We looked at our competitive advantage, which is sugar and created Sugar Master Plan. The target was to generate about 170,000 new jobs across the country, ensure self-sufficiency in sugar production and conserve about $350 million yearly in foreign exchange. We also targeted the industry to produce about 1,797,000 tonnes of the commodities yearly, while about 161.2 million litres of ethanol to be produced will generate 400mw of electricity, among others.
Another important BIP was in the cement industry. The story in this industry has changed as Nigeria does not only produce enough to meet local demand but also can now export cement to other parts of the world. This is the first of its kind for this country to export cement to other countries of the world. Our consumption of cement does not depend on cement importation again. All these were achieved because of our sincerity to transform this country into an industrialised nation.
Apart from our bold ambition to revamp local production of the auto industry, we have moved from limestone dependence for cement production, just as UNCTAD recognised Nigeria as the fourth globally acclaimed country with the highest return on investment (ROI) profile. Our cement export will hit 39 million metric tonnes attracting about $88 billion with 1.6 million jobs created at various levels.
Nigeria is now self-sufficient in cement production with Dangote Cement. The sector has grown by over 17 per cent to contribute more than 17 per cent (N79.9 billion).
Smuggling
This is a serious problem as a nation but we have positioned the Standards Organisation of Nigeria (SON) under FMITI to tackle this. It has been doing a lot to curtail this menace in the system. There has been a lot of reduction in influx of imported goods, which has encouraged local production of goods. We have introduced various policies to encourage buying of made-in- Nigeria goods. Many Nigerians are now encouraged to buy locally produced goods instead of imported ones.
Government introduced the buy made-in-Nigeria goods policy to encourage local manufacturers and discourage smuggling into our country. The rate of smuggling has been cut down to 40 per cent, unlike what it was before. SON has been restructured to handle this and success has been made in this direction.
Food and beverages
In our desire to make Nigeria the industrial hub for Africa, we have encouraged the food and beverage sector to grow. It has grown 60 percent between 2007 and 2011. In 2012, the industry comprised over 30 per cent of the Nigerian manufacturing sector with a number of large foreign-owned facilities.
When you look at Nestlé, which invested over N2.2 billion in local operations with the GI of tripling Nigerian sales in the next 10 years; while P&G broke new grounds on a multi-billion naira factory, its second in Nigeria, in mid-2012 (the multi-billion naira plant opened in Agbara, Ogun State); South African firm, Tiger Brands, recently purchased a controlling stake in Dangote Flour Mills, a producer of flour and pasta and one of Nigeria’s fastest growing conglomerates.
The food and beverage sector is among the most vulnerable to the country’s poor distribution networks exposed to fragmented logistics and a high risk of spoilage, but it none the less benefits from limited fluctuation in demand and a market of over 160 million people. As income continues to inch up in line with headline growth, demand and purchasing power are set to grow. All this was achieved because of our industrial plan to take the manufacturing sector to the next level in this country.
Automotive industry development plan
For us in the Federal Ministry of Industry, Trade and Investment (FMITL), the automotive industry development plan is an important policy. The introduction of auto policy by the ministry was to discourage the importation of cars and encourage local manufacturing of vehicles, which would also gradually phase out used cars, popularly known as Tokunbo.
Nigeria and Bangladesh are the only countries in the top 10 by population without a developed automotive industry. With our current population and economy, our potential vehicle market is about a million vehicles a year. This is more than sufficient to support an automotive industry. We also have the following advantages, which include being the 7th most populous economy in the world, a growing middle class (about 38 million) and a potential vehicle market of one million vehicles annually; annual spending on vehicle import is over N550 billion and growing, making it the number two user of foreign exchange in 2012 after boiler, machinery and appliances; Nigeria has not bound its tariff on vehicles at WTO, except for ECOWAS and we expect the auto industry to be within the common tariff exclusion list; regional potential into West Africa and Central African market and availability of a large and trainable workforce.
The auto sector is a key component of the Nigerian Industrial Revolution Plan (NIRP). The NIRP is a five-year programme developed by my ministry to diversify Nigeria’s economy and revenues through industry and increase manufacturing contribution to GDP from the current 4 per cent to 6 per cent by 2015, and finally about 10 per cent by 2017. Within the NIRP, the automotive sector has been identified as a strategic industry group due to its large domestic market, labour intensive characteristics, strategic industrial linkages, existing installed base and export potential into ECOWAS.
The economic benefits of this sector cannot be over emphasised. It is able to generate large employment opportunities for Nigerians. Major auto manufacturers typically produce 30 per cent of over 2,000 parts that make up a car. The remaining is bought from SMEs. There are therefore huge opportunities for SMEs. The industry has the potential to make Nigeria become the auto-manufacturing centre for the ECOWAS sub-region. The only way Nigeria, as a country, could become competitive with other global automobile giants was to review its automotive policy and give priority to local companies that desire to develop the sector.
Auto companies operating in the country should start looking towards setting up assembly plants for the production of made-in- Nigeria vehicles to enable government justify its desired objective to develop the transport sector.
That is why the Federal Government, through my ministry, has been investing heavily in the transport sector and recently, we came out with a blueprint on how to develop the Nigerian automobile industry. And I’m happy to tell you that most of the manufacturers are supporting the policy. I wish to use this medium to call on others that are yet to buy into the idea to support the policy and start preparing to open assembly plants in Nigeria. We have done it in the telecommunication sector, we are doing it in the power sector and the automotive sector is on the line now.
The gains of having functional and standard assembly plants in the country cannot be quantified because of the enormous potentials awaiting Nigeria at the international auto stage as one of the producers of vehicles.
Now, the onus lies in the hands of auto-dealers to convince their foreign partners to key into the government’s aspiration for the industry because the new auto policy provides the platform for Nigeria to become a truly giant of Africa and an industrialised nation.
Apart from the abundant employment opportunities in the automotive industry, it is the government’s objective to see in the near future that local vehicles dominate the country’s highways, thus elevating the country’s status at the international stage as one of the auto making nations.
We have worked very hard to make sure success is achieved in this important sector of the economy, for we know that the new automobile policy was the only way out for Nigeria to be recognised at the international stage as an automobile manufacturing nation if well implemented.
Positioning of NEDEP in Nigeria
This is our new baby – the National Enterprise Development Programme (NEDEP) – in order to reposition the Micro, Small and Medium Enterprises (MSMEs) as a major driver of job creation and wealth generation.
If we must develop as a nation and turn our quantity advantage into productive advantage, one of the most important sectors we have to focus on is the MSMEs sector. When you look at other developed economies on the world, you discover that they rely heavily on MSMEs for job creation, wealth generation and inclusive economic growth.
If you also check the history of this sector in Nigeria, it may interest you to know that this important sector has not received proper attention by past governments. This is the reason my ministry has deemed it right to introduce NEDEP. As I talk to you now, the sector currently contributes about 75 per cent of Nigeria’s GDP and employs more than 45 per cent of our people. The survey we carried out in 2010 shows that there are about 17.28 million MSMEs in the country, employing more than 32 million people. However, if you look at the mix of the 17.28 million MSMEs, about 96 per cent of them are actually micros. If you go deeper, you will discover that only four to six per cent of their funding is from organised lenders. This simply means that most MSMEs, lack access to affordable finance. Also, most of them don’t have the skills required to run businesses. So, it is a big opportunity that they have been missing for many years and that is what NEDEP wants to address.
This programme is spearheaded by my ministry and the three parastatals under my ministry – the Bank of Industry (BoI), Small and Medium Enterprises Development Agency of Nigeria (SMEDAN) and the Industrial Training Fund (ITF). I must confess that this is the first time these three parastatals under my ministry are coming together to develop and implement a programme that will revolutionise the growth of the MSMEs sector in the country. It is expected that with two years of implementing the programme it will generate 3.5 million jobs and an estimated five million direct and indirect jobs in the country.
SMEDAN will provide business training and support, ITF will provide the skills required for specific or specialised businesses while BoI will provide the funding.
As we talk now, we have the support of 17 state governments that have been working with BoI, ITF and SMEDAN in the area of MSMEs development, skills training and acquisition as well as business services development. With NEDEP, we will have the National Steering Committee, State Government Steering Committee and Local Government Steering Committee. In all these, we have involved the state and local government, the private sector, development banks, agencies and private individuals so that NEDEP will not be only government show alone. I strongly believe that after my exit as minister for Industry, Trade and Investment, NEDEP will continue to exist because of the structure on ground. With the involvement of the three tiers of government and the private sector, it will not go down like other government programmes.
We are looking at one local government, one product, based on the areas where we have competitive and comparative advantage. This was what was done in Asia and some African countries and it proved successful. If these models could work in these countries, I believe they can work in Nigeria. We want to see that every locality in Nigeria has skills manpower. We have found out that the major challenge facing us as a nation is that there is skills’ gap. We will form the skills manpower into cooperatives and Self Regulating Organisation (SRO), so that each of them will, in their trade, have a yellow book. If, for instance, you are looking for a qualified electrician, you can pick up the yellow book to find out all the electricians that are qualified and registered within your location, so that the issue of quack electricians will be ruled out in the system. I believe this programme will work in Nigeria and provide the needed answers to improve the economic development of this nation.
Just today, before coming to Commerce and Industry Correspondence Association of Nigeria (CICAN) Gala Nite/Award, President Jonathan inaugurated SME Council comprising the federal, state, local government and the private sector. This is what other countries of the world have done to have a structured approach to the development of MSME.
My target when I assumed office
Well, like I said earlier, my major target when I came into office was to make Nigeria an industrial hub in Africa. And gradually, we are achieving this. Of course, it is to get the Nigerian story out as much as possible, which is what we are doing here and we have done it successfully; investors are responding. As you know, Nigeria was voted number one destination for investment in Africa for the second year running; our department of investments is huge, much more than we have had as a nation.
Experience has shown that no country has been able to move from being a poor to a rich nation by relying on exporting raw materials only, without a strong industrial services sector. So the idea is to help diversify our economy and rein in resources by having a strong, comprehensive, ambitious, industrial plan, which was why we commenced that. In 2012, we started the implementation of this plan, which was launched by President Jonathan. Ever since then, there have been a lot of activities going on in this ministry with regards to investment and industrial development. We have got Nigeria on the path of industrialisation and I am very happy with this. We have reduced the level of unemployment in the country today.
Present administration’s industrial policy
I give kudos to President Jonathan for his Transformation Agenda. For the first time in the history of Nigeria, this is the only administration that has paid much needed attention to the development of our industrial sector, especially in the area of manufacturing.
Just look at Nigeria’s privatisation, it is one of the most successful anywhere in the world. In the rail sector, goods and services are now being moved from the North to the South as expansion and revamping of the sector are in high gear.
Under industrialisation, we are being guided by seven competitive factors including affordability, provision of finance for local investors, skills acquisition, among others. We have a lot of jobs to keep people busy but the problem is in skill acquisition. Skill development is a major investment factor. In auto production, for example, we want to produce and export spare parts for the African market. It is a comprehensive strategy. We will get banks to back up the plan; we need to raise bonds in the capital market to develop the business sector so that the SMEs, for example, can access capital for development. Short-term bank deposits and other short-term funds must reverse in favour of long-term funds. The Micro, Small and Medium Enterprises (MSMEs) can now smile as government has paid much needed attention to it. So from my judgment, this administration has done a lot to industrialise the country.
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FG’s repositioning real sector for industrial growth – Aganga |
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