SEZ Investment Company Saga: Crying Wolf Where There Is None – Presidency

The Presidency said it has noted reports in sections of the media about the status of Nigeria SEZ Investment Company Limited (NSEZCO), also known as Nigeria Special Economic Zones Company Limited.

In a statement by Femi Adesina, Special Adviser to the President (Media & Publicity), the Presidency said, “We wish to confirm that NSEZCO was incorporated as a special purpose vehicle to deliver Project MINE (Made in Nigeria for Exports), which is a Presidential initiative.”

“The Federal Government’s Economic Recovery & Growth Plan (ERGP) identified the development of Special Economic Zones (SEZs) as a major strategic tool to accelerate the implementation of the Nigeria Industrial Revolution Plan (NIRP).”

“Project MINE was envisioned by the Federal Ministry of Industry Trade and Investment (MITI) to develop SEZs to world-class standards and position Nigeria as the pre-eminent manufacturing hub in sub-Saharan Africa and a major exporter of made in Nigeria goods and services regionally and globally.”

“Indeed, Project MINE was necessitated by the following factors:

• Lack of operating competitiveness that limits the growth of the zones, despite the presence of generous fiscal and regulatory incentives.
• For government-owned SEZs, there were limited Federal budget allocations to make the required investments in infrastructure, operations and management services;
• The need to develop the skills and experience to operate and manage the zones to world-class standards of efficiency;
• The absence of a deliberate strategy to attract investors, create clusters or encourage the development of local value chains using SEZs, and therefore

the lack of appropriate link between the industrialization strategy of government and the Free Trade Zones.

Project Mine therefore seeks to achieve the following specific objectives:

• Support structural transformation of the Nigerian economy by increasing the manufacturing sector’s contribution to GDP to 20% by 2029;
• Contribute to sustainable inclusive growth by creating 1.5 million new direct manufacturing jobs in the initial phase of Project MINE;
• Increase and diversify foreign exchange earnings to at least US$30bn annually by 2029, by increasing manufacturing sector exports;
• Create local models of global best practice in the provision of world class infrastructure at competitive costs connecting SEZs to international and regional markets with transport links, uninterrupted power, ICT, water, sewage and other services to ensure smooth and efficient operation of SEZ businesses;
• Promote the “cluster” effect to be gained by locating similar export-oriented manufacturing businesses within the same locality;
• Attract world class investors with strong positions in global supply chains and investors with potential to increase the scale of operations rapidly to set up operations in SEZs; and
• Create an enabling environment for SEZ businesses by instituting best in class legal and regulatory frameworks, using technology and streamlined processes to facilitate movement of people, goods and capital and easy access to government services, approvals and permits.”

“In June, 2018, the Federal Executive Council (FEC) approved NSEZCO, with the endorsement of the Economic Management Team, as the holding entity for FGN investments and proprietary interests in existing and future SEZs.  The FEC approval also provides that all current and future capital appropriations for Project MINE should be transferred to NSEZCO’s account, as soon as opening formalities are completed.”

“With the formalities completed, NSEZCO became the platform through which Federal Government’s capital budget appropriations for SEZs are converted into long term value creating investments.”

“NSEZCO is a public private partnership (PPP) company to operate world-class standards of governance and management, to facilitate mobilization of capital and other resources from PPP partners, in order to overcome budgetary constraints to the provision of critical infrastructure for SEZs.”

“By aggregating and harnessing FG’s investment in a strong corporate special purpose vehicle, NSEZCO will facilitate the mobilization of additional capital from development finance institutions (DFIs) and private investors. Ministry of Finance Incorporated (MOFI) is the shareholder, holding the FG’s interest of 25% in NSEZCO.  The balance of 75% is currently held in trust on behalf of other prospective shareholders, pending completion of investors’ diligence and documentation and approval procedures.”

“On 8 February 2019, NSEZCO signed investment agreements with three Development Finance Institutions: Afreximbank, Bank of Industry, the Nigeria Sovereign Investment Authority (NSIA) and Ministry of Finance Incorporated for their investment in NSEZCO at a ceremony presided over by President Muhammadu Buhari at the Presidential Villa.”

“Africa Finance Corporation and African Development Bank which are still in the preliminary stages of their internal approval processes were also in attendance as observers.

“President Buhari said at the signing ceremony that: “When we committed to the implementation of the Nigeria Industrial Revolution Plan and launched our Economic Recovery and Growth Plan to fast track implementation, we had a vision of Nigeria as the pre-eminent manufacturing hub in Sub-Saharan Africa and a major exporter to our immediate West African sub-region, the rest of Africa and indeed the World.”

“Already, NSEZCO is mobilizing capital from the Federal Government and the development finance institution shareholders, for the development of Special Economic Zones across Nigeria.”

“Pilot projects in the first phase are Enyimba Economic City, Abia State, Lekki Model Industrial Park, Lagos State and Funtua Cotton Cluster, Katsina State.  In addition, pre-development studies are on-going in Benue, Kwara and Sokoto States whilst studies will soon commence in Ebonyi, Edo and Gombe States amongst others.”