· Claims 10 indigenous companies already applied
· Says 2019 Finance Act response to fiscal crisis
Vice President Yemi Osibanjo yesterday disclosed that the federal government might award 19 road projects measuring 800 kilometres in 11 states across the six geo-political zones on the basis of its Investment Tax Credit Scheme.
Already, Osinbajo disclosed that 10 indigenous companies had applied to join Dangote group and Nigeria Liquefied Natural Gas (NLNG) in the Investment Tax Credit Scheme with a view to encouraging private sector investments in infrastructure.
Osinbajo, also, justified the 2019 Finance Act, noting that the legislation “is government’s fiscal response to the issues of limited revenue sources and the need to improve the business environment, especially for small and medium businesses.”
He disclosed this in a keynote address he delivered in Lagos yesterday at the Redeemer’s Men Fellowship Conference on the theme ‘Galvanized for Geometric Growth.’
In the keynote, the vice president explained the effort of President Muhammadu Buhari to address the country’s major infrastructure deficit across the federation.
He noted that the focus of the Buhari administration in the last few years “has been on investing in roads, rail, and power. We have a major road project going on in every state of the federation.
“Some of the road projects scheduled for substantial completion in 2020/2021 include dualization of Suleja-Minna road, Ilorin-Jebba-Mokwa/Bokani road, Nnewi-Oduma-Mpu (in Enugu)-Uburu (Ebonyi), Yenagoa-Okaki-Kolo-Nembe-Brass road, Bodo-Bonny road with a bridge across the Opobo channel, the rehabilitation and expansion of Lagos-Badagry expressway and Lagos-Ibadan expressway.”
Under the Investment Tax Credit Scheme, the vice president said 19 other road projects measuring about 800 kilometres “have been prioritised in 11 states across each of the six geo-political zones.”
He added that the road projects would be constructed by 10 local companies that had already applied to join Dangote group and NLNG in the Investment Tax Credit Scheme, thus encouraging private sector investments in infrastructure development.
Speaking on the 2019 Finance Act, the vice president said the legislation was government’s fiscal response to the issues of limited revenue sources and the need to improve the business environment, especially for small and medium businesses.
“The Act has two main purposes with extremely beneficial effects on the Nigerian economy. It addresses the issue of domestic revenue mobilisation on which Nigeria has often paraded quite a low record.
“However, even while achieving this objective for the public sector, the Finance Act is calibrated to improve the ease of doing business in Nigeria and actively foster private sector growth.”
Having instituted reforms covering critical sectors of the economy over the past four years, the vice president noted that Nigeria under the Buhari administration would make steady progress on the path of prosperity.
The vice president restated that the country had enormous potential, which would be realised, noting that much still needs to be done in the different sectors of the economy.
According to him, despite our challenges, Nigeria is the ‘last major open market. Like China and India, its population and economic size will enable economies of scale and attract international investment.
Osinbajo said reforms by the federal government had over the past few years spurred progress and attracted investors’ interests across different sectors comprising agriculture, technology, tourism and entertainment, manufacturing amongst others.
Just this week, the vice president disclosed that the Spur Group, an IT company from China indicated that it would be establishing a computer hardware manufacturing plant in Nigeria.
In the course of last year, he added that the Mara Group of Ashish Thakkar had also indicated that it would set up a manufacturing plant for Mara Phones in Nigeria.
He said: “Kobo360, which was one of the start-ups in a group that I led to Silicon Valley in July 2018, aggregates end-to-end haulage operations and raised $30m in a Series A round led by Goldman Sachs and Nigerian commercial banks.
“Using technology, Kobo360 has made it possible for providers of haulage services to find cargoes for their trailers on return journeys, in effect halving the cost of transporting goods.”
He said the potential of the Nigerian economy “has also been boosted by the Buhari administration through direct and indirect investments in agriculture, manufacturing, technology and creative industries.
“The story of increased rice production in Nigeria is well known, with production of paddy rice in 2019 estimated at 7.3 million metric tonnes compared to about 5 million metric tonnes in 2015. A little noticed phenomenon taking place in agriculture is the use of technology to attract crowd funding into the sector.
“Given the huge interest in agriculture and the relative ease of investing through such platforms, we will see a huge increase in investment in agriculture and subsequent increases in agricultural output across the value chain.”
In the manufacturing sector, the vice president said all critical indices “have so far indicated significant improvements between 2018 and 2019.
“This positive outlook for the manufacturing sector can be seen from the Leventis Group, which, for instance, continues to make substantial investments in the Nigerian manufacturing sector through its subsidiaries, the Nigerian Bottling Company and Beta Glass.
“The Nigerian Bottling Company will soon be commissioning its Asejire Plant, which has taken a substantial part of a recent $500 million investment in Nigeria, while Beta Glass which makes the bottles for the pharmaceutical sector and for beverages like Coca-Cola and Star Beer, has invested another $30 million to expand its furnace capacity.”
He said the technology sector “continues to hold out great promise.”
Citing recent industry reports, the vice president said: “Nigerian start-ups attracted $122 million out of the $492 million in funding to the African start-up sector in 2019. Perhaps more compelling is the increasing use of e-payment channels within the economy.
“The value of Point of Sale transactions is reported to have reached over N3.2 trillion in 2019 as compared to N2.3 trillion in 2018, an increase of 38 percent, while the volume also increased by 153 million transactions to a total of 438 transactions in 2019.”
In the area of infrastructure, the vice president disclosed that the Federal Government’s interventions through the various reforms would yield greater results.”