Bennett Oghifo
The federal government is working on a robust energy transition plan that includes a template for the funding of renewables such as solar.
The Minister of Industries, Trade and Investment Otunba Adeniyi Adebayo, stated this in his keynote address during the World Trade Center Abuja maiden webinar series held on 14th February 2023.
The webinar series was organised by the Trade Services Department at World Trade Center Abuja, and it was conceived to enable professionals share their knowledge and expertise as it affects the economic growth and development of Nigeria, said Wuraola Onigbogi, the Trade Services Manager at WTC Abuja.
Present at the virtual event with the minister, were the Group Managing Director of Churchgate Group and World Trade Center Abuja Mr. Vinay Mahtani, highly resourceful panellists, and the moderator was Mr. Herbert Ndumele, a trade policy expert.
The Minister, in his keynote address titled, ‘Beyond 2023, Government Priorities and Posture for Trade and Competitiveness in Nigeria’, discussed Energy and Climate Change; Infrastructure; Food Security and Safety; and Competition Enablers, which he said, are “the key pillars that have shaped our interventions in trade promotion and enhancing competitiveness.”
In his remarks on energy and climate change, the minister said, “A key component of trade competitiveness is the cost of production and energy cost and availability is pivotal to this conversation.
“Energy use is crucial for almost every conceivable aspect of development. Wealth, health, nutrition, water, infrastructure, education, and human longevity are significantly related to the consumption of energy. Nigeria has historically faced challenges in its Energy Sector which greatly affect the business environment; our unmet energy needs are significant and we expect that future demand will be even greater due to our expanding population and urbanisation.”
He said, “In addressing our energy constraints, we have also had to consider environmental sustainability and energy transition. Accordingly, we have introduced the Nigeria Energy Transition Plan designed to tackle the dual crises of energy, poverty and climate change and deliver SDG7 by 2030 and net-zero emissions by 2060. The Energy Transition Implementation Working Group, Chaired by the Vice President Prof Yemi Osinbajo has been established for the implementation of the Plan.
“We also launched an innovative, results-based, finance programme; the Universal Energy Facility that focuses on scaling up electricity access for productive use. The Universal Energy Facility will provide grant payments to enable solar companies to expand their operations to small and medium-sized enterprises across Nigeria while crowding in additional private capital. Projects supported by the Universal Energy Facility will help grow businesses and create jobs, making them key contributors to our Energy Transition Plan.”
The minister also addressed infrastructure development in the country, stating that various ministries, departments and agencies have delivered several infrastructural projects ranging from railway lines, airports, roads, port terminals, industrial parks, bridges, broadband, dams, etc.
“In the Ministry of Industry, Trade & Investment, our focus for industrial infrastructure has been the delivery of six private sector- led industrial parks to enable industrialisation. These parks are in Lekki, Enyimba, Funta, Ibom, Kano and Benue.
“We have commenced the concession of two brownfield Special Economic Zones situated in Calabar and Kano. These are general economic zones which support export processing, large scale manufacturing, warehousing, logistics, tourism, food processing and packaging and technological development.”
The minister also discussed food safety and security, and competition enablers, explaining that “there are four areas that present significant concern to our competitiveness for which we are pursuing viable solutions. The first is synergy between fiscal and monetary policy. The naira continues to face significant downward pressure because demand substantially outstrips supply. This has created the need to appropriately balance what imports are eligible for foreign exchange with the need to provide foreign exchange for import of raw materials for the manufacturing sector.
“The discussion that we must now have and going forward is how best to manage the situation by finding a mechanism for increasing supply and moderating demand in a manner that is transparent and will boost confidence. The long term sustainable solution which we are pursuing is the focus on value addition and productivity in the economy. This is well articulated in our medium-term economic plan 2021 – 2025.”
On funding, the minister said, “One of the most critical economic enablers is access to long term patient capital that is suitable for industrialisation, and this has been at the heart of our agenda.
“The Bank of Industry has disbursed over ₦421 billion to about 12,000 large enterprises and MSMEs to ensure their sustenance and growth. This has also created an estimated 1.8 million jobs in the country.
“The Bank also initiated the ₦2.4 billion North East Rehabilitation Fund (NERF) to stimulate the regional economy through the provision of affordable credit facilities to new MSMEs in the Northeast Region. As at the end of December 2020, the sum of ₦569.34 million has been disbursed to 56,934 beneficiaries.
“In addition, we are collaborating with the African Development Bank (AfDB) and other financial partners to set up US$500 million fund to close the financing gap that exists in the Technology and Creative industries.”
Welcoming participants, the Group Managing Director, Churchgate Group, Vinay Mahtani highlighted Nigeria’s low ranking on the global competitiveness index, stating that there was hope, considering the efforts being made by the federal government.
According to him, “We are presented with a pressing challenge. Nigeria’s low ranking on the global competitiveness index demands immediate action to bridge negative output gaps and address any economic deficit. Despite being Africa’s largest economy, with a GDP of $432.3 billion in 2020, according to the World Bank, and possessing one of the largest proven oil reserves on the continent, Nigeria still faces significant hurdles to reach its full potential.
“The oil and gas sector has been the backbone of the Nigerian economy for many years. Unfortunately, this dependence has proven to be a double-edged sword. The decline in the industry’s growth by 19.8 percent in the fourth quarter of 2020, as reported by OPEC, has had a devastating impact on the country’s commercial activities and overall economy. The COVID-19 pandemic only exacerbated these difficulties.
“However, there is hope on the horizon. The government has put stimulus plans and financial support packages in place to facilitate an economic rebound. Furthermore, negotiations are underway to fast-track digital payment and trading platforms, such as the African Continental Free Trade Area e-commerce protocol, with the aim of boosting regional trade.
“Nigeria’s non-oil export sectors, particularly agriculture, hold tremendous potential for the country’s future. The sector has performed robustly, yet the country remains vulnerable to food insecurity and is unable to meet domestic demand. Low irrigation levels and outdated land tenure systems have contributed towards post-harvest losses that have limited the sector’s productivity. The COVID-19 pandemic has only aggravated these challenges, causing a hike in food prices and disrupting supply chains. Revitalizing agriculture will require a focus on increasing local production and improving the value chain.
“The Nigerian government must be commended for its efforts in formulating fiscal and macroeconomic policies aimed at promoting economic growth. However, much work remains to be done to achieve full recovery and competitiveness. A multi-sectoral approach is necessary to improve Nigeria’s trade competitiveness, and it is through a joint effort of the public and private sectors that we can succeed.”
He said, “This webinar serves a critical role in shaping the future of our national economy, offering a platform for us to collectively brainstorm and implement strategies for a more competitive and sustainable future. It is my sincerest hope that the discussions and agreements reached today will result in impactful outcomes for our nation.”
