The Federal Government’s recent negotiation with Siemens AG is evidence of its determination to revitalise the power sector as well as expand the generation and supply capacity from 11,000 megawatts to 25,000 megawatts by 2025. And this has received a boost from the conclusion of government’s strategic steps to resolve the $100 billion power sector infrastructure annually as major pillars to enhance investment and economic development, according to Otunba Niyi Adebayo, Minister of Industry, Trade and Investment, who stated this on Friday at the virtual edition of the Presidential Policy Dialogue organised by the Lagos Chamber of Commerce and Industry (LCCI).
Adebayo, speaking on the theme, ‘The Challenges and Benefits of Investing and Doing Business in Nigeria’, said given the report by the Nigerian Infrastructure Masterplan (NIMP), “Nigeria requires an estimated sum of US$3 trillion to upscale its national infrastructure over the next 30 years. This breaks down to an average of US$100 billion annually.
“President Muhammadu Buhari’s administration has taken strategic steps to resolve the power issue as evident in the conclusion of negotiations with Siemens AG to revitalise the power sector as well as expand the generation and supply capacity from 11,000 megawatts to 25,000 megawatts by 2025 that would trigger investment and economic development.
“Also, the Federal Government is concluding plans to secure a US$3 billion loan from the World Bank to bridge the gap between what is provided for in the current tariff, and the cost to businesses.”
The Trade and Investment Minister, who argued that power, roads and congestion at the ports posed a major concern to potential investors and existing business operators, stressed that the World Bank, in its 2019 report, stated that about 40% of the total population of Nigeria had limited or no access to electricity.
“As a result, there is a prevalence of more expensive self-generated power,” it claimed.
Continuing, the Trade and Investment Minister acknowledged that one of the major challenges usually raised by foreign investors and local businesses is the inconsistencies of government policies.
He said: “As we all know, the impact of government policies on the business landscape cannot be overemphasised, as this can be a major hindrance to both foreign and domestic investments in the country, which will drive business and economic growth.
“Aside from policy formulation, another key area is ineffective implementation strategy and monitoring process, all of which increase the risk profile of the economy.
“In addressing this, the current administration has adopted a holistic process in policy formulation spanning agenda setting, adoption, and the eventual approval of such policy.
“This involves stakeholders’ engagements of various sectors, recent examples being the Oil and Gas Stakeholders Engagement Forum and the Automotive Industry Stakeholders Session conducted earlier in the year, amongst others.
“This is to ensure that input from industry players and other relevant stakeholders are incorporated to create an effective policy environment.
“For effective implementation and monitoring, our administration has restructured and empowered certain designated task forces and government agencies in the discharge of their mandates through the establishment of the Presidential Enabling Business Environment Council (PEBEC), by the Buhari administration in 2016 underscores its commitment towards creating an enabling environment for potential and existing investors.”
Vice President Yemi Osinbajo (SAN), in his remarks, said opportunities abound across different sectors in the Economic Sustainability Plan (ESP) for the private sector to lead the charge for Nigeria’s economic growth and development
The vice president said the ESP, which is now being implemented by the Buhari administration, was driven by the desire “to adapt to the challenges and make required changes in order to come out stronger than before”.
According to him, “I take this opportunity to encourage the private sector to be proactive in leading the charge against recession and poverty in our country.
“The Federal Government is not under any illusion that it can do this on its own. The opportunities that now exist in the short term in agriculture, infrastructural development, housing construction, in renewable energy, digital technology development, mining, financial inclusion, healthcare and pharmaceutical manufacturing, call for the private sector to take the bull by the horns and make them a reality.
“The priority of the Federal Government in response to the economic challenges caused by COVID-19 is to ward off a deep recession by an admixture of stimulus measures to support local businesses, retain and create jobs and ameliorate the circumstances of the most vulnerable.”
He said: “Government developed the Economic Sustainability Plan with a stimulus package of N2.3 trillion to give fillip to the economy across various sectors.
Mrs Toki Mabogunje, president, Lagos Chamber of Commerce and Industry (LCCI), in her remarks, said the continued closure of Nigeria land borders with neighbouring countries was adversely affecting medium and small scale industries across the region.
She said: “The closure of land borders has enormous implications for cross border economic activities around the country. The indications are now that the closure is indefinite.
“While we share the concern of government on issues of security and smuggling, we believe that the indefinite closure of land borders is not the solution to the problem.
“We are excited about the signing of the AFCTA. But we need to get ourselves ready for the pressure of competition inherent in the continental economic integration agenda.
“A number of commitments were made about the creation of an environment that would enable the private sector to be competition ready. But not much has happened in this regard so far.
“We are aware of the efforts of government to fix our infrastructures, including roads and railways, but funding has remained a major challenge.
“We would like to see a new funding model with much bigger focus on private sector capital within a Public Private Partnership (PPP) framework for infrastructure development in the country.
“The slow pace of reforms in the oil and gas sector, especially the fact that the Petroleum Industry Bill could not make it through the eighth National Assembly is a cause for worry. And the part that was passed was not signed by the President. This has affected the growth of the sector.
“The failure of the Nigerian Customs Service to adhere to the Executive Order, which forbids customs’ checkpoints around the ports and within given geographical delimitations in the country, is also a cause for concern.”