FG to localise 40% expenditure on stipulated goods, services – Minister

The Minister of Industry, Trade and Investment, Chief Niyi Adebayo, said on Friday that the federal government would seek to localise at least 40 per cent of its expenditure on stipulated goods and services, to facilitate local markets access for Nigerian made products.

Adebayo spoke at the Udo Udoma & Belo-Osagie (UUBO) second private equity summit with the theme: ‘Drivers, Disruptors and Unlocking Value’, held in Lagos.

The minister, delivering a keynote on ‘Fostering an enabling environment for investment in Nigeria’, said that government had realised that building production capacity alongside strategic partners with strong track record in some priority sectors was critical to success.

“Through the Nigerian Investment Promotion Commission, bilateral investment agreements are being modernised with a greater sense of purpose.

“Much of our most recent agreements target countries that align with our ambition of building local production capacity,” he said.

According to him, government will seek a comprehensive approach in mobilising capital, incentivising priority sectors and expanding market access for local producers.

Adebayo said that government would further enhance the ease of doing business and support the growth of MSMEs.

He said that the ministry had begun implementing a number of key initiatives, including the reactivation of the six special economic zones and the special agro-industrial processing zones project.

“In supporting the growth of MSMEs, we are easing access to capital, deploying shared facilities across the country and facilitating the delivery of tax and regulatory incentives for MSMEs.

“Our priority sectors cut across agriculture, construction and the automotive industry,” Adebayo said.

He said that Nigeria would remain critical to the global economic market as the country prepared for the inevitable rise of the world’s third most populous country.

“This also presents a compelling case for global investors when viewed against the backdrop of the country’s capacity for growth.

“Achieving a GDP per capita rate comparable to South Africa would catapult Nigeria’s GDP to over one trillion dollars.

“The dwindling prospects of oil and our growing population leaves us with no choice but to develop a Nigeria that is investor-friendly, export-oriented, high producing and high growth,” Adebayo said.

He said that government’s primary objective in the present decade was economic diversification and job creation.

“Diversification of our economy, or more precisely government revenues, must accommodate both short and long-term efforts because we no longer have the luxury of time; considering the realities of our growing population and the dwindling prospects of crude oil,” Adebayo said.

Senator Udoma Udo Udoma, Founder of Counsel UUBO, stressed the need for private sector participation in the development of the country’s economy.

Udoma said that government must engage private sector to ensure economic expansion, noting that government could not do it alone.

He said that government needed to create an enabling environment that encouraged growth of private equity in Nigeria.

In her remarks, Ms Mary Uduk, acting Director-General, the Securities and Exchange Commission (SEC), said there was a nexus between adequate capital and business growth.

Uduk said Private Equity (PE) firms were important agents of business and economic growth, as they bring capital to business.

She explained that “such capital helps businesses grow, generates profits for the investors, creates socio-economic benefits to the consumers, and enhances overall growth of the economy.”

According to her, Nigeria has lots of startups with robust business plans, many profitable unlisted companies with established cash-generating capacity, as well as public companies with solid customer bases, proven products, and high-quality management.

She stated that all these businesses and opportunities were yearning for investments, and PE firms can tap into this.

“The ISA 2007 empowers the Securities and Exchange Commission to register PE Funds. Based on their scope and the need to attract investors such as the Pension Funds, many PE firms and Infrastructure funds (often structured as PE), file their returns with the Commission,” Uduk said.