THE BIG ENABLER

Nigeria 2015 | ECONOMY | VIP INTERVIEW

TBY talks to Gbenga Kuye, Managing Director of the Nigeria Export Processing Zones Authority (NEPZA), on the mandate of the authority and its new task to promote industrialization.

What is the role of the Nigeria Export Processing Zones Authority (NEPZA) and how does it function within the current context of the Nigerian economy?

The government realized that there was no single agency responsible for the industrialization of the country, so it was decided that NEPZA would have the additional mandate to be the agency responsible for it. Several things must happen to ensure this. First, the enabling act that set up NEPZA needs to be reviewed. That process has begun by order of the National Assembly. We need to restructure the way the agency works. One key thing that we noticed is that many of the jobs were done by too many people, so there was no ownership of the process. So you had too many departments that were doing the same sorts of jobs, or fragments of each other's jobs. But when it came to taking responsibility, nobody took it. So we restructured and pruned down the departments. We created the compliance and enforcement department that will be fully responsible for the end-to-end compliance and enforcement of various policies, aligned to the various incentives we have given. Then we separated the free zones into public and private ones. The idea is that you have one director responsible in each area who sees things end-to-end from the beginning with marketing to bringing those people on board, to registering them, to giving them incentives, to ensuring that they are complying with various incentives, and paying all relevant dues and fees. They are responsible for the training as well. Also, NEPZA will be called the Nigeria Industrialization and Free Zone Agency (NIDZA) when all approvals have been made. There are two key policies that will drive industrialization. One is the Nigeria Industrial Revolution Plan, and the second is the National Enterprises and Development Program (NEDEP). Those two government policies are anchored in the President's transformation agenda. In addition to these programs are the Sugar Policy and the Automotive Policy. Our mandate has been expanded, so we are not solely focusing on free zones anymore. We are now focusing on industrial cities and industrial parks. This means the whole appraisal process of the old free zone has to be amended, more checklists have to be put in, and it has to be more robust. I came in January 2013 and the transformation has been ongoing ever since. Prior to this time, the President had stopped approving free zones since he was not seeing their benefit. So for the first nine months I had to do a complete appraisal of why the free zones were not working.

What did you find out?

A lot. I had to meet with the Chief Economic Advisor to the President and other people to make sure that we were all on the same page. I came up with a checklist that I gave to them and we discussed it together. The idea in getting them to agree to the checklist was so that they could not later renege on what they had already agreed to. Within a few months of coming on board with the new checklist and the new structure, we have had about three approvals from the President. It has been a lot of work, but when you look back you can see the good it has done. It has lead to the birth of the first industrial city approval, called the Gas Revolution Industrial Park in Ogidigben.

“My strategy is based on facts, not on hope."

You identified some key sectors that are particularly promising for future development. Why are these sectors important and what will be the role of NEPZA in these sectors?

The US is our largest buyer. Soon it will not need our oil because of the shale gas fracturing, and the discovery of crude in Ghana. Ghana will offer a discount or tell buyers they can pay in five years or 10 years. It will hurt Nigeria because we depend so much on oil. Therefore, Nigeria has started looking at different sectors of the economy where we have comparative and competitive advantages. Agriculture is another area we need to focus on. We need to look at the oil and gas sector in a very constructive manner. We should not be exporting crude. We are exporting it to countries where they set up their own refineries and create jobs for their own people. We need to do it all end to end, and take the byproducts of the crude. You can see that everything is under the umbrella of a NEPZA operated zone. A NEPZA operated zone will have industry, skills workshops, and SMEs. NEPZA will become the hub that everyone has to connect to. I want my zones to be in the top-50 zones in the world. I want a line that shows that 15% percent of manufacturing is coming from these zones.

What will be your strategies and priorities? What will you do to achieve all of this? What kind of projects and incentives do you plan?

I believe in numbers. My strategy is based on facts, not on hope. We restructured and plugged the loopholes, looked at the free zone, and we have seen what is working and what is not. Of the 25 free zones, 10 are functional, nine are under construction, and six are dormant. The six that are dormant are state run. Obviously, government people are not good businessmen. So you should go to the state and tell them that they're not doing well. I told my staff from those states that it's a shame that their state does not properly use its free zone license. Tell them there is a new man who will revoke your license if things don't start working. I wrote personally to all of them. As a result, the governments of the dormant zones are currently talking to me regarding investments. Years ago industrial parks and industrial cities were created in this country, but they died with the government. They still exist and some manufacturing is happening. We did research around the country on the viability of these industrial parks. In partnership with the government, we are identifying the old industrial parks and industrial cities to see if we can jumpstart them. We have a new vision we are trying to bring into reality. It is very innovative. We have come up with the concept of the Nigeria International Financial Center, based on the Dubai International Finance Centre, that will be located within our free zones. The objective is to motivate Nigerians to transfer their funds back to Nigeria to set up industries, because currently 80% to 90% of total Nigerian funds are located outside of the country. The New Financial Policy will increase development and industrialization.

Where do you see Nigeria in the next five years and how do you make this happen?

I am a Nigerian. I love Nigeria. This country has done so much for me. I need to give something important back. The President has four years to showcase something. One quick way to jumpstart the economy is to use the free zones, industrial parks, and industrial cities. Since I have that responsibility, I see myself as the President's number one ally in this. I will make him succeed. For me to succeed, I have to come up with a very clear strategy and make sure it's executed. The problem with Nigeria has never been strategy. We have the best strategies in the world, but they do not get executed. That is what I am doing. Nobody comes into my office without a pen and paper. Fortunately, the things I am doing are not new. The only thing that is different is that for the first time you have somebody who is coming from the private sector and knows how to make money and is running the agency as a business that needs to make profit while running effectively.

© The Business Year - October 2014