It gives me great pleasure to be with you tonight for many reasons. First, I am passionately committed to the idea of encouraging our local investors and ensuring that our laws and policies enable you to succeed in your ventures in Nigeria.
Secondly, I am delighted at the efforts GE has shown in recent times as to its investment strategy in Nigeria. Clearly GE is committed to investing in Nigeria; and have shown that you are not only here just for the good times but have a long-term outlook for your engagement with Nigeria.
It is that reason in particular I felt it was important to be part of this event and use it as a platform to reiterate the position of government, particularly the National Assembly that Nigeria is ready for business in spite of the recession we are experiencing.
Having said that, let me reiterate that the present National Assembly is determined and has opened its doors to the private sector to exchange ideas, opinions and engagements that would see us create the critical legal and legislative superstructure on which the next free market Nigerian economy will anchor on. Our focus in the NASS has been the economy and will remain so until we can chart a course out of recession, create jobs, facilitate private sector investment in infrastructure projects; and encourage interest in the agriculture and mining sector. We are going to achieve these through working closely together.
I will not spend any time talking about how we got to where we are, as I am sure you are all more concerned as to what the plan of action is. People like yourselves; want to invest in this economic climate and are more interested in the government’s plan to induce growth in the economy.
At the onset of the 8th National Assembly we collectively decided to carry out a comprehensive review of the institutional, regulatory, legislative and associated instruments affecting businesses in Nigeria; this we did with the Nigerian Bar Association, members of the private sector community and our development partners, through the National Assembly Business Environment (NASSBER) Roundtable platform.
Our findings revealed the fact that we were running a modern economy largely on laws, regulatory structures, fragmented, highly incoherent and outdated policies; some dating as far back as the 1940s.
The Nigerian Railway Corporation Act, for example, is a textbook case for why there has been very little or no modernization in the subsector in the past 60 years. Private sector participation in transport sector infrastructure development, deployment and expansion was almost non-existent creating a deficit of over $350bn in our infrastructure market and thus depriving this country of a much-needed catalyst for growth and development. Therefore, we resolved that to enable the private sector to play its role, our laws needed to evolve to meet global business best practices of current times.
Infrastructure deficit must be led by the private sector. We must look at roads, ports, railways and power and see how we can encourage the private sector to invest so as to bridge the gap. Primary expenditures accounts for 56% of the capital budget and is still grossly inadequate. What do we need to do to reverse this? Also presently, we are not meeting UN commitments where we must spend 1% of our Consolidated Revenue Fund (CRF) on health and have a budget allocation of at least 26% on education. We cannot achieve this if the bulk of our government resources are tackling projects that could otherwise be driven by a vibrant and enabled private sector. This is why we must turn the resources within.
This is at the heart of my current campaign which essentially hinges on government patronage, support for and encouragement of local investors to “create wealth & foster localization”. For us in the 8th National Assembly it is not enough for government to say, “Patronize Made-in-Nigeria products and services”. We must ensure that government leads the way. Government capital expenditures in 2012 amounted to an estimated N1.8 trillion (<$2bn). This is why the Senate has passed the bill clearly giving a margin of government patronage to local investors and those who have chosen to make locally, use locally and create jobs for our teeming population. We would like to see local investors especially those adapting local content into their businesses, given preferential treatment in the way government procurements are done.
Presently we have a number of what we have termed economic priority bills that we are passing through NASS. They will provide the legislative framework, which will encourage investments in key sectors by the private sector. These include: Petroleum Industry Bill; National Development Bank of (Establishment) Bill; Nigerian Ports and Harbours Authority Act (Amendment) Bill; National Road Fund (Establishment) Bill; National Transport Commission Act, 2001 (Amendment) Bill; Warehouse Receipts Act (Amendment) Bill; Companies and Allied Matters Act (CAMA) (Amendment) Bill; Investment and Securities Act (ISA); Customs and Excise Management Act; Federal Competition Bill; and the National Road Authority Bill.
Aside from laws, we will by oversight responsibility, work to eliminate the bottlenecks in facilitating these objectives; also consider laws to back up policies to address investment in areas such as Agric and Mining that require a long incubation period; in light of past experiences of policy summersaults.
If we pass these laws, we will be creating new frameworks for ease of capital mobilization, business protection, conflict resolution & contract enforcement; all of which are aimed at creating a more enabling and friendly business environment. With these, investors will be encouraged to come in to play their part because there are policies backed by laws to support their businesses; and thus government can better tackle our social and developmental issues.
We have advised the executive strongly on the issue of the Niger Delta to achieve a peaceful resolution to the unrest there. We need to revisit the Export Promotion Policy Scheme; re-negotiate the joint venture partnership funding; plug leakages and strengthen the laws to address anti-corruption.
On Power, we need to address the improvement of generation capacity and find ways to fund and pay for it. We need to address the liquidity of distribution companies (DisCos), find a competitive tariff rate; improve on transmission and small scale projects to assist generation.
Ladies and gentlemen, though the Nigerian economy may be going through a difficult patch, we are confident that we will emerge stronger and more resilient after this. The demographics are good, we have a youthful population and our entrepreneurial spirit is unbeatable. I call on investors and the general public to take advantage of our new coherent vigour in our legislative plan and the sincerity of purpose in our executive to strengthen the business environment and encourage local investments. In this year, we will hopefully see a positive GDP growth and a better business environment.
Be assured always of the support of the National Assembly as a willing partner for success. Feel free to access my office with your new ideas that require legislative support and together let’s create a new Nigerian economy built for the 21st century and beyond.
God bless the Federal Republic of Nigerian
Thank you for listening.
PRESIDENT OF THE SENATE