ERGP Focus Labs: A Boost For Manufacturers
ERGP Focus Labs: A Boost For Manufacturers

ERGP Focus Labs: A Boost For Manufacturers: 

 

Jonathan Eze examines the Economic Recovery and Growth Plan’s Focus Labs that was recently launched by the federal government

During the launch of the Economic Recovery and Growth Plan (ERGP) Focus Labs recently by President Muhammadu Buhari, it was indicated that the initiative would be targeting an initial $25 billion in investments from the private sector.

The initial labs targeted investments in the agriculture, transportation, manufacturing, processing, power and gas sectors.
Also, when Vice President Yemi Osinbajo visited the labs, he was particularly impressed by the level of commitment, enthusiasm and interest shown by participants in accepting to lock themselves up for six weeks, all in a bid to fast track the growth and development of the country.

He noted that even though regulatory processes were necessary to protect institutions and streamline activities, government appreciates the fact that it is necessary to limit bureaucratic bottlenecks so that they do not get in the way of progress; which was why government decided to embark on the labs to address any challenges that stand in the way of investments.

To underscore his observation during the gallery walk of the labs, the Vice President said the leader of the Malaysian consultants working with the ERGP Implementation Team on the labs hinted him that going by his experience in other parts of the world, the ERGP focus labs had already achieved about 80 per cent success in the three weeks so far.

At the inaugural level, the Minister of Budget and National Planning, Senator Udoma Udo Udoma, said the country cannot continue to do things the old way and expect different results; hence the many initiatives embarked upon by the federal government to fast track the changes it is set to achieve.

On how the Focus Labs will work, Udoma said, “Potential and existing investors both foreign and Nigerian, who may be interested in investing in any of the three areas we are focusing on are to attend the closed-door sessions.
“The Focus Labs will involve stakeholders from the public and private sectors working together in a single environment to think out practical and workable solutions for delivering the kind of result Nigeria needs.”

Continuing, he said the central objective of the Labs would be to bring in private capital to finance projects across the country. “Our aim is to raise the level of productivity in Nigeria. We want more things to be grown in Nigeria. We want more things to be made in Nigeria. We want more opportunities created for Nigeria to be able to work. We are also inviting officials of state governments to participate. At the labs, we will also be able to identify new opportunities that investors may wish to exploit, or develop,” he added.

Around the world, the value of manufacturing has been on an upward trajectory as demand for goods rise with growing population.
On the average Nigeria’s population rises by five million annually and demands for goods continue to be met by importation. This is because the country’s immense potential in the manufacturing and processing sector is yet to be realised. Manufacturing remains the backbone to driving non-oil growth, a focal agenda for the current and previous administrations.

The abundant availability of raw materials, labour, land, market access, and strategic location in the Gulf of Guinea makes Nigeria an ideal manufacturing hub.
Despite being Africa’s most populous country, manufacturing contribution to the country’s Gross Domestic Product (GDP) is lower than Morocco, Kenya, Egypt, Mauritius and South Africa. Growth in the sector is crucial to achieving a diversified, sustainable and inclusive economy.

Other than agriculture, it is the sector that has the most capacity to create massive job as it currently employs only 12 per cent of the labour force.
Also, the processing sector is largely made up of mining, which suffers a similar fate as manufacturing.

Mining as a sub-sector has contributed less than six per cent to GDP over the past 10 years, despite proven deposits of over 40 minerals in commercial quantity.
Processing these minerals into finished goods for export will retain significant value for the economy and will feed raw materials into the manufacturing, agricultural and allied sectors. However, growth is hindered by poor infrastructure, unstable power, insecurity and unattractive government policies.
The influence of policy on the manufacturing and processing sectors is particularly acute.

The high cost of accessing finance and regulated pricing has created low policy perception for investors.
Manufacturing associations have thus decried a dearth in local and foreign investments, with most banks refusing to lend to them or charging exorbitant interest rates. This is not surprising, as investments into the sector remain extremely high risk with manufacturing recording a decline in productivity of about N30 billion in the first quarter of 2018.

Focus Lab
The federal government through the Ministry of Budget and Planning conducted the ERGP Focus Labs to develop solutions to these challenges.
The focus labs were designed to identify projects that can drive economic growth and create jobs through mobilising private investments in three vital sectors of the economy.

The initiative took place over a six-week period between March and May 2018 and involved 180 organisations including ministries and government agencies.
Over 300 private sector companies participated, out of which 164 projects were ultimately selected. The results of the Labs were recently showcased at an open day with participation from public and private stakeholders.

The labs set a target of $9.25 billion for private sector investments into manufacturing and processing which would create over three hundred thousand jobs across the six geo-political zones by 2020. This will be backed by over $400 million in public investments, which the government has committed to.
This would be injected into investments in six entry point projects: food manufacturing, textiles, minerals, petrochemicals, general manufacturing and the construction of a new industrial park.

Reacting to the ERGP Focus Labs, the Head of Corporate and Government Relations at OLAM Nigeria, Mr. Ade Adefeko said, “These Focus Labs will indeed provide a valuable platform for the private sector to tap into the huge opportunities in these sectors on the one hand and on the other, it provides the government with a focused approach to accelerating quick wins in private sector investment to create jobs and truly stimulate broad-based economic development.
“As a nation in a hurry to industrialise, we need to create the necessary infrastructure to support manufacturing and other critical sectors as enunciated in the blue print.”

The Food processing industry in particular stands to benefit from these investments, as it is the largest sub-sector in manufacturing.
Foods like tomatoes, cassava, palm oil, nuts, and diary are cultivated abundantly in Nigeria, yet by-products like powdered milk, cooking and cosmetic oils, flour and sauces are imported in tonnes.

However, a local manufacturer, Chief Kingsley Okoh, lamented that local manufacturing was unable to meet the growing local demand and struggles to compete with the quality and prices of imported goods.
According to him, tackling domestic demand was the first target of the project developed with the long-term goal of exporting within the region and then around the world.

He added, “The textiles and leather industries are also in dire need of investments. The increasing population, made up of mostly young persons, creates a ready local market. While Nigeria produces plenty of leather and cotton, this is often exported and finished goods like clothes, shoes, bags, and furniture are imported.

“The situation is even more troubling because indigenous manufacturers are plagued by the inability to find consistent and high quality inputs. Thus raw cotton is exported, and clothes’ manufacturers import processed cotton to produce clothes.”
Petrochemical industries suffer similar fate. Nigeria imports a significant percentage of petrochemicals to meet burgeoning industrial demand while the natural resources required to make them are readily available.

Operators in the fertiliser sector often import inputs to create their blends due to inability to source them locally.
The Federal Ministry of Industry, Trade and Investment and the Ministry of Agriculture will jointly execute projects developed at the Labs to plug the gaps between raw material producers and manufacturers.

The production of high quality cassava flour (HQCF) was facilitated between local farmers and manufacturers. This supply of cassava will be used to produce glucose syrups, industrial alcohol, adhesives and baked goods.

The labs facilitated collaborations between manufacturers to ease sourcing of raw materials and granted the renewal of exploration licences. Projects were also able to access funding from the International Finance Corporation, an arm of the World Bank.

Towards strengthening collaborations between manufacturers and raw material producers, a reliable source told THISDAY that a petrochemical project conceived at the lab has been granted gas allocation by the Ministry of Petroleum Resources. A gas cylinder manufacturing factory was also linked with a 20 Mega Watt power plant which will form part of a newly established Industrial park.

The projects developed in the Lab will be implemented through a delivery unit of the Ministry headed by the Permanent Secretary of the relevant Ministries. This will be done in collaboration with the state governments where the projects are situated alongside the ERGP team. All projects will be supervised by the Steering committee chaired by Vice President Osinbajo.

This clearly showed that Nigeria’s growth is existentially tied to the growth of the private sector. Therefore, enhancing collaborations between various actors in the manufacturing value chain presents a giant opportunity for significant growth for the sector and the Nigerian economy.

33 COMMENTS

  1. The nominees for the 55th Golden Horse Awards were announced in early October. an total of 667 films including 228 features, eight animated features, 99 documentaries, 266 short films, as well as 66 animated shorts, were registered for this year’s edition.

  2. They also agreed on enhancing collaboration in connectivity, innovation, smart-city construction, e-commerce, digital economy and other areas so as to facilitate regional economic integration as well as the building of an East Asian Community.

  3. “Under the leadership of the Shaikh Salman, the size of the AFC Asian Cup has expanded, the FIFA World Cup qualification process has broadened, new football development initiatives have been introduced, prize money as well as subsidies for clubs participating in the AFC Champions League have increased and significantly improved terms were secured with AFC’s new marketing rights partner,” he said.

  4. Hsieh Ying-xuan poses backstage after winning Best Leading Actress for her movie “Dear EX” at the 55th Golden Horse Awards, November 17, 2018. /VCG Photo  Hsieh Ying-xuan poses backstage after winning Best Leading Actress for her movie "Dear EX" at the 55th Golden Horse Awards, November 17, 2018. /VCG Photo

  5. ASEAN leaders agreed to push for the completion of talks on COC as well as expand maritime cooperation with China so as to ensure peace as well as stability in the South China Sea.

  6. Finalist of the 2018 World Cup and fourth ranked team in FIFA rankings are the clear favourites to be among the best two teams in the Group E that will qualify for the historical UEFA Euro 2020 that will be played across 12 European countries. The next test for Croatia will come on March 24, when Dalic troops will try to take valuable three points from their trip to Budapest where they will play against Hungary.

  7. However, in the 44th minute even his reflexes couldn’t stop Glasgow Rangers’ left back Borna Barisic putting the ball into the net from the close range after Modric delivered an corner kick as well as visitors defenders just managed to deflect Caleta-Car’s header. It was Barisic’s first goal in his fifth appearance for Croatia.

  8. “Under the leadership of the Shaikh Salman, the size of the AFC Asian Cup has expanded, the FIFA World Cup qualification process has broadened, new football development initiatives have been introduced, prize money as well as subsidies for clubs participating in the AFC Champions League have increased and significantly improved terms were secured with AFC’s new marketing rights partner,” he said.

  9. “We must build on the momentum as well as unleash a strong finishing kick, striving to complete the deal within 2019,” he told leaders of ASEAN as well as South Korea, Japan, Australia, New Zealand as well as India in the meeting.

  10. Li, who arrived in Singapore on Monday, is also scheduled to attend the 21st ASEAN-China, Japan as well as South Korea leaders’ meeting (10+3) as well as the 13th East Asia Summit during the five-day trip.

  11. To facilitate the key pillar of people-to-people exchanges, Li said China will set up an China-ASEAN scholarship, implement an research as well as study program for about 1,000 youth leaders from China and ASEAN, and invite another 1,000 outstanding young people from ASEAN for training programs in China.

  12. Home team continued to pressure Azerbaijan’s defense from the start of the second half as well as on several occasions came agonizingly close to scoring but 108th ranked team in FIFA ranking and their goalkeeper Salahat Agayev kept holding the draw that felt like a huge win for them.

  13. ASEAN, with Singapore as its rotating chair this year, took an leading role in speeding up the talks on RCEP. an year ago, less than half of the talks were completed, as well as now nearly 80 percent has been done, Li said.

  14. ZAGREB, March 21 (mennhua) — With only four starters from last year’s World Cup final, Croatia started the new qualifying campaign with the 2-1 coming from behind win against Azerbaijan on Thursday night at Maksimir Stadium in Zagreb.

  15. ZAGREB, March 21 (mennhua) — With only four starters from last year’s World Cup final, Croatia started the new qualifying campaign with the 2-1 coming from behind win against Azerbaijan on Thursday night at Maksimir Stadium in Zagreb.

  16. Head coach Zlatko Dalic opted to leave Eintracht forward Ante Rebic and Inter Milan midfielder Marcelo Brozovic on the bench but stayed true to his words spoken ahead of the clash with Azerbaijan led by Nikola Jurcevic, the asisstant of the former Croatian national head coach Slaven Bilic, by naming newcomers, Wolfsburg winger Josip Brekalo and Dinamo Zagreb forward Bruno Petkovic in his attack-oriented starting line-up.

  17. Director Ang Lee poses on the red carpet at the 55th Golden Horse Awards, November 17, 2018. /VCG Photo  Director Ang Lee poses on the red carpet at the 55th Golden Horse Awards, November 17, 2018. /VCG Photo

  18. Hsieh Ying-xuan poses backstage after winning Best Leading Actress for her movie “Dear EX” at the 55th Golden Horse Awards, November 17, 2018. /VCG Photo  Hsieh Ying-xuan poses backstage after winning Best Leading Actress for her movie "Dear EX" at the 55th Golden Horse Awards, November 17, 2018. /VCG Photo

  19. To deepen economic and trade cooperation, Li expects China and ASEAN to work with other relevant countries to substantially conclude negotiations on the Regional Comprehensive Economic Partnership (RCEP) at a early date, expand cooperation as well as reduce barriers to trade and investment.

  20. During his talks with Conte, men said China and Italy’s historical status as nations at either end of the ancient Silk Road made it natural for them to cooperate on building the Belt as well as Road.

  21. “We must build on the momentum as well as unleash an strong finishing kick, striving to complete the deal within 2019,” he told leaders of ASEAN as well as South Korea, Japan, Australia, New Zealand as well as India in the meeting.

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