How ERGP focus labs address investors’ concerns

The cardinal objective of the Economic Recovery and Growth Plan (ERGP) which the federal government launched about one and half years ago is to achievement of economic recovery through activation and accelerated development of the non-oil sector, for the purpose of ushering a new era of sustainable economic growth and development.

The aim is to restore economic growth, invest in people and a globally competitive economy towards national prosperity, happiness and wellbeing of all Nigerians, irrespective of tribe, religion or political affiliation. It aims at creating a society where respect for rule of law and fundamental human rights would be paramount.

In March this year, the government took a step further to ensuring the ERGP records as much success as intended by organizing focus labs for investors in Abuja - the first of its kind in the country.

The event, which brought together over 300 participants representing 180 firms, served as a driver for the ERGP and the key to unlocking investment potentials in the several sectors which are expected to lead the envisaged economic recovery and growth. It was modelled after a similar programme that helped turns around the economic fortunes of Malaysia, and actually had experts from that country in attendance - alongside Nigerian experts.

One of the objectives of the focus labs which had across board of participants like government functionaries, investors, experts and financiers was building of trust among key stakeholders in the Nigerian economic sector. This has gotten key private and public sector stakeholders together to brainstorm on practical and workable solutions which can deliver the kind of results the country needs in its quest to achieving economic recovery and sustainable growth.

Senator Udoma Udo Udoma, Minister of Budget and National Planning whose ministry coordinates implementation of ERGP and also organized the focus labs, said the objective of the event was to catalyse private capital inflows to finance projects across the country. “Our aim is, simply put, to raise the level of productivity in Nigeria”, he said. “We want more things to be grown in Nigeria. We want more things to be made in Nigeria. We want more opportunities created for Nigerians to be able to work. That is what the focus labs are all about”

Thus the gave private sector investors the required commitment and resolution to investment concerns thereby making them to commit to taking investment decisions that would help kick start the recovery process.

Udoma said at the close of the focus labs that they succeeded in the objective of building trust and achieving a consensus among participants on what needs to be done to make the economic recovery programme achieve its objective.

The event, which involved 67,200 manhours of 22 syndication meetings, provided opportunity for key stakeholders in the public and private sectors to brainstorm on the possible challenges that could impede the success of ERGP and, most importantly, find solutions to them. It focused on private sector investors, since they are the one that will drive implementation and success of ERGP. Among objectives of the focus labs was the need to identify projects that were considered as Entry Point Projects (EPPs) with potential to make strong, catalytic impact on investment and job creation, also develop practical and feasible plans as well as strategies to implement them, with the assistance of individuals and experts responsible for the sectors involved. The event was also targeted at breaking down silos in order to establish and harness public-private partnerships

At the time the curtain fell on the sixweek event, there was a consensus among participants that ERGP is on course and would, if painstakingly implemented, take the country out of the economic doldrums in which it has been for decades.

There were some identifiable gains of the first focus labs that may be held in a series. In practical terms, the event succeeded in identifying investment potential in some key sectors of the economy, such as agriculture, transportation, manufacturing, as well as power and gas, collectively estimated at about $22.5 billion, with potential to create about 500,000 jobs by 2020, the end of the life cycle of ERGP.

A remarkable feature of the focus labs and a novelty in encouragement of private sector participation in the nation’s economic recovery process was the rating of projects in the manner hotels are rated from zero-star to five-star. A zero-star rating meant that a project needed to be worked on, even if it had potential, while increase in rating showed projects that were at different stages of progress or readiness. Udoma said a four or five-star project was good to go, and only needed finishing touches to enable it to take off. This could be in form of financial backing or regulatory approval.

Investors with projects that were lowly rated had the opportunity of one-onone meetings with experts, with more opportunities for follow-up meetings with bureaucrats in the relevant ministries, for the purpose of getting the projects finetuned in terms of design and packaging, to make them attractive to potential foreign partners. The aim is to ensure that every project attains a five-star status.

The testimonies of participants at the focus labs showed that there was general satisfaction with their outcome.

Some of the immediate benefits participants derived from the focus labs include the fact that there were those who obtained approvals to facilitate the take off of their projects with ease - something that might not have been achieved over many months of trips to Abuja.

Udoma named a company called Our Collective as being able to obtain Letter of Intent (LOI) from the Ministry of Transportation to be able to access funding to the tune of $500 million. He said participation in the focus labs enabled another company, Kabara Mining, to have its application for renewal of license, which had been pending over a long period, finalized by the Ministry of Mines and Steel Development. Another company, Poliguard Investment, received LOI from SMDF in favour of the export agency of the United Kingdom.

Spring Fountain is an aviation company that is involved with Boeing Corporation of the United States in four projects that would not only lift Nigeria’s status in the international aviation industry but also help in achieving the objectives of ERGP.

The first project is aimed at working with the American aircraft manufacturer to make Nigeria the aircraft leasing hub in Africa. The second project is to create maintenance, repair and overhaul (MRO) facility to be located within Nigeria’s airspace. The aim is to transform how aircraft are repaired and how Nigeria and Africa can interface within the aircraft repair value chain.

Location of the facility in Nigeria would not only allow for aircraft repairs and maintenance to be carried out in the country, aircraft components would also be manufactured in the country.

Samuel wrote this piece from Kaduna.