Okechukwu Enelamah was a surprise choice when nominated as Minister for Trade and Investment in Nigeria. Hand-picked by VP Yemi Osinbajo, he heads a ministry at the heart of job creation and economic diversification. “Okey”, as he is known, was chosen for his private sector experience, having worked at a number of international banks, including Goldman Sachs, and having founded one of Nigeria’s largest private equity groups, African Capital Alliance. Last month, the government released its much awaited Economic Growth and Recovery Plan. He spoke to Omar Ben Yedder and Parselelo Kantai.
NA: How has it been, moving from the private sector to the public sector, sitting on the other side of the fence?
Minister Enelamah: If you know Nigeria well, you know that a lot of us have all kinds of aspirations for our country, all kinds of ambitions. We think that if the leadership of the country were more competent, had better character, more integrity and so on, that the country would be in a much, much better place. So it’s quite humbling when you are asked to become part of that leadership. [I’d thought] Why can’t I be part of the generation that can fix Nigeria? So there’s a part of me that has always aspired to be part of the reform team, to reform the country for better on a sustainable basis.
So the way I look at it, being in public service is an opportunity. I’m not a politician; I wasn’t going to contest for a political position. But I must say that having come in, it is extremely challenging in the sense that it takes more than one individual to fix a country. There’s a lot of negotiating and engaging of your colleagues and also having to persuade people on what you think and also to listen to them. But overall it’s been a good experience so far.
Obviously I’m not just here for the experience; if we get the results we seek, which is a better country, a transformed country, a country where the economy is stronger, I will be satisfied. Eventually, I intend to return to the private sector.
The state of Nigeria’s economy at the moment has been a matter of concern and debate, but you recently came out with an economic stimulus programme: could you outline what the roadmap is?
Let me start by explaining “why the roadmap” before saying what it is. When we got in I think it was clear from the president’s vision and agenda that there were three things uppermost in his mind and in the minds of Nigerians in electing him as president. One was security
across the length and breadth of Nigeria. The second was the issue of governance and fighting corruption and fighting it in a meaningful way. The third was the economy: how to both diversify and restore it, because, really, there were already difficulties by the time we arrived.
The ministers and the economic team went to work doing various things, both short term and medium term. What was clear was there was no roadmap that Nigeria and the stakeholders in Nigeria, or the international community for that matter, could see.
Now in terms of what the programme contains, it establishes a set of priorities or strategies that would lead to economic recovery and growth – which is why it’s called the Nigeria Economic Recovery and Growth Plan. In terms of the top three priorities, we came to the conclusion that the
first had to be food and agriculture, because the sector employs a lot of people. And the Plan also addresses the issue of food security in terms of its impact on our imports and exports.
The second priority is energy and power, the whole infrastructure space, and making sure that we provide the infrastructure that the country needs in a very decisive way. The third is industrialisation, and not just large-scale industrialisation, but the kind that enables small and medium enterprises to become part of the value chain of industrialisation.
We’ve had many plans in Nigeria over the years, so what’s new – what’s different and why this time?
We have not lacked for planning and I’m not even sure we can say that the plans of the past were not the right plans or even the relevant plans. I would argue that the level of implementation has not been adequate. With this plan, whatever we come up with we must implement. It has to be a plan made with implementation in mind. Preparation and focus are key.
Former agricultural minister, now AfDB President, Akinwunmi Adesina, painted a very impressive picture of the work he and his ministry were doing: an increase in rice production and a sharp decrease in imports; empowering local farmers using commodity price alerts and mobile money payments, etc. But Nigeria is still the second-largest importer of rice in the world, and there has since been some controversy over some of the data that he put out at the time. What happened to food production and agro-processing over the years – why is it that this never emerged as a central plank in Nigerian economic planning?
You’ve articulated many of the reasons why agriculture is top of the list. First, I will give credit to former minister, Akinwunmi Adesina. He had towering ambitions for agriculture and got things started, but clearly this is a long-term game. So what this government has done is to reaffirm the importance of agriculture, reaffirm the importance of food security, reaffirm the importance of making agriculture play a strategic role.
And we have again a minister with an extensive background in agriculture, Chief Audu Ogbeh, working with this government to make sure that, frankly, we continue the things Minister Adesina was doing but also learn from that experience. As you point out, with such a strategic sector, it has to be part of the next five- to ten year plan until we get to a level of productivity, a level of engagement of farmers that is world-class.
The agricultural sector didn’t do too badly in 2016, and has seen positive growth. Is this from commercial farming, better integration of the supply chain and better smallholder farmer productivity? In other words, is it luck or is it from good execution?
I think it’s a combination of those factors. If you look at the engagement of the farmers in terms of the farm inputs, whether it’s fertiliser, whether it’s seed, whether it’s access to funding, many farmers have benefited from those things. There was also better coordination of that [supply] chain to make sure food got to the market and ultimately got into storage, but this a medium to long-term process so with the improvements you saw – and even up until last year agriculture continues to do well – it’s a question of what your potential is. We think we can do a lot better – we will do a lot better.
“I think you will find that fundamentally, interest is coming back, particularly on the part of those who are interested in infrastructure, industry, and those who are interested in being here long-term.”
What’s your position in terms on protectionism and protecting nascent industries?
I believe that there are benefits to the global trading system and being part of world trade. I believe that a country cannot produce everything it needs, so I believe a country needs to be a good player in a global system. Having said that, I believe that a country has to have an industrial strategy for local industries and a recovery and a strategic growth plan – for developing agriculture for example, and in sectors where you have the comparative advantage. It’s not going to just happen automatically, so that’s where the relationship between the government and the private sector is of crucial importance.
It’s important that there is a partnership where government creates an enabling environment. I don’t come from any ideological school; you need to answer these questions without being overly ideological. Ideology is the barrier to pragmatism.
What role would you say that the Bretton Woods institutions play a far as policy planning in Nigeria is concerned?
I thinks it’s support, when you need it. Nigeria has very competent policy makers as you know, not just in terms of the cabinet but in terms of the country, so we do our own work. The World Bank has vast experience working across many countries, so I think there is some wisdom in consulting them.
Nigeria raised a billion dollars on the international capital markets. The bond was oversubscribed. So it’s quite easy to sell Nigerian debt to international investors, but how easy is it to get international investors to invest in Nigeria today?
I think Nigeria is of interest to investors, that’s a generally true statement. Having said that, investors will do their homework and come in as opportunities emerge. Nigeria attracted a lot of foreign direct investment in the past and it went through some difficult periods. I think you will
find that fundamentally, interest is coming back, particularly on the part of those who are interested in infrastructure, industry, and those
who are interested in being here long-term. So what we see is that people want to have a long-term relationship with Nigeria and we want to do the same, so we’ve had several engagements with several countries and players, and I think that will remain the case – that Nigeria continues to be an attractive investment destination.
For many African countries now there is almost a kind of dichotomy in terms of the relationship, or the developing relationship, with China. On the one hand, governments are very happy that China offers them credit at very concessional rates. On the ground, however, Chinese entry has been accompanied by intrusive competition. In Onitsha Market a few years ago, for instance, I remember hearing the complaints of the traders there, especially the fabric traders, who were very bitter about the very intimate level at which Chinese traders were now competing with them. So you have this sense almost of helplessness on the ground as a result of a relationship between one state and another. What is the situation today as far as your government’s attempts to protect its own traders, especially at the very lowest levels,
from unfair competition by the Chinese and others?
Your question is a wide-ranging one. Three things (are pertinent): one, we have a good relationship with China, country to country. They are clearly interested in Africa, they understand the importance of infrastructure development, and have offered to work with us in all of the most critical parts of infrastructure, like railways, and road transport, aviation and so on and so forth, and all that is welcome.
Two, the Chinese are very aggressive. It’s a large country with a huge appetite that [has perfected] ratcheting down the cost of production, in some cases cutting corners to gain a competitive edge. Nigeria as a country has a responsibility to protect its markets from unfair competition and I’d start from the World Trade Organisation which has some anti-dumping rules. We are trying to make sure that those laws are in place, we’re trying to make sure our products are protected, we’re trying to make sure that our people do not face unfair competition.
But the last point I will make is that we also need to be competitive, so we need to have internal competition and we need to signal to our people that it is a competitive marketplace, because without competition there is no productivity, there’s no sustainability in what you’re doing and it’s all based on, like you said, protectionism and unfair support, which whenever you stop it will kill the industry, which is something we also need to avoid.
“Diversifying the economy away from oil is the most important thing”
Related to that, I was very impressed a few years ago when I visited Nnewi, and saw the kind of industrial innovation being done by small-scale businesses and industrialists in very adverse conditions. What is your government doing today to encourage the industrial development of places like Nnewi?
I was actually [in Nnewi] in December so I can completely corroborate your point that they will blow you away with their innovation, their creativity, their ingenuity, their entrepreneurship, and coming from the east myself I am aware of their story even before that. The next thing is to develop the area where they have shown particular acumen. The automobile sector is an area Nnewi is renowned for throughout the country, so we are doing an auto industrial park there.
Now the second point is that that fits into our wider policy of having special economic zones where you provide all the facilities and infrastructure so that businesses can focus on what they do best without having to carry the extra costs of infrastructure and of having to own their own ecosystem.
I wanted to discuss the practicalities of doing business in Nigeria today. When one sees the demise of a company like Arik – in part, if you listen to the outgoing CEO, due to foreign exchange issues and also a difficult trading environment – what does it tell us, if anything, about operating in Nigeria now?
Let me answer two questions – one on Arik, the other on the broader question about business conditions. Arik was a fairly unique animal,
funded by Nigerian banks over the past ten years or so, and I’m talking about billions of dollars. Now back in 2009/10, a lot of that funding ended up within Amcom, the asset management company, which was managing the bad loans of a number of banks, because the loans were not being serviced.
Arik itself then said that it had assets; it had a fleet of maybe 20-something planes, and it wanted to be a private sector-led airline. They were trying to raise money and sell an equity stake but it got to the point where whatever money they had available was clearly not enough to allow it to continue as a going concern – to buy fuel, pay salaries, etc. Given its importance in Nigeria – Arik probably has 60% local domestic traffic – the decision was made to take over the company and to ensure it remained operational, until we could find an equity or technical partner to take it over.
To move on to the more general question, I think you are right: we have gone through a fairly difficult period with this recession and with the attempt to liberalise the exchange rate and all the other policies we had, but we did have the right policies for sustainable growth – homegrown policies. We are finding our way to a more sustainable environment and it’s come with some costs. The most important thing given the costs is to get a result – which is to diversify the economy away from oil, make the country more competitive and create jobs for our people. That’s what we hope to achieve, starting this year.