‘No country has ever become economic power house without special zones’

Ezedinma Chuma is the officer in charge of the United Nations Industrial Development Organization (UNIDO) Regional Office, Nigeria. He has worked as the monitoring and evaluation advisor for the European Union’s Support to Reforming Institutions and as chief of party for the United States Agency for International Development, Nigeria. He was a senior scientist and agricultural economist at the International Institute of Tropical Agriculture, Ibadan. In this interview with ODINAKA ANUDU, he explains what Nigeria needs to do to stimulate its industrial sector and get out of recession.

What role can industrial parks play in Nigeria’s diversification quest?

The idea of industrial parks was based on several principles which most of all included allocation of specialised infrastructure in selected areas with the aim of decreasing costs connected to building infrastructure and improving the capability of a country to attract new investors.

As special economic zones, industrial parks help to create jobs, increases state, local government and institutional incomes through taxes and duties from companies benefiting from the infrastructure made available through their involvement in attracting investors. It also provides an environment for competition and efficiency.

The United Nations Industrial Development Organisation (UNIDO) is currently working with the government of Nigeria towards the setting up of Staple Crops Processing Zones. These are special economic zones that support value-addition in agricultural products in Nigeria.

Can you share some success stories of industrial parks, using examples from one or two countries?

Success stories are right here with us in Lagos, Nigeria. Lagos is the only state that has become independent of the income from the Federation Account.

This is specifically because of the numerous industrial parks and estates located in various parts of the state. However, two countries of note in our recent history are China and India. Both countries invested heavily on Special Economic Zones, including industrial estates. Other countries considered comparators or peers to Nigeria are Malaysia, South Korea and Brazil. There is virtually no country in the world that has not become an economic power house without the development of Special Economic Zones including industrial parks.

Nigeria can actually become an industrial power house if each state in the federation develops at least one industrial park or agro industrial zone or a special economic zone. What’s your view on the Partnership Agreement proposed by the E U to the ECOWAS? Personally, I do not have the full details of what is contained in the EPA document and so I cannot comment on this objectively at the moment.

How can the Nigerian manufacturing sector   get out of the current  crises?

Most economists have recommended that the only way to get out of a recession is to spend your savings. And since Nigeria has no savings, the country should borrow and spend or encourage longterm foreign direct investments (this will require some significant concessions in the business environment). We encourage investments on a concessionary basis for capital projects (e.g. Infrastructure especially energy, railway lines, seaports, roads). Expenditure on infrastructure creates additional wealth and employment on a long-term basis.

I believe this was where the government was heading when it asked for about $30 billion in loans recently. The loans are tied to specific infrastructure projects. Increased spending in country on such projects injects significant liquidity into the economy, provides the enabling environment for investments and manufacturing and eventually provides the needed employment and growth.

We also have to think of increasing non-oil exports significantly in the short term to shore up the value of the naira.

How is UNIDO helping to strengthen Nigeria’s manufacturing and export sectors?

The global mandate of UNIDO is to promote and accelerate inclusive and sustainable industrial development (ISID) in developing countries and economies in transition.

The organisation’s programmatic focus is structured in three thematic priorities, namely creating shared prosperity, advancing economic competitiveness, and safeguarding the Environment Each of these programmatic fields of activity contains a number of individual programmes, which are implemented in Nigeria to achieve effective outcomes and impacts through UNIDO’s four enabling functions: (i) technical cooperation; (ii) analytical and research functions and policy advisory services; (iii) normative functions and standards and quality-related activities; and (iv) convening and partnerships for knowledge transfer, networking and industrial cooperation. In carrying out the core requirements of its mission, UNIDO has considerably increased its technical services in Nigeria and has also substantially increased its mobilisation of financial resources to support the diversification of the Nigerian economy and improve its export earnings.

UNIDO has specific targeted programmes that support manufacturing (for example the support to the Nigeria Industrial Revolution Plan), investments (for example, the Investment and Technology Promotion Office – the first of its kind in Africa), and trade (the National Quality Infrastructure Programme) in Nigeria. We are also looking at expanding our renewable energy portfolio to support productive (industrial) activities in the country.

Where is the National Quality Infrastructure Programme now?

I suppose your question relates to the status of the National Quality Infrastructure programme. This is one of the flagship programmes of UNIDO which is funded by the European Union. The whole objective of the programme is to improve Nigeria’s economic competitiveness in the non oil sector, especially when it comes to trade. Specifically, the project aims at achieving the following impact on the Nigerian industry and economy: increase exports, in particular of products tested by accredited laboratories; reduce the number of product rejections on the national, regional and international markets due to low quality; improve the image of ‘Made in Nigeria’ products on the local and international markets; and reduce the number of complaints from Nigerian buyers and consumers about the quality of Nigerian products.

It is also aimed at reducing the abuse in the trade system; increasing trace ability used in the industry, commerce and services; reducing cost for the private sector especially certification costs; integrating the Nigerian private sector into global value chains (especially with increases in certification); creating new qualifications in Nigeria with international recognition (i.e. assessors, implementers, third party auditors, internal auditors, quality managers, etc.) and creating additional jobs within the Quality Infrastructure system in Nigeria.

To date, significant progress has been made towards achieving the project objectives. In particular, the project has assisted in the development of a national policy on quality standards, which will enable Nigerian manufacturers and companies to increase their regional and global exports and, at the same time, contribute towards enhancing the ‘Made in Nigeria’ image on local markets.

Furthermore, within the framework of the project, technical assistance was provided towards the creation of domestic quality institutions, such as the Nigerian National Accreditation Service (NiNAS) and the National Metrology Institute of Nigeria (NMI). We will continue to support Nigeria to improve its commodities and goods to comply and conform to international trade requirements.