Speaking at the plenary on “Financing the Vision” at Edo State Alaghodaro Investment Summit, in Benin City, Chief Executive Officer (CEO), Nigeria Sovereign Investment Authority (NSIA), Uche Orji, said there was need for governments to look beyond scampering for cash to finance their developmental needs.
He argued that though the most likely option would be for state governments to provide guarantees for investment, there was need to explore trusteeship and development funds by establishing agencies with good governance structures, independent boards and transparent audit process.
Harping on the need to prioritise investment to boost small and medium scale businesses, he said that states need to create aggregation centers, which will also provide a structured system that can be used to access external funds with guarantees.
“For society to develop, we must build a highly educated workforce. Until we start to create and innovate, and build people’s capacities, we will not attract the needed investments. Investors look out for good education and health indices before they throw in their money,” Orji said.
Jude Chiemeka of United Capital Securities said it was admirable that the Edo State Government is building a progressive and modern economy anchored on leveraging its strategic advantage in natural gas, location and human capital.
“Many governments cannot provide funding to finance development, but what they can do is to ensure sound governance structure, reforms, laws and enabling environment to encourage investment,” he added.
“The private sector cannot go where there is no continuity. Edo’s Internally Generated Revenue (IGR) to federal allocations is approximately 42 percent, but it has other options for financing development. It can use Special Purpose Vehicles (SPV).
“It is important for revenue to come from projects being financed. We can also finance government projects using trustees, ensuring that there is good governance structure and in-depth audit of its operations,” he said.
The Group Managing Director (GMD) of Afrinvest West Africa, Ike Chioke, said that much as there are two currencies – cash and guarantees – with which government can finance development, there is need for creativity to harness the peoples’ potential.
“In Edo State, Arts and Culture is a huge industry but there is still no standard government agency that is leveraging this to deepen economic activities and growth.
“We need an agency that can promote and market Benin arts across the globe. It will also better organise the industry by aggregating works and building vocational institutes to train more young people. However, it needs to be creative in deploying and leveraging other funding structures to grow small and medium scale industries,” he said.
Managing Director, Zenith Capital Limited, Jubril Enakele, said much as government is pushing for funding, if it doesn’t get it right at the artisanal level, it really becomes difficult to drive development.
According to him, “It is possible to create a trust fund, Edo State needs to do that, especially when he does that with the right governance structures, independent boards and proper auditing. This will enable investors and many others outside to repose confidence in the system. There is need to replicate the trust fund model in Edo State.”
He added, “If you do not provide infrastructure for the informal economy, you can’t tap the potential for revenue they promise. You cannot access the money, except you organise them. You can’t ask them for tax if you have not provided infrastructure to ease businesses.”
