Refocusing Trade Policy and Industrialization in Nigeria

KEYNOTE SPEECH DELIVERED BY PROF. BENEDICT ORAMAH, PRESIDENT AND CHAIRMAN OF THE BOARD OF DIRECTORS OF THE AFRICAN EXPORT – IMPORT BANK ON THE THEME: REFOCUSING TRADE POLICY AND INDUSTRIALIZATION IN NIGERIA: PROSPECTS AND CHALLENGES OF THE AFRICA CONTINENTAL FREE TRADE AGREEMENT” AT THE NIGERIAN 59TH INDEPENDENCE ANNIVERSARY CELEBRATION GALA NIGHT ASO ROCK, ABUJA, 1ST OCTBER 2019

I deeply appreciate the privilege of standing on this podium on a very special day for Nigeria to address this August audience. I thank His Excellency, President Muhammadu Buhari and his Government for the honour accorded me and the African Export – Import Bank, the institution I lead.

I take this opportunity to put on record our appreciation for the strong support Afreximbank receives from Nigeria under the leadership of President Buhari.

I stand inspired by the opportunity to speak on a subject matter of my conviction, and to which Afreximbank has committed significant resources.
With the coming into force of the Africa Continental Free Trade Agreement (AfCFTA), Africa has finally taken decisive steps to rid itself of the vestiges of colonialism, a pre-requisite to achieving meaningful economic progress.

In a remarkable stream of events, African leaders rose to the challenge of their calling; courage trumped fear, vision upstaged myopia, and collective self-reliance became the clarion call for a continent so divided so that it could be exploited.

Nigeria should be proud to have been the main driver of the progress we are witnessing. From the Lagos plan of Action some 39 years ago to the Abuja Treaty in 1991, it was in Nigeria that the child called the AfCFTA was conceived.

Although it was eventually delivered in Kigali, Rwanda in March 2018, that Child’s future looked uncertain until Nigeria blew life into it when President Buhari signed the Treaty on behalf of Nigeria in July this year.

Your Excellencies, distinguished Ladies and Gentlemen, permit me to spend a few minutes to lay out the historical context that should drive the attitude and approach of Africans towards the AfCFTA. I do this mindful that it is the knowledge of our history that will help us shape our vision for tomorrow.

Contrary to the narrative that paints Africa as a historically backward and barbaric, as a “shithole” continent, in the medieval times and even before, Africa was great.

That greatness was built on industry and the trade that blossomed between and among African kingdoms which created tremendous wealth and civilizations that rivalled those in other parts of the world at that time.

Some of the kingdoms that flourished within and around the present-day Nigeria included the Old Mali Empire, the Kanem Bornu Empire as well as the Old Benin and Oyo Empires.

The Arab Chronicler AL Umari wrote that in 1324, Mansa Musa, the King of Old Mali Empire went on a pilgrimage to Mecca, stopping in Cairo enroute. He gave out so much gold in Cairo, that gold prices were depressed for years.

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Mali attracted global attention and appeared on the “Map of the World” drawn by Angelino Dukert of Majorca in 1339 and on many other world maps subsequently.

Scholars and designers from the Arab world migrated to Mali, and Timbuktu emerged as the centre of learning, architecture and commerce. It is reported that the Kingdom traded from as far North as Morocco to as far South as the Coastal West African Kingdoms.

Take the case of the Old Benin Kingdom. In 1691, the Portuguese seafarer, Lourenco Pinto, visited the Kingdom. He was astonished by what he saw and wrote:

“Great Benin, where the king resides, is larger than Lisbon; all the streets run straight and as far as the eyes can see. The houses are large, especially that of the king, which is richly decorated and has fine columns.

The city is WEALTHY and INDUSTRIOUS. It is so well governed that theft is unknown, and the people live in such security that they have no doors to their houses.”

The greatness of the Old Benin Empire was again hinged on industry and trade. It is reported that the empire traded with Kingdoms as far West as modern-day Ghana, supplying them textiles and beads.

The intricate intra and inter-Kingdom trade linkages built at that time were extremely difficult to break by outsiders.

It is no wonder that when the colonial powers arrived, they adopted the strategy of defeating the Kingdoms and splitting the continent into small fragmented, incoherent units.

It was that strategy, so effectively implemented, that laid the foundation for, and sustained the economic backwardness of Africa to this day. It was that strategy that deprived Africa of the benefits of intraregional economic intercourse. Mr. Albert Sarraut (1872-1962), a Colonial Administrator in the 1920s captured that strategy in his writings and I quote:

“Economically, a colonial possession means to the home country simply a privileged market whence IT WILL DRAW THE RAW MATERIALS IT NEEDS, DUMPING ITS OWN MANUFACTURES IN RETURN. Economic policy is reduced to rudimentary procedures of gathering crops and bartering them.

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Moreover, by strictly imposing on its colonial dependency the exclusive consumption of its manufactured products, THE METROPOLIS PREVENTS ANY EFFORTS TO USE OR MANUFACTURE LOCAL RAW MATERIALS ON THE SPOT, AND ANY CONTACT WITH THE REST OF THE WORLD. THE COLONY IS FORBIDDEN TO ESTABLISH ANY INDUSTRY, TO IMPROVE ITSELF BY ECONOMIC PROGRESS, TO RISE ABOVE THE STAGE OF PRODUCING RAW MATERIALS, OR TO DO BUSINESS WITH THE NEIGHBOURING TERRITORIES for its own enrichment across the customs barriers erected by the metropolitan power.”

Your Excellencies, distinguished ladies and Gentlemen, you can see from the foregoing that the AfCFTA represents the first major move by Africans towards full economic independence; it creates an unprecedented opportunity for Africa to finally take its destiny in its own hands;

to sound a death knell for a culture of dependency foisted on it by history; to turn away from a choregraphed march to perdition; and to say never again to 84,000 Km of borders that divide us. While the political act of signing and ratifying the AfCFTA is an important step, it is only the beginning.

The road ahead will be difficult. As we travel that difficult path, there will be disappointments just as there will be occasions to celebrate. Every step we take must be deliberate with a single-minded focus on the ultimate goal – a continent that becomes an integrated economic whole that leverages the strengths of its constituent units to generate a dynamic force for good for all Africans.

Nigeria has a very important role to play in this movement. Just as it led the efforts to a total political emancipation of Africa, Nigeria must take the lead in the emerging struggle for economic freedom.

The objectives are similar, but the methods will differ. Instead of waving flags and sloganeering, economic policies will represent the beacons on the path we have chosen; markets and not war fronts will represent the theatre of the struggle.

The path to economic freedom can only be charted within a strategic mindset. It seems to me that the optimal strategy should be one that reverse-engineers the colonial strategy as set out by Mr Sarraut.

As the colonial strategy was focused on commoditizing Africa, we must aim to add value; where the colonial strategy emphasized deindustrialisation, we must emphasise industrialisation;

as the colonial strategy built walls that fragmented Africa and forbade trade amongst African countries, our new strategy must focus on tearing down the walls that divide us. We must promote intra-regional trade and investments.

Your Excellencies, Distinguished Ladies and Gentlemen, what I am proposing is not new. In his book Africa Must Unite, published in 1963, Dr Kwame Nkrumah wrote, and I quote:

“………. the economic weakness of the new African states has been inherited from the colonial background, which subordinated their development to the needs of the colonial powers.

To reverse the position and bring Africa into the realm of highly productive modern nations, calls for gigantic self-help programme. Such a programme can only be produced and implemented by integrated planning within overall policy decided by a continental authority”
While the African Union provides the platform for sustaining the political independence of African nations, it is the Africa Continental Free Trade Agreement that will provide the platform for collective self reliance.

Every African must therefore welcome the AfCFTA and thank our leaders for making it possible against all odds. Special thanks to His Excellency President Muhammadu Buhari for bringing Nigeria into the fold. Continental integration without Nigeria would have tasted like tea without sugar!

Your Excellencies, Distinguished Ladies and Gentlemen, although the promise of the AfCFTA in terms of development outcomes is not in question, the road ahead is likely to be rough and turbulent.

It is the well prepared that can best manage the adjustment costs and difficulties that the AfCFTA may bring; it is the WELL PREPARED that can gain the full advantage of the opportunities the AfCFTA offers.

Nigeria has a great opportunity to benefit immensely from the AfCFA if certain actions are taken at Federal, State and Corporate levels, and most especially if those actions are coordinated.

Your Excellencies, distinguished ladies and Gentlemen, it goes without saying that any country confronted with a potential change of massive proportions as Nigeria and others have committed to under the Continental Free Trade Agreement must plan for it. Such a plan should set short, medium- and long-term goals for the country and how these goals can be achieved.

Without prejudice to the prescriptions of any such plan for Nigeria, it seems to me that the priority in the short term should be how to minimise the fiscal revenue losses that the AfCFTA may engender so that it can continue to receive support of key segments of the society.

Afreximbank estimates that continental fiscal revenue losses attributable to the AfCFTA could exceed 4 billion US dollars per annum in the early years of implementation.

The Bank has therefore agreed with the African Union to put in place an AfCFTA Adjustment Facility amounting to up to 3 billion US dollars of which Afreximbank has committed an amount of 1 billion US dollars, while working to raise the balance from the markets.

This facility can be available to Nigeria should it be required. Another important short-term priority should be to ensure that Nigerian businesses are well prepared to take advantage of the market opportunity the AfCFTA will throw open.

This will involve reducing the cost of doing business and properly resourcing the Nigerian Export Promotion Council to run workshops on “How to Export to Africa” for the organized private sector, especially the Manufactures Association of Nigeria (MAN), Chambers of Commerce, etcetera.

Afreximbank is currently supporting such programmes in some countries and will be pleased to do the same for Nigeria.

As a matter of short-term priority, Government should consider triggering an adjustment process for operators in sectors likely to be negatively impacted by the AfCFTA.

It will be unwise to aim to prop-up uncompetitive sectors. Rather, operators therein should be assisted to adjust in an orderly manner to other activities.

Arrangements should also be put in place to support those that can become competitive by simple re-tooling and transforming from import substitution to export orientation.

For instance, a manufacturer in Calabar who used to produce for the Lagos market may suddenly find that his/her best market is Douala in Cameroon! Helping companies think and act continental should also receive urgent attention.

Afreximbank recently committed an amount of 500 million US dollars to members of MAN for this purpose. The Facility is expected to help them improve their equipment to make them export ready.

Another important short-term priority of the Government should be to make appropriate and credible trade information available to Nigerian businesses interested in international trade, especially intra-African trade.

The AfCFTA creates the legal basis for a potential pan-African market in goods and services but does not create the market! Creating the market is the job of economic agents.

The operation of these agents is usually driven by information, an item in such a short supply in Africa that it stands as a key constraint to promoting intraregional trade. A study commissioned by Afreximbank, UNCTAD and the Commonwealth Secretariat revealed that:

i. South Africa imports leather further prepared after tanning, from India at a price which is double the price at which Ethiopia exports the input to the world. ii. Mauritius and Nigeria globally import leather products from Italy and Belgium at a much higher costs as compared to what South Africa and Botswana globally exports.

iii. Kenya imports raw hides from New Zealand while Burundi exports the same to the world at a much lower price. So, unless businesses and traders know where the markets for their goods are or where they can source inputs, they cannot participate fully in the market the AfCFTA is hoping to create.

Government must therefore consider providing a solid modern trade information service as a priority as the AfCFTA takes root. Trade information delivered with the latest digital technology may become the most cost-effective way of opening the African market to Nigerian businesses.

Such a project is underway at Afreximbank. This is in addition to the biennial Intra-African Trade Fair Afreximbank launched in Cairo in 2018 in partnership with the African Union. The second edition is planned for Kigali in September 2020. We look forward to a strong Nigerian contingent.

Your Excellencies, Distinguished Ladies and Gentlemen, the strongest economic argument in favour of the AfCFTA is that it will help African economies to industrialize and improve Africa’s share of global manufacturing output.

Accordingly, for Nigeria, as for other African economies, the medium- to long-term goal under the AfCFTA should be to achieve clearly defined levels of industrialisation

But where should the focus be? Should the focus be on labour- or capitalintensive industrialization? Distinguished Ladies and Gentlemen, available evidence shows that labour intensive light manufactures offer the greatest market opportunity for Nigeria.

Today, these products amount to 60 billion US dollars of intra-African Trade. China is also gradually moving away from the production of such goods, opening opportunities for African economies to aim to replace the over 65 billion US dollars in light manufactures China currently exports to Africa.

Nigeria stands a very good chance of capturing a significant proportion of that market. Capturing just 15 percent can boost Nigeria’s non-oil export performance by about 300 percent, to 14.6 billion U.S. dollars (up from 4.8 billion US dollars in 2018) while creating over a million jobs.

The levels of unemployment in Nigeria will also recommend that a focus be kept on labour-intensive industrialization. Labour cost per month for factory labour which averages about 80 US dollars in Nigeria is one of the lowest in the world.

Nigeria’s population is also quite young, with those under 30 years expected to reach 28 percent by 2030. If these youth do not find work, they can constitute a significant force for insecurity in the country.

Capital on the other hand is harder to access, more expensive and very short term in Africa when compared to most other parts of the world. It follows therefore that an optimal industrialization strategy for Nigeria should be one that emphasises labour intensive industrialization.

This conclusion has far reaching implications. It suggests that resourcebased industrialization for Nigeria may not necessarily target its abundant natural and agricultural resources especially if the capital cost of extracting and adding value to them is too high and the process requires limited use of labour.

For instance, if a dollar spent in building a modern cotton spinning factory generates less employment and less export unit value than a dollar spent in building a garment factory, the country may be better off promoting the export of raw cotton or cotton lint and re-importing fabrics for use in making apparels for export. Overtime, capital may then be accumulated to justify the backward integration into yarn.

An important area of emphasis should be the auto Industry. A car is made up of about 3,000 components each of which can be produced by labourintensive factories. An auto industry strategy that prohibits imports of used cars and also creates credit facilities for car purchasers will create millions of jobs. Afreximbank, the AU and major vehicle manufacturers are currently promoting this initiative.

I am happy that Nigeria is part of the discussions. While I am proposing that emphasis be placed on labour-intensive light manufacturing, I must quickly add that there are aspects of heavy industries that are crucial, and which present low hanging fruits for the country.

For instance, the Dangote Refinery and the associated petrochemical facility can be transformational to Nigeria and deserve full Government support.

The Petrochemical plant will produce important raw materials that can serve as inputs in light manufacturing while complimenting fertilizer supply from fertilizer plants operated by Notore and Indorama to potentially make Nigeria a major net fertilizer exporter to the rest of Africa and even beyond.

The Dangote refinery which has the capacity to supply the needs of entire West Africa, can form the basis for making the Gulf of Guinea a major global refining hub creating foreign exchange earning services and activities that will employ many Nigerians and other Africans in the Gulf of Guinea.

There is no reason why Singapore, which does not produce any oil, should have more refining capacity than Nigeria and the Gulf of Guinea. It is in recognition of its transformative power that Afreximbank has invested 1 billion US dollars in support of the Dangote Refining project.

The Government should also consider putting to work the heavy industrial capacities that are already in existence across Nigeria. The Aluminium smelter at Ikot-Abasi can add impetus to the economies of Guinea and Nigeria if put back to work.

Guinea’s abundant bauxite resources can be more economically transformed using abundant gas available in Nigeria in a win-win collaboration that can set the stage for similar sensible use of resources across the continent.

Ajaokute and Aladja Steel facilities also present rare opportunities for reviving heavy Industries. These opportunities must be seized because major Investments have already been made. Afreximbank is able to support bankable initiatives that can put these assets to work.

Distinguished ladies and gentlemen, while the AfCFTA offers Nigeria an opportunity to industrialize and expand export manufacturing, it will be up to Nigeria and Nigerian businesses to seize the opportunity. The goods have to be produced competitively and traded.

Access to markets is critical as no meaningful production can occur if goods produced cannot be sold. Manufacturers are in most cases not traders and can not therefore be relied upon to trade what they produce. I met a young Nigerian trader in a southern African country some time ago.

He looked well and told me he was a major distributor of consumer goods produced by a factory in that country.
“I know they don’t like me” he said looking at me straight in the eye. “But they need me or else they will have to eat what they produce”.

That conversation encapsulates the importance of the trader. Countries that became successful in export manufacturing, such as Japan and South Korea supported the emergence of Export Trading Companies.

These companies marketed the merchandise produced by SMEs in their countries around the globe, providing branding, sourcing market intelligence on behalf of the different manufacturers and serving as anchors for credit granting to the numerous manufacturing entities that they represent.

This was how global giants such as Mitsubishi and Mitsui in Japan and Samsung in South Korea emerged. Egypt’s Al Nasr played the same role up to early 1990s. In contrast, Nigeria has for too long left the trading of its light manufactures and agricultural products to informal traders.

Every week more than 100 trucks loaded with light manufactures, such as shoes and apparels made in Aba, head to Cameroon. It is all well and good as those exports create jobs and wealth. I, however, invite you to pause for a moment to consider the opportunity being missed due to the informal nature of this trade.

It is because we recognize the importance of Export Trading Companies in any arrangement to boost export manufacturing that Afreximbank has launched an Export Trading Company program to help countries create the environment for the emergence of such companies and to support them with Packing Credits, export development financing, guarantees and trade information services.

I invite Nigeria to also consider that it has unique market opening opportunities that when combined with the Export Trading Company initiative can lead to the spread of the Nigeria brand like the proverbial wildfire in the harmattan. For instance, in many countries in Central, West and Southern Africa, Nigerian immigrants control a significant share of the import and retail business for auto parts, plumbing materials and other light manufactures.

I encourage Nigeria to study the size and scope of the market these represent and how these small retail businesses can be outlets for Made-in-Nigeria merchandise.

Re-orienting them to source from Nigeria, instead of elsewhere, can create the demand that can within a short period expand manufacturing capacities in Nigeria: Export Trading Companies can be used to extend incentives, including credit, to them in the recognition that as non-resident Nigerians they also contribute to the Nigerian economy.
Further, a deliberate effort needs to be made to leverage the reach of Nollywood across Africa and use it to create and nurture a uniquely Made-in-Nigeria brand for Nigeria’s manufactured goods.

To understand the opportunity the creative industry can offer, consider how denim jeans was rapidly spread around the world by the US movie industry which in turn boosted the US textile industry. A recent issue of Film Daily wrote and I quote:

“….. this year marks 146 years since Levi’s acquired patent of the eponymous 501 Jeans. While Levi Strauss and Co. was born and bred in San Francisco in 1853 it wasn’t until Marlon Brando wore a pair of jeans in the Wild One that the company gained worldwide recognition. And today Levi’s jeans are a classic staple in every denim wearer’s wardrobe”

Let’s bring our minds back to Africa and Nigeria and consider what will happen if the popular Nollywood actress Genevieve Nnaji wears an appropriately and consistently branded Made-in-Nigeria apparel and there is a coherent distribution network to supply the demand that will follow across the major African markets?

The message in all of this is that trading manufactures across borders is different from trading raw commodities. Branding is key and in the context of the AfCFTA it is important for Nigeria to build a national brand for Made-in-Nigeria manufactures.

Professional branding companies will be required but underpinning the branding should be the Promotion of Export Trading Companies to ensure that branded goods are distributed and serviced.

Nollywood and the network of Nigerian owned retail businesses across many African countries provide unique advantages the country must exploit.

Your Excellencies distinguished Ladies and Gentlemen, it is competitively produced goods that can enter the international market and thrive. While efforts are being made to improve the state of infrastructure in Nigeria, the current situation is that in some locations, it cannot support competitive manufacturing.

And if the government agrees to focus on light manufactures, most of the activities will be driven by SMEs with limited capacity to invest in their own infrastructure. Nigeria should consider accelerating the implementation of its decision to use restricted geographic areas as centres of manufacturing.

These zones, designated Special Economic Zones, Industrial Parks or Export Processing Zones, will provide first class and cost-effective infrastructure where industries can locate and produce competitively for the global markets.

Afreximbank has agreed with the Government to be part of the investors spearheading the development of such zones in Lekki , Aba and Kano.

Although negotiations are yet to be concluded regarding how goods from such zones will be treated under the AfCFTA, I believe that production cost advantages that goods so produced will enjoy, will more than compensate for any tariffs that may be imposed, in the event such goods are not admitted under the AfCFTA.

There is also some urgency with regard to improving the state of Nigeria’s quality infrastructure.

The AfCFTA will require that goods of certain standards be traded within the Free Trade Area The quality, number and spread of testing, inspection and certification centres will determine the extent to which Nigeria can actively participate in the emerging continental market.

Afreximbank is supporting the work of the AU and African Regional Standards Organization (ARSO) to establish the necessary standards covering various sectors. Nigeria has to invest in developing its quality infrastructure as a matter of urgency.

Afreximbank is implementing an initiative to promote sound Conformity Assessment infrastructure across Africa to be branded Africa Quality Assurance Centers (AQACs). One such center is underway in Ogun State and 2 more are planned, one in the North and the other in the Eastern part of Nigeria.

I must caution that although these will be relatively large facilities, they cannot provide all the testing and inspections required. Public and private investments are needed to bring the capacity closer to what exists in Egypt and South Africa, where thousands of labs currently operate.

Creating industrial capacities will also require significant Foreign Direct Investment flows to sectors other than oil. This will require strengthening the Nigerian Investment Promotion Agency.

It will also require action at all levels to improve the security situation in the country. Nigeria should also consider rebranding itself for Investment promotion – a rebranding exercise that must tie-in with the Nigeria Incorporated branding that should drive the sale of Made-in-Nigeria goods across borders.

An important low hanging fruit will be for Nigeria to design schemes that will help transform Nigeria’s Migrant Remittance flows amounting to over 20 billion US dollars annually from consumption to investment funds.

Your Excellencies, distinguished Ladies and Gentlemen, although I have proposed emphasis on labour-intensive manufacturing, the labourer will not work for free; the labourer will not work with bare hands.

Significant amount of capital is required at Corporate, State and Federal levels to be able to bring Nigeria to the levels near its potential. Nigeria must consider using its banks as development agents.

The banks must be made to truly intermediate; the regulatory framework should make it possible for banks to increase their risk appetite. A minimum loans to total assets ratio should be set and any negative variation after accounting for minimum liquidity requirement should be taxed.

To understand the role Chinese banks played in transforming China, I paraphrase what a Senior Chinese official sati to Afreximbank Board some years back. In the words of a senior Chinese official,

“…when we decided to liberalize and pursue rapid development, we reviewed history and found that all the other countries that had developed plundered other countries, owned colonies …. We knew this was not an option for us …. We could not plunder the already dominant economies so we used our banks.

And today, 30 years later, a banking sector non-performing loan ratio of 6% is a small FEE to pay for being the 2nd largest economy in the world and the largest exporter of so many goods and more …”

Since financing is a critical success factor in exporting and trading generally, it is important that the Nigerian Government develops a comprehensive solution to make Nigeria’s participation in intra-regional trade beneficial. In this regard,

▪ NEXIM should be better capitalized to a level that can make it a serious Export Credit Agency. A situation where its capital is less than the capital of the banks it is intended to support is counter-productive. The Government may consider backing NEXIM’s commitments by way of legislated guarantees to certain levels per annum;

▪ NEXIM should be equipped to develop an arrangement for offering risk-bearing facilities to enable it support exports to riskier regional markets.

This is perhaps the time for the Government to consider activating the Political Risk Fund that was planned to be created to support NEXIM to underwrite the risk of Nigerians exporting to risky markets;Document Classification: Confidential
▪ Government should provide counter guarantee to NEXIM and Bank of Industry to enable them offer medium term financing for retooling factories and creating export production capacities.

Afreximbank on its own offers a broad range of financial support for Intra-African trade under its Intra-African Trade Initiative. For instance: • It signed a framework Agreement with NEXIM and Nigerian Export promotion Council in an amount of 1 billion US dollars to create the Nigeria-Africa Trade and Investment Promotion Programme (NATIPP) to support Nigeria’s trade with other African economies.

• Afreximbank has committed to disbursing an amount of US$25 billion on a revolving basis in support of Intra-African Trade between 2017 – 2021. To date, over 14 billion US dollars have been disbursed. Some of these funds have benefitted Nigerian entities;

• In 2018, Afreximbank launched the Fund for Export Development in Africa (FEDA) designed to provide equity and quasi equity capital in support of entities involved in intra-African trade and investments.

This Fund is more patient than the typical Private Equity Fund and is intended to support equity investments in manufacturing, services and similar dynamic sector.

▪ Afreximbank has also launched a project preparation facility to make it easier for entrepreneurs to better prepare projects and bring them to bankability.

Nigeria banks also have footprints across a large swathe of Africa. These banks can support Nigerian businesses in their trade in the countries where they are represented.

Only a few other countries, namely South Africa, Morocco and to some extent Kenya enjoy this advantage. And because payments remain a binding constraint in intra-Africa trade, Afreximbank has launched the first ever Pan-African Payment and Settlement System (PAPSS) to alleviate this and reduce the foreign currency content of intra-African trade.

PAPSS has been adopted by the African Union and Nigeria is among the piloting countries. Nigeria can over-lay this with credit lines in Naira to its trading partner Central Banks which can help them settle imports from Nigeria, especially for countries that suffer from limited access to foreign currency.

Given the complexity of the work that have to be done, all hands must be on deck. The state Governments should be fully involved so that the opportunities that Nigerian diversity offers can be fully realized.

Some Nigerian States compare favourably to a number of African countries in terms of economic size and population. Take the case of Rwanda. Its GDP amounts to 9.1 billion USD and its merchandise exports amount to 1.1 billion US dollars. 11 Nigerian States have GDPs comparable to or higher than Rwanda’s.

If those States achieve similar levels of non-oil exports as Rwanda, Nigeria’s non-oil export will today be twice its current levels. I raise this as an indication of what is possible and why Sub-Sovereigns must be involved.

Afreximbank is encouraging this and recently signed a MOU with Zamfara State Government, covering 1 billion US dollars to support its textile and solid minerals sectors;

discussions are at advanced stages with the Kaduna Government to support an internal rail infrastructure that can boost cotton production as well as with Imo State Government to promote manufacturing and logistics capabilities.

Your Excellencies distinguished Ladies and Gentlemen, to achieve results a coordinated action will be required. In a long-distance race, it is stamina that counts. In a sprint, speed is supreme.

This race has to be run both as a sprint and a long distance so that Nigeria can accelerate when it needs to while maintaining a steady pace with a view to achieving its ultimate goal. That goal should be set out in a carefully developed strategy and entrusted to accountable set of people to implement.

This leads me to my last recommendation tonight, and that is, that Government should consider creating an agency for AfCFTA perhaps under the Federal Ministry of Trade and Industry. It is this agency that will be the arrow-head for achieving Nigeria’s strategic objectives for membership of the AfCFTA.

Permit me now to once again thank His Excellency President Muhammadu Buhari and his Government for giving me the honour to deliver this important address.

As a young African who left Nigeria some 25 years ago to serve our continent, I feel so pleased to have been given the rare opportunity to speak to a gathering of the highest echelons of Nigerian Society on an occasion to celebrate its political independence, and on a topic that many believe will finally lead to Africa’s economic freedom and emancipation. Document Classification: Confidential

I thank the Organizing Committee of this event under the leadership of the Secretary to the Government of the Federation, Mr. Mustafa Boss, for paving the way for the opportunity to speak here today.

Special thanks to all the dignitaries here present for listening patiently to me. My appreciation also goes to my family and colleagues at Afreximbank for their support and loyalty. And to all Nigerians, I say a big thank you for the honour you have just bestowed on me through the grace of His Excellency President Muhammadu Buhari.

I thank you all for listening