KELVIN UWAIBI is the pioneer head of the Edo State Investment Promotion Office (ESIPO). In this interview with OSA VICTOR and TELIAT SULE, UWAIBI enumerates the achievements of his agency and calls for synergy between the federal and sub-national governments in order to attract the desired level of foreign investments into the country: Excerpts:
What mandate were you given and how much have you achieved from inception to date?
Interesting, I will say for the Edo State Investment Promotion Office (ESIPO), the office was established in January 2018, with the mandate to facilitate investments. It is for us to ensure that the business environment is enabled, so that investors that want to come into Edo State have seamless experience, whether to set up micro, small and medium enterprises. Right now, we are focusing on the made in Edo goods and we could also add services in that regard.
To the other question on how far we have gone, for those that know us very well, we don’t count ourselves as though we have achieved a lot because whatever achievement we have done is based on collaborative efforts because what we do really is to facilitate. So, it has been a team effort and when I say a team effort, I mean all the MDAs in the state and we all work together as a team. So, whatever achievements we have achieved in the last few years of the inception of the agency are not our achievements alone. I can say that clearly, it has been more of synergy, more of teamwork and collaboration.
Could you please give us on an annual basis, the amounts of investments ESIPO has facilitated and the sectors where those investments were concentrated?
In the last 7 years, we have been able to attract about $2.5 billion in several sectors. The way investment works, is not something you just say, oh, you know what, I talked to an investor this morning, let’s say we are in March, and by April the investment came in, it doesn’t work that way.
Some investors that we wooed about four years ago like the Asian investors, they take between 12 to 24 months before they respond and can even be longer than that. Investors from the West, they do a lot of due process that we call due diligence to ensure that the occasion is right for them to come in.
You know they look at data to ensure that they can have a return on their investment. So, Edo State and thanks to His Excellency, Governor Godwin Obaseki, we have been able to show the state as a preferred destination by making sure that those indices that the investors will examine are readily available. We are working to ensure that power is stable. For example, power is a major challenge for investors. I don’t need to tell us the power situation right now in the state but we have been able to address that to some extent.
Then we talk about infrastructure, especially the roads. I really don’t need to tell you the situation we are having right now on roads. As a state, we will do our part but it is not just about Edo, it is about how we translate that to the Federal Government. I think it is very important when we talk about investment attraction. It is just the recent policy from the federal government that expatriates should pay a certain amount, about $10,000.
Meanwhile, executive expatriates are different from technicians. They are not on the same salary scale. So, when we are talking about investments, while some sub-nationals are doing their best to attract investments, we will still need a whole lot of support from the Federal Government. I think we should actually look at it in a holistic manner, say, categorically that some investors are already telling me that I don’t know how to keep it up.
Imagine an investor that will need 20 expatriates maybe at the beginning, for example you want to start a manufacturing company and the machine they are bringing, people don’t know how to operate it here meaning you will bring your full expatriates to make sure for the next 12 to 24 months before you start to trickle down in terms of capacity building for the local employees.
Without even mincing words, if that policy remains in the next 12 months, the voice we are trying to avoid will be more because we are going to do more importation now. Most of the factories do import substitution by virtue of the products they provide and I think that it is important that we also in our own little economic way try to talk to the Federal Government. The Federal Government sometimes makes decisions without involving us at the sub national to actually understand that this is where the investments are located.
Edo State does not feature among the top states attracting capital importation based on the data released by the National Bureau of Statistics. For the purpose of clarity, could you please highlight the types of investments that came into Edo State?
What we do is direct investment. I have always been of the school of thought and I think I have shared it with my colleagues in the investment space that the way we presently calculate the investment attraction or Foreign Direct Investment is through what we call the capital importation certificate. I don’t want to use the word outdated; I think the way we have AI today, the way we have ChatGPT is the same way I will say there are other ways that we can look at foreign direct investments because I will give an example.
Nowadays, most of the investors no longer use the banks when they do not get their forex in there. What is the reason for capital importation? It is that when I want to take my funds out, you will allow me to take it out through the banks. But you will agree with me that for the last 12 months, they have had difficulty getting their funds out because some have found alternative channels to get their funds out.
That is why recently the CBN came out with a lot of policy reforms on forex. So, what used to work doesn’t work anymore. They try to attract diaspora for example as of 2017, the diaspora remitted about $22 billion and Edo is big on that also. A quarter of that fraction came to Edo State and it was used for construction and consumption.
Now going back to what you said, after the Covid-19, we looked at it and said FDI would be difficult because countries were shutting down. Countries didn’t want anybody to even take anything out of their countries. Supplies were low on medical supplies and it dawned on us and we said we couldn’t continue to say we were looking for FDIs. We changed our focus to Direct Domestic Investments (DDIs).
So, we came up with the strategy that we were going to be more focused on 70% DDIs and 30% FDIs. What we are saying is that most of the investments attracted into Edo State were direct domestic investments. One of the initiatives is that we have the After Care Department. What the department does is to look at existing businesses in terms of what they are doing and show them the data on areas that can expand into.
For instance, the business that came in, in less than 2, to 3 years they have started opening branches within the state. They would have taken those new openings to other states. But we were able to show them the potential of Edo State and that is why we are expanding. It is easier to get an existing business to come in than for you to get a new business to come in and that is exactly what we have done. So, when you talk about the various statistics of capturing investment inflows into the country, we have called them and said we need to start to be creative about the way we look at some of those metrics.
Those traditional ways to calculate FDIs, do you know the funds that go through the alternative markets? But the funds that go through the alternative market are more than what goes through the traditional market.
For us, we still need to understand the thinking of the investors. In my opinion, one of the things that investors look at very well is integrity, trust and policy consistency. You don’t want a situation where when I come in, and in less than 90 days, there are changes to that policy. That’s what we call policy summersault.
If you do a policy summersault to any type of investor, the investor will take their time to invest. They really want to look at the business environment. They look at the political, legal, environmental and all of that and they also speak to themselves, especially the foreign investors who are already in the country.
That is why for us at ESIPO it is very key to see that investors that are in Edo are happy. One of the meetings we held recently we actually discussed about the private sector. His Excellency did that two weeks ago by calling the businesses, manufacturers to find out what the situation was like. Once the investor knows that you truly care about their business, they will come and that is why you will still see some investors coming into Edo.
Based on your many interactions with investors, what challenges do businesses encounter and what steps you are taking to address those challenges?
One of their first priorities is land or building. They need to be in a location and they need to secure that location. That process of securing the location is very important and like you rightly mentioned, the Edo State Geographical Information System (EdoGIS), we work very closely with the GIS since inception, and the agency has been able to bring a lot of sanity into the system.
Another point they raised is the political will. They need to see that the government is intentional to their issues in terms of policies. We quickly forget that in 2017, one of the things we did was to prohibit community development associations (CDAs). That part you are seeing in GIS, it is based on the strength of the policy that GIS was able to move in and they are providing the kind of services they are providing now and nobody is able to cause problems for investors. The law was strengthened in 2021, and 2022. Right now, you cannot illegally go into another person’s property, there is a law to that, and there are sanctions to that. So, that has boosted the confidence of investors and businesses when it comes to doing business in Edo State.
If you do things that are not right in the business environment, there are consequences for it and that is what Edo under the current administration has been able to achieve through law and order. Before any investor goes into any community now, they come to the government. We engage the communities unlike when you just go into any community and you don’t know what to expect.
One of the mandates is working with our sister agencies, such as the ministries of business, trade and cooperatives, skills development among others. Our aim is to ensure that the MSMEs are investor ready. I will give you a clear example. While ESIPO was on the field, we noticed that when large business investors came in and they wanted some services, we found out that our MSMEs could not provide those services not because they were not skilled enough but just because they did not have that capacity. They ended up going to some other locations to get some other MSMEs that had the capacity. So, we are dealing with that presently to ensure that they can use local vendors. We want a situation when a new investor comes in, he can use local vendors to take up their auxiliary services.
Your agency thrives on partnership. You have partners like the German GZI. How has this partnership created jobs in the few years of the existence of ESIPO?
The good thing about partnership is that it doesn’t just come. I will give you some partners we work with such as GIZ, UNDP, FCDO, and IDH among others. All of these partners did their due assessment to find out how to work with the agency and if it is going to produce the desired outcome. Edo has been able to be at their top in terms of credibility and actually delivering what we say we want to deliver.
Now, speaking about the interventions which the partners have given to Edo, it is enormous in the sense that if an investor knows that you are dealing with a particular partner, that alone can attract that investment because they know that for those partners to deal with you, they know you are credible. So, the credibility they bring to the table is not quantifiable. We are talking about numbers; but I know that the numbers are over 100,000 in terms of job creation.
Now, how does job creation happen? An investor comes in and employs like 50 persons and that’s job creation. Again, there is what we call self-employment which is also like a job creation. So, if I train you to be a fashion designer and you open your fashion house and employ 5 persons, you have already created jobs. Usually, when we say we are going to create 200,000 jobs most people thought we are going to employ 200,000 civil servants, but that was not what we meant.
The idea was to boost the economy to that extent where you can have other people or you can absorb a certain number of persons in terms of giving them jobs. We have seen it severally and let’s say in 2020 for example working with GIZ, we scaled up in terms of technology advancement for businesses where we taught them digital skills to about 445 businesses.
Going back to the records, we see how those businesses have been able to scale up and some have been able to get extra hands and employ more people. And just that skills saved a lot of businesses because there was a time nobody could go out so they could use these skills to actually sell online. As I said, the kind of collaboration with foreign partners cannot be quantified because they actually bring a lot to the table by just being able to partner with us.
Of the investments ESIPO has attracted into Edo, which of them has given the state the most benefits?
You know the benefits come in different ways. If you talk about agriculture, it has a backward integration and some agricultural products we have are medium and long term. But if you talk about retail trade, it is sort of medium term because you have to speak about getting infrastructure but you see the impact immediately. Some retail shops immediately opened; they got about 300 persons immediately on board. Most of the manufacturing would have expanded.
For me really, you can say agriculture. It brings about trade also, access to the market. There are certain products right now that are meant for the international market. But we cannot even take them to the international market because we need it more here. That is the import substitution I am talking about. The more we are able to ensure that more of our people are able to go into agriculture in a commercial way the better. Then, we will now talk about agro processing which is also something we are also working towards because we have to balance it.
With all that is going on in Edo State in my opinion, we are on a very right track. You have to be able to take ourselves away from cosmetics. Unfortunately, sometimes those that may not mean well can come up with cosmetics. Cosmetics, what I mean, we want to see a building coming up but somebody needs to service that building. At least, health centres for example, you build a health center it is just fine. There are no doctors in there, nurses, materials are not in there, but you come and commission it. That’s not what we want to be doing.
Human capital development is something that is key for us and that is part of our principles in ESIPO. When you are coming as an investor, you should be able to tell us the numbers of jobs you are bringing, you should be able to tell us the numbers of people you are going to take from our own end in terms of Edo State. It is our responsibility to make sure that those people have the skills and capacity.
If you are going to make an investment in Edo, we must see how Edo people can benefit from that investment. But Edo people need to be very ready also to tap the benefits because it is not an emotional investment, it is for profit. It can be an impact investment but oftentimes it is for profit. So, we need to be business-like in this regard.
Investments are important. I will give you an example like Fiber Optics. How do I quantify the importance of the fiber on the internet when today we have young people from Edo that can easily be doing a lot of coding, trading and can earn money from the US, Canada, Australia or while they are in Edo State?
As a government, I believe we need to create that enabling environment and get investors to invest in fiber optics. In doing that, I have to make sure that I create that market for them because if you put about $1 million in fiber optics and you have just 10 people using it, do the maths, the facility will be underutilised. Yes, most of the investments we are doing are impact investments, while others like retail are going to get quick wins that we can see.
I just wanted to find out if between now and say before this current administration hands over, perhaps maybe they have some projects in the pipeline that people should be aware of.
Because of investors’ confidentiality, I try not to mention names. Like we talked about earlier, there are two refineries, and we are expecting another 2 refineries in the pipeline. Last time you heard about an automobile company in Benin. So, we have all of these companies coming in. It is that some of them don’t want to be mentioned. One thing I know we have done excellently well is collaboration.
We have also been able to show that Edo is that preferred destination for investments.
What we now need is the support of the Federal Government because when FG makes a certain policy we don’t have control over it as it has a trickle down effect on sub nationals.
One way, you are trying to attract investment, the other way, your other team is doing something that doesn’t promote investment. So, we need to do that balancing act very quickly. If we do it, it will benefit not just Edo State but all the 36 sub-national governments.
The more you encourage sub nationals by way of your policies, the more investments you will have. To be more sincere, in the present economic landscape, we need to be more investor friendly. We need to have more friendly investment policies at the central, very important.
It is difficult to see a country that is still growing in terms of GDP that the country is not doing well. But what we now need to do now is to trickle down to make a positive impact on the common man on the street.
The investments we are attracting must show some positive effect on the man on the street.
