News, Seat of Power

How FG policies, providence led to the emergence of start-up unicorns in Nigeria – Osinbajo

*VP’s NIPSS speech details an assessment of some national issues citing four recent examples



It is a special pleasure to join you for this graduation ceremony of the Senior Executive Course 43 of 2021. And I bring you the warm felicitations of President Muhammadu Buhari, President, Commander-in-Chief of the Armed Forces of the Federal Republic of Nigeria.

On his behalf, I congratulate you all participants of this Senior Executive Course for your excellent performance and your preferment today to the privilege of Member of the National Institute, MNI. I also congratulate family and friends, and especially spouses of participants on this joyful occasion. It will be remiss if I fail to congratulate you all on your well researched and thought-provoking presentation to Mr. President Thursday on “Getting Things Done: Strategies for Policy and Programme Implementation in Nigeria.” Congratulations and well done!

You are graduating at probably the most consequential period in Nigeria’s history; a time of immense challenges but even more enormous opportunities. Permit me therefore in the next few minutes to broadly sweep through some of the challenges we have faced and how we have surmounted or are surmounting them.

The point of the exercise is to exercise your minds as members of Nigeria’s foremost think-tank, as we interrogate how optimally leadership or other actors responded and perhaps what more needs to be done.

I will mention 4 areas:

  1. The public health response to the COVID-19 pandemic and the future;
  2. The response to the economic downturn in the aftermath of the pandemic, and the issue of continuous growth;
  3. The Unicorns and the future of youth employment and;
  4. The New National Development Plan.

Let me begin with how we responded to the onslaught of the COVID-19 Pandemic, the most devastating global public health crisis in living memory.

Shortly after the first COVID-19 patient in sub-Saharan Africa was identified in Nigeria, a sample of the virus was sent to the African Centre of Excellence for Genomics of Infectious Diseases (ACEGID), at Redeemers University in Ede, Osun State Nigeria. There, a team led by Professor Christian Happi, analyzed the sample and was able to, within 48 hours, share with the global science community the very first genome sequence of the severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2) from Africa.

Most people did not even know that we had that capacity or that the facility existed and had even been recognized internationally.

Second, we were able to scale up on testing and case management capacity quickly activating 120 laboratories nationwide from 5 just before the pandemic – most of them public laboratories. One reason why we have been able to manage this pandemic better than many expected is that our public health infrastructure is experienced and robust.

The Ebola outbreak of 2014, our ongoing battle with Lassa Fever and our successes with polio eradication helped us to tighten our epidemic contingency plans, strengthen our emergency coordination and surveillance capacities. It had also ensured that we invested in public health laboratories.

One of the key lessons we learned from our response to the Ebola outbreak was the need to build systems in ‘peace time’ that can be used during outbreaks.

The Nigeria Centre of Disease Control (NCDC) was founded in 2011 but in 2018, the President assented to it becoming an independent government agency. As it turned out, the NCDC’s independence was important in its being able to function unrestrained by bureaucracy when the pandemic struck.

With the NCDC’s National Public Health Reference Laboratory in Gaduwa, Abuja, its state-of-the-art equipment and well-trained scientists, it is evident that the NCDC is one of the best prepared and resourced of its kind, at least in Africa.

The President also directed the setting up of the locally and internationally acclaimed Presidential Task Force on COVID-19, an inter-ministerial interagency team led by the Secretary to the Government of the Federation, SGF, Boss Mustapha, reporting directly to Mr. President, which coordinated the national response, set the rules and briefed the nation daily for months. The task force swiftly issued and enforced Covid protocols for travel and general movement. When the first doses of vaccines came, the task force developed the protocols and the public health system already used for mass vaccination campaigns, deployed across the country in every nook and cranny of Nigeria so that the first eligible vaccine candidates received their vaccinations seamlessly.

Going forward, what do we need to do?

I think flowing from the reality that every nation is on her own in a global pandemic, and how vaccine-rich nations at some point even banned exports in order to meet local needs, it is clear that we must take our destiny into our own hands.

But what do we have already? Last December, the Nigerian Institute of Medical Research (NIMR) launched a new set of COVID-19 test kits that can produce results in 57 minutes. The new kit was designed by Joseph Shaibu, a molecular virologist at NIMR.

By the end of the year, the Africa Centre of Excellence in Osun State will inaugurate the biggest Genomics Research Centre in Africa. Earlier this year, the Centre was selected by the Broad Institute of the Massachusetts Institute of Technology (MIT) and Harvard University to be part of a prestigious scientific coalition that will help set up an early warning system to prevent and respond to future outbreaks and pandemics.

In September 2020, the World Health Organization named the Genomics Centre one of two (the other from South Africa) specialized continental reference sequencing research laboratories for emerging pathogens, including SARS- CoV-2.

Professor Happi and his team have also produced a groundbreaking rapid test, certified by the Food and Drug Administration, FDA of the US government. It costs around $3, much less than the (PCR) tests.

In addition, the test does not require highly equipped laboratories that tend to be too expensive. But more remarkably they are developing a Nigerian anti-Covid vaccine.

The Africa Centre of Excellence for Neglected Tropical Diseases and Forensic Biotechnology led by Professor Y.K Ibrahim, has also developed capacity and has been performing mass testing. During the Ebola outbreak in West Africa, between 2014 to 2016, The Africa Center of Excellence in Ede was instrumental in containing the epidemic in the sub-region by the development of a 15-minute Rapid Diagnostics. This method was approved by the World Health Organization and the Food and Drug Administration, FDA of the US government.

The same Centre developed a 10-minute Rapid Diagnostics test for Lassa Fever, setting in motion the possible development of the next vaccine for the disease.

Nigeria is in talks with the World Bank’s private lending arm and other lenders to raise about $30million to help finance a vaccine plant. Biovaccines Nigeria Ltd, (with 49% of the company owned by the Nigerian government and the balance held by May & Baker Nigeria Plc), plans to begin construction of the plant in the first quarter of next year.

The plant will initially “fill and finish”, which means importing the raw materials for the vaccines and then packaging them for distribution. Full manufacturing is expected to follow.

What about our response to the economic downturn in the aftermath of the COVID-19 pandemic? The damage to the economy by the COVID-19 pandemic, and the global lockdowns was great. GDP contracted to -6.10% during the second quarter of 2020.

The oil price at one point was about 10 dollars a barrel then finally settled at about $45 per barrel during the second quarter of 2020. Unemployment went up to 33.3% in the fourth quarter of 2020. The transportation sector declined by 49%, the hospitality sector fell 40%, the education sector fell 24%, real estate declined by 22%, trade declined by 17% and construction declined by 40%.

So, we were in a terrible economic situation and in response, the President took two swift steps. One was to set up a small inter-ministerial Committee headed by the Minister of Finance, Zainab Shamsuna Ahmed, to quickly work out the implications and the immediate mitigation for the economic shocks we were headed for.

The second thing the President did swiftly was to direct me, a team of Ministers and interagency heads to draw up a 12-month economic emergency plan, which became known as the Economic Sustainability Plan.

We were clear that the only way of avoiding an economic disaster that could last for years was for the government to essentially put forward a major fiscal stimulus plan. Such a plan must have clear objectives of saving jobs and creating new ones, supporting businesses that may close down, and employees that may not be paid during lockdowns, and, of course, healthcare support to reduce the COVID-19 caseload.

So, we promptly put forward a stimulus plan in the order of N2.3 trillion. We took quick fiscal measures including the:
• Grant of additional moratorium of 1 year on CBN intervention facilities.
• Reduction in the interest rate on intervention facilities from 9% to 5%.
• Grant of regulatory forbearance to banks to give borrowers some breathing space, including through restructuring of outstanding debts.
• The CBN also reports the disbursement of N798billion to 3.9million smallholder farmers under the Anchor Borrowers Programme.
• N134.6billion to 38,140 beneficiaries under AGSMEIS and N343billion to 726,158 beneficiaries.
• The release ofN1trillion to 269 real sector projects.
• N103billion disbursed to 110 healthcare projects

MSME Survival Fund was designed to keep as many junior private-sector workers as possible employed and paid 1.1million people benefitted from the fund.

Another important part of the ESP was the Agric for Food and Jobs Plan essentially to provide jobs and food. Through a mass agriculture scheme, 6.39million farmers were enumerated under the programme.

320 hectares of land has been cleared across 8 states at 40 hectares per State.

₦471billionn is allocated as loans to farmers across 14 Crop Value Chains, Beef Production, Aquaculture and Poultry Farming.

The President also approved the Fertilizer Subsidy Programme. The Subsidy payment is evidence-based and tied to the farmer enumeration process. The subsidy is paid directly to each farmer’s BVN verified account. A subsidy of N5.1billion was paid to 1,013,126 farmers.

The third component of the ESP is the Social Housing Programme, 300,000 homes to be built across the country. The States providing land free. This is creating and will create thousands of jobs and boost the local building materials industry. The design is to build two-bedroom homes costing not more than N2 million. So that a person earning the minimum wage can pay back the mortgage in 15 years. Borno State working with the Family Homes Fund has built 8,000 units.

Then we have the Solar Electrification Programme – #SolarPowerNaija, with 5 million new solar connections, to reach 25 million people. It is also designed to create several jobs and develop a local solar industry including the assembly or manufacturing of components of solar home systems and off-grid solutions.

Now I come to the Unicorns and the future of youth employment. In the past few years, we have seen Nigerian start-ups owned by young men and women grow from scratch to billion-dollar businesses.

As of 2021, more than 6 of such companies have been named Unicorns. A Unicorn is a company that is worth over a billion dollars. 6 of those companies started between 2016 in the middle of two recessions and the global health crisis. The companies are:

  1. Paystack,
  2. Flutterwave,
  3. Andela,
  4. Piggyvest and,
  5. Jumia.

Paystack and Flutterwave. Paystack was co-founded in 2016 by two graduates of Babcock University in their twenties. Paystack is a payment processing company. It is now estimated to be worth a billion dollars. Flutterwave is also a payment processing company founded in 2016 in Lagos. Flutterwave is now worth nearly over $3billion and both companies employ hundreds of young men and women.

There is also PiggyVest, co-founded in 2016 by ex-students of Covenant University led by a 21-year-old lady, Odunayo Eweniyi. PiggyVest is a wealth management platform that at the end of 2019 had helped one million users save about $80 million dollars with her classmates at Covenant University.

What is responsible for some of these successes? Providence and good policies. Providence because COVID-19 was a boom period for online payment systems. Policy because Mr. President approved the establishment of a Technology and Creativity Advisory Group that helped to formulate new banking policies to accommodate new tech-enabled payment systems, such that these tech companies could process payments without being full-scale banks.

The Central Bank of Nigeria was then able to issue new types of licences for payment processing. The Federal Government has established a N75billion National Youth Investment Fund, which provides financial support for small businesses in any field.

The Central Bank of Nigeria has also established a Creative Sector Fund. This is for young people in entertainment or technology. There is also the new programme called Investing in Digital and Creative Enterprises (iDICE) programme, an over $600million programme that will support young tech and creative sector entrepreneurs through the provision of finance, skills development and infrastructure.

Earlier this year, the Federal Government partnered with the UNDP and the private sector to start a programme called the Jubilee Fellows Internship programme. For the next 5 years, every year 20,000 students after the National Youth Service Corps, will be given internship opportunities in private sector companies and in public agencies. The idea will be for the participants to gain relevant career and life skills that will enable them to transition seamlessly into professional, business or public sector careers, while also earning very good pay during the internship.

These panoramic snapshots of possibility are enough to show us that we are not facing an uncertain future without any tools at our disposal. However, if we are to inaugurate a new age of accelerated growth then we must adopt a new strategic direction and policy orientation.

This is precisely what the Federal Government seeks to do through the National Development Plan 2021-2025 which was recently approved by the Federal Executive Council. In terms of strategic direction, the cornerstone of our strategy is boosting productivity by focusing on value addition as the guiding principle for all sectors, especially agriculture, manufacturing, solid minerals, digital services, tourism, hospitality, and entertainment.

In agriculture, for example, just as we seek to increase the production of rice, we are paying equal attention to other parts of the value chain such as storage, transportation, processing and marketing.

Similarly, in the mining sector, we recognize that exploitation and extraction will not create jobs. Our aim is to focus on resource beneficiation, local industries, thereby creating wealth along the mineral value chain.

There are a number of cardinal principles of the strategic direction enshrined in the National Development Plan but let me speak on three of them.

The first is the centrality of job creation; all programmes and policies are viewed from the lens of the number of jobs – direct and indirect that they create.

Secondly, the loosening of restrictions on trade. Generalised restrictions on trade are counterproductive when they impede the ability of local industries to procure critical inputs. Our focus instead will be on allowing imports of goods to which value can be added before domestic consumption or exportation. For example, importing cotton for garment making might be smarter than insisting on growing all your cotton. The focus must be on value addition.

Bangladesh only grows 2% of its annual cotton requirement and imported $11.8billion of textiles and apparel while it exported $31bn of garments in 2019.

Thirdly, the main fiscal policy challenge facing Nigeria is inadequate revenues especially in the face of lower oil revenues. It is therefore essential to improve tax administration, vigorous collection of all revenues due to the Federal Government from its Ministries, Departments and Agencies; bring all high earning agencies into the Federal budget. Concurrently, we must lower customs duties and tariffs on raw materials and intermediate goods used in manufacturing while giving reciprocal, non-tariff based support like procurement, subsidies and tax breaks to priority sectors.

Fourthly, creating a conducive environment for business to thrive. We need to eliminate red tape, extortion and harassment of small businesses which increases their costs.

Let me conclude by reminding our new MNI that every MNI belongs to an elite club of thought leaders of Nigeria. You are at the frontlines of our efforts to build a better future for our country; you must be the first promoters of Nigeria’s unity, the seminal policy work you produced here shows what can be done where the best Nigerian minds regardless of ethnicity or religion, work together for the good of our nation and its people.

Congratulations again and God bless you.

Released by:
Laolu Akande
Senior Special Assistant to the President on Media & Publicity
Office of the Vice President



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