The vision of President Muhammadu Buhari’s administration is to make Nigeria the pre-eminent manufacturing hub in Sub-Saharan Africa and a major exporter of locally made products to West African sub-region, the rest of Africa and indeed the World.

To achieve this goal, Project MINE (Made in Nigeria for Export), a Presidential Initiative, under the supervision of the Honourable Minister of Industry, Trade and Investment was developed to establish “world-class” Special Economic Zones (SEZs) across Nigeria and boost the manufacturing of ‘Made in Nigeria’ goods for export, regionally and globally.

Project MINE was designed to achieve some very important economic goals that would put Nigeria on the world map. What were the objectives of Project MINE? To increase manufacturing sector’s contribution to GDP to 20%, create 1.5 million new direct jobs and generate over US$30bn annually in foreign exchange earnings by 2025, amongst others.

It was no surprise that a lot of Nigerians were elated at the establishment of Project MINE but if the manufacturing sector was going to achieve this goal, it needed a vehicle to drive the laudable export agenda.

With many projects ongoing, funds could be sparse to achieve Project MINE, so the Federal Executive Council (FEC), Economic Management Team (EMT) and Project MINE’s Steering Committee (including various stakeholders) endorsed Project MINE’s implementation strategy to use a sustainable Public-Private Partnership (PPP) model to develop world-class SEZs across Nigeria.

It’s not the first time this PPP model had been used in Nigeria, other government units like Nigeria LNG, Nigeria Mortgage Refinance Company Limited and Development Bank of Nigeria Limited have adopted similar PPP models.

To get the PPP into full gear, a special purpose public-private partnership (PPP) entity – Nigeria SEZ Investment Company Limited (NSEZCO) – was designed to enable institutional investors participate in Project MINE alongside the FGN, and to apply global best practices and processes to the long-term financing and development of SEZs.

In June 2018, the FEC approved NSEZCO as the vehicle for implementing Project MINE and for co-investment between the FGN, development finance institutions and other institutional investors. Given that NSEZCO is a PPP, it was incorporated at the Corporate Affairs Commission (CAC), on 12 of June 2018 as a limited liability company under CAMA, with the FGN represented by the Ministry of Finance Incorporated (MOFI), holding 25% of the shares in NSEZCO at incorporation.

The remaining 75% shareholding was held in trust by A&O Secretarial Services Limited, the Company Secretaries, on behalf of Strategic Investment Partners including African Export-Import Bank (Afreximbank), Bank of Industry Limited (BOI), Nigeria Sovereign Investment Authority (NSIA), Africa Finance Corporation (AFC) and African Development Bank (AFDB).

With kick off in sight, the Federal Government released N14.3billion as its contribution. The money was domiciled in the account of Nigeria Export Processing Zone Authority (NEPZA) for Project MINE but then something happened.

*What Happened With NEPZA?*

For some reasons, NEPZA established by Act No. 63 of 1992 as an agency of government with responsibility for licensing Free Zones and regulating the Free Zone Scheme in Nigeria felt the need to overstep its boundaries and scurry more powers.

The agency wrote the Senate Committee on Trade and Investment quoting quoted Section 2(2) in which it falsely claimed that NSEZCO was a privately owned company that was trying to take over the functions of NEPZA. The agency urged the Senate Committee to halt the transfer of funds from its account to that of NSEZCO, the vehicle for Project MINE, even when it is on record that the money meant for Project MINE was only domiciled in the account of NEPZA on the order of the Minister of Industry, Trade and Investment.

But it didn’t end there; NEPZA also sought some interpretation from the office of the Attorney General of the Federation (AGF). In a letter dated 30 October 2018 and titled, ““Request for Legal Advise On The Propriety or otherwise of a directive to transfer funds appropriated in favour of the Nigeria Export Processing Zones Authority for the execution of some capital projects under the 2017 and 2018 Appropriation Acts respectively into a private company’s account” the letter was signed by Rt. Hon. Emmanuel Jime, Managing Director of NEPZA.

In the letter, NEPZA raised two issues for legal advise; (i) Whether the establishment of the Nigeria Special Economic Zones Company (NSEZCO) Limited to take over the functions of the Nigeria Export Processing Zones Authority is lawful.

(ii) Whether it is lawful for fund appropriated in favour of the Nigeria Export Processing Zones Authority for the implementation of some capital projects in the Free Zones under the regulatory mandate of NEPZA can validly be transferred into the account of a private Limited Liability Company without any prior amendment of the respective Appropriation Acts as well as the NEPZA Act.

*Response of the Attorney General of the Federation*

The response of the Office of the Attorney General of the Federation was explicit to say the least. In responding to NEPZA, the office of the AGF broke down the functions of the NSEZCO and that of NEPZA, stating categorically that, “NEPZA letter sought the advice of the Honourable Attorney General of the Federation on: Whether the establishment of the Nigeria Special Economic Zones Company (NSEZCO) Limited to take over the functions of the Nigeria Export Processing Zones Authority is lawful?

“It is imperative to state unequivocally that the NSEZCO was not established to take over the functions of NEPZA. The mandates of both entities are distinct with little or no area of overlap,” the AGF responded in its letter dated 6th February 2019.

The AGF then went further to state that, two critical factors that implicated the need for NSEZCO and they are *operational efficiency* and access to *international capital market* with limited or no direct burden on the Federal Government in like manner as NLNG.

The use of NSEZCO to implement Project MINE is to facilitate the creation of commercially-oriented, efficient and effective institutions in line with international standards.

The AGF pointed that NEPZA had claimed that “The Authority (NEPZA) shall be the *only* (the highlighted word is not part of the enactment) body corporate, with perpetual succession and a common seal and may sue and be sued in its corporate name and shall be capable of acquiring, holding, or disposing of any property movable or immovable for the purpose of carrying out its functions.”

The AGF further stated that in section 1(2), the NEPZA Act explicitly recognizes that an EPZ may be operated by any of three types of entities:
(i) public entity;
(ii) private entity; or
(iii) a combination of public and private entity.

The office of the AGF then raised a valid question in its submission, “If anything, the critical question is: were the provisions in the Appropriation Acts made for Project MINE or for NEPZA? The answer is unequivocal that the provisions were made for Project MINE. The funds were appropriated for the purposes of Project MINE, but domiciled in NEPZA at the specific request of the Honourable Minister for Industry, Trade and Investment.

*Money Domiciled in NEPZA should be appropriated to NSEZCO*

The AGF says another related question which ought to be answered is, is NEPZA the implementing entity for Project MINE? The answer is beyond doubt in the negative because the strategy for Project MINE requires a distinct vehicle that leverages the competencies of the co-investors in the vehicle, including sound governance practices and access to the international capital market to secure the success through sustainable performance. It is also needful to point out that Project MINE is not under NEPZA.

Finally, none of sections 2(2), 4(a) and 5(2) (a)-(c) of the NEPZ Acr individually or collectively give NEPZA exclusive rights to do everything relating to investing in, promoting and developing Zones inside Nigeria. If that was the case, then even Oil and Gas Export Free Zones will all be under the supervisory purview of NEPZA. Moreover, the focus of Project MINE is on Special Economic Zones – SEZs which is wider than EPZs that is the remit of NEPZA for purposes of regulation. SEZ is not coterminous with EPZ. Thus, it appears that NEPZA may have relied on a conceptual error.

AGF noted that the HMITI chose to collaborate with NEPZA in the furtherance of Project MINE. Against this backdrop, funding for Project MINE has been domiciled in NEPZA while NZESCO was in formation. In 2016, NEPZA was the domicile of the start-up grant from the President for Project MINE at the request of the HMITI. Project MINE was not a line item in the Appropriation Acts.

As a fact known to the management of NEPZA and the Budget Office of the Federation, all monies for activities of Project MINE were appropriated through NEPZA. The appropriations in 2017 and 2018 with respect to matters of Project MINE were only domiciled in NEPZA. They were not for purposes of NEPZA. NEPZA is not the implementing agency for Project MINE and the development of SEZs. Therefore, sums explicitly appropriated for SEZs under NEPZA are unequivocal indication of an understanding that NEPZA is the domicile for the appropriation and therefore should be stopped from denying this salient fact.

*NEPZA Flouting Presidential Order*
At the signing ceremony for the investment partnership between NSEZCO and its strategic investment partners on February 8, 2019, President Muhammadu Buhari said: “When we decided to continue with the implementation of the Nigeria Industrial Revolution Plan of the previous Administration and launched our Economic Recovery and Growth Plan to fast track implementation, we had a vision of Nigeria as the pre-eminent manufacturing hub in Sub-Saharan Africa and a major exporter to our immediate West African sub-region, the rest of Africa and indeed the World. Special Economic Zones have an important role to play in achieving this vision. Special Economic Zones (SEZ) offer investor friendly incentives, world-class infrastructure and ease of doing business in order to attract local and foreign investment and have been used as a catalyst for rapid and inclusive development, job creation, industrialization and diversified export earnings in several countries.”