It also announced the setting up of $500million capital for small and medium scale companies at single digit interest rate.
The fund which will be administered by the new ministry in collaboration with Lagos Business School is aimed at breaking the country’s vicious circle of poverty through aggressive and productive investment drive.
It will be headed by former Minister of Finance, Dr. Olusegun Aganga.
The Presidency said that with the creation of the new ministry, the Federal Government was targeting sustained double_digit growth, a private sector led investment flow of about N15 trillion in the next four years and the creation of adequate jobs to plug the country’s huge unemployment hole. The target is the creation of three million jobs annually.
According to the Vision 2020 document, the country needs to invest N34 trillion in growth oriented sectors in the next four years if it is to become one of the twenty largest economies of the world. Of the amount, the Federal Government is to provide investment outlay of N10trillion; state governments, N9trillion; and private sector (both local and international) N15trillion.
Presidency sources said the choice of Aganga to head the new ministry was based on his outstanding private sector background, result-oriented growth initiatives in his one year as Nigeria’s finance minister and experience as managing director of the world’s biggest investment bank, Goldman Sachs.
Under the new ministry, the small and medium enterprises which are the bedrock of growth in advanced economies, will enjoy the special attention that will enable them to perform their roles efficiently, thus providing the foundation for enhanced non-oil growth.
The new model was conceived based on the economic transformation achieved by the Department of Trade and Investment in the United Kingdom; the Ministry of Economy, Trade and Investment of Japan; and the Ministry of Economy, Trade and Competitiveness of Cape Verde, among others.
Historically, the UK’s trade and investment department, which is now known as the Department of Business Innovation and Skills, is headed by senior ministers with first_rate experience in investment matters.
BIS’ mission is to drive economic growth by enhancing business productivity, deepening private sector investment/involvement and developing the relevant skills for sustained growth.
For Nigeria, the functions of the former Ministry of Commerce and Industry will be accommodated under the Investment and Trade ministry, while the Nigeria Customs Service, Nigerian Investment Promotion Commission and the Bank of Industry will be strengthened to keep pace with the new drive.
Aganga, during his term as finance minister, started the campaign for the creation of the Sovereign Wealth Fund and got the bill passed under five months. The SWF is not only a tool for strengthening Nigeria’s fiscal framework, but also a vehicle for infrastructure development and wealth creation for the nation.
He successfully launched the first Nigerian Eurobond in the international capital market, which attracted credible investors from more than 14 countries across the continents. That the Eurobond was over_subscribed in an election year was also remarkable.
The new Minister of Investment and Trade was the driver behind the job creation initiative of the Federal Government, including the provision of N50bn for public works.
He pioneered the struggle for the reduction of Nigeria’s recurrent expenditure, developed the funding plan and strategy for the development of SMEs and set up a consumer credit scheme for made_in_Nigeria products to boost consumption and local production.
Under him, a $500m capital was provided at single_digit interest rates for SMEs, a feat that endeared him to the organised Private Sector.