The Forum of State Investment Promotion Agencies of Nigeria (FoSIPAN) and key investment stakeholders have moved to strengthen the capacity of state investment agencies to convert economic opportunities into bankable projects and attract capital faster.
The initiative, unveiled at an Investment Mobilisation Stakeholders’ Roundtable on Wednesday in Abuja, seeks to address what stakeholders described as the gap between investment opportunities identified by states and projects capable of securing financing and reaching financial close.
The roundtable, themed ‘From Opportunity to Capital to Outcomes: Building Nigeria’s Subnational Investment Mobilisation Infrastructure,’ also featured the signing of a Memorandum of Understanding (MoU) between FoSIPAN and BraveICONS Global Limited (BIG Advisory) to develop the Subnational Investment Pipeline Nigeria Programme (SIP-NG).
Terhemen Johnpaul Kpenkaan, chairman, FoSIPAN, said Nigeria had no shortage of investment opportunities, but many failed to become financed projects because they were not sufficiently prepared to meet investor requirements.
He described the gap between economic potential and investor confidence as the ‘conversion gap’, stressing that closing it would require states to move beyond investment promotion to project preparation and transaction delivery.
‘Capital does not move towards opportunity alone. It moves towards credible institutions, prepared transactions, manageable risks and clear pathways to decision,’ Kpenkaan said.
According to him, reforms undertaken by states in areas including public financial management, land administration, taxation, digital infrastructure, public-private partnerships, regulatory transparency and commercial dispute resolution had improved the business environment.
However, he said such reforms did not automatically produce investment-ready projects.
‘Reform makes a State easier to enter and operate in. Investment readiness makes a particular opportunity capable of attracting finance. Transaction delivery moves that opportunity through structuring, approvals, negotiation and financial close. These stages are connected, but they are not the same,’ he said.
Kpenkaan said SIP-NG would provide a common framework for participating states to identify, qualify, prepare, govern and advance investment opportunities towards transactions and capital deployment.
The programme, he said, would establish minimum disciplines around reliable project information, readiness criteria, defined stages of progression, institutional ownership, secure documentation, targeted capital engagement and evidence-based tracking.
He added that SIP-NG was not intended to create another project-listing platform but to improve the readiness and transaction pathways behind existing state investment platforms.
Speaking at the event, Fife Banks, managing partner, BIG Advisory, said the MoU marked the ‘visible beginning’ of work that had been ongoing for almost a year to develop a programme capable of institutionalising investment mobilisation capacity across state investment promotion agencies.
Banks said state investment promotion agencies needed to be equipped with the skills, knowledge and technology required to prepare investment opportunities and engage capital in a structured and governed manner.
He said the initiative was particularly important given the Federal Government’s ambition of building a $1 trillion economy by 2030.
According to him, achieving the ambition would require significant activity at the subnational level because states control or influence many of the projects, licences and investment opportunities available across the country.
‘Investment mobilisation is much more than investment promotion,’ Banks said, adding that the programme would seek to help states improve the time required to move projects from identification to investor-grade preparation.
He said participating states would eventually be able to enter an accelerator programme designed to provide technical support and help institutionalize investment mobilisation capabilities.
Abraham Durosawo, vice president, Nigeria Sovereign Investment Authority (NSIA), identified inadequate project preparation as one of the major constraints limiting investment in subnational projects
He said many projects presented to investors remained ‘unbankable’ because essential professional work required to assess and structure them had not been completed.
‘The question is who will repay that project? The project requires some professional work to be done on it. Now, who will pay for that professional service?’ Durosawo asked.
He said government agencies were often reluctant or unable to pay for project preparation, while commercial investors were generally unwilling to deploy capital to fund preparatory work before an investment decision had been made.
Durosawo therefore urged state governments to allocate resources to their investment promotion agencies to prepare projects before taking them to investors.
‘The governments across the sub-nationals need to allocate resources through the investment promotion agencies to take on the responsibility of preparing the projects, so that it makes it easy for the universe of investors where we belong to that room to come in on day one, see the projects, the work has been done, and you can then move it on to investment decision,’ he said.
He added that adequate project preparation could shorten the period required for investors to assess opportunities and make investment decisions.
Kpenkaan said the MoU signed between FoSIPAN and BIG Advisory was limited to programme development, stakeholder consultation and institutional alignment, and did not admit states into implementation or approve projects or commit any institution to financing.
He said FoSIPAN would use the outcome of the roundtable to engage the Nigeria Governors’ Forum Secretariat, federal institutions, development partners, financing institutions and state governments on the programme’s development and possible adoption.
According to him, the initiative is expected to focus on strengthening the institutional capacity of state investment promotion agencies to serve as coordinating points between investors, state governments, sector institutions, PPP authorities, finance ministries, regulators and other relevant bodies.