The new President and Chief Executive Officer, GE Africa, Farid Fezoua, in this interview with ’FEMI ASU, says partnerships between the public and private sectors are capable of enhancing sustainable growth and development in Nigeria
How does GE view the Nigerian economy?
Nigeria, for us, has been for a long time the first economy in the continent. I think there have been ups and downs in terms of macroeconomic evolution but fundamentally, Nigeria remains, by its population and natural resources, a very important market for GE, and I don’t think it is only for GE. It is a recognised fact that Nigeria within the continent is an important economic hub, and we have been traditionally working in Nigeria on building strong partnerships with the government and the public sector in the various sectors where GE is relevant. I think the one aspect of the Nigerian economy and the Nigerian context that I personally recognise is the high level of entrepreneurship that is capable of driving economic growth through private sector engagement and private sector growth. I think we don’t see that everywhere throughout the African continent, and for us, we believe that structurally the Nigerian economy is and continues to be a major contributor of growth and as GE we want to be associated with the current and future growth.
I am very familiar with Nigeria. I started working on transactions linked to Nigeria 20 years ago; 15 years covering for GE on different aspects of the business because the advantage of working in support of the GE industrial businesses for 15 years allows you to know and have insight into the different sectors and businesses of GE. So, I have been very much involved in power projects, notably in Nigeria when we started seven years ago, talking about independent power projects. On health care, we have been working in Nigeria with the Federal Ministry of Health, the state ministry of health and several private health care providers. We have been able to work on developing specific programmes with the Federal Ministry of Health around primary care; we launched, a few years back, a programme focused on maternal and newborn health in the urban and sub-urban areas of the country, in partnership with USAID and the Federal Ministry of Health.
In Nigeria, we built what we call a country-to-company type of understanding, playing the role as a trusted partner with the government of Nigeria on addressing the key needs in the different infrastructure sectors, particularly energy. We have done a lot of projects in energy on the generation side particularly but also working on the grid side. If you look at power, health care, and oil and gas, we have, in a span of seven years, maybe tripled our staff – our localised expertise and human resources. And we have been able to do that with 99 per cent localisation. So, all our experts today in Nigeria are all Nigerians. I think in a very short period of time, being able to either develop young talents or being able to bring back talents from abroad back to the country and being a local trusted partner has been one of the major contributions of GE to the country.
How critical are public, private partnerships in developing an economy?
We believe that public, private partnership is a key element of two things – first, to solve important infrastructure problems in a win-win equation between the government and private sector partners. It also has the ability to accelerate growth to a large extent when we are doing that the right way and we are not bogged down by too much bureaucracy, which I think is the biggest element hampering public, private partnerships. When we do it the right way, it is probably the fastest way of having power in the grid, of having functional hospitals with the right level of expertise, and of having well-rounded airline companies. So, I think we are definitely relying on the growth of PPPs. We demonstrated our capacity as an early promoter of independent power projects in the power space in Nigeria, and we have done similar exercise throughout the continent, whether it is South Africa where our public, private partnership with a company like Transnet and the rail company in South Africa has enabled the localisation of the first African locomotive in the world. Today, together with Transnet, we produced a locomotive that has 55 per cent local content integration, which is a manufacturing capability that can supply locomotives throughout the continent. If you look at some of our activities in health care in Nigeria, whether it is in Kaduna or Borno, working closely with the state governments on the revitalisation and modernisation of the health care infrastructure and systems, we have been able through a formal PPP to put in place long-term agreements that will cater for not just supplying and installing equipment, because we know that this is an equation that never worked efficiently in the past, but also making sure that whatever technology is supplied, there is a provision for long-term servicing and maintenance, so that the technology in the hospitals or in primary care centres can deliver the function it has.
But it is not sufficient; you also need to make sure that you have a long-term plan for continuous training of the users and the clinical staff who are going to be using these technologies. When I look at what we have managed to do in Borno over the last year and in Kaduna over the last two years, which is starting to show impacts and results, I expect to be able to do that tomorrow with other states within Nigeria; we have done that already in Kenya and Ethiopia over the last three years. This is the kind of definite commitment we have with PPPs, and we really believe that the partnership between public and private sectors is a source of enhancement of quality of sustainable development.
Do you think IPPs are the best model in driving growth in the power sector?
Globally, the reason why independent power projects were adopted is that the public sector or the utility companies needed to fast-track some projects. So, this resulted in the participation of a private developer that teams up with an EPC contractor and gets into a PPP-type of agreement under a power purchase agreement over 20 or 25 years. And it worked very well in many parts of the world. I think to that extent it is a good model, when it is done with the right developers and the right agreements.
Now, is it the only space that can ensure the supply of electricity at an affordable cost in Nigeria? Probably not. There are other spaces where we need to make efforts, particularly on the grid. We know that transmission and distribution in Nigeria with regards to the infrastructure are currently an element of constraint. And while you are enhancing generation, you need to fix your transmission and distribution. My colleague, Lazarus Angbazo, who is our CEO for GE Nigeria, is also the CEO for GE Grid Power, and has been a major advocate in the country on how to accelerate the enhancement of the grid. We are definitely engaged to help Nigeria get there. I think if we can solve these major infrastructure problems, then we will be in a better position in terms of solving the overall electricity problem from generation all the way to delivery to the customers.
Recently, it was reported that the GE had reached its 100th power plant installation in sub-Saharan Africa; In Nigeria, do you have plans to do more in the power sector?
Yes, absolutely. Nigeria is considered within our power strategy as a major country for growth. Whether it is working directly with the power authorities or working under PPP models, we are very keen. But there are also other areas of growth; we should not discount the potential of renewable energy, which GE is a big player in globally, and one of our ambitions is to make sure we bring some of those renewable energy solutions as well as distributive power solutions to Nigeria. And that is not a phenomenon unique to Nigeria. But some other African countries are also faced with the need, to a large extent, because of transmission and distribution infrastructure not being spread out as it is in other parts of the world. So, we have an opportunity to leapfrog and say, “How do we apply new distributive power solutions that will enable electricity to be produced and consumed where it is produced and not having to fit it into a grid that could be deficient?” I think this is something that, for Nigeria, we are considering very seriously.