The Ambassador of Ecuador, HE Leopoldo Rovayo Verdesoto, on Thursday, attended the Institute of Directors Dinner as a Guest Speaker in Abuja.
The event was organized by the Institute of Directors Nigeria.
The event provided an incomparable exchange of information on the bilateral relations between Ecuador/Nigeria as well as the Institute objectives: Promoting professionalism through continuous education, information sharing and networking of opportunities and making positive contribution to the socio-economic growth of Nigeria.
Upon receiving the invitation sent by Chairman of the Institute, Chief Rex Onyeabo, the Ambassador had stated that ‘it is an avenue for him to share with Nigerians the beauty of Ecuador as there are still millions of Nigerians who are yet to know more about the Ecuadorian people and its government’’.
Full text of speech delivered by HE Leopoldo Rovayo Verdesoto, Ecuadorian Ambassador to Nigeria, on 23 February 2017 at the the Institute of Directors Dinner, Crystal Hall, Chelsea Hotel, Abuja.
Excellencies, Distinguished Directors, Watch Dog of the Society (Press), Ladies and Gentlemen. Good evening, I would like to begin by welcoming all of you to the Institute of Directors Dinner.
TOPIC: ECUADOR- A PLACE OF OPPORTUNITIES
INTRODUCTION
Ecuador is a South America country straddling the equator bordering the Pacific Ocean to the West, Colombia to the North and Peru to the South. Its diverse landscape encompasses Amazon jungle, Andean highlands and the wildlife-rich Galápagos Islands.
In the Andean foothills at an elevation of 2,850m, Quito, the capital, is known for its largely intact Spanish colonial center, with decorated 16th- and 17th-century palaces and religious sites, like the ornate Compañía de Jesús Church.
With a population of 16,526,175 million, there are at least 14 recognized languages spoken in Ecuador. Spanish is the official language while Spanish and English as business language. 13 indigenous languages are also recognized including Quichua and Shuar.
Ecuador has the world’s first and second UNESCO World Heritage Sites. At the inaugural UNESCO World Heritage conference in 1978, 32 sites were initially designated. Every World Heritage Site has a number – site #1 is the Galápagos Islands and #2 is the city of Quito.
WHY INVEST IN ECUADOR
The Government of the Republic of Ecuador has promoted public policies focused on the responsible governance of our natural resources. With this judicious vision, the Ministry Coordinator of Strategic Sectors was created with the mission of directing the policies and actions of the institutions that make up hydrocarbons, mining, electricity, telecommunications, and water and environment sectors.
In the last eight years, the government has reached a significant growth in GDP of 4.3% compared to 3.15% of Latin American average. Based on the effectiveness of public policies, investment in strategic projects and their implementation, we have focused on transforming our energy matrix as a means to change the production matrix.
These investments are intended to generate a dynamic economy focused on knowledge and innovation, diversified, inclusive and environmentally sustainable, producing 93% of energy generated from renewable source in this year. This is low-cost pure energy that will benefit production processes enabling the good governance of our natural resources.
In our policy to change the production matrix, a fundamental pillar for the cross-sectional development of the country is the creation of basic industries to enable that our economy makes a quantitative leap, thus enhancing the use of our natural resources, adding value and improving the competitiveness of Ecuador. This will generate in the short, medium and long term, high potential for exports, imports substitution, and productive chaining.
GROWING ECONOMY
Ecuador has become one of the most dynamic economies in Latin America. Since 2007 has maintain an average growth rate of 4.3% and currently is the country with the highest public investment, which reaches 11% of the GDP, Moreover, Ecuador is in the position 71 of Global Competitiveness index, the position since 2007.
These successes have been achieved thanks to the political stability of the country that has made it possible to make proper decisions.
Ecuadorian currency is dollar (USD), which has contributed to making our country attractive to foreign investment. Inflation is on a single digit, lower than the Latin American average.
SAFE AND TRANSPARENT COUNTRY
In order to strengthen a culture of honest, ethics and quality in public administration, Ecuador has enacted laws that seek to promote transparency in contracting processes, which are carried out by the National Service for Public Acquisition (SECOP), through efficient and technologically updated procedures which facilitate the control of both contracting entities and suppliers and of the general public.
SECURITY FOR FOREIGN INVESTMENT
- Equality: of conditions and protection for national and foreign investments and investors.
- Property: protection of investors’ property (prohibition of all forms of forfeiture).
- Rights: liberty of production, marketing, import and export of goods and services, subject to the provisions of the Constitution, laws and regulations established by the current legislation.
- Taxation: national and foreign investments are subject to the same tax regime.
- Resolution of conflict: investment contracts with foreign investors may include arbitration clauses to solve disputes that arise between government and investors. The dispute may be subject to international arbitration in accordance with the treaties signed by Ecuador.
- Investment contracts: provide stability on tax incentives and those stated in the Organic Code of Production. They may include contractual commitments that are necessary for the development of the new investment. Also, for investments above 100 million Dollars, investors can benefit from tax stability incentives over tax rates charged to income tax, tax on funds sent abroad, and other national direct taxes.
- Others: Free transfer of profits abroad and investment (upon completion of tax obligations and other responsibilities, as stated in legal regulations).
CONSOLIDATED INFRASTRUCTURE NETWORKS
Ecuador is strategically positioned in terms of infrastructure and logistics. According to the Ministry of Transport and Public Works, Ecuador has a transportation infrastructure of 43,197 km of roads, this being the main means of communication in the country.
Thanks to major public investment, two new airports have been built and the existing ones have been modernized. The port system of Ecuador consists of seven public ports and ten private docks, specialized in general cargo and oil. On the other hand, river transport is consolidated through several navigable rivers, such as Guayas, Napo and Morona, some of which are part of to the Manta-Manaus inter-oceanic corridor.
In terms of technology, Ecuador has installed 37,418 km of fiber optic, representing annual growth rate of internet access of 32.8%, which is reflected in sophisticated telecommunications services.
INCENTIVES FOR FOREIGN PUBLIC AND PRIVATE INVESTMENT
- Complementary nature: Foreign investments shall have a role of direct complementarity in Strategic sectors and those prioritized in the economy that requires investment and financing.
- Development and promotion of Strategic Sectors: Delegate to private initiatives the investment in Strategic Sectors in those cases established by the law for each sector. New projects of private companies for the generation of electricity, under an equal treatment in terms of mechanisms and conditions of guarantee and/or payment in the purchase of energy, than those applied to international transactions.
- Sectoral incentive: Total exemption of Income Tax for five years for new investments, as of the operation phase in the sectors that contribute to the change of the energy matrix; strategic substitution of imports, promotion of exports and rural development. Their implementation in strategic sectors is limited to electric generation projects of renewable energies.
In the specific case of basic industries, income Tax exemption is for 10 years as of operation of the industry.
INVESTMENT IN STRATEGIC SECTORS
Investment in Strategic Sectors offer guild to national and international investors and financial institutions about the opportunities for public and private investments .These Projects are divided according to the sector they belong to: basic industries, mining, oil, electric, water and telecommunications.
In total, this includes 94 projects, both public and private, of which 83 are of the Ecuadorian state and require an investment of 37,153 million dollars
| Nº | Projects | Numbers of projects | Investment amount(Millions of USD) |
| 1 | Basic industries | 10 | 11,955 |
| 2 | Mining | 8 | 113 |
| 3 | Mining blocks for bidding | 25 | |
| 4 | Private mining | 11 | |
| 5 | Oil | 21 | 17,034 |
| 6 | Bioenergy | 2 | 1,155 |
| 7 | Electric | 13 | 5,786 |
| 8 | Water | 3 | 727 |
| 9 | Telecommunications | 1 | 363 |
| TOTAL | 58 | 37,153 | |
OPPORTUNITY TO FINANCE PROJECTS IN ECUADOR
- Financial Agreement: Financing may establish provisions related to the participation of national companies that provide the loans for the implementation of projects, under the condition that funds are granted in profitable, advantageous or concessional terms for Ecuador.
- Guidelines for bidding:
What do we observe when evaluating an offer?
– Companies with internationally recognized trajectory.
-An economic offer within market parameters.
– Quality of materials, equipment and service.
– Percentage of national aggregate.
If the offer includes financing:
– Firm offer for financing with an internationally recognized lending entity.
– Percentage of financing over the amount of investment.
– Term of the credit.
– Period of grace for payment of capital (at least equal to the period of time for the Implementation of the project).
– Interest rate (all in cost).
COMMERCE AND TRADE OPPORTUNINTIES
Apart from investment, there are also commerce and trade opportunities. Ecuador is known for productions of qualitative products which are as follows:
- STRAW HATS: Ecuador is the original producer and exporter of the hat known as the “Panamá Hat”
- BANANA: Ecuador is the biggest exporter of bananas in the world.
- PRAWNS: Ecuador is the second world exporter of frozen prawn
- TUNA: Ecuador is the second world exporter of canned tuna.
- PALM HEAT: Ecuador is the first world exporter of canned palm heart.
- FLOWERS: Ecuador is the second biggest exporter of roses in the world
- COFEE: Ecuador is one of the few countries in the world that produce and export all the varieties of coffee: Robusta, Arabica, agglomerated instant coffee, freeze dried coffee, etc
During the period 2011-2015, Ecuador has exported a total of 47 different subheadings to Nigeria and imported 25. Accumulated value during this period, Ecuador exported about USD 4.87 billion and imported more than USD 97.51 million.
Bilateral trade deficit was 2011 due to the type of products traded, while Ecuador sold processed foods, crafts, flowers and seafood; Nigeria sold their part to Ecuador petroleum and hydrocarbon bearing machinery for the oil industry and electrical appliances primarily. From the year 2012 they have been recorded surpluses to Ecuador. Around 76 Ecuadorian exporters have boosted trade to Nigeria, during the period.
In conclusion, The Government of Ecuador identified the need to strengthen economic ties between the two countries, hence the Embassy.
The Embassy of Ecuador in Nigeria would be ready to help facilitate contacts between the Ecuadorian businesses and that of an immensely rich and beautiful country like Nigeria who has interest in trade and investment in Ecuador.
We hope this will afford us with useful information in investments and trade potential for Ecuador export supply opening the horizons and work together toward a brighter future.
