Assessing Ogun’s Diversification Drive

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The Ogun State Investors’ forum was an opportunity to showcase efforts being made by the state to become an economic force in Nigeria, writes Nume Ekeghe

Following the significant drop in funds from the federation allocation as a result of the slump in crude oil prices, economic diversification has become an anthem with most states looking inwards to attract investments.

Ogun State is no doubt doing its best in this regard. At the recently concluded two-day economic summit, the state announced that it had since the 2015 summit been able to attract about 96 new businesses through various initiatives.

Since the inception of the investors’ forum, it has focused primarily on agricultural development and industrialisation. It has been able to attract $2.1 billion investments from China, 96 new investments, created an enabling environment and incentives to attract investments into the state thus spiraling development throughout the state.

Governor of Ogun State, Senator Ibikunle Amosun, said the state would continue to focus on agriculture. The theme of the forum was: “Agriculture, Environment and Transportation.”

Amosun said: “Agriculture plays a significant role in economic development of our state. The state is endowed with favourable climate and good vegetation for all year round cultivation of various cash and food crops as well as livestock rearing. In the south, we have the evergreen forest vegetation and soil most suitable for the cultivation of cash and food crops like oil palm, rice, kola- nut, cocoa, cotton, cassava, cocoyam and vegetables.

“While in the north, we have a vast grazing savannah land that is very proper for animal husbandry. In addition to this, there are forest reserves, rivers and lagoons. Other natural resources include forest and large quantities of mineral deposits, such as limestone, phosphate, granite stone, gypsum, bauxite, bitumen, feldspar, clay, glass sand, kaolin, quartz, tar sand and gemstones.”

Speaking on environment, he said: “Environment is a new theme this year, but as demonstrated during the COP21 Climate Change Summit in Paris in December 2015, we are aware that we cannot ignore our environment while pursuing our developmental initiatives. Ogun State has one of the last remaining virgin rain forests in West Africa.

“Found within J4, a forest reserve located 66km from Ijebu Ode, of which 20 per cent is protected by the United Nations. Yet, unless surrounding communities can see how preserving the forests can help them earn a decent living, they are likely to collude with illegal loggers, threatening the world’s ecosystem.

To demonstrate how agro-forestry can generate wealth for local communities, Ogun State has entered into an ambitious collaboration with LaFarge Holcim Africa Plc and the Nigeria Sovereign Wealth Fund for the restoration of the Aworo and Imeko Forest Reserves.”

Furthermore, on transportation, he said: “The strategic location of Ogun State offers immense benefits for investors in the area of logistics, distribution and retail, which emphasises the need for infrastructural development in the state. Ogun State is a natural transportation hub for Nigeria, as the flow of goods and people from the commercial capital Lagos via land must and does pass through our state.

“Indeed, whether going into or out of Lagos from any other part of Nigeria, one must pass through Ogun State. We believe that an inter-modal transportation network is essential in order to maximize economic growth. The development of strategically placed airports and railways is integral to the Ogun State development plan.”

“Now, more than at any time in our history, industries and entrepreneurs from within Africa and around the world are choosing Ogun State as their preferred investment destination. For example, just last month (April, 2016), our Administration attracted $2.1 Billion dollars of Investment from China, directed mainly towards the development of our railways and Free Trade Zones.

“Yet, more investment is needed to realise the full potential of the State. Our State Master Plan, which is the statutory policy of government, guiding the physical development of the State, captures the many areas where the discerning investor may wish to put his or her money to secure attractive returns.”

Agriculture and Economic Diversification
Presently, agriculture has been embraced as the major plank for governments’ economic diversification drive.
Speaking at the forum, the Minister for Agriculture and Rural Development, Chief Audu Ogbeh described agriculture as the soul of nations, saying that any nation without a vibrant agricultural sector is already deprived of its essence and its soul.

According to the minister, it was in recognition of the strategic importance of agriculture to national transformation that President Muhammadu Buhari is giving the revival of the agricultural sector the priority it deserves in the on-going national development efforts.

“So what are our priorities over the next four years? The first priority is the achievement of self-sufficiency, and excess, in our local staples namely: cassava, rice, maize, sorghum, millet, wheat, fruits and vegetables, poultry, honey, sugar, beans, soya, oil-palm, fish, milk, vegetable oils.

“Through the cooperative efforts of all key stakeholders in the agricultural sector that we expect to key into this vision and help us to actualize it, we are confident that over the next four years, the huge import bill that we are incurring presently should gradually be a thing of the past while we conserve foreign exchange for deployment to areas of strategic importance, and improve on our employment generation capacity, especially for youths, which invariably will help to guarantee shared prosperity and enhance national security,” the minister added.

He also urged participants to enhance agro products for export in the areas of Nigeria’s comparative advantage namely: Cocoa, Coffee, Kolanut, Cotton, Cashew, Tea, Sesame, Soya, Fruits & Vegetables, Banana, Onions, Pineapples, Ogbono, Gum Arabic.

He recalled that at independence, Nigeria was a world-leading exporter of many cash crops including groundnut, palm oil, cocoa and cotton till the subsequent period of petroleum resource dominance that overshadowed the agricultural sector for many decades. Then, the South-western geo-political zone of the country financed most of its development programmes with earnings from the agricultural sector which made the region a pace setter in many areas of human endeavour in the country.

To this end, Ogbeh, said there was need to recover lost grounds in these areas given the realisation that Nigeria controls a sizeable share of the global market for crops in the past.

“We believe that the various measures that we are putting in place to re-energise the production of these crops in larger volumes, both as raw materials for home industries, and as exports, will help to restore our market share within the next two to four years.

“Given its proximity to Lagos State and the investment-friendly disposition of the State which has attracted more corporate organisations and industries into it lately, it is evident that Ogun State will be a key beneficiary of this policy drive of enhanced agro production and export in our areas of comparative advantage,” he added.

Ease of Doing Business
An array of investors who were discussants at the forum, all agreed that the state accessibility to Lagos, which is the largest market in Africa, as well as its Ease of Doing Business, have all helped their businesses positively.

The Managing Director Unilever, Mr. Yaw Nsarkoh hailed the state for being a people-focused state. He said: “It is a reality that whilst it is one of the states that make up the federation of Nigeria, it is also competing in the international sphere. The reason I define the contest that way is because I feel that Ogun is setting apart a thought-leader when it comes to people centred development and thinking about development in a very integrated way.

“There are specific attributes of competitiveness in Ogun state which is the roads, infrastructure, and the fact that there is a government that is accessible, and aside from giving priority to the private sector, it gives priority to people.

“People are at the centre of Ogun state development effort and at the end of the day; those of us at the private sector understand that there is no way to build an enduring business module without putting the people first then the community would thrive. That is the most distinguished feature of Ogun state which should be an example for many states not just in Nigeria, but for many communities elsewhere in Africa and the world.

Also, Managing Director MD Rites Food, Mr. Saleem Adegunwa said: “We have been in the state for 2 years now and by virtue of location, the state is actually statically perfect. It is an hour from Lagos and to get across the country it is much easier than you would actually realise because we need our products all over the country.”
He added that with this ease they experience doing business in the state also, they are targeting to employ over 3000 workers once their new plant is up and running.

Also, the Chairman Flour Mills, Mr. John Coumantaros said: “I think Ogun has one of the greatest opportunities because it is at the cross roads of Agriculture and industry. There is an old saying that a factory without a farm is scrap metal and a farm without a factory is a weed. I see tremendous ability here to unite industrious and agricultural sector.”
On her part, the Managing Director Larfarge Africa Plc, Mrs. Adepeju Adebajo, disclosed that her organisation had invested heavily in the state.

“WAPCO has been in the state for 59 years so I think we actually predated Ogun state as the heart in western region. We have continued to invest in Ogun state. We have also invested in power, we have currently 90 megawatts and we are looking 310 megawatts by 2017. We have huge social investment which we estimate our total impact at N24 billion per annum.

“We have huge environmental investments which are in line with this conference. And the question is why we continue to invest in Ogun state. I do believe that here, we have one of the most investor friendly and accessible government in the country.

“By nature, cement companies are there for a long time, we tend to invest for 50 to 100 years and we have one of the most peaceful relationships with this state and that gives us the confidence to keep on investing. And of course the state is very close to the biggest market in Nigeria. So we have invested very much in Ogun state and we would continue to invest and going forward,” she added.

Also speaking at the event, the Managing Director, Coleman Technical Industries, Mr. George Onafowokan, said he actually started his business in Lagos and then moved into Ogun state in 2009, saying that he has not regretted his decision because of the proximity to the port which gives you good access to export.

Unveiling More Possibilities
The state also unveiled the Olokola Free trade zone. The Olokola Free Trade Zone (OKFTZ) is a state of the art industrial zone of about 10,000 hectares located in both Ogun and Ondo State in Nigeria. The zone is located about 100 km east of Lagos, the economic centre of Nigeria, and right in front of the new oil and gas deposit discoveries.

It aims at attracting a wide range of manufacturing industries including oil and gas based industries, heavy and light industries, manufacturing and logistics as well as residential area. The master plan of the OKFTZ includes a state of the art deep sea port, which will be constructed in several phases up to -18 m water depth and other infrastructures amongst a Liquid Distribution Terminal (LDT).