Delta as Emerging Industrial Hub

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With a large deposit of solid minerals and a properly developed
economic blue print, experts are of the view that Delta State can become a leading business destination in Nigeria and West Africa. Chika Amanze-Nwachuku and Ugo Aliogo report

Nigeria is going through her worst economic recession in decades. The situation has gone from bad to worse. Most states currently are unable to pay workers’ salaries and could also not service domestic debts. Delta State is among one of those indebted states; despite having an economy standing at approximately $24.6billion.

Presently, the state is targeting an annual growth rate of 10% in commodities with comparative advantages in cassava, palm oil, and aquaculture. The state also has a large deposit of solid minerals such as industrial clay, kaolin, lignite, silica, limestone, decorative rocks, and others. The state is also one of the largest producers of crude oil in the country.

With these economic growth indictors, the state has not been able to take a leading position as an industrial hub. Economic analysts are of the view that if the abundant solid minerals are well harnessed, it will boost growth, create jobs, expand the state’s economy and increase government revenue base.

They expressed concern that if the state’s focus remained only on crude oil, which the price has plummeted in the international market, the state would not attain greater economic prosperity in the years to come. They therefore stressed the need for the state to diversify into agriculture and solid minerals, promote increased private sector participation and create more jobs.
At the 25 Silver Jubilee celebration of Delta state in Asaba, these views were expressed as part of measures to develop a workable blueprint for the region in its quest to become a leading industrial hub in the country.

Specifically, the state Governor, Dr. Ifeanyi Okowa, said the ultimate goal of his administration was to vigorously develop the non-oil sectors of the economy such that they will overtake oil and gas as growth drivers.

He said: “With the ever-growing complexity, disruption and global competition of the 21st century, it is incumbent on us to build a strong, robust and resilient economy that is adaptable to the physical, social and technological changes that are a growing part of the age we live in. We must rise to the challenge now, or we lose out. He said his administration is responding to this challenge through policy thrusts and programme priorities conceptualised in its S.M.A.R.T agenda.

“The S.M.A.R.T agenda embodies policies, programmes and initiatives to aggressively develop the non-oil sector, create wealth, raise entrepreneurial leaders, reduce the worrisome level of youth unemployment, drive rapid infrastructural development, and ensure and sustain inclusive economic growth and sustainable development. Ultimately, our goal is to vigorously develop the non-oil sectors of the economy such that they will overtake oil and gas as growth drivers.” The governor said the framework and executional guidelines of the agenda have been articulated in our Delta State Medium Term Development Plan (2016-2019).

The priority areas, under plan are: Improved, effective and efficient resource mobilisation and better fiscal management; Economic diversification through stimulating and boosting agricultural production and developing agro-businesses; Reposition Delta State as preferred investors’ destination; Develop PPP models to accelerate infrastructural development, actualise critical investments and sustainable economic growth; and
Build a knowledge-based economy and a critical mass of skills for entrepreneurship and business competitiveness. Five key areas were listed as Investment Climate, Ease of Doing Business, Agriculture and Agribusiness, Agro-Industrialisation and Peace and Security

Investment Climate
To create an investor friendly climate and healthy business environment, the governor said the state has sponsored an Executive Bill for the establishment of the Delta State Investment Development Agency.
The Bill, which is at advanced stage in the State House of Assembly, sets out the institutional framework for public-private partnership, establishes guidelines to enable easy access to land for private investors, and envisions the creation of working committees/teams that proactively engage with the private sector to actualise their investment and business plans.

The governor said: “Our objective is to remove the opaqueness usually associated with government business. The provisions of the bill will help facilitate business decisions for the private sector and, because every prospective investor knows what to expect, outcomes can be predicted.”

Okowa added: “Our partnership with the private sector is of utmost priority to us and we are pursuing it with relentless vigour. Our approach is to adopt robust and flexible PPP models that guarantee a win-win for all. At the moment, we have signed several Memoranda of Understanding with domestic and foreign private sector groups in energy, housing, infrastructure, water resources and agriculture sectors.”

He listed others, notable projects for which MoUs had been signed to include the Delta Commercial City, Asaba Integrated Power Project, Umunede Rest Park, Warri-Effurun Water Scheme and Foreshore Estate Housing Project.”

“We have also reached advanced design and planning for the development of agro-industrial parks in the State.
From the preliminary analysis, the total private investment to be realised over the next two to three years from the various PPP projects is $500million. In developing these PPP models, we are very mindful of the need for transparency, value for money, equity, respect for sanctity of contracts, and project outcomes.”
He said the PPP models are tailored to protect and satisfy the business interest of the investor, while taking cognizance of our growth aspirations.

Ease of Doing Business
The governor said his administration has taken steps to eliminate some institutional encumbrances that hitherto frustrated the ease of doing business in the state. “Notably, we have introduced an electronic-based system, known as Fast track 90, for obtaining Certificates of Occupancy to landed property within a maximum period of ninety days. It may be far from the ideal, but it is a remarkable improvement from the long delays, sometimes stretching as far as five years, previously associated with this process.”

He also said the state is at the concluding stages of harmonising the various taxes in the State in line with the Consolidated Revenue Law 2009 of Delta State (as amended).
“This harmonisation is necessary to mitigate the negative impact on the tax payer/business, and correct the wrong impression among business owners of multiplicity of taxes. At the end of the day, we want to see a situation where only the Delta State Board of Internal Revenue is required to issue a single “Demand Notice” on taxes and levies collectable by the State.”

Agriculture and Agribusiness
With its comparative advantage, particularly cassava, oil palm and aquaculture, the state government has set a target of 10% annual growth rate in the agricultural sector, especially in commodities.
Through its Youth Agricultural Entrepreneurs Programme (YAGEP) and Production and Processing Support Programme (PPSP), the governor said the state is building capacity for farmers and agro-processors by resourcing them with improved technologies, efficient inputs and marketing support to trigger high yields, ensure profitability and create jobs. “In particular, through YAGEP we are raising a generation of young, dynamic agricultural entrepreneurs as evidenced by the array of youth-based farm clusters throughout the State”, he added.

Agro-Industrialisation

Desirous of attracting high-impact private sector investments along the agricultural value chain through various forms of public-private partnership, Okowa said his government has structured the State’s agro-industrialisation plan into three major cluster development areas namely; Uzere agro-industrial area, Abraka-Umutu agro-industrial area, and Ogwashi-Uku agro-industrial area.

The idea is to use agro-processing and agribusiness epicentres to drive the commodity value chain for sustainable inclusive economic growth, job and wealth creation. The governor said each agro-industrial epicentre would be “driven by an anchor private sector investor devoted to agricultural value chain development activities including agro-processing, commercial farming, out-grower schemes, market linkages and farm support services.”

Peace and Security
Pointing out that Peace, security and public safety are imperatives for healthy business environment, the governor, who expressed the regret that the economy of the State, in the past, suffered setbacks owing to inter-ethnic clashes and violent agitations in the oil producing communities, said his administration established the Delta State Peace Building and Advisory Council, which has adopted a proactive, people-centred and community-based approach to dealing with the issue of security and public safety.

He noted that the Delta State Government Advocacy Committee against Oil Facilities Vandalism is also working to contain the resurgence of pipeline bombings in the State.
“Essentially, our approach is to maintain peace and security through peace building initiatives that rely on effective engagement with grassroots organisations, local government structures and traditional institutions to prevent relapse into conflict. Additionally, our Job and Wealth Creation Scheme, targeted at unemployed youths is helping to curb youth restiveness by engaging them in productive enterprises.”

Delta as Investment Heaven
In his keynote address, a former Governor of the Central Bank of Nigeria (CBN), Prof. Charles Soludo, said with the large number of high skilled manpower and entrepreneurs from the state, there is a high propensity to attract investments to the state in every sectors.

Soludo, who envisioned the state to become a leading economic base in the South-east and South-south pioneered by its neighbours such as Rivers, Baysela, and Anambra states, added that the state can be an alternative trade centre to Lagos.
“Delta state can become an international state. We envision delta state to become a newly economy rooted in services such as manufacturing, agriculture, and residually, natural resource extraction and transformation. I see a state that can be accessible by land, air and sea”, he noted.

He also stated that the state has the potential of building the largest seaport in West Africa, adding there is need to decongest Lagos in order to build the corridor as an alternative to Lagos state. “This seaport has to be modelled on the patterns of Philippines economic zone authority,” he stressed.

Soludo called on Okowa to position the state as an investment nerve centre for foreign investors from Asia and Europe, stressing that there must conscious efforts by the state government to put deliberate policies in place, so that positive results can be achieved.
He added: “In this post oil economy, there must be active interest or design to build alternative economic centres in Nigeria. With the potentials of Delta state, I see the enablers to be first, active participation with the federal government. The federal government needs to give fast track approval to a whole number of things. When Tinapa was completed, it took a long time to get necessary permit from the federal government.

“The state needs to fast track approval for number of areas and you also need to work with local and international private sectors. The state governor should work with the Minister of Aviation to secure an AIP approval in order to raise the statues of Asaba airport from local to international. This will boost trade and commerce not only in the state, but also around the South-east regions.

According to him, “The federal government with the sovereign wealth fund should as a matter of urgency complete the second Niger Bridge. This will create a free flow of a much larger economic corridor which will become an alternative to Lagos. There is need to setup the delta development fund using individuals such as Tony Elumelu, Dr. Ibe Kachikwu, Dr. Jim Ovia and others as your think-tank. They will have to suggest ways to generate funds for the state.”

Furthermore, he said: “There are still funds that you can leverage in thinking and jump starting many of these initiatives. The fund could also have private sector equity contribution to it. It is akin to an infrastructure bank that is the Delta state infrastructure bank. You can leverage on other funds such as PenCom, sovereign wealth funds, and others. This will help to execute the commercial infrastructure projects, ports development, highways and industrial parks.

The federal government can help to dredge either Warri or Koko port. There must be a plan by the federal government to work a plan to develop the seaport, airport and the highways. This will open up the state to the world.
“You need a smart team with a high execution capacity and it requires also hands on, and case study approaches. The Dangote Cement didn’t begin through prices fixing, it happened through deliberate focused policies of backward integration and government gave all the support for it to happen.”