The ever-pressing need to break the ground in fast-tracking industrialisation and economic diversification has led many state governments to tinker with diverse industrial models, with a number of them recording negligible successes.
This trial and error approach has led to the creation of industrial clusters or zones that dot the country, all of which, analysts say, are boggled with numerous challenges ranging from ill-thought out policy measures, decaying infrastructure, little or no incentives for investment or in-fighting among initiators.
Policy flip flops and other man-made errors have made it difficult for these clusters to provide conducive environment for innovation and production to foster the growth of Small and Medium Enterprises (SMEs). This is cast against the backdrop of what obtains in other climes, where deliberate government policy has sparked industries in India, the United States and Europe.
In Edo State, Governor Godwin Obaseki has pooled resources to set up the Edo Production Center, an industrial cluster for over 200 SMEs in Sapele Road axis of Benin City, fitted with 24 hours electricity, as an incentive to boost productivity. The governor is focused on repositioning the state as an industrial hub in Nigeria by creating the environment to stimulate the smooth operation of manufacturers, expand the space for youths to be engaged in productive activity and promote inclusive development.
The Production Center is an initiative of Governor Obaseki, to provide a multipurpose production facility with conducive environment for manufacturers to work in clusters. The multipurpose production cluster will serve as hub for Micro, Small and Medium Scale Enterprises (MSMEs) in the state.
According to the Senior Special Assistant (SSA) to the Governor on Jobs Creation and Skills Development, Mrs. Ukinebo Dare, at the one-stop-shop and production Centre to be located across the three Senatorial Districts of the state, MSMEs would enjoy economies of scale and low cost of production.
Some of the major attractions include constant electricity, good road network, security, solar powered street lights and other business support services so as to boost capacity to produce at scale, create more jobs and deepen industrialisation. The cluster is also expected to aggregate different manufacturers with sections for welders, metal and fabrication, polythene cut, printers, woodwork, recyclers, shoemakers, among others. The site of the Production Centre in Edo South Senatorial District is located along the Sapele Road-axis of Benin, in a formerly abandoned government warehouse refurbished by the Obaseki-led administration. The facility of four blocks has been described as the future of production, to accommodate local manufacturers.
When the Centre opens for business in June, it will host over 200 Small and Medium Scale Enterprises (SMEs) involved in fabrication, furniture making, printing and polythene production and a number of other interested small business owners. Dare explained that through the Production Centre initiative, Obaseki was focus on encouraging the growth of small-scale businesses to spur economic growth and create jobs and wealth for the people, as it only makes more sense to groom local manpower as step to attract big investors, by creating the enabling environment for everyone to work harmoniously with the right policy framework. Dare added that the initiative is being set-up by the state government with support from the Bank of Industry (BOI), MEND and Benson Idahosa University.
Commissioner for Physical Planning and Urban Development, Hon. Edorodion Oye Erimona, noted that aside being a one-stop-shop for MSMEs to enjoy economics of scale and low cost of production, “the Centre will accommodate MSMEs clusters while the Benin Industrial park will host big industries.
The electricity that will be at the hub will be drawn from the Ossiomo Power Purchase arrangement. Pollution in the environment will be minimal at the businesses will be MSMEs.”
Another key factor in favour of the initiative is that it would provide conducive environment for the development of other business clusters which will serve as incubation centres for new businesses in the state.
The Centre is also expected to bring many small businesses together that will cooperate with each other in an attempt to efficiently share resources such as electricity, information, materials, water, energy, infrastructure, and other resources, and help achieve sustainable development, with the intention of increasing economic gains and improving the quality of lives for Edo people.
The production cluster would feature facilities designed to drastically reduce cost usually incur during production, increase income for small business owners, while at the same time reducing the price of goods and services in local economy, and growing foreign exchange earnings for the state and country.
For Governor Obaseki, the Production Centre will enable his administration assists entrepreneurs into small scale production cut down on cost of production and grow their businesses with ease in accessing finance and funding from financial institutions.
This is in fulfilment of his promise to ensure a conducive environment for businesses to thrive and improve the quality of lives of the people. This will also complement the Obaseki-led administration goal in driving industrialisation of the state and undeniably revolutionise the state’s economy.
A unique attraction at the Centre according to Obaseki is the provision of uninterrupted power supply to the facility, as the state government has made arrangement for provision of 24/7 electricity to assist owners of small-scale businesses eliminate initial setup cost on electricity.
As entrepreneurs are set to commence operation at the Production Center, three 500KV transformers have been installed at the facility to demonstrate Governor Obaseki’s promise to provide 24-hour electricity at the center.
According to the Head, Energising Edo, Mr. Paul Okungbowa, “The 500KV transformers will be connected to the 33KV line in the area. The plan is to have at the onset 1.2MW of power, which we intend to expand to 4MW in the near future. We want to ensure that the heavy machines to be run at the facility have 24-hour electricity to work optimally. Essentially, there will be no downtime, if the occupiers wish.”
In addition to provision of 24/7, the Centre is fitted with factory space, security and office space, the Production Centre will provide spaces for live-in desks for relevant government agencies to engage, support and provide services to the small businesses at the Centre.
The agencies to be hosted at the Centre according to the governor’s aide, are the Bank of Industry (BoI), Corporate Affairs Commission (CAC), National Agency for Food and Drug Administration and Control (NAFDAC), Edo Internal Revenue Service (EIRS), among others. These supports will make owners of MEMEs more productive.
A representative of fabricators and welders to be hosted at the Production Center in Benin, Rev. Lugard Ekhosuehi Michael, said the arrangements for working space and constant electricity supply will help them eliminate the major problem they are faced with. “The state government has provided space for us and promised 24 hours electricity supply as these are the problems we are faced with as welders and fabricators in the state,” Michael said.
With the Production Centre in Benin about to be open for business, the state’s economy stands to gain immensely with complete turn-around in terms of quality of what will be produce at the Centre.
Dare, who heads Governor Obaseki’s jobs creation and skills development agency, EdoJobs, said, “As we are looking forward to the commissioning of this project, in the very near future, we will see a complete transformation in terms of the quality of what we produce, capacity to produce and the number of jobs created by this Production Centre.”
According to the governor’s aide, the hub would boost his promise to create a minimum of 200,000 jobs before the end of his first four years in office, as his administration planned to create more jobs from industries through providing opportunities for industrialisation driven through private sector participation.
Dare said, the hub was also expected to affect the growth of local capacity, and support the state government skills acquisition programmes which will create lasting impact and provide viable paths to prosperity for youths in the state. With the Centre in place, skills acquisition will be delivered alongside entrepreneurship and business management, start-up acceleration, digital marketing and branding programmes.
The Obaseki led-administration is also not relenting in formulating the necessary policies and programmes that would empower youths to fit into the emerging economy which his administration is creating.
For Obaseki, “We want to create several job incubation centres/hubs, where job seekers will be trained and employed by the entrepreneurs in the state. We have the potential to create all we want as we have the base materials, so we have to prepare our youths to fit into these new jobs we intend to create via training.”
The direct and indirect jobs to be created at the hub will contribute significantly to Nigeria’s manufacturing sector.
Access to Finance, Funding for MSMEs
The production Centre initiative pursued by the Edo State Government is quite grand and offers a wide range of benefits to local investors who are being strategically organised as a cluster to improve access to funding and other financial instruments.
During a visit to the hub, the Governor of Central Bank Nigeria (CBN), Mr. Godwin Emefiele while lauding Governor Obaseki’s initiative in setting up the Production Hub, said the Centre will enable financial institutions like the apex bank easily reach SMEs and assist them tackle the problem in accessing finance and other support.
With the cluster, it becomes easy for the CBN and other financial institutions, to meet with entrepreneurs who are doing business at the hub. According to Emefiele the creation of the hub is a timely intervention by the Edo State Government as the CBN is making plans to deal with issues affecting financing for SMEs.
According to him, the CBN in collaboration with the Bankers’ Committee have set-up the National Micro Finance Bank to assist deposit money banks and SMEs access fund easily. “We have set up over 20 centers for the National Micro Finance Bank (NMFB) across the country and I am sure Edo State will have a share,” the apex bank governor said.
Dare, explained that the state government is also collaborating with the Bank of Industry (BoI) for funding as the Obaseki-led administration will leverage on the BoI’s expertise in industrialisation and production to attract funding for the MSMEs at the Production Centre.
Small-scale businesses who will operate their businesses at the Benin cluster will now have easy access to funding, with the opportunity to take loan as a cluster. With the ease to access loan at about 9 per cent interest rate and provision of constant electricity, the Production Centre has provided solutions to challenges faced by SMEs, which according to Emefiele will enable owners of small-scale businesses to cut cost of production, even as they are better prepared to compete effectively and create employment for themselves and others, while supporting the government to also grow the economy.