The Kwara State Governor, Alhaji Abdulfatah Ahmed, spoke with business editors on some of the administration's efforts at bringing economic prosperity to the state. Kunle Aderinokun, who was there, presents the excerpts.
The commercial agricultural scheme in Shonga was launched with fanfare, are the products in the markets?
Shonga Farm is one of the best things that have ever happened to Kwara State and indeed Nigeria and I wish that the transformation agenda we've been talking about in the country borrows from what we have done in Shonga as a platform for driving commercial farming in Nigeria. We started with 13 farmers who moved from Zimbabwe and settled in Shonga. We have them compartmentalised into 3 sectors - Poultry, Mixed Cropping and Dairy.
These farmers came in to be commercial farmers. For commercial farming, we are talking about what we call value chain. In other words, they will form largely what we call feed stock for processing. That is what we mean by commercial farming. You will not see their products on the shelves like you expected to see. Their products are there in the market which you use, probably daily but you will not know because it is a value-chain concept. For instance, the dairy plants soya and maize to prepare feed. This feed is fed to cattle. The cattle produce milk. Milk is now sold to WAMCO. WAMCO produces Peak Milk which you use. You now understand the value chain. That is why if you expect to see fresh milk in the market you will not see it. They are largely designed to be feed stock and the same thing happens to the poultry. They plant maize and soya. They have a 50-tonner feed mill there where they generate feed. They buy day-old chicks from Olofa's Farms which is another feed stock farm and in 6 weeks they grow to table size.
They have an abattoir that has the capacity to slaughter 10,000 chickens every day, but currently they are doing about 5,000. Once they slaughter the chicken, they are packaged and sent to eateries. At major eateries, it is their chicken you will eat. So people who expect to see Shonga Chicken in the market will not see it that way. The cassava that is grown there has the highest yield in the country. The national average for cassava is about 15,000 tonnes per hectare; in Shonga we do 40,000 per hectare.
This cassava is currently been exported to China as chips. The kind of transformation agenda we are talking in the country is what is already happening there. Our own effort in the State is to see how our local farmers would now begin to be incorporated into this transformation agenda beyond just subsistence farming. They now begin to see themselves as clusters around these commercial farmers and it is that model which we are trying to translate to the state wide farming concept. So if you hear us talking about agricultural transformation in Kwara, what we are talking about is replicating what we are already carrying out in Shonga to make it a state-wide farming concept. Unfortunately, the biggest challenge we are faced with is the issue of irrigation which is capital intensive.
That is what the Federal Ministry of Water Resources should be doing by supporting us with irrigation so that we as a state continue to give necessary inputs to drive our farmers from subsistence level to commercial level under a clearly spelt out value chain concept. This will see our farmers truly seeing agribusiness as a means of economic empowerment. For us in Kwara State we have gone further by not only enumerating our farmers, but clustering them according to cooperatives and compartmentalized them into crops; i.e. rice, maize, soya and cassava. These are the four crops we are taking to commercial level. These four crops will form feed stocks to a value chain development programme. So that is what commercial farming should be seen as. Hence, when you are trying to drive a transformation agenda, it is the whole chain that requires to be renewed. All we need to do now is to use our local farmers to copy what the Zimbabwean farmers are doing successfully. Hopefully, Kwara State will become the true hub of what agricultural transformation and agricultural value-chain development in Nigeria.
You said you are interested in micro finance banks. The policy allows State Governments to put aside a percentage of their money to help the micro finance banks. How much have you given to the micro finance banks and what is the agenda to develop the micro finance banks?
What we have done here is that we looked beyond just giving the one per cent. We were very conscious of the fact that the micro finance banks are expected to drive deposits to be able to bring about lendable funds within the micro finance industry. We are not waiting for that. I just told you that we set aside about N500m as a debenture which we are making available to prospective beneficiaries through the micro finance banks. So the way the federal government has created a debenture under the support for agriculture and made this money available through the Central Bank to Commercial Banks to beneficiaries, we have also set aside that kind of money. The micro finance banks that have demonstrated capacity to lend this money and collect back will continue to be our partners. As a matter of fact, we are still assessing the first tranche of their administration of those funds and the level of recovery will make us know what next.
What are the things you put on ground that could attract Shoprite to Ilorin and others that are coming?
The first attraction to any business is how enabling is that environment in terms of security. We have spent so much and we have put so much at stake in ensuring that we have a secured environment.
Secondly, we've invested so much on our road network, which makes us accessible from the North, the South and the North-Central. Most importantly, our people are very hospitable. You hardly see any issues to do with religious, social problems in the State. We have always tried to ensure that our environment is quite enabling. We also have the population. This tells you that the environment couldn't be more enabling to support this kind of businesses. That is why when we asked Shoprite to come here. And they saw that the environment is quite good for them. Our weather is also quite supportive of driving businesses. These have been part of the ingredients that government has always seen as part of its own contribution to creating an enabling environment. However, we are not stopping at that. We are bringing Spar to Kwara.
We have had the same kind of arrangement we had with Shoprite with Spar. They will not only create a new Spar outlet here, they will also create a new Shopping Complex which will be a very good platform for employment. Our major concern is getting our people employed and creating the enabling environment for our people to carry on their businesses. Shoprite alone has generated so much employment for our people. The turnover in one day is on the average of N6m to N7million. Nobody ever believed that Kwarans have this level of disposable income. This tells you that our people are hungry for this kind of businesses. Apart from the environment that would be created for employment, it will also create an environment where we can get value for money.
Spar is one of the biggest outlets globally from Netherlands. We are lucky to partner with them to bring them here to set up something that will change the lives of people. We are focused because we are driven under policies that have been outlined, structured, methodically put in place to drive Kwara State to desired level. From day one when we were coming to this business, we already knew what we wanted to do for the next four years. We didn't come to this business by accident. We knew exactly what we were coming to do. We knew how much resources are available and we know how much these resources can do and we know that we are going to get there only through ingenuity, through partnerships with the private sector and that is what we are doing. We are not deterred.
What is the idea behind Harmony Holdings Limited?
Before now, the State had interest in some business - transport, insurance, properties, hotel business and so many things. These things were just run on their own. Sometimes the state has shares in some businesses, for example, Kwara Furniture. But to what extent have all these businesses translated into increase in revenue for the State government? We have found out that they have not contributed anything, largely because they have been running on their own and we began to see that whatever they are right now they have assets with latent potentials to grow to desirable levels where they can contribute revenue to support economic growth in the State. It is against this background that we said all these things should be put under an umbrella which we called Harmony Holdings with a very strong management that will see each of these businesses as S.B.U - Strategic Business Units that would be given specific targets in terms of growth and development and most importantly, in terms of expectations in revenue to advance the much required revenue for the State.
Some of the businesses are even moribund but we are reviving all of them so the potentials are huge. I will give you an example, Kwara Transport, used to run commuter buses from one town to the other. We said no, this cannot go on like this. If you want to be in the business of transportation, what are the best practices? Who are those that know how to do it and are doing it well? Bring their models to see how it is working. That is what we have done. Today we have a structured management. We have a programme that allows individuals to bring in their buses. In short, we have been able to get to efficiency level from where we will grow organically and ultimately inorganically. This will begin to see us getting to the desirable level of revenue. There are so many options where we can go. There are courier services. There is haulage business. There are ferry services. These are all inorganic ways of growing. We can increase the fleet. Look at more routes, do a feasibility of which routes give us best benefit for our value for money. That is organic growth and that will see us getting to desirable level. Our major concern is value for money.
What is the economic importance of the Aviation College?
For keen observers and those who want to truly see themselves growing among committee of nations, they must begin to learn how to do a clear analysis of opportunities. One big opportunity that exists in the Aviation industry is the fact that there is dire need of pilots globally. Check any international airline, they will tell you. Training pilots requires that you understand the dynamics of the business. The last administration realized that this gap could be filled to serve two purposes. Firstly, it will serve as a hub for aviation. It will support what we have on ground. Don't forget that we have a cargo terminal. We already have the Air Force hanger here and of course an International Airport. Secondly, we want to bring Kwara State to be on the map of the world because when you have an International Aviation College it goes beyond servicing the immediate community.
Apart from Zaria and South Africa, I don't know where else pilots are trained in Africa. Obviously, by the time this school gets to its full potential, everybody in Africa who intends to train as a pilot will know the existence of an Aviation College in Ilorin. For now, we are training pilots but there are other services. There is engineering training. There are other services that are going to go into it. This would become itself a hub for driving aviation business.
Indirectly, there are people who will support those who are going to work there. So for us, it is a major hub to create the kind of economic environment that will not only put us on the map of the world but also we begin to see Kwara as a place that is attractive for prospective businesses. In Kwara, we are looking beyond just tapping on low-hanging fruits. We are looking at the process where in 15 to 30 years the state will be one of the most developed.
So beyond just doing the normal infrastructure - roads, water, hospitals, schools -what are the long term benefits that we can bring to our people that on its own can regenerate support scheme for growing the economy of the state. This is part of the reasons why we have set up an International Aviation College and luckily under the new EXIM loan that the federal government has signed with the Chinese and India governments and others across the world, International Aviation College will be benefiting from the loan. It will be able to acquire at least 10 new aircraft under a 25 year loan agreement with a 10 year moratorium. It couldn't be better than that. The school will acquire the aircraft, develop economy of scale, train students, earn money and pay back the loan on their own. The 10 year facility means that the college's cash flow will not be under pressure.
It is when you borrow money and you have to pay within a very short time that you have pressure on your cash flow. The loan was so attractive that we couldn't resist it and it is one of the best things that ever happened to us. That will enable the school to get to the much desired full scale aviation college that we have always prayed for and will allow them to attain economy of scale where they can earn a lot of money to service the school and pay back. For now the school is fully owned by the State but don't forget that the State government is not in the business of running aviation. So, ultimately, we will sell off 70 per cent of that business to those who know how to do that business and then the school will run on its own internationally.
It is said that you only capitalised on the events of the recent Offa/Erinle crisis to actualise a political agenda by dissolving the councils. What's your reaction to this? In the spirit of continuity, to what extent are you increasing the workforce in the productive sector in the state?
What you observed in Offa and Erin-Ile has been an age-long boundary problem which is not uncommon with most traditional communities staying side by side. For a new entrant, you hardly know the boundary between the two communities. You won't know they are two communities. The state government has always been trying to ensure that these communal crises are resolved.
Unfortunately, this last crisis, in spite of efforts at checkmating it, stemmed from a dispute over motor parks located near the Federal Polytechnic, Offa. Sensing the likely breakdown of law and order between both communities as a result of struggle over the parks, government quickly summoned the Local Government Chairmen. We advised them to do the needful by especially relocating the parks away from each other to their original sites inside the communities. Motor-parks and markets are governed by bye-laws that are made by local governments. So we directed the chairmen to restore sanity to the parks. The state police command was ready to adequately support them to nip the crisis in the bud.
However, the chairmen took things for granted. The state government was not alerted by the chairmen that the thing had gone beyond their powers. They kept telling us that everything was under control. In fact it was premised on the situation being under control that I travelled outside the country, only to be informed that things had escalated into full-fledged violence. I felt very bad. We had also called on even the traditional rulers to talk to their people to ensure that there was dousing of the tension but the traditional rulers are not security officers. It is the local governments that are the Chief Security Officers of their council and the issues at hand are governed under the bye-laws of the local governments. So, lack of effort to drag this thing to ensure that there was law and order were sustained was what led to the breakdown of law and order.
Hence, the first thing was that we had to alert the councils that they had not done what they were supposed to and they have to stay aside to allow the judicial commission to make enquiries to see to what extent the chairmen played their roles in ensuring that there was law and order, especially when the laws are bye-laws of the councils. That is the major reasons the councils were suspended. It has nothing to do with political motivation. It is about the protection of lives and property.
On the issue of employment, I can tell you that it is the benefit of continuity. The real meaning of continuity is value for money in the real sense because what are we trying to continue? You want to continue something that has been started which is expected to drive itself to a level of fruition that you can get benefit. For us in Kwara we started the issue of getting people out of the streets, getting them empowered. We went further the moment we came in 2011.
We went into an enumeration programme to know how many people are unemployed. What is their category? What is their educational level? That helped us in generating the database which has helped us in creating a platform for giving those jobs. The first thing we did was that we gave 2,000 youths jobs under the Kwara Bridge Empowerment Scheme. We promised these 2,000 youths that within the next one or two years they would be properly engaged. That is, they would move from the bridge to proper engagements and so others will replace them on the bridge. I am happy to let you know that the 2000 have been completely absorbed. In addition to that, additional 2,000 have been replacing those ones that moved from the bridge. It is a continuous programme.
Also, we have just started an International Vocational Centre which will be driven under a programme with City and Guilds (C&G) of London so that the people who graduate from them will be give C&G certificate. We chose C&G because we want to create people that would be employable outside Nigeria. We are looking beyond Nigeria. As soon as it starts with the first tranche of students in September, the centre will be the platform for training youths and reduce unemployment. We will also create a platform for supporting them. We have a debenture. We have set aside over N250million, the first tranche of people who already had skills but gaps in funding have collected theirs. We have given some of them part of the N250million under the cooperative scheme. So those who undergo training will also have access to these funds. In other words, we are training people that will become employers and employees at the same time. So that is the kind of support we are giving to address the issue of youth unemployment in the State.