Nigeria: Oyo and Prospect of Economic Development

20 October 2020

Kemi Olaitan writes on a new initiative by the Oyo State government to aid economic expansion in the state

When the entire world was hit by the COVID-19 pandemic at the beginning of this year, the devastation it brought was massive. Nigeria, for all its identity as the giant of Africa, was not an exception as it also had its pillars cracked.

The states in the country were also not left out of the effects as they were confronted with dwindling resources from the federation account, no thanks to the huge fall the nation suffered, due to the collapse of its major source of income, crude oil revenue.

However with the governors in the country forced to put on their thinking cap in finding solution to the economic problems facing their states, for Governor Seyi Makinde of Oyo State, bemoaning the situation would not be in the best interest of the pace setter state.

Apart from planning a post COVID-19 Oyo State through financial re-engineering of the state, his administration has adopted what he called Alternative Project Funding Approach (APFA) and Private Public Partnership (PPP), to aid the development of the state.

Taking the bull by the horn, the administration through the initiative has succeeded in changing the narrative in areas that include housing project, revitalisation of moribound company as well as turning around the fortune of an abandoned shopping complex constructed over 40 years ago.

Makinde, while flagging off the construction of 360 housing units at the Ajoda New Town Estate, located on the New Ibadan-Ife Expressway, in Ibadan, the state capital, estimated to cost about N2.5 billion, said the new estate will enhance affordable housing to all and sundry in the state while the strategic location will ensure that the investors make quick returns on their investments.

The governor added that the project which is a fulfilment of one of his campaign promises would consist of 2-bedroom semi-detached houses; 3-bedroom semi-detached houses and 3-bedroom detached, assuring that it will be replicated in other parts of the state so that many residents of the state can benefit from such projects as investors have begun to repose confidence in the state and are willing to do business with the administration because of the way the government is now being run.

According to him, "We are here today to flag off a project, which is in fulfilment of one of my campaign promises. Those who have taken time to study our Roadmap for Accelerated Development in Oyo State, 2019-2023, would have come across our promise to facilitate private sector-driven housing delivery through variants of public-private partnership (PPP) initiatives.

"And so today, we are flagging off the construction of three hundred and sixty (360) housing units here in Egbeda Local Government Area, Ibadan Zone. This is a PPP initiative. We are working with Remax Realtors Limited.

"The project will cost N2.5 billion, and upon completion, the developers will recoup their finances when the houses are sold. We have seen the wisdom of getting contractors or developers to commit to projects by using their own monies to carry them out.

"Some people may wonder why we are starting off in the Ibadan Zone. Well, the need for an affordable housing scheme in Oyo State is clearly evident. Statistics show that the population of the capital city has been growing at over 2 per cent since 2018 with a peak of over 2.5 per cent in 2020. So, half of the population of Oyo State live in Ibadan Zone.

"But that the project is starting in Ibadan Zone does not mean that it will end here. Our plan is to replicate these housing units in other parts of Oyo State in the shortest possible time."

The Managing Director, Remax Realtors Limited, Mrs. Adefunke Adesoji, said it was an honour to work with the Oyo State government on the project, which was conceived as a public-private partnership while the state Commissioner for Lands and Housing, Barrister Abiodun Abdulraheem and his counterpart in the Ministry of Justice, Prof. Oyelowo Oyewo, enjoined investors and residents of the state to key into the projects, which they described as a landmark initiative.

One other project that benefitted from the new initiative of the government is the Agbowo Shopping Complex.The governor speaking at the flag-off of the renovation and remodelling of the complex which has become dilapidated and an eyesore, said the state will work in collaboration with Messrs Whitestone Global Ltd to convert the moribund facility into a premium commercial real estate and a 4-star hotel. He disclosed that the collaboration would be in the form of a long lease concession for 50 years, with a capital injection of N4.9 billion, saying, "Our administration understands that the only business that the government should have in business is to create a conducive environment and the needed support for private enterprises to thrive. And this is what we are doing. You will readily agree that the injection of N4.9 billion into the Oyo State economy is an economic stimulus in the short term which will translate to broader benefits in the long run.

"The process of selecting the concessionaires was also transparent. As everyone knows, the days of getting contracts from the government solely because a person knows the governor is in the past. I make bold to say that the PPP mechanism of the state has been re-engineered for effectiveness."

The Managing Director of Whitestone Global Ltd., Mr. Woleola Oluwole, assured of the commitment of the company to turn the fortune of the complex around, stating that when it is completed it would be a pride to the state.

He said, "Today is indeed a great day and another landmark in the trending capacity of Oyo State. This is not surprising because we have a governor that is an honour to follow; we have a governor who is a father to watch.

"Here we are today marking another trend for others to follow. In this place today, as it is, in the next few months, we will know, indeed, that the God of heaven has smiled upon us and the rest of Oyo State.

"This facility, when completed, will have a time level car park that will double as a drive-in Cinema in the evening; a 10-floor first class hotel; 600 capacity 3D Cinema in the evening, an underground gaming arcade; what I call the 22nd-Century E-shopping Mall. All of these will be inside 25,000 square metres."

Similarly, the state government has kick started the process of reviving its moribund Pacesetter Fruit Processing Company, Oko, which it handed over to AGVEST Limited.

While performing the handover ceremony, Makinde said it is a further testimony of the commitment of his administration to resuscitate moribund state-owned companies and other facilities through Public-Private Partnership arrangements and concessionaires, maintaining that the revival of the company will bring economic development to the state as the government has been getting results in terms of economic expansion through creation of a conducive environment for businesses to thrive.

According to him, "I am happy to be here in Oko. When I was in Tampa, Florida, earlier this year to preach Oyo State to the world, I stated that there are big opportunities in Oyo State and it was not an exaggeration.

"Oyo State is truly blessed with an abundance of human and natural resources. So, our job, quite frankly, is to annex the abundant resources for the benefit of our people.

"Today, we are here to welcome another investor into our midst. We are bringing to life another company that has been moribund for almost a decade, Pacesetter Fruits Processing Limited. This company was established during the administration of former governor, Senator Rashidi Ladoja in 2007.

"However, it never commenced operation. And as I have always stated, government is a continuum and our administration will ensure that people in Oyo State benefit from abandoned or moribund projects to which the funds of the state have been committed. They did not use anybody's father's money.

"They used Oyo State money to set this up. So, the state must derive value from the money they have put into this. The state government has no business in running businesses. Businesses should be left in the hands of corporate organisations who know how to run them and make a profit.

"The role of government is to create an enabling environment so that more of the private entities will be attracted to the state. And this is exactly what we are doing in Oyo State. As you can see, we are getting results.

"Also, we have to be competitive and be able to bring the product out of here in a competitive manner. So, what the government will do is to ensure the road networks, electricity supply and security are worked upon so that the private companies will function better."

The governor added that the investor has promised to inject N350 million into the project and that it would be completed within six months while it would create more job opportunities for the people of the state.

The Managing Director of AGVEST Limited, Mr. Olabode George, said the company through the resuscitation of the fruit juice company will add value to the economy of the state and turn the state to a hub of fruit juice in the country.

He said, "Our focus is on Oyo State because we live here. Coming to the Pacesetter Fruit Processing Company that is being handed to us today, our intention is to produce fruit juice for mango, pineapple, orange and fruit cocktail. Because of the abundance of fruits in this locality, we also intend to produce jams that will make it easier.

"We will generate waste from all the production we are going to be doing. We intend to produce organic fertilizers from the waste that will be generated. And we will push this fertilizer to market.

"In all, we will be able to add 50-75 direct jobs and put 500-550 indirect jobs out. By the time the governor comes here for formal commissioning, we expect that we will have done a lot of work on the physical structure of the property.

"We will be importing a fruit juice lime from India, which is coming in here. We believe we will add value to not only the host community but also to the economy of the state in terms of what we do. We also believe we should give back to the host community where we work."

A financial expert, Mr. Yemi Adepeju, while speaking on the new initiative by the Oyo State government, lauded the government for not wallowing in self-pity but setting an agenda for itself to make life more prosperous for the people of the pace setter state. He however raised the fear of the government sustaining the current tempo.

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