The Nation Newspaper

Tag: diversification

  • How real sector’s woes hurt diversification

    How real sector’s woes hurt diversification

    Things are not looking up for the real sector. The challenges in the business environment has continued to hold the sector down, pushing its contribution to the Gross Domestic Product (GDP) down to 9.5 per cent. This has raised fears that Nigeria’s hope of riding on the sector’s back to diversify the economy may not be realised, if the challenges are not addressed. Assistant Editor CHIKODI OKEREOCHA reports.

    Nigeria’s transition to a non-oil economy is under threat. The real sector, particularly manufacturing, upon which Africa’s largest economy anchored its hope of diversifying the economy from  over-dependence on oil proceeds, is gasping for breath. For most operators in the sector, the deteriorating operational environment caused by lack of supportive infrastructure and macro-economic uncertainty has become too heavy to bear.

    Apart from the huge costs imposed on them by the lack of critical infrastructure, particularly electricity supply, the prevailing macro-economic indicators such as high interest rate, rising inflation, depreciation of the naira against other major currencies, especially the dollar, and scarcity of Foreign Exchange (Forex), among others, have continued to plague the sector acknowledged as the economy’s growth engine.

    The economic downturn manifested by these negative indicators, The Nation learnt, has since forced not a few operators to take drastic measures including scaling down their operations and sacking their workers in a bid to stay afloat. Others that could not cope closed shop or relocated to neighbouring West African countries where the operating environment is friendly.

    Expectedly, one of the unsavoury consequences of the high mortality rate and or relocation of companies in the sector is job losses. Apart from compounding the nation’s already high unemployment rate, the spate of job losses in the sector clearly defeats one of the government’s objectives of pursuing diversification, which is job creation.

    According to experts at PriceWaterhouseCoopers (PwC Nigeria), oil & gas jobs account for less than one per cent of total employment and the young population can no longer be absorbed by the sector. The experts said apart from the need to insulate the economy from the risk of being vulnerable to a single commodity, job creation was another core reason why Nigeria needed to genuinely pursue diversification.

    The consulting firm identified the real sector as one of the priority sectors that Nigeria should target for diversification, apparently because of its job creation potential and dominant transmission link to the overall economy. However, the challenging fiscal and monetary policy environment has weakened the real sector’s capacity to stimulate economic diversification and create jobs.

    For instance, since manufacturers came under the challenge of lack of forex, workers in the food, beverage and tobacco sector have not slept with both eyes closed. Recently, the National President of Food, Beverages and Tobacco Senior Staff Association (FOBTOB), Comrade Quadri Olaleye,  said between December 2015 and March 2016, a period of four months, about 405 workers in the sector lost their jobs.

    The labour unionist raised the alarm that under the guise of lack of forex, virtually every company in the sector is now calling for downsizing of the workforce. “Even companies, which seemed immune to the gale of redundancies are now being put under pressure by the action of others to shed weight and retrench some of their workforce,” he alleged.

    Although, the employers are said to have cited the challenging operating environment as reason for sacking the workers, Olaleye would have none of that. He argued that the economic downturn presented an opportunity for innovation and creativity.

    According to him, instead of carrying out “incessant and deceitful redundancy exercises as bailout”, companies in the sector can reduce the pressure created by the demand for forex if they stopped being intellectually lazy and engage in Research and Development (R&D) to discover alternative sources of raw materials for production.

    FOBTOB president, noted that the union was not unaware of the fact that not all the raw materials used in the food industry can be sourced locally, and that where they are found, they are not in commercial quantity.

    He, therefore, called on the Federal Government to review the forex policy with a view to placing the companies in the food industry on the priority list of those deserving of forex.

    But Olaleye’s call appears to be a tall order, as the Federal Government through the Central Bank of Nigeria (CBN) may have foreclosed a review of the import prohibition list. The Nation learnt from reliable sources close to the apex bank that the creation of a special forex window for operators in any segment of the manufacturing sector is not on the card.

    Besides, it wasn’t the first time such call came from real sector operators. Early this year, Manufacturers Association of Nigeria (MAN) President, Dr. Frank Udemba Jacobs, led a delegation of its members on a courtesy visit to Vice President Yemi Osinbajo in Abuja where, among other issues, he urged the Federal Government to avert imminent shut down of factories by creating a special forex allocation window for manufacturers.

    The MAN boss said the special forex window was necessary to facilitate easy access to forex required to fund importation of industrial inputs that are not readily available in the country. Although, the vice president assured the Association that the issue as well as others presented will be treated with dispatch, succour is yet to come the way of manufacturers, especially with regards to the request for a special forex window.

    But forex challenge is an addition to the long list of woes plaguing the real sector and limiting its capacity to drive economic diversification. Others that have continued to leave sour taste in the mouth of operators include lack of supportive infrastructure especially electricity, faulty monetary framework that has continued to push up cost of production and policy inconsistency.

    For instance, manufacturers require about 3,000 Megawatts (MW) of electricity for optimal performance, but less than 1,000 MW get to them. This is why over 75 per cent of the electricity needs of manufacturers are said to be generated in-house, leaving only about 25 per cent coming from the power utility firms. Electricity supply alone takes between 35 per cent and 40 per cent of manufacturers’ cost.

    The huge cost came about because most manufacturing firms run full time in-house power plants for production for fear of unannounced power outages and surges from the utility companies, which often result into damages to machines, tools, raw materials, man-hour loses, and disruption to production processes.

    Although, small-scale operators are worst affected by the erratic electricity supply, as they are unable to finance the cost of backup power, large scale manufacturers are also seriously constrained.

    Some of them spend more than 40 per cent of their production cost on diesel. Such outrageous cost is proof that the inefficiency of the energy sector, despite the power sector privatisation about three years ago, is a major setback to private investment, and by extension, a hindrance to the on-going economic diversification.

    Dr. Jacobs did not mince words when he lamented recently  that the emergence of the new core investors in the electricity market, the Electricity Distribution Companies (DisCos) nationwide did not seem to provide the anticipated reprieve to manufacturers.

    “We are still contending with inadequate and poor supply; high tariff, including fixed charges; arbitrary and startling increase in tariff; unwarranted disconnections, among others,” he lamented at a recent forum organised by MAN in Lagos.

    Jacobs said in spite of the poor energy situation in the country, the Nigeria Electricity Regulatory Commission (NERC) has maintained increased electricity charges not considering its implication on the economy, especially the productive sector, which spends so much on alternative energy sources for production.

    The increase in the average cost of production caused by lack of electricity lowers the competitiveness of locally produced goods against imported close substitutes. It has also forced a decline in operators’ productivity.

    The Chairman, Economic Policy Committee (EPC) of MAN,  Reginald Ike Odiah, an engineer, put it in perspective when he said because of the rising cost of production, Nigeria’s real sector contribution to Gross Domestic Product (GDP) currently stands at a paltry 9.5 per cent.

    He said in contrast, those of United States  (US) and China stand at 35.6 per cent and 49.5 per cent, respectively. According to the industrialist, manufacturing cost in Nigeria is twice that of Ghana, four times that of South Africa and Europe, and nine times that of China and Malaysia.

    The nation’s faulty monetary framework is also frustrating the hope of levering a vibrant real sector to drive economic diversi-fication.

    The belief, for instance, is that with inflation rate hovering around 20 per cent, currently, and cost of funds as high as 20 per cent, while the exchange rate remains unstable, real sector operators may not gather enough steam to drive diversification.

  • ‘Intensify efforts on diversification’

    As the price of crude oil continues to crash in the international market, the National Association of Academic Technologists (NAAT) has advised the Federal Government to intensify efforts to diversify the economy from oil.

    This was among several resolutions  adopted by the union at its 29th National Executive Meeting (NEC) in Bauchi State.

    The union, in a communiqué signed by its National President, Alhaji Sani Suleiman, noted that before the advent of crude oil as the main stay of the country’s economy, various parts of the country were known for massive production of food and cash crops.

    “With the decline of crude oil price, NAAT urges the Federal Government to intensify efforts aimed at diversification of the economy in the areas of solid minerals, food and cash crop production,” the communiqué read.

    According to the union, diversification will raise the prospect of jobs for youths.

    The union, however, warned the Federal Government to avoid employing military in the crisis going on in the Niger Delta. The statement reads:“NAAT urges Federal Government to adopt dialogue in addressing the agitations in the Niger Delta and the Southeast Zone with reference to the constitution of the Federal Republic of Nigeria.

    “Dialogue will help in ensuring that the main stay of the economy(oil production) is not disrupted, thereby attracting local and foreign investors to the economy.”

    On the challenges in educational institutions, NAAT observed with dismay the shortfall of fund which makes it difficult to pay the salaries of workers.

    It lamented that this has resulted in the institutions having to go the extra-mile to augment the deficit being experienced in the payment of salaries.

    The leadership of the union at the meeting demanded the payment of outstanding arrears so as  to cushion the effects of the harsh economy.

  • Plateau steps up diversification plan

    Plateau steps up diversification plan

    The diversification of the Plateau State economy gathers steam with the revival of Panyam Fish Farm. YUSUFU AMINU IDEGU reports

    Governor Simon Lalong is making good his promise to expand Plateau State’s revenue sources beyond federal allocation. In just over a year, Bark Farms, once sold, has been bought back, while the iconic Jos Main Market and Highland Bottling Company have had new life injected into them. The fourth to be revived is Panyam Fish Farm. The firms, once popular and substantial revenue earners, were run down and abandoned by previous administrations, leaving the state essentially with the federal government’s monthly allocations.

    Those allocations are drying up because oil prices have crashed. To stay afloat, Governor Lalong said at his inauguration that his administration would do everything possible to boost the state’s cash profile from its local sources.

    That promise is being fulfilled with the partnership of private firms. The state’s moribund companies are coming to life.

    The Lalong administration has just signed a Memorandum of Understanding (MoU) with a private firm Solbec Ltd with the aim of resuscitating Panyam Fish Farm and boosting both its agricultural sector and internally generated revenue.

    Confirming the deal, the state Commissioner for Agriculture and Natural Resources, Mrs Linda Barau, said the new arrangement will be based on Public-Private-Partnership (PPP) between the state government and the private sector.

    According to her, the government’s effort is in line with its resolve to prioritise the agricultural sector.

    Panyam Fish Farm, which was established about 65 years ago, is reputed to be Nigeria’s largest fish farm covering a land mass of 309 hectares, with the capacity to produce about 4.9 tonnes of fish and over 10 million fingerlings annually, but was abandoned by past governments.

    A press release singed by Mr Mark Longyen, the Senior Special Assistant to Governor Lalong on Media and Publicity, said the signing of the MoU was a watershed in the state government’s effort to boost both its agricultural sector and internally generated revenue.

    Longyen noted that when it becomes fully operational, the farm’s annual revenue generating potential for the state will hit about N1.7 billion, which is about the equivalent of the state’s workers’ total monthly wage bill.

    ”Plateau State has huge aquatic and fisheries potentials, given its clement climatic conditions and myriads of tin mining ponds.

    “The state has about 20 dams and reservoirs with an estimated water surface area of 673 hectares, as well as 12 natural lakes with a water surface area of about 365 hectares,” he said.

    The farm, which is located in Mangu Local Government Area in the Plateau Central Zone of the state, also has the potential to generate employment opportunities for many people.

    It is expected that when the fish farm is fully back on stream, commercial activities, such as the buying and selling of the adult fish and or processing of same, as well as the marketing of the fingerlings across the country will reach an unprecedented level.

    The governor’s spokesman added that of the over 1,000 abandoned mining ponds in the state, 24 have been certified fit for fish production and if all these potentials are fully harnessed, the state could produce 4.9 tonnes of fish per annum.

    It would be recalled that the Lalong administration identified three key sectors, namely, agriculture, solid minerals mining and tourism, in which the state has comparative advantage, to leverage on them and diversify the state’s economy to boost its internally generated revenue for rapid economic development.

    The Cyprinus Carpio species of freshwater fish farming started in Panyam in North Central Nigeria when it was brought from Austria before Nigeria’s independence in 1960.

     

  • Diversification: Fed Govt endorses 129-page agricultural roadmap

    Diversification: Fed Govt endorses 129-page agricultural roadmap

    With yesterday’s approval of a roadmap in agriculture by the Federal Executive Council (FEC), the Federal Government has demonstrated its seriousness to diversify the economy from oil, reports AUGUSTINE EHIKIOYA.

    THE Federal Government has taken its economy diversification policy a step forward with the endorsement a new roadmap in the agricultural sector at yesterday’s Federal Council Executive (FEC) meeting.

    Agriculture Minister Audu Ogbeh said the FEC took the bold step at the meeting, chaired by President Muhammadu Buhari, to boost local food production for self-sufficiency and export in the next three years.

    He dropped the hint in Abuja while addressing State House reporters in the company of Women Affairs Minister Aisha Alhassan.

    Contained in a 129-page document and tagged: “The Green Alternative”, the roadmap is expected to be unveiled soon.

    The President Buhari-administration has identified agriculture and solid minerals as priority sectors for development to diversify the economy from oil.

    Giving an insight into the roadmap, the minister said the 129-page document intends to amongst other things, raise agriculture’s share of the Gross Domestic Product (GDP) to 23 per cent; increase the share of labour force to 70 per cent; agricultural activity mix by 85 per cent crop production with a 15 per cent increase in livestock and other non-crop.

    It also seeks to enhance the country’s foreign exchange (forex) earning capacity through agricultural exports by growing the agriculture’s share of non-oil exports earnings to 75 per cent.

    The roadmap will also facilitate the government’s capacity to meet its obligations to the citizenry on food security, safety and quality nutrition as well as increase budgetary provision for the agriculture sector by 2.0 per cent.

    On the ‘Green Alternative’ blue print, Ogbeh said: “It is a detailed document that outlines our policies and our objectives in trying to see agriculture as the next biggest alternative in our drive to diversify the economy.

    “It outlines virtually everything we need to do; every policy we need to undertake to achieve self-sufficiency in agriculture and also to become major exporter of agriculture products.

    “The situation in which we have been many decades ago is unacceptable. We are working hard on the staples to satisfy local production and we are fully aware that there is a major concern in the country for food self-sufficiency and that there is crisis in many families as a result of serious food shortage.

    “But we are working hard and thank God that ours has not become as bad as one South American country, which was also a major oil producing country, by that I mean Venezuela, which situation is definitely a 100 times worse than ours.

    “The point is that where we are going, we believe that in a short while, in another year and half in the maximum, we should be reasonably self-sufficient in grains like rice, maize and beans.

    “We may not achieve everything in wheat but we will be very close to our targets. Other things are also there in the roadmap. And that is what council endorsed this (yesterday) afternoon.”

    Reeling out statistics on food imports, the minister said: “Food has many species and varieties; we import about 40 to 50 per cent of the rice we eat; at a time it was almost 100 per cent, costing $5 million daily. That has been the situation in the last 20 years.

    “We still import almost 70 per cent of wheat for bread?. We import about five million eggs per day from South Africa and some other countries. But we don’t import yams, garri and we don’t import beans. We use to import beans from Burkina Faso but that has stopped. We don’t import chicken although smugglers are quite busy every day. We import fish worth $600 million annually, but this is on the decrease because local fish production is increasing.

    “We still import tomato paste. We are going to halt that in the next three months because local production capacity is almost satisfactory now. This is because the quality of the imported paste is doubtful. The importers are going to be very insistence that we can’t do it on our own but we will stand our ground.

    “We import honey to the tune of about $100 million per annum; we still import cookies and biscuits and even toothpick but all these did not happen in one day. The idea is to reduce these imports.

    “We import a lot of milk and some local production by Friesland and some of the policies we put in place will reduce and also eliminate. But we can’t achieve self-sufficiency absolutely in the next one year but we are approaching there.”

    He said the Federal Government has concluded plans to protect farms and agricultural investments against itinerant herdsmen and other criminals with the deployment of members of the Nigerian Security and Civil Defence Corps (NSCDC).

    According to him, the deployment will check incidences of abduction of farmers and destruction of their farm lands by hoodlums in herdsmen’s garbs.

    According to him, the measure became necessary forv the success of the government’s quest to making Nigeria a destination of first choice for foreign investors in the agriculture sector.

    He said his ministry and that of the Interior were collaborating on how to make the farmlands safe for investment.

    His words: “I had a meeting with the Interior Minister (Abdulrahman Dambazzau) and we were looking at the security situation in agriculture. Sometime last year, some gunmen went to Chief Olu Falae’s farm – a Nigerian in status, in age and ranking – and took him away and marched him around and forced him to trek 10 kilometers. They even carried him on their backs.

    “Many more farmers are coming in including foreign investors and they stand the risk of being subjected to this kind of humiliation. So, we are talking with Ministry of Interior that we have to put measures in place.

    “These things are happening in other countries too, where the civil defence corps may have to train a special department to protect huge investors and investment in their farms for a fee, because kidnapping will not stop.

    “From the security point of view, we have to take measures to make sure that people who invest are protected. In other countries of the world, you may have noticed that people live on their farms. You hardly see a farmer who lives in the city. The farmers live on the farms with members of their family. You cannot do that here.

    “They will come and take you, your wife and children in the name of kidnapping. We have to stop it and we have to use the legitimate instrument of state to do it legitimately because the farmer has no right to buy an AK47 to protect himself.”

    Ogbeh went on: “The crisis between herdsmen and farmers will soon end. In few days, we shall begin to run a programme – padock development here in the Federal Capital Territory (FCT). We have got very good seeds of grass which we are going to start planting.

    “Eventually and in the next one year, I hope we shall move most of our cows into ranches and reserves depending on different terminologies people want to hear.

    “Some people don’t want to hear about grazing res=, the Women Affairs Minister disclosed that FEC resolved to cede portions of two federal roads in Kaduna to the state government based on its request.

    Alhassan said: “Council also approved the memo presented by Minister of Power, Works and Housing for the re-designation of two roads in Kaduna State from being federal to state roads based on the request by the Kaduna State governor, to Mr. President.

    “The two roads are the Nnamdi Azkiwe Expressway – Kaduna Bye-pass popularly called and the popular Ahmadu Bello Way which runs across almost inside Kaduna town.

    “They are presently federal roads but he (Governor Nasir El-Rufai requested that they be redesignated as state roads so that they will have the power without any inhibitation to work on the road to make them better for Kaduna indigenes.

    “The council was very pleased with that approach, because ordinarily, other state governors should have requested for permission to repair and be reimbursed but he asked for outright handing over to the Kaduna State government so that they can take care of it as their own.

    “The Council also welcome the idea of the governor that the government should complete the eastern by-pass ?which is outside Kaduna linking the Northcentral to Northwest.

    “The Council also appealed to other state governments that can afford to take over federal roads to lessen the burden on federal government, to enable them repair and maintain road as quick as possible, so that they don’t go into total deterioration.”

  • Osinbajo: Nigeria needs diversification not restructuring

    Osinbajo: Nigeria needs diversification not restructuring

    Vice President Yemi Osinbajo said at the weekend that Nigeria needs diversification of the economy and not restructuring because the Federal Government controls the bulk of the resources.

    Osinabjo attended the second Foundation Lecture of the Elizade University, Ilara-Mokin in Ondo State, and delivered a lecture entitled: “The Future is Here Earlier Than We Thought.”

    He urged Nigerians to embrace technology as a vital key to development.

    During the question-and-answer session, Osinbajo said: “We are not earning enough from oil and taxes anymore, the nation is blessed, every state can feed itself and also export if we engage in agriculture.”

    On restructuring, he described calling for restructuring of the country simply because the federal government controls a bigger portion of the resources, may not be helpful or make a difference.

    He said: “Even if states are given half of the resources of the federal government, the situation will not change; the only change is to diversify the economy.”

    In his lecture, he said understanding the way technology works and thinking out of the box is the way to go in the world of today.

    He stressed that the path to greatness and development is in critical thinking and coming up with innovative ideas.

    A statement by the Senior Special Assistant on Media and Publicity, Laolu Akande, quoted Osinbajo as saying: “Whatever you choose to do, be technology savvy and understand its best uses in your chosen discipline.”

    Osinbajo also listed major and global advancements attained through technology and innovative ideas including how some Nigerians have taken due advantage of it.

    He noted that people can no longer just be, for instance, an economist, an accountant, a graduate of international relations, Mass Communication or Performing Arts, but “Create a network of peers where participants interact and share in the value creation. Multi-skilling is crucial today.

    “You must learn to be a versatile operator not a mono-skilled graduate…everyone has a right to be rich, age is not a barrier.”

    He pointed out that the old way of doing things are gone with the advances of technology.

    Recognizing the central role innovation and technology play for national economic growth plan, he said, that the federal government provided extensively for technology and innovation in the current budget.

    “This year we are establishing technology hubs across the country. Two super hubs in Abuja and  Lagos and six regional hubs in the six geopolitical zones. In partnership with several technology companies the hubs will be fully resourced with infrastructure and capacity building,” he said.

    He added that the federal government will also train a pool of 100,000 software developers, hardware service professionals, animators, graphic artists, building services professionals, artisans and others.

    The government, he said, has further launched a special presidential initiative on technology and start-ups and that 50 of the most innovative technology start-ups would soon be invited to the Presidential Villa to meet with major technology and innovation companies as well as to collaborate with the federal government.

    While in Ilara-Mokin, the Vice President visited Oba A. A. Adefehinti, the Alara of Ilara-Mokin.

    He also inaugurated a Divisional Police Station in the town.

  • Solid minerals development: Beyond rhetorics of diversification

    Solid minerals development: Beyond rhetorics of diversification

    Next to agriculture, the solid minerals sector is another area being eyed by the Federal Government to diversify the economy from oil. GRACE OBIKE reports on the steps so far taken to attract investments into solid mineral and turning to the country’s pot of cash.

    It used to be a robust sector in the 60’s, 70’s and early 80’s. The sector was full of activities, creating employment opportunities. At a point, it was arguably the most formidable sector in the local economy, yielding huge revenue for the government. But the sector was relegated with the discovery of crude and the dependency of the Federal Government on earnings from oil exploration and export for foreign exchange.

    However, the Federal Government has been left with no other option to develop other sectors of the economy, following the fall in the oil prices at the international market in 2013. Besides, the unending attacks on pipeline facilities by restive youths in the Niger Delta has worsened the situation for the government which relied on oil sales for almost 80 per cent of its revenues.

    As a way out of the dwindling economic fortune, the President Buhari-led administration came with a mindset of diversifying the economy by developing other sectors. Since inception, the government has identified so many other sectors, two of which are agricultural and solid minerals.

    At his inaugural news conference, Solid Mineral Resources Minister Dr. Kayode Fayemi said his ministry had a mandate to remove all the obstacles hindering economic growth and militating against diversification of the revenue base.

    Seven out of the country’s many natural resources have been prioritised and being promoted for private sector participation and investment by the Federal Government.

    The minister has been meeting with stakeholders in the sector, seeking out ways to formulate policies that will jumpstart the sector and take it to the level of diversification desired by the country.

    Fayemi has quick been to say: “This is not a sector that will be developed overnight; the stakeholders in the sector know the challenges that confront them which we will like to discuss – be it the activities of the ministry, overall ease of doing business, in finance and every part of operations.”

    A ministerial committee that was inaugurated in March was given the task of developing a roadmap for the growth and development of the mining industry.

    The committee was also mandated to formulate a course that will stimulate growth in the sector, the roadmap which was based on identifying the current status and hindrances to the development of the mineral sector and proffering solutions to overcome them.

    The roadmap, which was eventually launched in Kaduna, created eight strategies on how to improve the ecosystem for the minerals and mining sector to thrive.

    These are: integrated strategy through proactive communication; investor-friendly regulatory environment; coordinated infrastructure investments; community partnership; investment funding; institutional reform; geo-scientific value added and mining as development catalyst.

    The ministerial think-tank also recommended a review of how other countries like Guinea, Democratic Republic of Congo (DRC) and Cameroon have used similar levers to promote competition in mining sectors.

    Other recommendations included the need for the Federal Government to work with states using a variety of mechanisms to communicate that mining will remain under the exclusive list without precluding the states from becoming legitimate equity investors in their own right by applying to the Mining Cadastral Office (MCO) for licenses alone, or in partnership with private companies.

    At the launch, the minister assured the states that the MCO would open local branches to bridge the gap between them and the Federal Government. According to Fayemi, the local MCOs will eliminate the bureaucratic bottlenecks and ease the stress associated with the issuance of licenses to potential investors, adding that such measures would encourage investment in the sector.

     

    No longer business as usual

    Demonstrating that it will henceforth be business unusual in the sector, the ministry has threatened to revoke the more than 1,500 dormant mining licenses. It said the country has been losing revenues from the non-operation of such licenses, which would have created 8,000 jobs.

    Before the expiration of the 30 day ultimatum issues to beneficiaries, the Federal Government raked in over N500 million from license renewal alone as operators rushed to reactivate their licenses and leases.

    Since more than 80 of local miners are mostly artisanal and small-scale miners, illegal mining has been a thriving business and the trend has affected revenue generation in the sector. There have been reported cases of illegal miners, including Asian and African illegal immigrants at sites in Osun and  Zamfara state.  Not a few investors have complained of purchasing licenses, only to find illegal miners reaping the fruits of their labour.

    A source at the ministry that pleaded for anonymity said that the Federal Government is careful not to create problems that might lead to militancy amongst the illegal miners if they are forced to stop trying to make ends meet.

    Ironically, the illegal miners, who mine in small quantities and without access to market, are often shortchanged by businessmen, who give them peanuts only to resell the products for huge profits.

    Already, the Federal Government is working with the unauthorised miners to organise themselves into cooperatives which will in turn agree with the government on the payment of revenues, taxes and other requirements.

    With the arrangement, the government will not only provide the miners access to a market where they can sell and make better money but also widen their access to credit facilities from financial institutions.

    It was learnt that the minister has been in talks with financial institutions like the World Bank, Central Bank of Nigeria (CBN), Bank of Industry (BoI) and Money Deposit Banks (MDBs) on the possibility of providing intervention funds to investors in the mining sector.

    He said that the facility will serve as incentives to local miners and investors and on the long-run stimulate growth in the sector and increase local production.

    Beides, Fayemi has equally urged commercial banks to set up mining desks to enhance investors’ access to the intervention funds. Investigation showed that some banks have set up these desks and others are working towards it.

    To allay investors’ fear on insecurity at the mining sites, Fayemi has secured the Ministry of Interior’s commitment. This was demonstrated with the deployment of some 3, 000 operatives of the Nigerian Security and Civil Defense Corps (NSCDC) by Interior Minister Gen. Abdulrahman Danbazzau to curb illegal mining operations and ensure security in all the 774 local government areas.

    Gen Dambazzau said the NSCDC operatives will not only check illegal miners but unravel their sponsors to achieve the diversification plans of the Buhari administration.

    The interior minister also added that the ministry will deploy more personnel from the Customs and Immigration Services to effectively monitor illegal exportation of minerals at the airports and borders.

    Recently, Fayemi stated that the government was working on modalities to kit the local mining laboratories in Kaduna and Jos with Open Interconnect Consortium (OIC) standard in the nearest future.

    He said the development will enhance miners’ capacity to test minerals excavated in the country without having to take it to laboratories outside the country to confirm the quality efore export. According to Fayemi, the sector will start running in full force.

     

    Not taking chance

    On their own, local miners have been working with the United Nations Industrial Development Organisation (UNIDO) to address the quality infrastructural gap of all exportable items in the agricultural and mining sectors. They have reportedly working on the creation of a lab in the country that can certify all exports from the country and have the required OIC standard.

    The partnership which is between the Miners Association of Nigeria, Ministry of Trade & Investment and UNIDO, has been working to encourage six UNIDO-assisted companies to create laboratories that will have the OIC standard and all exports from the country can be tested without taking them outside the country.

     

    Reviving the steel sector

    Some $3 trillion would be needed to fund infrastructural needs in the solid minerals’ sector in the next three decades, Fayemi said at a business forum in London. He confirmed the projection at a News Agency of Nigeria (NAN) forum in May.

    He said the Federal Government will stay action on the Ajaokuta Steel Company until all legal issues have been resolved.

    According to the minister, the company to which Ajaokuta was concessioned in 2003 has taken the Federal Government to the Arbitration Court in the United Kingdom (UK), pointing out that the government was working on how to resolve the issue.

    He, however, informed that six countries have approached the government with proposals on how to revive the steel company within 24 months.

    Besides, the minister said that the 18 companies operating out of 30 steel companies in the country have capacity to produce 2.6 million tonnes of steel annually.

    In December last year, the Federal Government promised to unveil a comprehensive blueprint for the completion and rehabilitation of Ajaokuta Steel Company and the National Iron Ore Mining Company (NIOMCO) in Itakpe, Kogi State

    Though the minister has restated that the government would soon come up with realistic policies that will turn the steel sector into a viable sector of the economy, nothing has been heard of the promised blue print seven months into the year.

    Ajaokuta and NIOMCO are still in their sorry state.  Many stakeholders in the industry have expressed hope that mining will become the nation’s next hub of unemployment with the level of commitment already shown in the sector by the Buhari administration.

    Players’ perception of the sector

    Although divergent views often resonate from stakeholders about the state of the solid minerals’ sector. Many of them believe that the government has demonstrated enough seriousness to the development of the sector.

    They have predicted light at the end of the dark tunnel, but urged the government to be steadfast with the implementation of its policies, saying that the rush with which licensees renewed their dormant lincences was a demonstration of what could be achieved with the will power.

    But miners under the umbrella of the Nigerian Miners Association disagreed with the revocation threat. They argued that the government was insensitive to complaints that the sector was moribund and struggling to get by.

    According to them, there were no activities in the sector for years and that the revocation of licenses would further worsen the unemployment situation. They said the dominant players in the mining sector, being artisanal and small scale businessmen, should be supported by the government and not discouraged from investing in a sector in need of as many investors as possible.

    President of the association, Alhaji Sani Shehu, explained: “There is nothing wrong with the government revocation licenses but the environment is not yet matured for it as there are no activities in the sector.

    “Some people got licenses for speculation purposes; to see if they can sell it. Although speculation in the advance mining jurisdiction is acceptable so long as you do not break the law, but the kind of speculation we see in Nigeria is capable of discouraging serious players from investing in the sector because if one covers a place with no capacity to mine and for years in just sits there, no one else has the right to cover it, preventing others with the capacity from doing so.”

    On the policy of intervention funds being packaged for investors by the government, Shehu lauded the move as a welcome development but also gave solutions for a successful implementation.

    He said: “If it is done, I think we will see something different. For instance, Chinese investors get loan facilities for two to three per cent for a repayment period of 20 years but if compared to the Nigerian environment, they charge between 22 and 26 per cent for two to three years.

    “So, you see that it is not possible for a Nigerian businessman or miner to compete with his Chinese counterpart. We are happy with what the government is doing. They are funding initiatives here and there for example the Small and Medium Enterprises (SME) single digits by the Central Bank of Nigeria (CBN) is encouraging but the challenge my people are having is, the funds have to be disbursed through the commercial banks and the risk components of the loan facilities are left to the commercial banks.

    “So, to them, the nine per cent interest rate may be okay but beside the nine per cent interest rate, the facility and all the criteria, risk mitigating majors are taken by the commercial banks.

    “If the government can create a risk mitigating structure for the facilities in solid minerals just like they did with agriculture, commercial banks will be at ease to fund miners and ones the funding challenge is properly addressed, we will be seeing activities in almost every part of the country.”

    In a telephone conversation with The Nation, a NIOMCO official who pleaded for anonymity explained the state of the plants in Itakpe and Ajaokuta. The official said that when his association visited the ministry in March, they were officially informed that the government was considering handing Ajaokuta and NIOMCO over to Chinese investors.

    The official told The Nation: “Presently, the statuesque of Ajaokuta and NIOMCO remain the same. When our association visited the ministry in March to discuss the state of the companies, we were officially informed that the government wants to invite the Chinese to come and take over Ajaokuta and NIOMCO.

    “They said that it is because of the ongoing crises between Russia and Ukraine that the government does not want to get involved in the crisis. We are opposed to a Chinese takeover. Ajaokuta workers prefer the Russians to return since they installed the machines and have been managing the plant before now. In NIOMCO, we prefer that the government negotiates with the German company – Koch. They have a better knowledge than the Chinese.

    “Presently NIOMCO has a new management team in place and they have started installing light around Itakpe, the management got money from cooperatives and we are presently hoping that the installation will be complete in latest a week from now and the plant will have light.”

  • Road to economic diversification, recovery

    Road to economic diversification, recovery

    The three-year debt management strategy unveiled last week by the Federal Government  is aimed at boosting the diversification of the economy. The strategy, which runs from this year to 2019 with a marginal increase in external borrowing, would increase commitment to capital projects execution. The policy is expected to generate job, reduce poverty and increase the living standard of Nigerians, writes COLLINS NWEZE.

    Drop in crude oil prices, which constitutes over 85 per cent of Nigeria’s export earnings, means several things for the economy. With oil revenues still low, and the government’s commitment to deliver on its infrastructure development plans unshaken, a three-year debt management strategy unveiled last week by the Federal Government seems a viable option for the economy recovery.

    The debt plan, to be managed by Debt Management Office (DMO), would run from 2016 to 2019 with a marginal increase in external borrowing, increased commitment to capital projects execution and long term borrowing plan.

    The DMO Director-General, Dr. Abraham Nwankwo, who unveiled the debt management strategy in Abuja, said the plan was approved by the Federal Executive Council, and would boost economic recovery and diversification.

    The DMO boss explained that the focus of the new initiative is to develop a debt management strategy that would ensure that in the face of macroeconomic and other financial constraints, the cost and risk profile of the public debt portfolio remains within acceptable limit over time.

    The plan is also in line with President Muhammadu Buhari’s vision to generate maximum employment, reduce poverty and increase the living standard of Nigerians. Dr. Nwankwo further stated that for this to be effectively achieved, the government is making positive efforts in diversifying the economy as against the backdrop of structural collapse in oil prices and oil revenue.

    “The Debt Management Strategy we are going to pursue over the next four years takes into account the fact that for now, Nigeria’s public debt portfolio is dominated by domestic debt. After the Paris and London Club exits between 2004 and 2006, the country took a deliberate decision to develop its domestic bond market and to do most of the public borrowing from domestic sources so as to develop the domestic bond market, that objective has been sufficiently achieved,” he said.

    “And therefore taking into account that external financing sources are on the average cheaper than domestic sources, it becomes more necessary to slant more of the borrowing in favour of external sources. Therefore, one of the major elements of this strategy is that over the medium term, we will strive to remix the public debt portfolio from 84 per cent domestic and 16 per cent external to 60 per cent domestic and 40 per cent external.

    “In addition taking into account other factors, the fact that over the next four years public borrowing proceeds will be devoted to capital expenditure an element of the strategy is to ensure that we remix the current status of about 31 percent short-term and 69 percent long-term to a maximum of short-term 25 per cent and the minimum of long-term 75 per cent.

    He said Nigeria is remixing between external and domestic; and also remixing within the domestic, between short and long-term.

    Justifying the  decision to remix in favour of external debt, he said the country will be able to achieve cheaper cost of funds, lower debt servicing and avoid the risk of crowding out the private sector from accessing the domestic market, adding that the private sector is still expected to play the lead role to complement government’s effort.

    While dismissing concerns on government’s decision to focus on external borrowing in a country currently facing foreign exchange constraints and harsh macroeconomic environment, he disclosed that the new strategy is the best for the economy as the government is presently making sustained efforts on diversifying the economy.

    He projected that in the next five to seven years, export proceeds accrued to the economy will rise, making the exchange rate favourable. While encouraging Nigerians that the future will be sustainable, the DMO boss further stated that the citizens should take advantage of the current challenges as a stepping stone to actualise their vision and achieve their dreams.

    “One of the questions that will naturally arise and which many of you have asked us, has to do with the challenge of foreign exchange constraints. At this point, our exchange rate is not very favourable and our reserves are not as buoyant as they used to be and people are raising the question while would you go for external borrowing when you have foreign exchange constraints,” Nwankwo said.

    He explained that a closer look at the issue shows that the strategy the government has chosen is still the optimum strategy and the secret to arriving at that conclusion is simply to differentiate between a short-term static situation and a long-term dynamic situation.

    “If we are simply focused on the challenges we have currently, there will be undue concerns about our ability to service external debt, however if you take into account that everything we are doing now are for the purpose of diversifying our economy in a sustained manner, so that in the next five to seven years, we will be exporting a variety of processed and primary products. We have all it takes in terms of variety of opportunities in agriculture and in solid minerals for example. The efforts being made by the government and private sector is to ensure that many of the products we now import will be provided locally, such as rice, sugar, flour, wheat, fruit juice, we can produce in abundance to satisfy our domestic needs and also have surplus to export,” he said.

    Nwankwo was upbeat that in the next few years, there will be significant improvement in employment generation, poverty reduction and living standard of the people, adding that as part of the new strategy, the DMO will develop new products particularly the Federal Government saving bond and also diversify the sources of raising funds domestically.

    The Director-General of West African Institute for Financial and Economic Management (WAIFEM), Prof. Akpan Ekpo, agreed with Dr. Nwankwo. He explained that with declining government revenues from oil, budgetary allocations alone may not be enough to finance the infrastructure deficit in the country.

    Prof. Ekpo admitted that the debt option is still the most viable at this time. He said Nigeria’s rebased $510 billion Gross Domestic Product (GDP) economy gives it more room to borrow more to bridge infrastructure gap.

    For Prof. Expo,  Nigeria could borrow up to 40 per cent of its GDP externally, adding that the DMO has in the past, demonstrated good negotiation skills in dealing with the country’s debt matters, either with internal or external creditors.

    He believes the viable option for government to take is to borrow from the World Bank or African Development Bank (AfDB) to fund the key developmental projects.  Government can also borrow internally to achieve the feat, but disclosed that internal borrowing is always short term while external borrowing has longer tenor.

    Besides, the Nigeria Trust Fund with the AfDB can be used as leverage while borrowing from the bank, adding that borrowing from the International Monetary Fund (IMF) will be expensive because Nigeria is now classified as a Middle Income Country on the Fund’s list.

    Ekpo said the DMO has the capacity and constitutional role to advise the government on these choices. “The World Bank rates are cheaper with longer term. The DMO can also leverage on the Nigeria Trust Fund with the AfDB to get better deal on new loans needed to fund developmental projects,” he said.

    A report by FBNQuest titled: ‘A planned pick-up in FGN external borrowing’, said: “The DMO has set a medium-term target of a 60/40 blend for the FGN’s domestic and external obligations in its Debt Management Strategy, 2016 to 2019. The blend as at end-2015 was 84/16. The target is unchanged from the previous strategy for 2012-15, and is driven by relative servicing costs and the DMO’s determination not to crowd out the private sector”.

    On the costs, the DMO shows the weighted average interest rates for domestic and external obligations at 13 per cent and 1.74 per cent respectively at end-2015. Naira rates are far higher than dollar rates.

    More significantly, the difference in the weighted averages reflects the fact that the FGN’s external debt is predominantly contracted on concessional terms from the World Bank Group and the African Development Bank (AfDB). This burden amounted to $10.73 billion at end-2015, and the only substantial borrowings on market terms are Eurobonds totalling $1.5 billion.

    FBNQuest said the strategy was prepared before the liberalisation of exchange-rate policy by the Central Bank of Nigeria (CBN).

    It said the 2016 budget projects net domestic and external borrowing of N940 billion and N900 billion respectively. A figure of N1.20 trillion for the domestic element in an earlier version was reduced for fear of crowding out.

    “For the external element, the Federal Ministry of Finance has suggested a possible Eurobond issue in the third quarter. We assume that it would be mostly concessional, and are waiting for news of the FGN’s negotiations with the World Bank and the AfDB,” it said.

     

    Senate on debt management advocacy

    The Senate has called for more advocacy on debt management and servicing to enable Nigerians understand the benefits and impact of government’s plans to raise funds from the capital and bonds’ market for development purposes.

    The Chairman, Senate Committee on Local and Foreign Debts, Senator Shehu Sani, spoke during a three-day retreat organised for members of the committee by the DMO in Minna, Niger State.

    Sani said if there was aggressive advocacy on what such debts were taken for, Nigerians would support such initiative aimed at driving development and engendering development.

    According to him, it was imperative for the DMO to develop a framework in the major languages in the country to get the citizens to understand why debts are taken, for what purpose and what the society stands to benefit from such borrowing.

    He said: “There is need for strategy mix anchored on proper advocacy on what debt management is all about. Nigerians want to know why governments borrow, to what purpose such debts are taken and I can say that once it is well explained, the people will key into the programme.

    “I, therefore, hope that the DMO will rev up its advocacy especially in the major languages because a whole lot of Nigerians don’t seem to understand why their state governments will take loans and they cannot see why the loan was taken in the first instance.”

    Dr. Nwankwo said the workshop with the theme: Processes and procedures for external and domestic borrowing and settlement, became imperative given the funding of the 2016 budget from loans.

    According to him, the Federal Government does not just borrow for borrowing sake but to address the challenge of development and infrastructure growth. He explained that the workshop was not only to keep the lawmakers abreast of developments in the debt sector but to get their buy-ins in DMO’s drive to seek for funding from the capital market.

    The DMO chief also said states have not been barred from raising funds but rather, the National Economic Council (NEC) was against borrowing from commercial banks, adding that it supports states seeking for capital from bonds, which is cheaper and more sustainable in the long run.

  • Enugu’s quest for economic diversification

    It is public knowledge that agriculture was the mainstay of the country’s economy before the discovery of oil in Nigeria. Since the discovery of oil, Nigerians and successive governments played down agricultural activities to the detriment of the nation’s economy.

    It is shameful that a country like Malaysia touted to have taken palm-nuts from Nigeria so many years ago is today the world’s major producer of palm oil. For several years of oil boom, Nigerians over-depended on imported food items to survive, with little or no manufactured exports in return. Also government’s policies on imported food items were neither here nor there, considering that it was never protective and supportive of local production.

    Successive governments at all levels had consistently paid lip service to diversification of the country’s economy before now.  They usually rush to Abuja on monthly basis to collect handouts called monthly federation allocation. This was the practice in government’s circle and corridors of power since the discovery of oil in the Niger-Delta region until recently when the global price of crude oil suddenly crashed.

    With the unprecedented crash and the renewed militancy in the Niger-Delta, the country’s economy is in dire straits. The only way to revive and sustain the economy is through diversification into agriculture and other sectors. If there is any appropriate time for our leaders to put on their thinking caps, it is now.

    So far, only a few states are taking concrete steps to diversify their states’ economy in line with the federal government’s economic diversification agenda. Enugu State is one, not just through policy statement, but by implementing policies and actions that will sustain the agenda. Its first step to demonstrate a commitment in that direction was during its International Investment Summit which held from April 12-14.

    At the summit, agricultural processing was one of the major identified 10 key sectors that the governor, IfeanyiUgwuanyi presented to the investors.    The agri-business players and investors at the summit were presented with the ample opportunity to explore options at developing the agricultural sector in the state through Public Private Partnerships, as well as privatisation and commercialization of government agriculture enterprises.  The summit and its major theme were indicative of the importance the state government attaches to revival and development of agriculture in the state. The plenary, held under the theme; Agribusiness as a Viable Business Platform, had in attendance international investors, agribusiness players, exporters and players from within and outside the shores of Nigeria. Speakers commended the government’s effort, embraced the agricultural potentials of the state and expressed readiness to partner with the government in developing the sector.

    The governor made it clear that his government was seeking to commercialise agriculture in the state as part of its development plan for the sector.  It was discovered that major crops that are viable in the state which offered potentials for investment and commercialisation include; palm oil, rice, cassava, cashew, vegetable fruits, and livestock production.

    Subsequent to the summit, the governor has apportioned 750 hectares of arable land across the state for commercial agriculture. The communities that benefitted include Ogbeke – 50 hectares, Oduma–50 hectares, Ogulogu– 100 hectares, Akpugo-Eze – 50, Owo– 50 hectares and Nnewe–100 hectares.

    Others are Ikem – 50 hectares, Agkuibeje –50 hectares, Oghu–50 hectares, EhaAmufu –100 hectares, Obimo– 50 hectares and Amangunze –50 hectares.

    Contractors have commenced work diligently to clear the lands, after which the land would be segmented into three-hectare plots for allocation to youths and women to undertake commercial agriculture in the state.

    In addition, the government has packaged soft loan for the would-be-beneficiaries of the programme, and purchased 20 tractors with complete sets of implements for each of the tractors at the total cost of N175.3 million.

    The tractors are to be given to young agricultural/engineering graduates to render tractor-hiring services to farmers, especially those farmers at the arable planting areas where commercial agriculture is being practiced, on a cost recovery basis for sustainability. The beneficiaries will be required to pay back the subsidised cost of the tractors and its implements over a period of six years.

    To ensure that the farm produce from these earmarked farms could be easily transported to the urban areas for sale, the state government constructed some major roads leading to these farms and other rural areas. This can be seen in the ongoing dualisation of Opi/Nsukka road, Achalla road, Orba road and other roads in Enugu North zone.  It is of note that the zone, which is made up of 80 percent agrarian communities has the agricultural and human potentials of feeding the South-east zone and beyond if given the necessary support.

    But unfortunately, these potentials have not been harnessed by successive governments in the state and national levels due to poor agricultural policies, high revenue from crude oil, resulting in neglect of the zone for too long. With the crash in crude oil price and governments anxiety to diversify the economy by reviving the agriculture, Enugu State government may have taken the lead by its concrete plan and efforts so far.

    The governor’s focus and pragmatic policies in that direction has not deterred or prevented government from attending to other state obligations like road construction, payment of workers’ salaries among others. Obviously, the Ugwuanyi administration understands the potentials of huge investment in the agricultural sector.   With that foundation, it should not be surprising if, in the years ahead, the state competes favourably with states like Benue, Nassarawa and Taraba in food production.

    Instead of relying solely on the month federation allocation to run the state as has always been the case, governors should take a cue from what their Enugu counterpart has done so far in the area of agriculture. Every state in the country is blessed with vast arable lands that have been left unused and unattended because of the availability of the crude oil proceeds. The advantage of what Enugu government is doing in the agricultural sector is that even if crude oil price rebounds in future, the state will have enough funds to develop other sectors of the economy.

     

    • Ugwuoda, a development expert wrote from Agani, Enugu State.

  • Oyo multi-billion agro diversification to boost employment

    Oyo State government has said its multi-billion naira agricultural initiative partnership with the Heritage Bank will boost employment in the state.

    The state said the partnership is in line with the current drive by the government to diversify the economic and revenue base of the country, hence the partnership is geared  towards reviving agriculture and boost agro-allied businesses in the state.

    Tagged, Oyo State Agricultural Initiative, OYSAI, the state government announced that the project is part of its revolution in the agricultural sector and a massive empowerment programme for both youth and women across the state.

    Speaking at the launch of the project in Paago Village, along Igboho – Okeho road, the state governor, Senator Abiola Ajimobi, explained that the state has successfully secured a viable partnership with some private investors and financial institutions to back up the project in the areas of poultry development, rice production and processing along the value chain.

    The governor thanked Heritage Bank and other partners for deciding to support the project aimed at diversifying the state economy and drive self-sustainability by adding value to the lives of about one million beneficiaries. He added that the project will also reposition the state as the food basket of Nigeria and generate massive revenue for economic emancipation.

    “Farming is attractive; we want to make it more attractive. The programme will create jobs, wealth and socio-economic productivity. It will link agriculture to small business and manufacturing. The programme will also improve the lot of women, youths and small scale businesses,” Ajimobi said.

    The project, according to the governor, will spread across 3,000 hectares of land in 28 out of the 33 local government areas of the state. He added that the project will be in three stages: food crop cultivation, cash crop/horticulture and food processing.

    Under the arrangement, land, improved seedlings, fertiliser, farming equipment will be made available to participants in the projects, while the banks will support willing agro investors with funds and advisory services.

    The bank’s Executive Director, Lagos, South West and Corporate Banking, Mrs. Mary Akpobome, who represented the Managing Director/CEO of Heritage Bank, Mr. Ifie Sekibo, at the launch, stated that the project is in line with the bank’s vision of partnering with individuals, organisations and governments to create, preserve and transfer wealth across generations.

    She said: “We believe that our youths are the future leaders that will positively reshape and reposition our country in the global environment, and Heritage Bank is committed to contributing her unending quota towards grooming them by facilitating enabling opportunities and platforms.

    “This programme will definitely lead to the creation of quality and sustainable employment and livelihood for the youth, which will in turn reduce the crime rate in the society,” she said.

  • Amosun: diversification boosts Ogun IGR by 97 per cent

    Amosun: diversification boosts Ogun IGR by 97 per cent

    Ogun State Governor Ibikunle Amosun yesterday said the challenge of dwindling revenue from the centre has assisted his state in boosting its Internally Generated Revenue (IGR).

    According to him, his state has been able to double its revenue by about 97.8 per cent.

    He spoke with State House correspondents after meeting with President Muhammadu Buhari at the Presidential Villa, Abuja.

    The governor, who noted that things are really tough as a result of dwindling oil revenue, said all the states are adversely affected by the development.

    He said: “We are part of the larger context called Nigeria  and because of that challenge, people must think outside of the box and I am happy to report that in Nigeria today, maybe not in the quantum of what we generate but we are number one.

    “If you check the indices that have been released, we doubled our revenue with about 97.8 per cent, the next state to us I think was 41 per cent.

    “We are working hard and we are doing well but there is still lot more to be done,” he added

    Speaking on the state’s fourth investors’ forum, the governor said it centred on three key areas of agriculture, environment and transportation.

    He said: “And the reason is not far fetched. Everybody believes that there is no alternative except for diversification and even before this crisis we realise that, the only way to go is to diversify into agriculture, it will employ our people, it will create wealth for them.

    “Those nations that have gotten it right, if you see them, you will discover that they have their cottage industries, they are the enablers, that’s why we believe that once we zero in on these three grey areas, of course, we will get it right.”

    He was optimistic that Ogun State will become the nation’s industrial hub in the next one or two years.

    Amosun said: There is no state that has the kind of resources we have in terms of numbers and value. We are not limiting it at that we want to take it forward.

    “Not agriculture alone, we want to take full advantage of the full value chain that agriculture offers.

    “In the area of transportation we need to see how many people we can get on the roads, we need to introduce rails, waterways.

    “Like I said we are the most industrialised state, we want green industrialisation.

    “The era of emitting dangerous hazardous smoke is over.

    “There are new ways of doing things, new engineering solutions that are in place and are what we are trying to do.

    “We are even generating electricity with our waste that is what I call using waste to generate power and waste to wealth. Those are the areas we are focusing on,” he said.