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Investment Opportunities in Oyo State, Nigeria
1 August 2012
Presentation
by
His Excellency, Sen. Abiola Ajimobi
Executive Governor of Oyo State
at the
New World Nigeria
High Level investment & Business Summit
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Our Objective – Why we are here
Oyo State Government of Nigeria is represented at the New World Nigeria, High Level Investment and Business Summit for a number of reasons, some of which include:
To initiate a partnership and strong working relationship with the Bank of Industry, as well as the international development and investing communities and entrepreneurs.
To create awareness on the numerous investment opportunities in Oyo State with a view to attracting more private investment flows into key sectors of the State
To highlight the Government’s priority areas for investment promotion. These include:
1. Agriculture
2. Transportation Infrastructure
3. Manufacturing and Small to Medium Enterprises
4. Solid Minerals
5. Culture & Tourism
6. Power
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Outline
This presentation will throw light on the following:
History and Economic Profile of Oyo State
Strategic Vision for Oyo State
Priority Sectors and Opportunities for Investment
Incentives for prospective Investors in Oyo State
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Oyo State’s Antecedents
First University
Cocoa House
We have been known to set the pace in the following areas:
First Sky Scrapper in Africa
First Industrial Estate in Nigeria
First University in the Country
First Stadium in Africa
First Television Station in Africa
Host to one of the first sets of University Colleges in Africa
One of the oldest states in Nigeria
And many others
Historically a Pacesetter State…
Large arable land – 27,107.5km2 (approximately 10,466 square miles)
Large population of about 6.7 million with diverse skills and expertise
Access to world class educational and research institutions (UNIBADAN, NISER, IITA, etc.)
A number of natural tourist attractions
Large deposits of solid mineral resources
…With abundant and largely untapped resources
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Over the years, certain potentials have also been identified in the economic landscape of the State...
Economic Profile and Comparative Advantage of Oyo State
Feature Statistics Rank*
Land Area 27,107.5km2 • 1st in South West, Nigeria
Population Approx. 6.7m• 2nd in South West,
Nigeria
Gross State Product (GSP)
Approx. $1.7b• 3rd in South West,
Nigeria
Per Capita GSP $276• 4th in South West,
Nigeria
Research InstitutionsOver 5 world-class research institutes
• Highest in the South West
Civil Service Population 38,185 people• 2nd highest in the South
West
Emerging middle classSignificant market for product uptake
• 2nd highest in the South West
*Source: Economic Associates 2010
Popularly known as the “Pace Setter”
Oyo State: The Pace Setter
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A review of the challenges and opportunities in Oyo State unveil the following…
Poor infrastructure especially in the rural areas including electricity, transportation, etc
Low productivity and value chain addition especially in agricultural production and processing
High rate of unemployment among youths and women
Ageing farming population
Inadequate funding especially for major/large projects
Shortage of technical expertise in the public sector to drive a private sector led economy
Challenges
Numerous investment opportunities in agricultural production, agro-allied industries and marketing of agricultural produce
Potentials for tourist attractions and development of the hospitality industry in the State
Exploitation and processing of solid minerals
Opportunities for infrastructural development – Logistics Center, Dry Ports, Free Trade Zone, and Okerete Transnational Border Market
Availability of a large market with a population of over 6.7 million people
Proximity to Lagos air and sea ports
Opportunity to leverage on abundance of skilled but low cost labor in the State
Higher security of life and property as well as a peaceful environment as necessary ingredients for investment flows
Relatively low cost of living fosters low overall cost of doing business
Opportunities
Despite these challenges , enormous economic opportunities abound
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Having analysed the Opportunities and Challenges, this is our desire for Oyo State…
Our Vision“A State in which people can be the best they can”
Our Vision“A State in which people can be the best they can”
Strategic Objectives
Determined to make the state physically functional, economically vibrant, socially harmonious and aesthetically
delightful
Preferred destination for national, regional and international trade, investment flows and leisure activities
Agro-based economic nerve center for the West African sub-region
Good governance (participatory, transparent and accountable), effective and efficient service delivery
Prime center for the development of critical technical and vocational skills in specialized areas such as agriculture,
manufacturing and craftsmanship
The Restoration Agenda
Ground Zero
Ground Minus Zero
Before this administration
Where We Are Now
Where We Should Be
The Pace-setter State
Repositioning
Transformation
Restoration
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Some of the ongoing economic/ business-friendly initiatives of Oyo State include…
Establishment of a PPP Unit
Enhanced e-Governance Initiatives
Establishment of a functional socio-economic management team for the State
Preparation of a 10-year Development Plan in progress
Effective and efficient monitoring and evaluation framework for the State
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Steadfast promotion of partnership with the Development community6
Government has no business in business
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Oyo State is willing to partner with Investors in exploiting the opportunities in these sectors
AgricultureTransportation Infrastructure
Culture & Tourism/ Hospitality
Solid Minerals
Highlights of the current state of each sector and the aspiration of the State for each of the key focus sectors are presented in the subsequent slides
Manufacturing & SMEs
Power
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Sectoral ReviewAgribusiness and Food Processing – Current State
• Agriculture is the major occupation and source of income for a larger portion of the people of Oyo state.
• Oyo State is the 12th largest crop producing state and 15th largest livestock farming state in Nigeria.
The State produces well below its full potential due to the following issues:
– Ageing Farming Population
– Up to 30% post harvest losses due to poor harvest handling/ storage facilities
– Sub optimal agricultural value-chain (lack of processing companies)
– Large scale subsistence farming
– Inadequate infrastructural facilities and outdated farming methods due to lack of finance
– Sub-optimal utilisation of dams for irrigation in the state
– Unavailability of managerial expertise amongst others. • Agricultural produce in the State includes:
– Tree crops such as cocoa, oil palm; Arable crops such as cassava, yam, maize, rice and Fruit crops such as pineapples, orange, lime, pawpaw, tangerine, guava, banana and tomatoes, etc
• Livestock farming is carried out on a small-scale basis.
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Sectoral Review Agribusiness and Food Processing – Ongoing Initiatives & Investment Opportunities
Goal
To make agriculture a major driver of growth for the state’s economy, ranking amongst the top 5 agricultural producing states through a profitable, sustainable and technologically driven agricultural sector
Ongoing Initiatives Construction of three agricultural storage silos (10,000 metric tonnes each) Preliminary plans for the establishment of canning/ processing factory for key crops Ongoing resuscitation of farm settlements and school farms in the State Commercialisation of the Government-owned Fashola Farm Plans for the development of a 1,377 hectare logistics centre which would be expanded to
15,000 hectares
Investment Opportunities
Agriculture Fruits and vegetable production Arable crop production Aquaculture activities Livestock farming Farm machinery leasing
Agro-Processing – Value Chain Additions Food and Cash crop processing i.e. cassava, oil palm, cocoa, maize, yam, etc. Tomato paste and fruit juice processing – through the establishment of canning factories Silo and storage facilities building and operations
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Sectoral ReviewSolid Minerals – Current State
• Oyo state is endowed with soil-based resources which include granite chips, red clay , sand and gravel that have high potentials in the construction industry
• The State also has mineral resources including Amphibolites, Marble, Dolomite, Tantalite and Talc
• Oyo State is and currently ranks 7th in terms of solid minerals production in Nigeria however, the potentials are yet to be fully explored
• The state is also renowned for its impressive gemstone collection and deposits
Mineral Industrial Linkage Key Demand Markets
Marble and Dolomite
Cement Works, Construction
India, China, France, Hong Kong
Tantalite Electronics Brazil, UK, Colombia
Tourmaline JewelryUS, UK, China, Hong Kong, Brazil, Canada
Gold JewelryIndia, China and Saudi Arabia
Although there are over
10 solid mineral types in
Oyo State, the following
are strategic and posses
significant international
industrial linkage
Majorly, current exploitation is
focused on marble. Thus leaving
significant potential for the exploitation of other available mineral resources
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Goal
To significantly leverage the extensive solid mineral potentials for socio economic development of the State
Ongoing Initiatives Plans for the establishment of a center for the processing of gemstones in
Oyo State
Sectoral ReviewSolid Minerals – Ongoing Initiatives & Investment Opportunities
Investment Opportunities
Exploitation of available mineral resources especially with the proven reserves of granite, marble & dolomite, kaolin, etc.
Investment in large scale industrial ventures and industrial clusters
Local and international trade of commodities in the State: Solid minerals
Opportunity to participate as a player in the logistics center which will ultimately be developed into a Free Trade Zone
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Sectoral ReviewTransportation infrastructure – Current State
Transportation in Oyo State is largely by land. Key transport infrastructure issues include:
Inadequate Road Network
• Over 1,150km length of Federal Roads in the State
• Over 2,345 tarred roads in the State
The State’s road network is still largely inadequate to support the large population, especially in the major cities.
Non-Motorable Roads
A number of the major city roads are not motorable leading to frequent motor accidents and traffic congestion.
Low Investment
Low investment in the rehabilitation and maintenance of existing infrastructure have resulted in low levels of access to basic amenities and high costs of doing business in the State.
• The State has an airport in Ibadan, however the airport is currently sub-optimally utilised
• Rail transport in Oyo State has ceased to be relevant in recent times although there are ongoing efforts to expand the rail facility in the State
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Goal
To provide quality infrastructure and transport services for socio-economic transformation and sustainable development of the State
Ongoing InitiativesConstruction of modern terminusOngoing plans for the development of a master plan for Oyo State “Keke Ajumose” scheme which provides tricycles to riders under the umbrella body of their
associationConstruction, upgrade & beautification of various roads within the metropolis (Circular road)Planned construction of flyovers at key traffic interchanges
Sectoral ReviewTransportation Infrastructure – Ongoing Initiatives & Investment Opportunities
Investment Opportunities
Conversion of the under-utilized Ibadan airport into a cargo airport under a sustainable PPP model
Construction/rehabilitation of major roads under public private partnership
Deployment and Implementation of a mass transit scheme through a sustainable PPP model
Provision of multimodal transport services, including multi-storey car parking facilities
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Sectoral ReviewManufacturing & Small – Medium Scale Enterprises (SMEs)– Current State
• Oyo State currently accounts for less than 1% of total manufacturing in Nigeria. However, Ibadan is the industrial hub of the State with over 60% of the State’s manufacturing output
• Oyo state contributed N4.2 billion to the total national revenue from manufacturing, making it the third highest in the south-western region.
• Oyo State’s manufacturing industries currently operates below 20 percent capacity
• A number of big players in the manufacturing industry have established businesses in the State. Some of such key players include
Nigerian Breweries Plc
British American Tobacco
Procter and Gamble
PZ industries
Various printing & publishing organisations
• Oyo State ranks third among south-western state and 14th overall in the country with respect to dependence on trading
• Oyo State has embarked on the establishment of enterprise zones across the State in a bid to have a structured market model to take care for unskilled workers and artisans
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Goal
To encourage and attract small to medium scale businesses and manufacturing from within and outside Oyo State.
Ongoing Initiatives
Ongoing activities toward the development of a Free Trade Zone to promote and develop manufacturing industries amongst others
Provision of incentives (such as land etc.) to attract foreign businesses and manufacturing companies
Ongoing plans for the facilitation of micro-finance loans to SMEs
Sectoral Review Manufacturing & SMEs – Ongoing Initiatives & Investment Opportunities
Investment Opportunities
Public Private Partnership arrangements with the State Government resuscitate and manage the State-owned companies into commercially viable entities:
(a) Cashew-nuts processing
(b) Juice &Tomato processing
(c) Electric Products manufacturing
(d) Paper milling
Establishment of new manufacturing industries to take advantage of the numerous available resources in the State
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Sectoral ReviewPower and Energy – Current State
• The demand for electric power in Nigeria is estimated at a very modest 20,000MW, but we are only able to generate 4,000MW at the peak of our power generation
• Oyo State in line with the general trend in the Country has constantly suffered huge supply gaps in a bid to meet electricity demand
• The Ibadan Distribution Company draws approximately 11.5% of electricity from the National grid which is shared amongst five States and as such barely meets the demand
• Despite huge supply gaps, monthly revenues for the Ibadan distribution company are in excess of $9.6m monthly.
• Oyo State has potential for power generation through the exploitation of the power generation capabilities of the Ikere gorge, one of the 17 dams in the State which has a capacity of generating about 450MW of electricity.
• Oyo State is also home to Nigerian Cables and Wires producing housing wires, armored cables, bare conductors, telecommunications cables and customised cables
• Oyo State has the potential to support the retail distribution of electricity through the manufacturing of electric poles by Conpole limited, a company with majority share ownership by the State
• Conpole (equipped with requisite equipments for production) has over the years performed sub-optimally and currently moribund.
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Sectoral Review Power and Energy – Ongoing Initiatives & Investment Opportunities
Goals
To promote industrialisation and ensure stability of power supply in the State through IPP projects and embedded power generation
Ongoing Initiatives Ongoing discussions with private sector players for the possibility of power generation in the
State through the Ikere gorge dam Discussions with interested parties for the resuscitation of Conpole
Investment Opportunities
Private sector investment in the Ibadan Distribution Company – following the renewed drive by the Federal Government to complete the privatisation process of the unbundled PHCN companies by 2012
Investment in power generation through the establishment of independent power projects and captive power generation
Technical support to tap the 450MW potentials in the Ikere Gorge Dam as well as optimise other dams and rivers for hydroelectric power generation
Manufacturing of electrical materials from the availability of materials locally
Solar power generation
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Sectoral ReviewCulture & Tourism/ Hospitality – Current State
• Potential tourist attractions that have historical, cultural and artistic appeal in Oyo State include:
Ado – Awaye Suspended Lake
Captain Bower’s Tower, Ibadan
Royal Forest (Igbo- Oba) in Igboho;
Old Oyo National Park
Rock formation (Agbele hill) in Igbeti
Sogidi Lake in Awe
Alaafin’s Palace, Oyo
Agodi Park and Gardens, Ibadan
Samuel Ajayi Crowther’s Birth Place
University of Ibadan Zoological garden
National Museum, Ibadan
Alagba – The 324 year old tortoise in Soun’s Palace in Ogbomoso
Many of the tourist sites require investments in terms of infrastructural and aesthetic upgrade in order to attract sufficient tourism traffic in the state
Old Oyo National Park
• Tourism in Oyo State (hotels and restaurants) contributes 0.49% to the State’s GSP, which translates to about N1.2b in 2010 (approx. $7.5m).
• There is currently one UNESCO heritage site nomination in Oyo State. The Old Oyo National Park nominated since 1995
Alagba, 324 year old Giant Tortoise in Soun’s Palace, Ogbomoso
Erected in honor and memory of Captain Bower, the first resident colonial Administration of Oyo group of provinces in December 1936 as a result of his effort at maintaining peace and social development in the whole of Yoruba towns and cities.
Captain Bower’s Tower
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Goal
To make Oyo State a preferred destination for tourism and leisure activities in Nigeria
Ongoing Initiatives
Signing of an MoU with hotel developers for the development of 2 world class hotels in the State which together with existing hotels barely meet the market demand in the State
Renewed drive towards the development of tourist sites in the State
Sectoral ReviewTourism/ Hospitality – Ongoing Initiatives & Investment Opportunities
Investment Opportunities
Public Private Partnership arrangements with the government to develop and manage existing tourist sites
Establishment of new tourist sites such as amusement and theme parks.
Provision of necessary support services such as
Accommodation: Many of the hotels in Oyo are below international standard and in most instances do not have standard facilities to support the demands of visiting tourists.
Restaurants, Bars: Most of the state’s tourist sites presently have little or no entertainment facilities such as restaurant and bars which are required to attract tourists.
Tour operators: Owing to its undeveloped tourism industry, there are presently no tour operators to provide tourist packages in Oyo State
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The Federal Government of Nigeria along side Oyo State has put together exciting incentives to attract investors who are willing to play in the focus sectors…
• Pioneer Status: 100% tax holiday for up to seven years granted to qualified eligible industries located in economically disadvantaged local government areas of the Federation
• Corporate Tax Relief: Tax relief of up to 120% of expenses on research and development carried out in Nigeria and are connected with the business from which the income or profits is derived
• Liberalisation of Ownership: investors can own up to 100% equity shares in any company
• Repatriation of Profit: Foreign investors are free to repatriate their profit and dividends net of taxes
• Guarantees against Expropriation: There is a guarantee that no enterprise will be nationalised by any government in Nigeria
• Minimum Local Raw Material Utilisation: A tax credit of 20% is granted for five years for industries that attain the minimum level of local raw material sourcing and utilisation
• PPP Incentives: The State is willing to partner with private investors to increase production capacity, and deliver quality infrastructure across various sectors
• Access to land: Prompt access to land through timely issuance of relevant land title documents
• Land at Discounted Rates: Available at highly discounted rates as incentives for investors
• Personal Tax Relief: Availability of personal income tax reliefs of players in priority sectors of the State
• Provision of Infrastructure: Provision of support infrastructure (where required) e.g. access roads, as part contribution of the State towards large projects.
• Expeditious Processing: Expeditious processing of required regulatory consent and other regulatory requirements
• Guaranteed Security: Extremely successful working relationship with security agents
Federal Government Incentives Oyo State Government Incentives
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Soliciting for the Sustainable Partnership for the Development of Oyo State
Let us join hands on our drive to tap the significant potentials, create wealth for both the investor and the people of Oyo State.
We look forward to welcoming you into Oyo State!
• At this juncture, and on behalf of the Oyo State Government, I extend our unreserved invitation to willing investors interested in taking advantage of the numerous opportunities that abound in the State
• Please join us in unearthing the significant untapped wealth that our State possesses