March 20th, 2018
I’m delighted to be here at the 2018 Ogun State Investors’ Forum. When we last gathered here for this forum two years ago, Nigeria was slipping into its worst recession in decades, after a dramatic fall in the price of crude oil. Dollar shortages left businesses and manufacturers reeling, inflation rose, and unrest in the Niger Delta drove down our oil output.
Between then and now, we have launched and implemented a comprehensive Economic Recovery and Growth Plan; we pursued peace in the Niger Delta; we focused on improving our business environment; we scaled up our investment in agriculture and infrastructure, and aggressively worked on expanding Nigeria’s revenue base.
The ultimate goal has been the diversification of the economy, away from the kind of unhealthy dependence on oil and gas revenues that led us to the dire straits in which we found ourselves.
We were also zealous about reversing the trend of under-investment in infrastructure that had characterized our recent history. But perhaps most importantly, we have reversed grand corruption in public finance, and the impunity which attended the conduct of public business especially in the past five years.
Yesterday at the Quarterly Presidential Business Forum, I said that the main reason for Nigeria’s recursive growth is not just a matter of our relying heavily on a single commodity, it is the fact that the proceeds of that single commodity were regularly hijacked consistently by a few. The most of the proceeds go to rent seekers, who invest little in industry and production.
So, for example in a so called strategic alliance contracts with the NDPC, the promoters of the companies made away with over 3 billion US dollars, almost a tenth of our reserves at a point!
Here is a list of possible roads 3 billion dollars could have built, and at the moment we are in the course of getting 3 billion dollars to build these roads that I am about to name:
1. Abuja-Kaduna-Kano road
2. 2nd Niger Bridge
3. Enugu-PH road
4. East-West road
5. Sagamu-Ore-Benin road
6. Kano-Maiduguri road
7. Abuja-Lafia-Akwanga-Keffi road
8. Lagos-Abeokuta (old road)
That is what 3 billion US dollars that some people made away with could have done, and that is why it is important for us to understand that our country’s problems must be analysed from the perspective of what the real issues are. We talk of the Nigerian economy without talking about the blight that was caused years ago by people simply stealing the resources of this country.
In one single transaction, the sum of N100 billion and 289 million dollars in cash were released a few weeks to the 2015 elections, it was not released as such, it was the money embezzled.
When you consider that, in 2014, when oil prices were an average of 110 dollars a barrel, only N99 billion was spent on Power, Works and Housing. Agriculture and Transportation got N14 Billion and N15 billion respectively.
So, the total spends on capital in these critical areas I have mentioned was only N153 billion, and over N150 billion was released and shared within three days. This is enormity of what we are talking about; there is no country in the world that can survive on grand corruption on the scale that we are talking about. And that is why it is important for the Federal Government of Nigeria under President Muhammadu Buhari to reverse that grand corruption.
So, we spent, in 2017, N1.3 trillion on capital, the highest spend in the history of the country, earning almost 60% less than we were earning in 2014. So, you can do far more with less if we are prudent with the resources of this country.
Today, with less revenue but no leakage, we have increased funding capital in Power, Works and Housing, Defence, Transportation and Agriculture by as much as 400%.
Today, we are two quarters out of the recession and firmly on the path of recovery. Our external reserves are at their highest levels in five years. Inflation has dropped for 13 consecutive months, manufacturing confidence is on the rise and in 2017, Nigeria moved ahead 24 places on the World Bank’s annual Doing Business Index. And the World Bank reported that Nigeria is among top ten reforming economies in the world.
All present here today can therefore see why this is a great time to be speaking confidently about ‘consolidating gains, and accelerating growth.’
Distinguished Ladies and Gentlemen, I see strong similarities between our ambitions at the Federal level, and those of Ogun State; in terms of the commitment to raising domestic revenues, attracting investment, and the emphasis on infrastructure, agriculture, industrialisation and technology.
Ogun State has seen a ten-fold increase in internally-generated revenues, between 2011 and today. I am also told that a significant portion of the Foreign Direct Investment that came to Nigeria between 2016 and 2017 ended up here in Ogun State.
It is not difficult to see why. Between 2011 and today, the State has moved from 35th place on Nigeria’s subnational Doing Business Index, all the way to the fifth place.
Ogun’s claim to the title of ‘the Industrial Hub of Nigeria’ is more than mere rhetoric. I was here in December 2017 to commission the largest Petroleum Tank Farm in Nigeria, the Petrolex project, which includes a refinery in its plan. And again, just last month, we commissioned a new Nestle factory and the Belloxi Biscuit factory, all here in Ogun State. These are only two of the several industrial facilities that have opened here in recent years.
In the past 18 months, the State has also made giant leaps in agriculture and has advanced boldly to take on the whole value chain, especially with rice, from farm to market.
Reforms championed by the State Government have touched everything from soft infrastructure — land acquisition, construction permits, and business registration to hard infrastructure — an ambitious programme of road upgrades across the State. And I’m sure that all of us who came here today would have seen all these developments.
And the future looks even more promising. Last year I flagged off construction of a new standard gauge railway line that will run from the Ports Complex in Lagos, through Ogun State, to Ibadan — one of the terminal sections of a network that will run more well over a thousand kilometres across the country. We expect the line to be completed by the end of the year.
But ahead of that, we are creating an inland terminal at the Railway station at Ilugun on the Lagos-Kano narrow gauge rail route. Illugun is between Ogun and Oyo states, about 150km from Apapa.
The GE led consortium through the APM Terminal is providing the investment and they expect that the project will take ten weeks. This will be used to move freight from Apapa port to Illugun and importers will take their freight from there and same for exporters. This will decongest Apapa port and bring more opportunities to this axis.
The Lagos-Ibadan Expressway, one of the busiest highways in the country, and at the moment the primary land connection between Lagos and the rest of Nigeria, is another infrastructure priority of the Federal Government. We expect that now that the contractors are back to site, that project would move on very quickly.
These two transport projects will further bolster Ogun’s special standing as Nigeria’s “gateway” state and no doubt attract even greater investment — and migration — to the State.
Ogun’s status as home to the largest concentration of tertiary institutions in Nigeria is also a pointer to the size of its potential for youth-driven innovation. One of the practical ways by which the State Government can help unleash this potential is implementing policies that will attract private sector investment into the rollout of broadband across the State. You can be assured that high-speed Internet will be a game-changing proposition for Ogun State’s technology ambitions.
It is unlikely that any administration since the birth of the State has developed infrastructure as rapidly and as sure-footedly as the Amosun administration, the Governor and his team certainly deserve the loudest commendation.
I am, therefore, here today to encourage Governor Amosun and his administration; to say to them that there is no room to relent in the efforts to fast-track the growth and development of the State.
The successes recorded so far by your ‘Mission to Rebuild Ogun State’ ought to inspire even more ambitious reforms now and into the future. The reward for hard work they say is more work.
It is heart-warming to note that Ogun State has made clear its aspiration to move from 5th place on Nigeria’s Doing Business Index for States, to 1st.
On our part as the Federal Government, we will continue to do everything within our power to support every State in Nigeria to reach its full economic potential. It is gladdening to note that Ogun has been consistently enthusiastic in its reception of our hand of cooperation.
It would be hard to find a Federal Government in Nigeria’s recent history that has been as supportive of the development ambitions of the States as the Buhari administration. We have been attentive and responsive to their needs and wishes, and have treated State Governments, regardless of partisan affiliation, as partners, not minions. So far, in terms of support, which includes the Paris Club Refund which Ogun state was owed, we have spent N1.91 trillion on support to the various states.
A significant number of our programmes and policies have been designed with them in mind; our Anchor Borrowers Programme that provides cheap credit and input to smallholder farmers; the Presidential Fertilizer Initiative has revived the domestic fertilizer blending industry and delivered cheaper fertilizer to our farmers; our Social Investment Programmes where we are now feeding about seven million school children in public primary schools in 21 States; the Budget Support Facility has enabled States better cope with the shock arising from the drop in the price of crude oil.
Let me, in closing, highlight something about what is, without doubt, one of Ogun State’s greatest assets: its proximity to both Lagos State and the Republic of Benin.
I am pleased to note that the State government has already begun to prepare for a future in which it will be the norm for people to live in Abeokuta or anywhere in Ogun State and commute daily to Lagos for work.
I would even go a step further to say that it should not be that difficult to foresee a time when Ogun State will be home to business districts that rival those in Lagos, and when some of Nigeria’s busiest air and inland ports will be found here.
Already, Ogun State is the industrial hub of the nation, but it must also be the business hub; it must also be a business district of choice for everyone who wants to do business in Nigeria.
It feels almost inevitable, that as Lagos grows in the most feasible direction: which, of course, is upward; that Ogun State is going to be a very important rival indeed.
This proximity between both states and the fact that they will significantly affect each other for good or for ill in the years to come ought to be the starting point for more deliberate economic cooperation between the two States.
A few weeks ago I attended the first joint Economic Summit between Lagos and Kano States. There is no reason why there should not be a similar collaboration between Lagos and Ogun States, for mutual benefit.
The closeness to Benin Republic means that Ogun is a potential trade gateway to West Africa and the rest of the continent. This is one potential that must be exploited. So, we must see a sub-regional meeting, a sub-regional summit between Lagos, Benin Republic and Ogun State. This is the kind of collaboration and cooperation that will take us to the destination that we set for ourselves.
The words of the Ogun State Anthem, a persuasive call to labour, to service, offer a fitting way to end this address. “Omo Ogun, ise ya a. Ise po fun wa lati se e.” “Ise si po fun wa lati se o!”