As the demand for good governance stares various tiers of government in the face, a conscious effort is being made by some state governments to augment whatever accrues to them from the Federation Account through improved internally generated revenue. In Kwara State, a robust private sector driven economy where government’s role is reduced to facilitator of a conducive environment is emerging. Festus Akanbi who was in the state last week reports

A combination of inequality in revenues accruing to states from the federation account, uneven spread of mineral resources and the variation in the degrees of revenue streams especially from taxation and other forms of internally generated revenue has to a large extent explained the disparity in the levels of development across the 36 states of the federation.

Gradually, the various states of the federation are coming to terms with the fact that as the demands of their subjects increase daily in proportion to the challenges of modernisation, there is an increasing need to explore other ways of augmenting whatever comes to them from the federation account.

Economic analysts, however, said such efforts need a long term planning, clarity of purpose and a deep sense of direction so that at the end of the day, whatever measures put in place to generate additional income would not be viewed as punitive measures against the people who ordinarily should enjoy the rise in the fortune of their respective states.

They also stressed the need for government to hand off the running of businesses so as to concentrate on governance.
Government’s responsibility, they argue, revolves round the provision of incentives to private sector initiatives given the bad story of government controlled businesses in the country.

In Kwara State, the government is not unmindful of the inadequacy of its share of federally collected revenue to meet the yearnings of its people. This point was made succinctly by a number of the state government officials in separate interviews with THISDAY last week. Setting the Priority Right

Like other states of the federation with low revenue flow from the federal purse, the Kwara State government was not unmindful of the need to painstakingly make a choice of the opportunities to leverage upon in its quest to tackle the socio-economic problems of the state. And according to the Senior Special Assistant to the Governor on Investment Promotion, Mr. Abayomi Ogunsola, the present administration was prepared for the task ahead right from the onset. This, he said, informed to choice of the current investment template, which, according to him, is capable of making the state self sufficient pretty soon.

Ogunsola explained that having realised the enormity of the challenges on ground, the government decided to embark on programmes geared towards employment generation and wealth creation. He maintained that the government was not unaware of the fact that efficient and effective governance attracts private sector initiatives like a bee, adding that because of this reality, the present administration had from the onset made up its mind to provide an atmosphere irresistible to private sector operators.

The special assistant listed the two special areas of focus determined by the administration to include agriculture and education. "So, the first evidence that we are serious about this drive was by renaming the ministry of education as ministry of education and human capital development," he said. The aim of this measure, according to him, was to create a spirit of entrepreneurship in the people of Kwara. Government, he said, was particularly interested in encouraging the people to acquire relevant skills across agric value chain. "So we want to make sure there is adequate skill acquisition not only in agric production but across all the value chain which include processing, sale, distribution, marketing and many others. We also realise that a number of other economic activities across the value chain requires skills," he added.

Given the fact that government alone cannot drive the process profitably, the state government, according to Ogunsola, has signed a number of memoranda of understanding with quite a number of private investors drawn from within and outside the country.
The involvement of private initiatives in the agric sector was said to have largely been determined by the agric master plan, which covers a period of five years. Ogunsola explained that the plan is quite expensive but was quick to point out that government is not going to be a player but a facilitator.

The government is planning to encourage farmers to form cooperative societies and they stand to benefit from agric subsidy from the state government through the provision of land, input, seedlings and soft loans.

He said: "We are discussing with banks to make available to farmers loans at concessionary rates and the state is ready to provide banks with collaterals for the loans."

THISDAY gathered that government’s focus in the agricultural sector include emphasis on rice and cassava farming. Ogunsola said government efforts might not yield the desire results without a corresponding intervention in the health sector. Consequently, efforts are being put in place to renovate all the five general hospitals in the state, make effective use of the state diagnostic facilities, open hospitals in every local government areas of the state as well as making a direct intervention in schools and infrastructure.

Justifying government’s investment in roads, Ogunsola said farmers would need to bring their farm produce to the market without incurring additional costs. This, according to him, explained why the government set aside N2.5 billion for road projects in 2012 budget and the same amount in this year’s budget.

"Government cannot introduce tolls on the road here because our people are predominantly civil servants but once the state is opened to private sector operators, then the situation may change," he stated.

Privatising State’s Firms

Perhaps, one singular effort of the administration that confirmed its readiness to open its doors to private sector was the decision to bring all its business concerns under one holding structure-Harmony Holding Limited.

Fielding questions from our correspondent, Group Managing Director, Harmony Holdings, Mr. Tope Daramola, said government’s action was driven by its resolve to move away from dependence on the federal allocation, which it cannot control, to improving its internally generated revenue, which it has control over.

He said, "For it to look inward, government needed to take an inventory of all its companies and businesses established a long time ago but which were not being properly run.

"The essence is to put them under one umbrella with prudent management and a conscious effort to add value to them." He said the mandate given to his management was to make Harmony Holdings number three of government holdings in Nigeria.

According to him, the intervention is already yielding dividends in the agricultural output. For instance, Kwara State, according to him, boasts of the largest cassava farm in Nigeria with a national yield record per hectare of cassava put at 30 -40 metric tonnes per hectare.
Already, the state has been exporting cassava chips to countries like China and Israel.

The Harmony Holdings helmsman admitted that the potential for cassava export is huge, saying demand from China is in the region of 500,000 metric tonnes of cassava per annum demand for Nigerian cassava from Israel is 100,000 metric tonnes.
He, however, challenged the federal government to assist in cassava farming, lamenting that despite the huge potential, Nigerians are yet to have access to modern way of processing cassava.

Aviation

One other sector, which the state government is banking on, is its investment in the aviation sector. One of such is the Ilorin International Airport Cargo Terminal. Although the idea behind this investment predated the current administration, Governor Abdulfatah Ahmed was said to have completed and equipped the gigantic project based on its economic potentials. This is because the cargo terminal at Ilorin International Airport is expected to provide a huge boost for importers and exporters. It is also designed to support the broader economic policies of Kwara State, and in particular the agricultural plans.

These take a holistic view of the agricultural cycle and support primary producers, transporters and companies that add value later in the cycle through processing. The modern Cargo Terminal will support this comprehensive approach as it would allow for the export of fresh produce (because of the cold-storage and wet facilities at the terminal), the export of processed agricultural products (because of the large storage areas) and the import of materials and equipment needed for the support of the agricultural sector.

Designed to take the strain off the massively busy airport at Lagos, the cargo terminal aims to take advantage of the state’s already advantageous central position.

In the case of the International Aviation College, the aim is to produce human resources to feed the burgeoning aviation sector in the West African region. The rector of the college, Capt. Fola Akinkuotu, in an interview with THISDAY, said given the dominance of Nigeria in aviation environment in West African sub region, the fact remains that the pioneer aviation college in Zaria cannot meet the need for human resources in the sector. He, however, hinted of the plan of the state government to sell about 70 percent of its current stake in the institution in the nearest future. The institution, which runs the course of Oxford Aviation Academy in England, currently has 30 students.

Artisanship

In view of the dying culture of artisanship in Nigeria, the Harmony Holdings chief executive explained that the Kwara State government believed that there is a great opportunity for some categories of school leavers, especially primary school and secondary school products who could not proceed to tertiary institutions.

This was the idea behind the establishment of the International Vocational Centre, Ajasse Ipo in the state. The centre is designed to fill the gap in middle level manpower, empower youths through employment provision and entrepreneurship. The curriculum, designed in collaboration with NECA and moderated by London’s City and Guilds, aims to equip students with globally-recognized skills and establish Kwara State as the hub for vocational skills in the sub-region.

Key industries that will be served by the International Vocational Centre based on Industry Need Assessment include, oil & gas, food & drinks, electrical, general manufacturing, mining and mineral processing, fashion, hotels and restaurants, among others.

SME Financing

In order to stimulate economic activity, especially in the informal sector, government provided N250m in micro-credit to small and medium scale enterprises across the state. Loans were issued through 10 designated microfinance banks. So far, 842 cooperative groups, with an average of 10 members, have so benefitted from the scheme, meaning 8,420 traders and artisans have been empowered under the scheme. Similarly, about 4,000 youths have been given permanent civil service jobs through the Kwara Bridge Empowerment Scheme (KWABES) as well as more than 3000 public works jobs through the federal government’s SURE-P initiative. One immediate endorsement of government’s cocktail of investment drive is the rising appetite of private investors in Kwara economy.

For instance, the arrival of Shoprite in Ilorin has raised the tempo of commercial activities. An enquiry showed that virtually all the stalls in the arena had been occupied by prospective shop owners who wanted to take advantage of the new business initiative.