Southwest harps on potentials to develop economic model

No Comments » September 6th, 2014 posted by // Categories: Nigeriawatch



Southwest harps on potentials to develop economic model

Category: Business news
Written by Temitayo Odunlam
To authors of “Southwest Nigeria: An Economic Outlook for 2014”, the pursuit of leveraging the potentials within the Nigerian economy requires, now more than ever, new models. The authors, the Development Agenda for Western Nigeria (DAWN) Commission team, assert Nigeria can only actualise its immanent capacities if only the constituent regions would be enabled, or enable themselves to play to their strength.

Reading the content of the economic outlook that DAWN Commission recently released, playing to its strength for fast, strategic development is what Southwest Nigeria has set out to achieve. The region, comprising Ogun, Lagos, Ekiti, Ondo, Osun and Oyo states, desirous of working together under a common set of development strategies and marshalling their common synergies and economies of scale, established the DAWN Commission in 2013.

According to the DAWN document, the Commission’s overriding objective is “the attainment of an egalitarian, democratic and economically self-sustaining region that unlocks the creative energies and resourcefulness of its people for greater good and security, while assuring their liberty and freedom.” The Mission Statement is “the realisation of an entrepreneurial and innovative economy built around institutions and having capability to deliver value to investors, visitors and every person(s) of contact.” The Commission is headed by its Director-General, Mr Dipo Famakinwa.

Perhaps, the Southwest has good cause to work at an integrated regional development, while embracing competition with, and competitiveness at the national level. The DAWN 2014 outlook paints a flattering picture of the region’s potentials. According to the document, the Southwest has proven to be the fastest growing economic bloc in the country via its greatest contribution to non-gross domestic product.

By 2012, the region’s non-GDP has grown by 21.8 per cent, followed by the Northwest’s, which grew by 6.38 per cent. The nation’s leading sectors include trade, manufacturing and commercial services (financial, transport, telecoms, etc.).

A bit of the breakdown shows that the Southwest leads in the production of cassava, kolanut, coffee and cocoa. Fifty per cent of the forestry output also comes from the region, as 60 per cent of the country’s manufacturing life is based there, especially in Lagos and Ogun States. The report states that Ogun State alone actually attracted 43 manufacturing firms in the last three years alone.

The Southwest, boosted by the ever-busy activities at the seaports and airports there, contributes about 60 per cent of the GDP in wholesale and retail trade. Its commercial services are also enhanced by the nation’s highest number of commercial banks and microfinance banks that it hosts.

The DAWN Commission report maintains the region is the hub for both foreign and domestic investment, not only in Nigeria but in the whole of sub-Saharan Africa. Between 2007 and 2013, investments worth $69.17 billion berthed in the Southwest, a figure illustrated by a graph as 22 times higher than investments in all the other regions within the same period.
It is pertinent to clarify that a bulk of the foreign investments into the Southwest is always resident in Lagos, with the state alone claiming 90 per cent of the major investments into the region between 2007 and 2013. An illustration shows that the Southsouth and the Northcentral regions attracted more foreign investments than the Southwest minus Lagos within the period.

Locally, the Southwest has, since mid-2012, been the beneficiary of 10 of the 15 major investments in the country, with Ogun State dominating. The Western Metal Products Limited established a N247.5 billion in Ogun State. Western Metal Ceramic Tiles & Nails Plant (N115.5 billion), Dangote Cement Plant (N140 billion), Nestle Maggi Production (N12 billion), Lafarge Power Plant (N23 billion), Lafarge WAPCO Cement Plant (N75 billion) and Nestle Distribution Centre (N5.4 billion) are some of the other major businesses that have found home in Ogun State since mid-2012.

In other states, within the period, the Shoprite Chain Store established a N33 billion outlet in Anambra State, Southeast, as it also did in Kano State, Northwest and Ibadan, Southwest, with the sums offering though. There are also the N198 billion Indorama Crop Fertilizer project in Rivers, Southsouth; the N100 PZ Wilmar Oil Palm plantation in Cross River, Southsouth; and the N1 billion Teragro-Transcorp Benfruit plant in Benue State, Northcentral. Lagos State benefited from a N9 billion PZ Wilmar Refinery and a N30 billion ICH Group Hotels investments.

The Southwest also leads in terms of spread of small and medium scale industries, followed by the Northwest. The Southwest boasts of 6,928 small-scale enterprises, Northwest 4682, Northcentral 2960, Southsouth 2864, Southeast 2350 and Northeast bringing up the rear with 1480.

The few number of medium scale enterprises, a major driver of any nation’s economy and impactful solution to the employment question, shows why Nigeria’s economy is still unimpressively developed and unemployment is rife. In a situation where ordinary districts in fellow third world countries like Malaysia, Singapore, Thailand and India boast tens of thousands of well-functional medium scale enterprises, the leading region in Nigeria in that area, the Southwest, has only 546, many of them operating under an inclement business environment. The Northwest has 328, Northcentral 262, Southsouth 208, Southeast 170 and Northeast 138.

The DAWN document announces that the Southwest sits on great economic potentials that are grossly under-explored. The authors believe that the economic framework of the late Chief Obafemi Awolowo era paid off handsomely in engendering complementary growth of the region on the pedestal of competitiveness.

The document says that with the current focus on public-private partnership in stimulating economic growth and development, the Southwest region holds yet untapped potentials in the very sectors that the administration in the Awolowo era exploited to drive its modest achievements.

In fostering growth in the Southwest, DAWN maps a blueprint of actions and strategies hinged on five pillars upon which it is anchoring the drive. The pillars of development are Economic Competitiveness, Social Development, Infrastructural Development, Good Governance and Homeland Affairs. While projecting an increased contribution of about 20 per cent in GDP for the region this year, DAWN is looking up to overtaking the Northern region which it admitted is the current “major driver” in Nigeria’s non-oil growth efforts with its massive contribution via agriculture. DAWN is emphasising a greater attention from Southwest leaders to reviving the agriculture sector.

The DAWN document also focuses on more effort on human and social development in the region. On education, it has given hint on a revisit to the educational system. How that will pan out will be discussed at a proposed Regional Workshop on Education Advancement which theme is, “Education For What?” The Commission commends Osun State governor’s Opon Imo information technology initiative, which it described as improving IT penetration in the state. It also heaped praises on Ondo State’s Abiye health programmes, as well as other “game-changing” health initiatives other states in the region are championing.

The DAWN Commission has its fears, though, about its projections and optimism. It warns that the Southwest is not invulnerable to shocks and systemic risks which could arise from intra- and inter connectedness with states and global forces. These risks include economic, geo-political and environmental/social risk. Highly identified is the risk of a central government failure.


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