The billions of Naira spent in importing food from other countries of the world. Nigeria spends about $2 billion annually in importing food items. Recent reports show that each year, Nigeria spends $132 million on importation of milk; $400 million on wheat; $200 million on poultry, especially frozen chicken; and $756 million on rice. Nigeria also imports about 95 million metric tones of sugar annually. In short, Nigeria’s approach to development has been ineffective and unsustainable.

Our approach is to lead the way in changing Nigeria’s reliance on imported food, especially poultry, milk and other diary products by making Kwara State a net producer of food, agricultural and Agro-allied products both for the huge domestic market and for export.

For example, we project that investment in dairy production will yield up to 5 million litres of milk per annum (pa) and will take care of domestic needs which is currently characterised by shortfalls, high prevailing prices, and the importation of up to 98% of domestic consumption. At present Nigeria, imports 48,000 metric tonnes of dry whole milk, 30,000 metric tonne of evaporated milk, and 16,000 metric tonne of dry skimmed milk every year.
It is also projected that production of broiler chickens would yield 125,000 broiler hens, pa; dry land rice at 15,000 metric tonnes of, pa and irrigated rice at 8,500 metric tonnes of, pa. With all these, projected growth in dairy output in Kwara State alone, excluding growth in other sectors (rice, maize and poultry) will generate a potential $21 million saving in foreign exchange outflow (20% of total whole milk imported amount by Year 3), which will free up considerable potential development funds.

Quite significantly, it is projected the Zimbabwean farmers would be cash-positive in poultry and diary in the first 3 years, and would declare profit for mixed farming in the first 4 years. It is anticipated that total agricultural output will increase substantially over a 5 year period as production expands and the impact of improved farming methods and techniques are disseminated to the smallholder population through a planned agricultural extension programme. 

In employment terms, it is projected that direct employment per annum based on a target of 15,000 ha of production would be 4,000 labour days in dairy (rising to 40,000), 1,560 labour days in poultry, 2,000 labour days in rice. While these estimates reflect direct on-farm employment a substantially larger quantum of employment will be generated in downstream activities (processing, transport, wholesale and retail).   The overall effect of the commercial farming initiative could be huge.

The Challenge of Value Addition

The overriding concern in all these is how to develop the penetrative capacity of Africa’s products in the larger economies of the world. We cannot achieve this and the economic growth we envisage by merely exporting raw materials. If we fail to add value, we would merely be labouring in vain. Statistics from the International Coffee Organisation, shows, for example, that for every dollar earned by the local coffee farmer, traders and firms further up the value-adding chain received $13. Apart from the enormous loss in income that comes with raw material export, there are other advantages too.

It has been pointed out that exporting flour from, say Zimbabwe, depends largely on economic conditions in Europe. Moreover, when prices of raw materials increase, manufacturers in the West naturally device a more efficient use of resources and ultimately substitute these with synthetic material, as in the case with cotton. Also, increased protection of agriculture in the West and slow down in population in, say Germany, decrease demands for primary products.

In Kwara State, we have large farms of fruits and vegetables, especially tomato. Almost all of these are sold cheap to domestic consumers and are mostly wasted. Whereas the market is flooded with all brands of imported canned and packaged fruit juice and tomato purees. However, the enabling environment provided by Federal Government policies has allowed us to tie our agricultural policies to industrialization, especially in the agro-allied sector.

We intend to replicate the success recorded in Asia with the philosophy of “small is beautiful,” by establishing small production and processing units for poultry, especially frozen chicken, diary products, fruits and tomatoes, cassava, cashew and sugar cane. With less than $8, 000 we could establish sugar processing plant with 95% local content and a capacity to produce up to 90 tonnes per annum. Nigeria produces about 120,000 tons of cassava annually, out of which 5,000 tons have been billed for export to China. The country hopes to realize 5 billion naira (about $38 million US dollars) from cassava export every year. To promote this scheme, the Federal Government is providing $35 million dollars through the Nigerian Export Import Bank to boost the production of cassava chips.

Our government would be hoping to take advantage of this by establishing cassava chipping centers in various parts of our state to support local farmers, especially women, to benefit from this initiative. We have already established small processing units for tomatoes, again to be operated by women, which we launched late last year. The case of cashew is even more interesting. In the past, Indians would come to Nigeria and buy up the raw cashew nuts and take it to India for processing, from where they export to Atlanta. Our plan is to process our cashew nuts ourselves and export from Ilorin to Atlanta. We envisage that all this initiative will in time position our Kwara State as a leading producer of processed fruits and tomatoes, as well as sugar, poultry and cashew, for the domestic markets, while pitching us for exports on these products.

The point I seek to make with the Kwara State efforts is that harnessing Africa’s competitive advantage in world trade will require us to add value to our raw materials by investing in manufacturing, especially in the agro-allied industries, and Small and Medium Scale Enterprises (SMEs) sectors.

Like agriculture, the industrial sector in Kwara is not large and not very developed due to a combination of factors: relatively small size of the local market; inadequate levels of critical infrastructure such as unstable power supply, poor rural road connectivity, inadequate water supply; low availability of affordable capital for potential entrepreneurs and inadequate linkage between local research and technology institutions and local entrepreneurs.

There is a total of about twenty Small and Medium Enterprises (SME’s) operating in the State. Three-quarters of these are privately owned and are engaged in activities such as the production of soap and detergent, chemicals, pharmaceuticals, biscuit, tobacco, foam and beverage brewing and bottling. There are five publicly-owned SMEs in the state in the business of furniture-making, paper milling, textile manufacturing, sugar production and rice milling. None of them is functioning at full capacity and some of them are moribund.

In seeking to revive this sector, we are embarking on an Independent Power Plant (IPP) project to improve power supply and hence, reduce the cost of doing business in the State. We have also focused on improving rural-urban road network to ease farmers’ difficulties in transporting produce to the urban centres. At policy level, our step-change in agriculture has enabled us to focus on schemes that would offer real and productive support to farmers by assisting them to strengthen their associations and to organize themselves better to take full advantage of the markets. Another policy action is in leveraging funding support for small scale investors in financial institutions with loans targeted for the development of small and medium scale enterprises in the country.

Generally, our experience has shown that in seeking to develop the SME, regulation and partnership are key factors. While outright privatization seems to be easy way out for most of the moribund companies, many private investors are usually very skeptical of their viability. One way we have sought to shore up their confidence is through partnership. The Kwara Furniture Manufacturing Company ltd. is our major success in this respect. Even though the company had been moribund for years, we have managed to revive it through private partnership and investment with a South African company. Backed with appropriate export incentives, we envisage that this company would soon be exporting to markets in Europe and the Middle East. 

In developing all these export capacity, I must mention that our international airport in Ilorin is envisaged to play a very crucial role. Recently, we were able to get the Federal Government to designate the airport as the country’s main cargo hub to serve as alternative to Lagos, which usually suffers from congestion. Apart from serving as a dry port, exporting by air from Nigeria also gives enormous advantage, especially in exporting agricultural produce because it is only 6 or 7 hours away from major markets of Europe.

Bureaucracy is a major death of enterprise in many African countries. Government that should exist to facilitate business actually hinders business. So, the first stage is to ‘debureaucratise.’ Apart from willingness to partner with private investors, all the bottlenecks associated with setting up business have to be removed. In Kwara State, one of the most difficult aspects of setting up a business in the past is getting legal title on land.

Therefore, many investors who recognized the strategic advantage of our location as it relates to the national markets could not come because it was near impossible to get land. One of the first things we did was to review the regulations surrounding land allocation in the State. Then we came up with a fast-track system that guarantees money back on failure to deliver the Certificate of Occupancy to an applicant within two weeks of concluding his application.

However, our experience has also shown that while partnership and regulation are crucial to nurturing industrial growth, equally important is access to market and of course, capital as well as a range of governance issues that would inspire investor confidence. Government must demonstrate willingness to strengthen and sanitise institutions of government and be more transparent in the way it conducts business. In our short period in office, we have managed to institutionalize the due process as an administrative culture. By establishing the Price Intelligence Unit (PIU) that ensures that cost of projects are kept at the prevailing market rate; and the Project Monitoring Unit that ensures effective completion of projects, we have not only enhanced the efficiency of governance, but also ensured transparency and accountability.

If contractors know that their proceeds would not go back into bribing officials or doing “PR”, they won’t be too keen in inflating contracts and they are likely to execute projects effectively. We are one of the very few States in Nigeria that have followed the Federal Government in this governance reforms effort. In fact, we were the first State to volunteer for the DFID governance benchmarking exercise, which subjected our system to strict compliance tests on a number of indicators on accountability and transparency.

By playing by the rules of good governance, we seek to gain the confidence of everyone that come into contact with our State. This way, we are not only seeking to re-brand Kwara State, but also Nigeria. With this, outsiders can take a second look at us and by doing so, notice our market and resource potentials and accept us as a viable enterprise.