#OsunDecides2018: Focus on the Economy

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Friday, September 21, 2018 5.00PM / Proshare WebTV 

As the people of Osun State go to the polls tomorrow Saturday 22nd September, 2018 to cast their votes for the gubernatorial elections, we take a look at the economy of the state and its competitiveness ranking at the moment, and what should be a 7 point agenda for the next Governor of the State.


 Background

Osun State was created in 1991 from Oyo State and is situated in the South-West geo-political zone of the nation. It has a population of approximately 4.7m people with 30 local government areas. 

The state is home to the Yoruba cultural heritage centre Ile-Ife with the Imperial Majesty the Ooni of Ife one of the leading traditional rulers in Africa. 

Ile-Ife is also the destination of Nigeria’s foremost tertiary institution the Obafemi Awolowo University.

The capital city is Osogbo and the state is blessed with agro products, a large forest reserve and mineral resources. 


NCCN Competitiveness Ranking 2017

According to the National Competitiveness Council of Nigeria 2017 State report, Osun emerged number 13 in overall ranking out of the 36 states of the federation. 

The report identified areas that the State has made progress which is stated below;

 

NCCN 2017 Competitveness Report-Osun State

 

Sector

Index

Health

Number 1 out of 36 states

Security & Instability

Number 1 out of 36 states

 

Taxation

Number 3 out of 36 states

 

 

 

Source: NCCN

 

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Source: NCCN 

In terms of the economic and business space Osun state had the following rankings;

 

NCCN 2017 Competitveness Report-Osun State

 

Segment

Indicator

Business Sophistication

Number 11 out of 36 states

Permits

Number 35 out of 36 states

State Finances

Number 36 out of 36 states

 

Access to Finance

Number 13 out of 36 states

Government Policy and Contracting

Number 13 out of 36 states

Quality of Roads

Number 7 out of 36 states

 

 

 

 

 

Source: NCCN

 

BudgIT State of the States Report 2018

Recently BudgIT Nigeria released its 2018 state of the states report which highlighted key issues around the fiscal level of the sub-nationals. From the report we highlight the key developments as it concerns Osun state;

 

BudgIT State of the States Report 2018-Osun Indicators

 

 

 

Fiscal Sustainability Index

Number 35 out of 36

External Debt

$96.5m

Domestic Debt

N138.24bn

IGR Total for 2017

N6.49bn

IGR per capita

N1,378 per person

Net FAAC Allocation for 2017

N10.4bn

Average Statutory Monthly Allocation(January-June,2018)

N782.4m

Average Monthly VAT (January-June, 2018)

N924.8m

Average Monthly IGR (January-June, 2018)

N540.5m

 

Source: BudgIT

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Source: BudgIT


Keynotes

Osun State in terms of its fiscal sustainability faces a challenge which the next Governor has to work with a formidabble economic team to address. It does not have the luxury of the 13% oil derivation that is reserved for the Niger-Delta states, so it must look inward and come out with innovative ideas, to move the economy forward. 

The new Governor will have to make tough economic decisions to ensure the state is still able to function effectively and manage its resources. 

For those contesting it should not be a jolly affair, but a time that requires focus, discipline and pragmatism. 

It is clear that the public finance architecture has to be reworked and the reposition itself to attract key investments into the state, to boost industrialization that will in turn increase the internally generated revenue(IGR). 

The new state government must explore the public-private partnership(PPP) model for financing key infrastructure projects, because it needs to mobilize more of private capital investments into its economy.

 In the area of resource utilizaton, Osun state should work with the National Investment Promotion Council, NIPC to explore how it can engage potential investors that seek to tap into its mineral resources like gold, scaling it to a massive industry, driving the solid minerals sector in the country. 

Agriculture constitutes 26% of Nigeria’s GDP, and Osun state must leverage here with large-scale production of cocoa and other agro-products. 

With the South-West regional economic framework, Osun state has the opportunity to expand its economic frontier and should also explore strategic state trade and business agreements, like the Lagos-Kebbi example. 

Understanding that it has a population of over 50% that are under 25, the next administration must plug into the opporunities in the digital economy from blockchain, fintech, software and hardware developments etc that can create jobs for the teeming youthful population.

 

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