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Thursday, December 16,
2021 / 09:17 PM / by Prof. Yemi Osinbajo / Header Image Credit: StateHouse
Being the keynote address by His Excellency, Prof. Yemi
Osinbajo, SAN, GCON, the Vice President of the Federal Republic of Nigeria at
the Ekiti Investment and Economic Summit (Fountain Summit 2021) themed
"INVESTMENT ATTRACTIVENESS and ECONOMIC DEVELOPMENT: LESSONS FOR SUB-NATIONALS"
on the 14th of October, 2021
Introduction
Governor Kayode Fayemi,
thank you very much for the kind invitation to join you at this 1st Investment
and Economic Development Summit and the third anniversary celebration of the
government of Ekiti State. Congratulations! Accept my gratitude for the warm
and generous hospitality of Her Excellency, Erelu Bisi Adeleye-Fayemi, and
yourself to me and my team today as always.
I bring you and the great
people of this State - the Fountain of Knowledge - the very warm felicitations
of President Muhammadu Buhari, on this auspicious occasion of the third-year
anniversary of your government. As you know, President Buhari has a special
interest in this State being that your dynamic Governor is actually on loan in
the second coming from the Federal Executive Council chaired by Mr. President.
The theme of the summit
is an important one "Investment Attractiveness and Economic Development:
Lessons for Sub-Nationals."
The economy of the
sub-national is a peculiar animal. The State within the Federation is not a nation,
but it must behave like one, it derives some resources from the federal pool,
and generates some income; the sum will provide infrastructure and services to
the community. The size of the sum and the quantum of opportunity available to
provide livelihoods for the populace will depend on how the State enables local
and external investors, small and large to put their resources into business
and commercial activity business in the State.
The funded portion of the
State's budget is after all a mere fraction of the sum total of economic
activity or income-generating activity, formal or informal, within the State.
So, the attractiveness of a State to commerce is a radical issue. The very
lives and livelihoods of the people within the borders of the State, whether
the people will live prosperous and happy lives, be educated, have access to
affordable medical care, depends on it.
There is no question at
all that Ekiti has established the foundations for a modern and thriving
economy. The fundamentals are there; a modern, strong, consistently improving
legal and Justice sector, with forward-looking laws, which include a
contemporary administration of Civil Justice Law, a first-of-its-kind
Sustainable Development Goals law, a Tourism and Hospitality law, Property
Protection law, a 2020 amendment to the Ekiti State Board of Internal Revenue
Law, which amongst other provisions, enables the service to collect all taxes
due to the State Government and all the Local Government Councils in the State
under any law through a centralized electronic payment platform. This is
important for two reasons; the first is that it decentralizes payment and does
so electronically, but also, it takes directly to the question of the bane of
multiple revenue collectors and multiple taxations.
Also, a business-friendly
environment with Ekiti ranking 18th overall out of the 36 States and the FCT in
the inaugural edition of Nigeria's own homegrown "Subnational Ease of Doing
Business Baseline Survey." The survey was commissioned to serve as a status
report on the current attractiveness of business environments of States for
small and medium-sized enterprises.
Ekiti State was strongest
in the Skills and Labour and Infrastructure & Security indicators where it
had an average score of 5.35 and 5.05, respectively. Also, in the last World
Bank Doing Business sub-national survey on Nigeria released in 2018, Ekiti
excelled in the area of "Dealing with Construction Permit" ranking 4th in the
entire nation.
This is a State that has
vast arable land for agriculture and its value, chains, a modern strong, and
effective media and public communications system, an experienced CEO of the
State, Governor Fayemi, whose academic, civil society background, (and we will
leave out the outlaw days of NADECO), excellent relationships with
international donors and DFIs, his experience as second term Governor, one-time
Minister of Mines and Steel, and as Chair of the Governors' Forum, whose
important experience in extracting benefits for the States from the Federal
Government; all these put the State at a distinct advantage.
So, the evidence is
compelling and significantly, there is a commitment to a private sector-led
economy, and this is important. Business is, if you'll pardon the pun, the
business of the private sector, governments should as much as possible
facilitate, or at best, collaborate.
An excellent example is
the formerly State-Owned, Ikun Dairy Farms at Ikun Ekiti, after 40 years of
inactivity, the State Government divested 76% of its shareholding to a private
dairy company, Promasidor, resulting in a company that is now producing over
80,000 litres of milk per month from a herd of just under 500 cows.
There is also the recent
concessioning of hospitality facilities such as the iconic Ikogosi Warm Springs
affirming the same principle. This is a very important principle, the idea that
it is the private sector that really should lead the economy.
Some years ago, in 1999,
when we assumed office in Lagos State, at the time the previous government had
sold majority shares in Eko Hotel and when we got into office, we were very
angry. We tried our best to get it back, we went to court. About a year into
our court action, the Minister of Finance called me (I served as
Attorney-General) and said to me that the new shareholders were prepared to pay
some dividends. I said no, we shouldn't accept anything from them because they
might go back to court and say that we had conceded the case. But the finance
minister said, "why don't you listen to how much they want to pay first?" When
I heard how much they wanted to pay, I said he had to take it immediately!
The truth is that after
many years of Lagos State owning majority shares in Eko Hotel, we had made no
profit and we had spent at the time, millions up on till the time we took
office in 1999, just trying to make that hotel work. Today, it is a thriving
business and Lagos State is earning significant dividends from it. I'm sure His
Excellency, Governor Babajide Sanwo-Olu can confirm. So, the private sector-led
model is the best and I think this is absolutely the right way to go, as the
Governor as indicated.
There are several
investments in the agro-allied value chain, JMK Foods, an integrated rice mill,
FMS Farms, Promise Point, and Arog Limited, all with starch and ethanol
production plants using cassava feedstock; and Egbeja farm, an export-focused
snail farm.
And there is a growing
tech start-up ecosystem with companies like Kinplus Technologies, a software
and web development company, building applications and enterprise promotion
software, and is also focused on talent development; and JM Tech Centre, a
research and technology institute recently launched in Ikun Ekiti. All of these
are thriving and modern businesses that are functioning here because the
environment has been provided for them to succeed.
Your Excellency, two
Saturdays ago I represented Mr. President at the swearing-in of the new
President of Sao Tome and Principe. As I sat in that well-appointed hall and
took in the solemn grandeur of the oath-taking of the new democratically
elected President, I reflected. Here was a country whose GDP is $472million,
and it is a nation, it has one vote in the United Nations as we have. Ekiti
State has a GDP of $2.8billion, 5 times the size of the GDP of the Nation of
Sao Tome.
But it's not just Sao
Tome, Ekiti's GDP is higher than that of the nation of Gambia. Gambia has a GDP
of $1.902billion, and also Cape Verde with a GDP of $1.704billion, or
Seychelles, the lovely tourist destination Nation, with a GDP of $1.125billion.
Ekiti's GDP is about the same as the GDP of Liberia which is $2.95billion.
The Nigerian sub-national
(and we are talking about Ekiti, not even Lagos) is indeed a peculiar animal,
even a relatively small State like Ekiti, small in terms of population in
particular and even in allocation from federal revenue, has a bigger economy
than many African nations.
So, the hopefully useful
point to be made is there has to be a collective change of mindset. Thinking
differently, there is a need for a sub-national to think like a sovereign
State. You have a bigger GDP and even more revenues than many nations.
I was talking once to a
President of a West African country with a total population of 5 million and I
told him about our home-grown school feeding programme where we feed 9.6million
children every day. He said to me, "bro, come and feed us now, we are only 5
million, you can feed all of us every day if you want."
So, the question the
policymaker should ask is, what if I were a landlocked nation? How will we
survive? There is a different mindset when you are sure of a monthly allocation
of cash at least enough to pay salaries, whether you generate income or not.
This is the challenge. The so-called Dutch disease, one becomes complacent. But
what if you had to take responsibility for all those who reside within your
borders, pay all salaries, from Internally Generated Revenues (IGR)?
Sometimes a shock is what
you need. That's what happened to us in Lagos. I am sure that we all know the
story, Governor Fayemi was very much a part of those who thought through some
of the issues then. Lagos was happy with its allocations, we started off with
600 million a month in 1999/2000, until then-President Obasanjo withheld our
local government funds, and did so until he left office, even after the Supreme
Court ordered the release of the funds. So we were compelled to think like a
sovereign State.
We moved to re-engineer
our tax office (much like what the State Government is doing here in Ekiti),
and our lands registry, our own oil. From an IGR of N600 million in 1999/2000,
Lagos does almost N45 billion a month today and targets 60 billion by next
year, I'm told.
I think the way surest
way forward is to deepen investments in niche areas or the areas of Ekiti's
comparative advantage. We have already noted the tremendous potential in
agriculture and dairy, but clearly, the way of the future, especially for the
huge population of young men and women seeking good-paying jobs, is technology.
And I think you are in
the flow of progress with the planned establishment of the Technology Special
Economic Zones. Clearly, the future of fast-growing economies is in the
knowledge economy.
Every day we are
beginning to see the transition, as Shimon Peres, former Prime Minister of
Israel said, "from the age of territory, we are entering the age of science;
land size, natural resources are forced to give way to science and the
knowledge economy. Science has no borders, land has borders, and visa and other
immigration restrictions. Technology has erased borders, even physical
offices."
Young men and women in
Ekiti can work from here and earn world-class wages. This is why the planned
investment in the Ekiti Knowledge Zone is strategic. And it's exciting to see
that the plan is to use business process outsourcing as an anchor. It is
designed to be a service-led SEZ, a digital technology hub, leveraging its
proximity to 5 tertiary institutions. This is if one may borrow the term, the
future of jobs and we must commend the farsightedness of the State Governor and
his team for determining that technology as the knowledge economy is the way to
go.
However, for a digital
SEZ to be successful, it must be attractive to digital companies; that means
there must be high-quality, well-trained local talent. I'm glad to hear already
that on account of the reduction in charges for laying of cables for broadband
connectivity, the State is already attracting investments in the laying of
cables. That I think is fantastic because it is an important component of the
knowledge economy in using that for commercial purposes.
The CEO of Apple Inc, Tim
Cook was asked why his company was investing in China. He said and I quote:
"The number one reason why we like to be in China is the people. China has
extraordinary skills. And the part that's most unknown is there are almost two
million application developers in China that write apps for the iOS App Store."
Gone are the days when
you could argue that you should be an attractive destination for investment
because you have cheap labour. Today well-trained technology and innovation
talent is the game-changer.
So, there are three
keys to the knowledge economy which in my opinion is the future. The three
keys are education, education, and education. It would, therefore, be very
important for Ekiti State to leverage its famed love and passion for education
by focusing on Science, Technology, Engineering and Mathematics. I think Ekiti
has not lost that edge and this is the moment, I believe, to refocus on STEM
education.
STEM education is vital
for being able to participate in the 4th Industrial Revolution which is at once
a digital age and knowledge age. This must be the fountain of the knowledge
economy.
Of course, education is
not only at the high end but also requires a strategy for imparting of
technical and vocational skills to artisans. The importance of having a pool of
healthy, well-trained workers such as electricians, fitters, mechanics,
laboratory technicians, welders, machine toolists, and even web designers, is
vital for an ecosystem that will be attractive for technology and innovation
investments.
Happily, Ekiti State has
the highest score amongst all the States in the Technical and Professional
Skills category of the Ease of Doing Business Rankings, so there is certainly a
strong foundation to build upon in this regard.
But I think there is more
to leverage, for example, there is tremendous potential for the development of
a whole medical education and healthcare industry around the huge private
investment in the iconic Afe Babalola University and the ABUAD multi-system
Teaching Hospital. I know that the State was helpful in providing access roads
and some other facilities to the campus. Today, ABUAD is getting mentioned
internationally for the complex surgeries being done there a variety of cardiac
surgeries, neurosurgery breakthroughs in skull-based tumors surgeries, spine
surgeries, even a special type of neuron surgery called Awake Neurosurgery,
where the patient is actually awake while operating on his/her brain.
Many countries of the
world do not have the number of medical talents assembled in that hospital
alone. There are huge opportunities here and I believe that we must tap into
those opportunities also.
Let me close by
commending Governor Kayode Fayemi and the excellent team that you lead. Your
Attorney-General, my dear friend, was with us leading a team of Southwest
Attorneys-General after showing us all he had done in Ekiti State, I had to
remind him that he actually comes from Ogun State, but he would argue about
that!
Governor Fayemi, I must
commend you for leading a focused and value-sensitive, modern, and informed
approach to governance. So much has been done, but always much remains to be
done. On your third anniversary in office, I pray that you will finish well and
finish strong and this State and its great people continually enjoy peace, and
prosperity.
God bless you all, thank
you.
About
the Author
Professor Yemi
Osinbajo is the Vice President of
Nigeria.
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