Bayelsa’s strategy for growth, by commissioner
Why did you embark on this investment forum since last year?
Specifically, for the forum which was held for the first time in 2014, the reason is that we felt it is important, coming from the backdrop of what used to be Bayelsa State before the amnesty, when it was known for things like militancy, pipeline vandalism, kidnapping and other violent crimes. So, coming from that background, post amnesty, the government of His Excellency, Seriake Dickson, saw very clearly that there was need to communicate to the world that Bayelsa is open for business and welcomes investors and that the state is serious about growing the local economy. And one of the ways that was clear to us to communicate that effectively was to organise a forum where investors can meet with government officials and local private sector operators in the state and have discussions focused on how to establish businesses in various areas of interest.
That was what gave birth to Bayesla State Investors Forum and we at once, set out a vision for what we had planned to achieve in the state. On appointment as a commissioner, I could remember on the day of our swearing in, the governor made a point during his speech that my portfolio was going to be critical and pivotal to the success of his administration in terms of creating jobs, as well as creating private sector content that would allow individual enterprises to grow in the state. So, with that, we set a very clear vision and it is targeted at possibly becoming the model of African economic success story. Our aim has been to grow enterprise, create jobs and ensure prosperity for all.
Our strategy has been such that for us to achieve these dreams, we need to move away from depending on the receipt of Federation Account and Allocation Committee and that which comes to every state on a monthly basis, to having an economy that has a proper value chain with opportunities abounding. That can only be achieved when you focus on industrialisation. This is because it is when you industrialise that you create secondary and tertiary levels where people can be hooked up on the value chain.
Knowing that states are heavily dependent on allocations and in dire need of fund, is this initiative part of your diversification strategy? What is your internal revenue generation like? How have you fared in terms of workers’ salary?
First, the state is not owing any salary and by God’s grace, it will not owe. The state is committed to the welfare of civil servants. We know that if you engage people that are not incentivised, it is going to be more difficult. But from the policy point of view, we are not resting on our oars and as well, not at any time going to put all our eggs in one basket. Of course, the investment forum is targeted at bringing more investors, who will establish various businesses, thereby creating employment, which is very important. When people are employed, surely they will pay tax, which is a source of revenue to the state. But that would be when the investors open up businesses as we are inviting them now. Yes, our Internally Generated Revenue (IGR) is lower than it should be at N1.2 billion presently, but we also know that the only way to grow it is to grow the state’s economy and that is what we have been doing under the current administration. In fact, the present crude oil price burst is the more reason to diversify.
How do you plan further to achieve these?
Having determined our vision, we also considered what should be our focus areas, that is the drivers. Four areas were mapped out. One area that is very obvious is oil and gas industrial activities. This is because we already have a well developed oil exploration segment of the market. We thought much about industries that can spin off from the oil and gas- like those in petrochemicals, fertiliser and refining. Of course, we have a roadmap in this area now.
The second focus area is agriculture. Bayelsa State, even prior to oil exploration, was a very big centre for oil palm trees. As a matter of fact, some of the earliest palm oil estates were established in the state way back in the 1960s. So, we thought much about deepening the oil palm sector of agriculture as a focus area. Added to it, we considered rice farming, because our terrain is ideal for rice farming. The third area we focused on is power generation. And the reason for this is quite simple. Even though Bayelsa is known as oil and gas producing state, we are actually more of gas than oil, that is, we have more gas than oil. In many ways, oil is actually incidental to the abundance of gas that Bayelsa State has. And you know, gas is now fixed up for power generation. So, our aim is to attract power generation companies and incentivise them to cite their operations in the state. In that regard, we have already set aside an area, which is called a power hub as continuity to gas evacuation plan.
The fourth area for us is light manufacturing. From our studies, we have realised that for many businesses in the area, regular power supply is key. If we have regular power supply, we will be able to attract that kind of businesses because power is perhaps the single costliest factor for any business anywhere in Nigeria. We know we could leverage on our potential in this regard. Tied to light manufacturing is the establishment of the eco-industrial park. Some people may wonder why the name ‘eco’. This simply refers to what is today’s global best practice in building industrial parks to make the environment greener, to have much better standard of waste management, such that waste will not impact negatively on the environment. These are the four focus areas that we intend to use to build the foundation of Bayelsa State’s economy.
We also know we cannot achieve these without certain key enablers. One is infrastructure and it may interest you to know that within the vicinity of this industrial park that is being built, there is an airport which is due to be completed this year. It is just 15 minutes drive from this eco-industrial park. There is already an excellent road network in the area. All these will make it easier to get in and out of the state. 50 hectares of land was acquired for the industrial park, which is to be divided into four zones- commercial, industrial, office and residential. So, there is good fundamental infrastructure already in place.
Skill is another big area. This is because there is going to be a lot of work to do. There is a huge skills gap, but we are focusing intensively on addressing these skills gap to ensure that we have people who have the right entrepreneurial, technical and vocational skills to take advantage of the opportunities that will abound. This surely will create the opportunity of transfer of knowledge.
What are the things on ground already?
To give you an example of what we are doing, recently we signed a Public Private Partnership with a company that wants to build a building materials market. Part of that contract provides that they set up a vocational school within the building industries’ market to train a lot of our indigenes in different vocational skills so that as the project progresses, people are able to take part in those projects as skilled labour.
The third area, which is also the reason for the yearly investment forum, is creating the right investment climate. We organised the maiden edition last year and the second edition this July. This is to communicate to the wider world what we are doing and what kind of opportunities and investment climate we have created already.
The other area is access to finance. In this regard, our biggest breakthrough came from what the Federal Government is doing through the Central Bank of Nigeria (CBN). You know there is a CBN facility, which is providing N2 billion to every state to fund Micro, Small and Medium Enterprises (MSMES). We are actively participating in this scheme. We have drawn down close to half of the N2 billion that is due to the state. We have drawn about N900 million and that has gone to different MSMEs in the state. In a nutshell, there are a number of things we have done in creating enabling environment.
what are your achievements with this initiative?
The first and second edition of the investment forum were successful. We had up to 800 delegates in attendance last year. And I think one of the singular achievements of that forum was to communicate the new Bayelsa- that it is no longer the Bayelsa of old. That it is now a secure place, a place that investors are welcome and where they can do business. It is a place where you can be taken seriously and every effort will be made to facilitate what you want to do.
The second achievement was the fact that people actually responded and came out en masse. Of course, on a practical note, there were series of agreements and Memorandum of Understanding signed in different areas- pharmaceuticals, power generation, Information Communication Technology, among others. There are many benefits accrued from that forum. However, I must point out that it was never our expectation that in the first year of organising that forum, we would start having businesses flowing immediately. Our expectation was that in the first year, we will be able to have a sense that the private sector is taking us seriously. But our expectations have so far been surpassed, because not only did we get a sense that the private sector took us seriously, we have seen results in investments.
For example, about two months ago, we signed a N19.8 billion public-private partnership agreement with Kesio Associates Nigeria Limited, one of the companies that attended that last forum, to build a 5, 000-unit building materials market to serve the Niger Delta region. One of the things that market will do for us is that it will create a cluster in a specific location for all building and construction related activities.
What further things did you show participants at the last forum to woo them?
We showed the investors, with verifiable facts, opportunities that are left untapped in gas business, because we have it in abundance and given the power needs in the country, it would be worth considering. There are opportunities in power transmission, value chain businesses in oil and gas sector, as well as agricultural activities. We also explored opportunities in the state for those who want to generate power, those who want to make gas available and those who would want to transmit power.
The nature of the conversation at the forum was not theoretical. Those who were experts in different areas, those who were actively involved in different areas, spoke on how to get viable projects in the state running. The most explosive idea is the readiness of Bayelsa and Nigeria to take advantage of opportunities presented in business to do business. It is exciting. It makes our job easier. The Bayelsa State Investment Initiative will help the people tidy up the documentations and ensure that their expectations are met.
We are creating the necessary tax incentives for people to come. So, there is no doubt that we are very serious and a lot of incentives will come. We want to ensure that everything that investors need is provided and that nothing holds them back from investing in the state. At the Federal Government level, we are also collaborating to hasten processes.
We have opened our doors to all agencies to build sustainable wealth, skills and promote entrepreneurship. We are happy that Brass has been granted a free trade zone status, which will impact on over multi-million dollar transactions in Brass Island- Brass Fertiliser and Brass LNG. The presentation by the Oil and Gas Free Trade Zone Authority revealed investment opportunities for project developers and financiers at the new Brass Oil and Gas City.