Economy

accelerated Development in Agriculture

Strong economies make strong nations. For any nation’s economy to thrive, the component states/regions need to focus on and strengthen their Internally Generated Revenue. Yet, economies do not grow in a vacuum. There must be a targeted focus on sectors where the state enjoys a competitive advantage. It is against this background that the Oyo State Government is leveraging on agribusiness to revamp the economy of the state. Our strategy is to work with private organisations and development agencies (PPDP) to get funding where possible.

Review of Agriculture Campaign Promises

(one year in office)

1. Opening and maintenance of rural feeder and farm settlement roads

(short term, less than nine months).

Governor Seyi Makinde has commenced the construction of Awontan-Akufo road linked to the Akufo Farm Estate and Moniya-Iseyin Road linked to Ipapo-Iseyin farm settlement. The Oyo State government had, two months into Governor Makinde’s tenure fulfilled its obligation with the World Bank by paying the 12% counterpart funding of N350 million which the previous admin had failed to pay since 2016. It has also inaugurated the implementing committee for the state to benefit from the Rural Access and Agricultural Marketing Project (RAAMP). Because of this, Oyo State has been accepted to benefit from the construction of over 1,000 km of rural roads. The roads selected in 2017 are currently being re-validated to reflect the current gaps in the rural road and a contractual agreement with the World Bank is being finalised. Oyo State is particularly supported by the French Development Bank and World Bank on RAAMP to the tune of over $30million dollars in 7 years. Implementation will commence in second half of this year and this will open up most of the dilapidated rural roads that have impacted negatively on transportation and marketing of farm products in Oyo State.

2. Establishment of cottage industries in commodities clustered areas (P.P.P.).

Eight indigenous and international agribusiness companies have signed up to commence work in both Eruwa and Akufo Farm Estates. The construction of the two farm estates will commence in the third quarter of this year. (July 2020)

3. Cassava products processing plants (long term, 4 years).

Of the eight companies that have signed up to commence work in Akufo and Eruwa Farm Estates, two are focused on cassava processing and packaging of diverse products.

4. Fruit processing plants [short term if linked with existing processors (1 year) but medium to long term if new off-takers will be brought in].

Not yet commenced.

5. Meat processing industries (long term, close to 4 years).

Two of the eight companies that have signed up for Akufo and Eruwa Farm Estates, are focused on ranching, meat processing, and milk processing. They are going through the business engagement process with the Oyo State Agribusiness Development Agency. They should finalise contracts by the middle of June. The companies will run operations from the moribund facility at Fashola Farms, Aawe, Oyo State which they will be revamping.

6. Modern central fish market (short term, 1 year).

Not yet commenced.

7. Agricultural training centre for youths at farm mechanisation (short term, 1 year through the collaboration with the educational and agricultural research institutions in the state).

The Youth Employment in Agribusiness and Sustainable Agriculture project is funded by the International Fund for Agricultural Development (IFAD) to the tune $2 million through Afe Babalola University, Ado-Ekiti (ABUAD) and technically led by the International Institute of Tropical Agriculture (IITA) and Africa Rice. The objective is to train youths for enhanced technical, business, entrepreneurial, financial and life skills for increased incomes and creation of employment opportunities. The training centre in Aawe will be used and 135 hectares have been earmarked for cultivation by these youths. They will also get starter packs and support for scaling through loans from the Agriculture Credit Corporation of Oyo State to implement the second phase of the project starting in June, 2020. Selection of the youths has commenced in the state. They will be used as a pilot for the scaling of this project across most of the agrarian local areas in Oyo State. Governor Seyi Makinde has approved the revamping of the Aawe facility which was built in the 1980s, and could house close to 300 young people, but was left moribund, for this purpose.

8. Expansion of School Agricultural Programmes (short term, 6-12 months).

Oyo State Government, in partnership with the IITA’s Start Them Early Program (STEP), and the French Government, has commenced redesign and revamping of Agribusiness Education Program in the state. Reconstruction of Fashola Grammar School, to serve as a pilot location for the programme, with all facilities and modern technology to drive young people in agriculture at an early stage, is ongoing. The administration also has, through the French Government, commenced curriculum review and needs assessment of the Oyo State College of Agricultural Technology in Igbo Ora. OYSACTECH will be turned to the Centre of Excellence for Agribusiness’ Technical Training in Oyo State. An Agribusiness Apprenticeship Program development is ongoing.

9. Small scale irrigation schemes for farms on existing dams in the four agricultural zones (short term, one year).

Not yet commenced.

10. Possible collaboration with the Federal Government on the use of the silos in the state (short term, 1 year).

The Oyo State Government had a discussion with the Federal Government, but their Silo in Oyo State is already in the hands of a private concessionaire. Governor Seyi Makinde then went into dialogue with Rahvet International Limited, the contractors who had taken the former administration to court for revoking their contract (despite the disbursement of over 98% of funds for a 10,000 metric tonne silo) and restored the contract. The silo project is ongoing.

11. Mobilize small farmers for action by supporting them with these agricultural inputs while training them on the timely use of such inputs at the required quantities.

The Oyo State Government has created a database of 10,000 smallholder farmers under the Oyo State Agricultural Micro-Enterprise Scheme. They are being supported, this planting season, as part of the COVID-19 Food Security in Emergency scheme.

12. Small experimental plots on farmers’ farmlands will be utilised per village to let the farmers see the difference between their own practice and the improved practice first-hand. Farmers who are resident in villages will be identified and their farms used as demonstrations farms for others to emulate.

Approval of the opening up of 6,000 hectares of land in Oyo State, as a pilot under the Central Bank of Nigeria (CBN) supported project. The pilot will commence this year in Oke Ogun.

13. Link farmers with the markets through a whole wide range of approaches such as:

a. Ensuring that the farmers actually have access to subsidized inputs (fertilizers, improved seeds, tractor hiring etc). This means that the list of registered farmers in the state must be validated and updated to weed out fake farmers’ names and register authentic ones, with the GPS of their farms adequately recorded to prevent multiple use of a particular farm land by many fictitious farmers. In addition, the State Government can complement the efforts of the Federal Government in the supply of subsidized inputs. (Short term, 1 year and continuous).

The Oyo State Ministry of Agriculture currently has a database of over 10,000 farmers collected under the current administration. The bio-metric data of all the farmers and GPS of their farms will be captured for authentications of the farmers. The government will work with them under the Anchor Borrowers’ Scheme of some commodities in the state.

b. Contract farming to ensure a linkage of farmers with already established processing plants in the state and neighbouring states. This will be done to prevent underground buying and selling. (Short to medium term 1-3 years).

Not yet commenced.

c. Linking some farmers with the Staple Crop Processing Zones closest to them in order to take advantage of the existing markets for the farmers’ products in those zones. (Continuous from day one in office). The Oyo State Government is collaborating with FarmCrowdy and funded by FarmCrowdy – $5 million. The project’s overall objective is to improve the livelihood of the smallholder farmer through (1) increased access to community storage facilities (2) increased access to profitable markets, and (2) increased premiums as a result of selling directly to major off-takers or processors. This will invariably lead to increase in income for the smallholder farmers.

Farmcrowdy has started with bio-metric data of about 20,000 farmers in Oyo State and the development of 30 Commodity Aggregation Centres in preparation for the planting season this year. These centres will have a maximum of 60MT storage capacity and will serve as aggregation points for smallholder farmers in the host communities. The goal is to ensure that farmers do not have to transport their produce for more than 10km to the nearest Commodity Aggregation Centre. Also, as soon as the produce is received at the centre, the farmer can immediately receive payments either through electronic transfers, mobile money payment, or issuance of a collection centre receipt for onward redemption in any participating commercial bank.

d. Linking up the state with the Fadama AF so that some farmer groups can benefit from the grant already provided by the Federal Government to states to produce food. This calls for the full monitoring of activities of the state Fadama Coordinating Office to make the best use of such funds which will be available for the farmers. Currently, the Oyo State Fadama has facilitators which we can depend upon by retraining them as demonstrators for the farmers in the small demonstration plots, so as to convince the farmers of the need to adopt new and improved cultural operations for their farming. This will facilitate the imbibing of best management practices. (Immediate short term on assumption of office, 3 months).

The Fadama project was already winding down when Governor Seyi Makinde came into office. The plan seek collaboration with the Federal Government on any other proposed projects that will replace Fadama.

e. Provision of adequate agricultural extension services by making the living conditions in the agricultural production sites conducive through the provision of rural infrastructure such as electricity, health facilities, potable water, and good roads, among others. (For road grading and water supply, short term; 1 year. For electricity, health facilities, medium term).

Re-organization in the Agriculture sector in Oyo State that birthed the Oyo State Agribusiness Development Agency has given way for the development of the Directorate of Extension services in the Ministry of Agriculture with regional offices. More staff in the former OYSADEP will strengthen the deficit in the Directorate. The new staff will be trained in modern advisory services. Also, as part of the state’s partnership with IITA as technical partner, E-extension services will also be deployed to back the current extension services.

f. Prepare a backup framework for acting as buyers of last resort in case of market failure. (Medium term, 2 years).

Not yet commenced.

g. Adequate and sustainable irrigation infrastructure strategy. (4 years).

Not yet commenced.

h. Also, in the medium-term framework, young agropreneurs will be encouraged to take up farming by revitalizing the farm settlements in the state to accommodate these youths. At such farm settlements, farmers will have access to basic amenities especially primary schools for the education of their children, good housing, roads, stable electricity and linking the farmers to subsidised input markets and off takers. (Medium term, 3 years).

As part of the Agribusiness Education project, STEP, a $200,000 IITA project has started a pilot at Fashola, A school has been revamped at Fashola, Ibadan with modern agricultural equipment. This will eventually be replicated in all LGAs in Oyo State. The overall objective is to promote agricultural education in primary and secondary schools to prepare young people from an early age to love farming and to consider their future in agricultural entrepreneurship to fight poverty, unemployment and food insecurity in the long term.

In addition, as stated above, the government has also in collaboration with the French Government, commenced curriculum review and needs assessment of the Oyo State College of Agricultural Technology in Igbo Ora. OYSACTECH will be turned to the Centre of Excellence for Agribusiness’ Technical training in Oyo State. The project is aimed at supporting the organisational capacity development of the agricultural institute in Oyo State for entrepreneurship and vocational skills in agriculture and possible apprenticeship among agricultural companies

i. The government will make adequate credit accessible to farmers and agro-entrepreneurs. They will be assisted with a take-off loan which must be repaid at a specified but convenient rate and time period for the youths. The credit for the generality of the farmers will be designed in a manner that repayment is not cumbersome. (Short term, 1 year).

Not yet commenced

OTHER ACHIEVEMENTS

1. In February 2020 the African Development Bank (AfDB) selected Oyo State as one of the two Strategic Agro-processing Industrial Zones and the Hub for Industrial Cassava, Poultry, Fisheries, Crop and Livestock production. The discussion is ongoing and will be finalised for implementation within the year.

2. In April 2020, Governor Seyi Makinde signed the Oyo State Agribusiness Development Agency bill into law. The agency, based in Saki, is mandated to develop a strategy to coordinate and implement agribusiness investments and projects in the state through public, private and development partnerships.

3. Oyo State was selected as part of the pilot states in Nigeria for the West Africa Competitiveness Program under the 11th Europe Development Fund (EDF) on two value chains of Tomatoes and Chili. The overall objective of this programme is to “strengthen the competitiveness of West Africa and enhance the countries’ integration into the regional and international trading system. Each participating state gets 11 million Euros.”

Review of Finance Promises

(ONE YEAR IN OFFICE)

1. No increase in tax or rates

Standing by the campaign promises on Internal Generated Revenue (IGR), there has not been any increase whatsoever on the existing tax rates inherited by the current administration led by Governor Seyi Makinde.

2. Broadening the Existing Tax Base

The Governor Seyi Makinde has taken steps led administration to bring more people into the tax nets, especially artisans in conjunction with their various cluster groups and associations. In addition, some of the outdated and abysmally low rates are being looked into with a view to reviewing them. Legislations are also being considered to amend some of the obsolete rates.

3. Providing business support and information, particularly to SMEs

The current administration has been supporting SMEs in the State through the provision of seamless access to low-interest capital, training and workshops. The concept of ‘One Stop Shop’ put in place by this administration is to avoid bottlenecks in the ease of doing business and eradicate double taxation.

4. Better collection of property taxes.

The Electronic C of O platform currently operational across the State is eradicating the bottlenecks in the processing of title documents on property leading to increased patronage by private, commercial and industrial property ventures.

5. Reorganisation of Board of Internal revenue

The current administration has brought significant changes to the structure and operations of the Oyo State Internal Revenue Service through the various reorganisation efforts implemented to reflect professionalism, accountability and efficiency .

6. Introduce an online payment system to reduce the difficult nature of paper services. Payment platforms can be designed for each agency where the forms are filled and payment made using electronic means. The payee receives email/text messages confirming the payment. In addition, the date for the collection of titles or documents is then communicated by email.

Ongoing

Online Payment Platforms are being developed, and very soon, IGR payment applications will become operational in conjunction with a State-appointed revenue consultant to facilitate ease of payment for the various services to beneficiaries through mediums like phones and from the comfort of homes and offices.

7. There is a need to enact a law that requires all contracts to pass through the Board of Internal Revenue Service so that all individuals, households and agencies comply with the withholding tax requirement in the State.

Ongoing

Discussions have been held with the stakeholders in the relevant relevant Ministries Departments and Agencies (MDAs) about the proposed law to be introduced. The impact of the change of the law and the timelines to roll out implementation are equally being discussed with a view to having general concurrence.

8. Enhance the automation of collection through Billing Application software. The Payment Alert will not only alert the system, but it also becomes difficult to tamper with it. Furthermore, an enhanced automation drive system will be designed for the BIRS offices. The BIRS offices will be adequately computerised and an automated and fully integrated tax administration system would be established.

  • Procurement of IT infrastructure for staff of the OYSIRS.
  • Training sessions have been carried out for the staff who would be directly engaged in the billing process.

9. An audit of major companies in Oyo State will be done to ensure that they pay tax. Working in collaboration with the State Board of Internal Revenue, seasoned revenue enhancement professionals armed with documented intelligence information can negotiate and recover tax arrears to the coffers of the State.

A Lead Consultant has since been engaged to audit major companies in Oyo State and the audit exercise is ongoing. However, based on feedback and due to the backlog of audit work to be carried out, sub-consultants have been appointed to support the activities of the lead consultant with a mandate to ensure that the entire audit work is completed before the end of Q4 2020.

10. The Oyo State Board of Internal Revenue Service will carry out a rigorous sensitisation of the public on the need to pay their taxes.

Sensitisation of the taxpaying public is done through regular interviews and press release by the Service, and radio jingles by Consultants. For example, the Tax Stakeholders Poverty to Prosperity Summit held in February 2020 with the Governor in attendance and where he appealed for the cooperation of the public in meeting their obligation to Oyo State Government. Similar summits of the Poverty to Prosperity Summits are planned in the three senatorial zones in the 2nd half of 2020.

11. Implement the approved list of taxes and levies which each tier of government can collect as an effort made towards addressing the menace to increase taxpayer compliance.

Engagement sessions with the Commissioner for Finance, Commissioner for Local Government, Chairman of the Board and all other stakeholders was held in Q1 2020. The intent was to clearly establish the taxes due to the State and that of the Local Government and how both parties can work together for the benefit of the State. It was agreed that regular engagement meetings to harness a mutually beneficial working relationship be scheduled at the first instance monthly with a view to discussing areas of improvement and compliance. The outcome of these meeting have been beneficial and has increase tax compliance within the State and the Local Government Areas.

12. Proper funding and training of tax officials.

In-house training by subject matter experts has been conducted in Q1 2020. External facilitators were invited to share their knowledge and train the staff on effective communication as relating to tax matters, audit process and accountability etc. Lessons learned from the training sessions indicated the need to have these sessions every quarter. The next training is scheduled to hold at the beginning of Q3 2020 (July 2020).

13. Set up a review committee to review government rates and levies

Ongoing

A committee comprising of the Commissioner for Finance, Chairman of the Oyo State Internal Revenue Board, Accountant General of the State and the Permanent Secretary of the Ministry of Finance was constituted with the view to review the applicable Government rates and levies. The report of the committee will detail the tax administration structure obtaining in the State and the processes that have been introduced to ensure the successful implementation of taxes.

14. Effective collection of Public Utility Service Charge

The new IGR framework introduced in November 2019, with lead consultants for both the formal and Informal Sectors and the use of technology, has made it more viable for the appointed consultants be able to enumerate and collect the right public utility service charge. The gradual increase in the IGR figures of early 2020 suggests that the collection methodology is working. IGR figures for the State increased to 2.43bn in December 2019, 2.51bn in January 2020 and 2.7bn in February 2020.

As part of the framework, all the consultants’ contracts were renegotiated and commissions were reduced from over 25% to a maximum of 10% of the revenue generated in the period. The baseline on which consultants earn a commission was also increased from N400m to N1B. This ensures more funds available to the state.

OTHER ACHIEVEMENTS

1. Consistency in payments of monthly salaries to civil servants and political office holders as well as other benefits:

  • Salaries are paid on or before the 25th of every month. Minimum wage accomplishment for civil servants in the state and payment of 13th-month salary to civil and public servants in the state;
  • Increase in payment of gratuities of retired civil/public servants from the monthly sum of One Hundred and Fifty Million Naira (N150,000,000.00) only to the sum of Two Hundred and Thirty Million Naira (N230,000,000.00) only;
  • Increase in the monthly release of car loan grant to civil /public servants from the sum of Ten Million Naira (N10,000,000) only to the sum of Twenty Million Naira (N20,000,000) and Three Million Naira (N3,000,0000) to the sum of Fifteen Million (N15,000,000) for Post Primary Teaching Service Commission;

2. Pursue all domestic indebtedness to Oyo State

Managed and proactively engaged the Federal Government agencies including Joint Tax Board (JTB), Federal Inland Revenue Service (FIRS), Accountant General of the Federation (AGF) & Central Bank of Nigeria (CBN) on the Federal PAYE reimbursements to the state to the tune of N19.7bn with the first tranche of funds (4.9bn) received in April 2020. This reimbursement was the second (2nd) highest among all states of the Federation.

Recovery of excess bank changes to the tune of N123m in two transactions without even embarking on a critical review. As a result, consultants have been appointed to critically review and audit all state accounts, and huge excess charges have been discovered. Presently in the process of engaging with the relevant banks to ensure that the refunds are reimbursed to the State coffers.

3. Position the state to be able to attract foreign direct investments and also access all available loans/grants.

Coordinated the World Bank STFAS audit for 2018 performance and through a proactive approach, the state received $4.5m for the SFTAS Performance Grant for 2018 assessment. Measures are in place to ensure improvement in the 2019 SFTAS amount received at the next audit with a minimum target of $6m.

4. Prudent management of the state’s resources

  • Aggressively negotiated terms & conditions for specific borrowings for priority projects to help boost the state’s economy: N10bn – N4bn from FBN, N3bn from UBA, N3bn from Unity Bank, N20bn from First Bank; N2.5bn intervention from CBN for the health sector from Access Bank.
  • Innovative and creativeness in the funding arrangement and management of resources to help fund key projects in the state including ‘Light-up Oyo,’ interventions in the health sector and provision of critical infrastructure, the Moniya-Iseyin road, construction of bus terminals, to mention a few.
  • Presently in the process of restructuring the state’s debt portfolio to more flexible payment terms and increasing the tenure to free up resources for projects.