How to promote economic growth and improve the lives of the citizenry have been topics for economic development discourse and research for a long time. The role of state governments in formulating policies to establish the conducive environment for economic development should be a matter of real concern for political leaders. It is also essential that economic transformation is a process of continuous exercise of service delivery, economic improvement, industrial upgrading and institutional arrangement that constitute the context for business development and wealth creation. Also, and most importantly, the political will to establish the strong and sustainable partnership with the private sector to develop state economic capacity cannot be over-emphasized.
The Ondo State Government has done well in resolving the Okitipupa Oil Palm’s long years of legal battle amicably, as it is a big step forward towards revamping the existing oil mill which is in comatose and to boost the economic activities in the locality that compromises five local governments and beyond.
The oil mill offers one big opportunity, and a quick catch to feed part of Governor Rotimi Akeredolu’s economic transformation process.
The Nigeria-Malaysia Business Council is engaged in several stages of discussion on the type of stimulus and support for economic and business development both at the federal and state levels.
The NMBC and the Malaysia External Trade Development Corporation are discussing economic development issues that may affect states’ economic and technical cooperation between Nigeria and Malaysia with focus on sector and project specifics to accelerate economic capacity development, contribute to and support the Federal Government’s Economic Recovery and Growth Plan.
It is obvious that the Nigerian economy is adjusting to the significant decline in oil revenues and foreign reserves while at the same time seeking solutions to address the increase in unemployment and underemployment scourges facing the country.
In response to this adjustment, the Ondo State Government under Akeredolu adopted five cardinal points to accelerate the state’s economic transformation within the four years of his tenure. And to achieve this, number one of the five cardinal points, job creation through agriculture and industrialization, is placed at the center of his economic transformation policy.
Okitipupa oil palm represents a major link between agriculture and industry, to drive job creation and stimulate activities for agribusiness development for the localities and to generate revenue for Ondo State in particular. However, it is important to first identify the major challenges facing Ondo State as well as many other states in the federation which can be classified into three major areas. One of the challenges is the fact that Nigeria’s economy lacks sound economic structures which have serious adverse effects on the local and state economic development processes. Two, states in Nigeria lack economic capacity to create wealth internally. They are more than ever dependent on federal allocations to meet monthly obligations and other developmental issues. Currently, some states are faced with different challenges including difficulties to pay workers’ salaries. Besides, they need assistance in terms of economic development planning for sustainable economic activities to generate revenue within their respective states rather than wait for monthly allocations from the Federal Government.
So, the focus should be on how to build the state’s economic capacity, to move from dependence on revenue allocations to a state-sustained economy.
It has been accepted that modern economic growth is founded on products and wealth creation rather than on the availability of raw materials with no value addition. Trade and investments have become an artful act of economic success, and when we talk about trade deficit in Nigeria, in actual fact, we are making reference to productivity from the states which amounts to a big gap and trade deficit.
Thus, it is a matter of urgency for Ondo State to develop economic capacity by reactivating business activities in Okitipupa. Developing state economic capacity is
the process through which smallholder farmers, organizations, and local governments obtain the capacity to set economic objectives i.e. product development, revenue
generation, etc. Through Okitipupa, Ondo State can develop capacity in production and competitiveness, and it will attract tangible investment in agribusiness through private sector partnership.
The challenge is how to dismantle obstacles that conditioned the development of oil palm plantations with negative reports to pave the way for best practices in the oil palm industry.
Now is the time to find the political solution and to invest in Okitipupa Oil Palm, in order to create durable and sustainable partnerships with new investors, to acquire new techniques in a modern agriculture-led economy. For Ondo State, it is a better approach to achieve accelerated results in backward integration in the agriculture industry and forward linkages in production, processing, storage, distribution, and marketing, to transform the state’s economy.
Dr. Michael Aderohunmu is the President, Nigeria-Malaysia Business Council