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The Ondo Paradigm

  • Diversification: state government moves to seize hold of a huge poultry market

While many states are still in a quandary as to the meaning and import of diversification, Ondo State has bolted off the starting block by showing in concrete terms that it can put a handle on a turbulent economic situation.

Just last week, President Muhammadu Buhari had reiterated Nigeria’s current economic crisis when he noted that as many as 27 of the 36 states are too distressed to pay workers’ salaries. Though over the years, many state governors have shown they lack fiscal discipline, the crash in crude oil prices has further exposed the overall precarious situation of an economy that for more than four decades depended largely on crude oil exports.

With the sharp fall in oil prices late 2014, Nigeria’s economy has been on a downward spin. The glut in the fuel market occasioned the introduction of shale oil and US’ release of her oil reserves have ensured that crude oil prices tumbled to way below $50 per barrel from a high of about $110.

The world has not been the same ever since, especially the Nigerian world. Her economy depended about 90 per cent on oil. Naturally, revenues accruing to federal coffers fell sharply and conversely, allocations to federating states crashed. Almost all the states had to depend on Federal Government’s bailout last year to attend to arrears of workers’ salaries. Yet trouble persists.

Since November 2014 when the first wave of crude oil crash hit the world, there has been a campaign for an urgent diversification of Nigeria’s economy from overly dependence on crude oil. Experts have touted such areas as solid minerals, agriculture and tourism, to name a few; but hardly any state had deigned to rise to the moment.

This is why we are quite elated by Ondo State government’s initiative to seize the bull by the horn and latch onto the huge opportunities in the poultry value chain. It is uncanny and indeed, a signpost of an utterly flawed economy that about 90 per cent of poultry products consumed in Nigeria was until recently, smuggled into the country mainly from China and Europe. Dr. Ayoola Oduntan, president of the Poultry Association of Nigeria (PAN) has said this costs Nigeria about $2.7 billion annually.

Picture8The good news is that the scenario is changing. The ban placed on poultry products import is beginning to be effective under the Buhari administration. Nigeria Customs’ renewed strictures at the borders have boosted local production. This must have driven the establishment of the 1,000-daily capacity chicken processing plant in Akure, Ondo State.

While on a tour of the facility last week, the state governor, Dr. Olusegun Mimiko, had told chicken farmers in the state to maximise the opportunities in the entire poultry value chain as has been created by the facility. And there are quite an ample number of advantages to tap.

Hundreds of graduates are already trained and deployed apart from numerous artisanal jobs to be created. According to report, there is a 20-tonne capacity cold room, 80 KVA power generator and a sizeable water system. The plant will help large poultry farmers process, store and make ready for distribution.

This facility will not only ensure the availability of locally produced and wholesome poultry products in the state, it will galvanise the entire gamut of the poultry value chain: from maize farming to feed production, veterinary drugs and services, eggs production, poultry facilities production as well as a range of distributorship businesses. We are talking about millions of captive consumers.

While we commend the Ondo State government for taking this bold step, we urge it not to rest on its oars. First, it is a time-proven fact that the state (i.e. government) lacks the capacity and temperament to carry out commercial ventures successfully and sustainably.

We therefore advise that the facility be commercialised or concessioned quickly in order to sustain it. We dare say that spending tax-payers’ money to set up a business is the easy part. The government must partner major local chicken farmers, feed millers as well as support the market down to the cold rooms in major markets. It is an entire gamut, it is a multi-billion naira subsector and the trick is to sustain it over a long time.

Via The Nation

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