Ondo MoUs: The what, who and why
By Kayode Crown
Since the advent of the Oluwarotimi Akeredolu administration in Ondo State, it has signed a flurry of Memoranda of Understanding.
These are like seeds of development sown. Though initially, all people see is a paper signed by the different parties to the agreement, and possibly a photo op, with the smiling faces, but it is a concrete step forward which commits the partners to certain aspects of the agreement.
Usually the Secretary to the State Government signs on behalf of the Ondo State Government, with all the full force of his office behind him.This is not without significance as it assures the investors that what they have undertaken will not be subject to the vagaries of those, who will, at different times, occupy the Alagbaka Government House.
That certainty, stability and predictability is music to the ears of the would be investors, giving them the assurance that his or her huge investment has found a long term home in the state and nothing untoward will happen to it, to change things for the foreseeable future.
With everything spelt out after a period of negotiation, the state can also be sure of a good deal for the people, which the investors will also commit to. It is calculated to be a win-win for both sides.
According to Wikipedia, a Memorandum of Understanding is a type of agreement between two or more parties. It expresses a convergence of will between the parties, indicating an intended common line of action.
A well executed MoU can also serve to attract other investors, once the buzz goes out that the state is open for business and has a pro-business posture.
The investor takes advantage of the numerous potentials in the state, which would directly benefit the people in many ways.
The MoUs are to put public private partnership on a sound and sure footing, setting mutually favourable parameters that will satisfy all parties, with clearly stated commitment from the government to the other partners, something they can take to the bank to secure needed funding, if need be.
This is definitely a way to leapfrog development by bringing on board developmental partners in different areas who will be able to inject the needed expertise, funding and long term focused interest to see the projects through with minimal attention from government.
So we can have a multitude of projects taking place all over the state, but the government does little more than putting signature to paper. That is definitely a way to leverage government for the people. And lack of funds from the government, rather than being a hindrance to development, is actually a plus, since it is forced to be aggressive in facilitating investors to come and set up businesses in the state.
These MoUs are a clear statement that the state government realises that it does not have the resources or the ability on its own to take the state to a desired future in all its ramifications the way it wants and seeks for partners who will come with the requisite cash, development and business plan to participate in the leap into the future, with the creation of the right atmosphere for investment to flourish and the political will to back that up.
But the MoUs are more than just taking care of the business end of creating job and setting up investment. Six weeks after the advent of the Governor Oluwarotimi Akeredolu-led administration, which began in February 2017, ODSG and the Niger Delta Development Commission signed an MoU for the construction of the 50km Araromi-Akodo-Lekki. This is part of the need to remediate the infrastructural deficit of the country, and will have a direct impact on the life of the people of the southern part of the state.
It is in recognition of this that Governor Akeredolu at the signing of the MoU said: “This route unlocks our state’s potential; our beautiful beaches, our free trade zone, cementing us as a hub of investment opportunities.
Similarly, at the eventual flag off of the project earlier this year, the governor said: “This is the project for us. To link our state almost seamlessly to Lagos is the big deal.”
NDDC Managing Director, Mr Nsima Ekere, on his own, said: “The Araromi-Akodo/Ibeju Lekki Road will connect the agricultural rich communities of Araromi Seaside-Igbo Erelu, Eba, Awodikora, Elefon, Ode-Omi, Imedu, Igboguna, Akodo in Ondo State with Ise in Ibeju-Lekki Area of Lagos State. It is the first part of the very important road project to link coastal towns with strategic road network. On completion, it will cut travel time between Ondo State and Lagos to less than one hour and facilitate easy evacuation of agricultural produce from these communities.”
He also highlighted the vital role the state governor played in facilitating the project, for signing the MoU within six weeks of resumption in office.
He said that Governor Akeredolu “brought a sense of urgency for collaborative development of our Niger Delta region to the table.”
To complement that project, an MoU was just this month signed with a Chinese company to link Akure with Araromi seaside in Ilaje Local government, via a dual carriage way.
Another MoU which directly impacts the Southern Senatorial District of the State is the one for the establishment of an industrial park in Ore in Odigbo Local Government.
The MoU is for the development, management and of the pack 1000 hectares of land at Obatedo-Omotosho-Ore, Odigbo Local Government.
The partner is Hessmac Industrial Limited, which describes itself thus: “an industrial development and management company” and promises to strategically develop Ore Industrial Park in a fiscally responsible manner that maximises its economic benefit to the community through creation of meaningful jobs in line with established plans and policies. The stated objective of the Lagos-based company is to solve the problem of unemployment and bring prosperity to the nation through industrialisation.
The governor in his remarks about the project said that the Ore Industrial park is expected to generate 15,000 direct employment and the numerous other ancillary services from 400 industries to be set up in the park.
His words: “An industrial park of this magnitude is typically accompanied by a number of technical and infrastructural facilities such as hotels and guest houses, textiles and apparel, telecommunication, furniture, garment, building materials, plastic products, gas pipeline and distribution, among others.”
The project, expected to gulp N15billion, was flagged off in February.
Among the MoUs, the one that takes the cream specifically with regards to its job creation potential is the one signed in November 2017 with NNPC for the establishment of a 60million litres annual capacity biofuel plant. It would use cassava as a raw material and located at Okeluse, in Ose local government.
The Group General Manager of NNPC, Maikanti Baru, said that it will reduce the need for fuel importation, and local animal feeds production will be boosted from the by-products of the plant.
His words: “Your Excellency (referring to the Ondo State Governor), we have already discussed with you and you have agreed to make 15,000 hectares of land available towards the cultivation of cassava.
“We expect that this plant when built will be producing 65million litres per annum of fuel ethanol that could be blended into our Premium Motor Spirit and will be used in Nigeria and neighbouring countries when exported”
“The benefits of this project to Nigeria and specifically to Ondo State are immense. We are working with the investors who will invest because there are different dimensions to the project.”
In addition, he stated that a 40megawatts electricity plant will also accompany the project to supply its needs and also serve the host communities. He also explained that money could be made from the by-product of the project, such as industrial starch etc.
To show that this lofty dream did not die on paper, its shape is becoming clearer as the Special Adviser to Ondo State Governor on Development and Investment, Mr Boye Oyewumi said, on a visit to the project site, that it would involve a consortium of OBAX Worldwide Ltd in partnership with NNPC with 12,000 direct jobs to be created and 200,000 farmers fully engaged.
At the site, he said: “We are here with the representatives of the NNPC, OBAX Worldwide Ltd and a Chinese company. I am happy to inform you that we are about to start.”
In the areas of agriculture, some MoUs have also been signed. In October 2017, one was signed for the construction of a powderised egg factory to be undertaken by Greenfield Poultry Limited. Emure ile in Owo Local Government Area is the site of the project which is in partnership with the CBN, being the first of its kind in West Africa.
Greenfield Poultry Limited, a company which started in 2004 stated on its website that: “Greenfield Assets Limited under a Public Private Partnership arrangement with Ondo State Government of Nigeria has commenced the utilisation of 150 hectares of land for the establishment of 10million broilers per annum farm with a 4000 birds per hour meat processing plant; a 600000 layers farm for the production of 100million eggs per annum; 2nos. 20 tons per hour Feed-mill and a 500,000 eggs per day egg power plant in Ondo State of Nigeria.”
The project on completion would have gulped N28.3billion and is expected to supply companies with oil based emulsions needed in producing drugs, and food like chocolate, mayonnaise and ice cream.
Another agricultural-related MoU is the one signed with Adventum Global Inc USA for a 4000hectare project to set up an integrated agricultural value chain, from cultivation, processing, marketing to distribution, with the potential to employ 3000 indigenes of the state in the first few years of operation.
Another of the MoUs which is already yielding fruit in project commencement is the one with Bambi Farms, which is to set up a factory producing vegetable oil located in Ile-Oluji in Okeigbo local government area.
Governor Akeredolu noted that his administration’s hunger to industralise, with the attendant job creation and the revenue accruable to the government, helped to facilitate the development.
“Without any doubt, this company will generate more income to farmers who deal in palm kernel and would equally end the stressful old method of producing oil and from the record available to me, it can produce 120 tonnes of soya bean and palm kernel oil per day.”
As part of the agreement reached, the Ondo State Government contributed 1000 hectares of land for the company to invest on.
Also, a few months ago, the Governor visited China, and specifically Linyi City in China where seven companies were pleased to sign an MOU with the government.
As the fruit of that seed, four of the seven companies are already being set up in the state: a paper mill, MDF (medium density fibreboard) plant, Cassava to Ethanol plant and a Textile mill, with sophisticated equipment already moved into the Ore industrial hub created specifically for that purpose.
Giving more insight into the projects, the Senior Special Assistant to the Governor on Afforestation Project, Mr Alex Ajipe, said that the ethanol plant has the capacity to generate 3,500 jobs, the paper mill, 5,000 and that the MDF production line of about 33,000 tonnes person is the first of its kind in Nigeria.
He stated that the planting of Gmelina Aborea on hectares of land by another company, Wewood Ltd, which signed an MoU with ODSG last year, was done simultaneously with the planting of the cassava to be converted to ethanol. The proposed ethanol plant (different from the Okeluse’s) reportedly has the capacity to produce 400,000 tonnes of ethanol in the first line and second 600,000.
The Project manager of WeWood Ltd, Mr Jack Li, while noting that his company has employed about 1000 people in the state, said that a special specie of cassava had been planted between the gmelina trees, which was planted on 1,500 of the 10,000 hectares granted the company for the purpose of afforestation.
The gmelina tree, which is medicinal, is described as a fast growing tree and is used in the making of furniture, carriage, sports, musical instruments and artificial limbs, boat building, because of its lightness, strength, stability and durability, and is called one of the best timbers of the tropics.
WeWood Limited on its website credits itself with facilitating the Ondo -Linyi Industrial Park Establishment in Ore (remember what was mentioned earlier about an MoU leading to others) in fulfillment of the twin cities agreement and Memorandum of Understanding signed by the government of Ondo State of Nigeria and Linyi Government of Shandong Province of the Peoples Republic of China during the investment tour of the Ondo State government that the company sponsored.
The company said that the cassava to ethanol plant will need 300,000 metric tonnes of cassava per annum.
The WeWood Ltd project Memorandum of Understanding is among the first that the Akeredolu administration signed, and the state is already feeling the impact in employment generation and the multiplier effect of drawing in other investments.