Oyo Gas Distribution Network; The Journey to Improve IGR Like Lagos, Ogun

 

OYO GAS ECONOMY — Between 2007 to 2009, the Ogun State government initiated a gas supply project from Lagos to the capital city in a bid to tap the overcrowded nature of industries in Lagos. 

A wise government like Ogun needs to explore the proximity of the state to the former capital and the nation’s economic capital. Signing a project valued to $51.10million dollars is huge and prosperous for the state to triumph over the lopsided nature of her IGR.

The project consists of the construction of a 35 km x 24” diameter gas pipeline system of design capacity of 250 mmscfd from the intermediate Pig Launcher Station on the Escravos Lagos Pipeline (ELP) Itoki/Papalento for onward transmission to Abeokuta. EPC of the tie-in/ pig 

launching station at the intermediate Pig Launcher Station including Pig launching facilities as required. EPC of the class 600 Abeokuta City Gate Station (ACGS) at Onijaganjagan Industrial Estate to process 250 mmscfd including all station process and civil infrastructure and hookup to potential gas distribution for the safe and reliable gas supplies to Abeokuta. (Gas supply to Abeokuta – Ogun State – Zakhem International). 

The above is the replica of what the Oyo State government just signed with Shell Nigeria Gas, $100million worth. Then, how is Oyo preparing to benefit from the project beyond the signing and leaving for the Shell NG to operate for 20 years as signed?

Let’s look at what happened after the transmission of Escravos Lagos Pipeline (ELP) Gas in Itoki/Papalento to Abeokuta, Ogun State?

The successful transmission from Lagos to Abeokuta witnessed a surge in Ogun state IGR. Sticking to the state Master plan to the core is one of the ways, and their proximity to Lagos by harnessing and harvesting frustrated industries operating in the congested Lagos with Tax burden and all such. And what does those industries need most, the ease of operation from A to Z, and which Gas supply is a key to their means and ease of operation. Not only that, there is still a need for a strong partnership with neighboring state(s) because of overlapping and synergy in the area of taxation and economic development. No state can do it alone. 

And why Oyo Governor, Seyi Makinde, needs to look more inward to the borderlines of Oyo and Ogun, with the interlocking areas. Ibadan to Ijebu-Ode, Ibadan to Ijebu-Igbo, Ibadan to Abeokuta (Ogun State Capital) and with the advantage of newly created light rail system, Ibadan to Sapade, Igboora to Abeokuta, Iseyin to Igboora to Aiyetoro, and host of others between the two state.

Also, Oyo’s proximity to Osun, Kwara, Ondo and some other West African countries that connect from the Northern part of the state, Saki most importantly. And to explore the Lagos congested port to the inland dry ports (Erunmu and Moniya), the government should look for appropriate concessionaires for the development and operation of the two inland dry ports, through a proper partnership with the Federal Government.

Just like the way of Ogun State in the area of industrialization with the availability of Gas pipelines mostly needed by these mega industries. They are the ones that can help the surge on government IGR. Let me quickly refer to Ali Abdukareem analysis of the Ogun State journey of improve IGR, Beyond this, it is apposite to note that the administration created an enabling environment for many industries that previously were under the tax yoke of neighbouring states, and which also had the problem of land and accommodation where they were operating previously, to thrive. Those business outfits moved into Ogun State and began to change the business and IGR dynamic. And, what is more, the influx of companies is unrelenting: as a result of the enabling environment created by the Ogun State government, many industries are now relocating to Ogun State and businesses are now opening up.

From the above, we could all see the key points there. It is important to note that, the virgin lands available between Oyo and both Lagos and Ogun States can be activated, incentivise and use to attract investors that are not interested in entering the inner part of Ogun state but want the express sideway to join British American Tobacco (BAT) in exponentially skyrocket the state IGR. 

While Ogun State specifically tap into the objectives Africa Continental Free Trade Agreement (ACFTA) through cost competitiveness and provision of industrial clusters with adequate infrastructure; achieve efficient port logistics through much more coordinated call-up systems where Ogun provides holding bays/parks for trailers heading to Apapa ports in order to reduce the traffic congestion in Lagos. (Ali Abdulkareem) 

But how did Ogun state arrive there?

They have their master plan without any interference. Proper exploration of their proximity to Lagos, in particular, and a serious partnership agreement to boost industrialization. Their land allocation system is unique with no rancor and moving from court to court seeking injunctions on the ownership of one land or the other that will drive away investors.

It is important to also know that the Ogun State government upgraded her survey systems, services and data to improve the ease of doing business for industries and all. Which thus attracts investors.

Let us cross examine the analysis of Akinmade, who is a special adviser to Governor Dapo Abiodun on media, communications and strategy, “the government under Abiodun has provided solar street lights, solar boreholes and solar home kits to rural dwellers, built the Gateway Agro-Cargo International Airport, which, along with its aerotropolis, is expected to generate over 25,000 jobs; automated business processes to improve efficiency and the Ease of Doing Business Index in the state; renovated and constructed of over 1,200 classrooms and buildings across all 234 wards in the state; rehabilitated, equipped, and staffed 100 primary healthcare centers across the state.

Also, it boosted the status of women by including them in politics, governance, and economic activities, as well as providing education for girls; grown over 50,000 businesses by women, with investment in women’s empowerment put at N1.5 billion; constructed 4,000 housing units; commenced the construction of 200 units of high-end duplexes at PMB Estate, Kobape, commenced development of Ibara and Idi Aba GRA Regeneration Schemes, the construction of 200 units of affordable housing in Gateway Aviation Village, Iperu and 250 units of Affordable Housing in Kobape Phase 3, and 100 units of mixed Housing units at OPIC Estate, Warewa, Isheri.

In all honesty, whether functioning later or not, the Oyo State government has invested in almost all those areas of governance as explained above. And those are the incentives the investors are looking at to determine how flourish their business would be. The Light-Up project is superb, and one of the key factors to improve the economy as it aided night markets and businesses. If Ogun State can explore the services above to amplify the economic growth and development, why is Oyo state not riding on that as well and even beat Ogun state in the area of IGR competition? What is Seyi Makinde, Governor of Oyo State not getting right?

In 2011, Ogun State IGR is #10.84billion. Remember the Lagos-Abeokuta Gas completed between 2009 to 2010 after the signing of the project in 2007. By 2012, the IGR has commenced to witness a kind of significant upward move, rising to #12.44billion, #84.55billion in 2018, and #70.92billion in 2019. The IGR (Internal Generated Revenue) of Ogun State experienced a remarkable growth of 554% from 2011 to 2019 (Statisense).

While Oyo State government has been able to grow its IGR from N8,915,603,182.50 in 2011 to N38.04billion in 2022, which is far from where Ogun State was in 2019.

But can Oyo meet up with Ogun? Yes, Oyo can but it will require lots of discipline and mastering of the industrialization roadmap through the energy sector. That is the most explorable sector in both Lagos and Ogun state. Kudos to the present Commissioner for Energy in the state, Barr. Seun Ashamu for providing the needed stimulus of the ministry and setting agendas for the state government.

Gov. Seyi Makinde should kindly see to the rural electrification project of his administration. He should adequately take the opportunity of the Independent Power Project Initiative to electrify communities, both needing urban and rural areas and allow for natural food processing and exports without any hindrances. If rural production and processing of foods and raw materials are enhanced, Oyo will be serving neighboring states with her agricultural products, and see to the reality of ‘nearness to raw materials’ by industries. Opening of industrial parks in most of the virgin areas of the state with adequate land reform system from original owners as to avert land related issues for investors.

These are few of many things the Oyo government can do to aid the exponential upward trend of her IGR and to favorably compete with Lagos, Rivers, Ogun and others topping the chart at present in relation to its energy sector drive. 

Compiled by 

Akintunde Yusuf

Publisher, Daily News NG

References:

Economic Profile Of Oyo State: Major Sectors And IGR (infomediang.com)

Ogun: Contextualising the exponential IGR growth – Tribune Online (tribuneonlineng.com)

Contextualising the Ogun development survey | TheCable