Ogun State: The Legacy of a great future – Part 2

The urgency of the issues involved becomes clearly defined when we examine the impact of our “unitary federalism” on the prospect of fiscal federalism for internal development of the federating units. If it is correct that government exists to bring economic development through infrastructural provisions to the citizens, then we immediately see how the federal system can adequately manage this. The 1963 Constitution provides a sound demonstration of this: the regions not only had control of the natural and human resources in their domain, but were also able to exercise wide powers to use these resources for local development. We saw the result in terms of agricultural development, education and industry. However, with military rule commencing in 1966, state autonomy became critically reduced with growing centralization. It is against this fiscal injustice in the Nigerian constitutional and economic framework that we can begin to understand the evolution of Ogun State since its creation in 1976, and its struggle to achieve the best socioeconomic and infrastructural objectives for the Ogun people.

Ogun State as Economic Corridor
When it came into existence in 1976, Ogun State immediately inherited a unique development and business geography that positioned it as a central hub around which development in Nigeria would be measured. Bordered by Lagos to the south, Ondo to the east, and Osun and Oyo to the north, Ogun became aptly the Gateway state because it is not only strategically contiguous with Lagos state as the hub of industrialization and commercialization in Nigeria, it is also the lead-way into the southwest, and the rest of Nigeria as well as the rest of the West African sub-region.

Ogun’s proximity to Lagos state has turned it into a growing and significant industrial hub benefitting from its strategic location near Lagos. Indeed, Ogun has been dubbed the “New Jersey” of Nigeria because it has now become the preferred location for investments in Nigeria. As Nigeria’s largest commercial market and busiest port center, Lagos state does not have the capacity to deal with the large flow of business coming into the state. A spillover effect ensured that Ogun state would benefit from the necessity of relocation for businesses and development dynamics that needed to escape from the congested environment. Two significant factors have concretized Ogun’s strategic relevance to Nigeria’s development. The first is her natural endowments, especially the availability of limestone; and the second is the access to a large quantity of natural gas that makes energy available in abundance.

Ogun’s favorable climate that aids good vegetation also ensures the cultivation of valuable food and cash crops—cocoa, palm oil, rubber, rice, tobacco, yam, etc.—that add value to the state’s agricultural agenda and also increase its industrial and manufacturing strength, deriving from processing of agricultural products. For instance, this led to the conception of the Olokola Free Trade Zone in 2004 by the Gbenga Daniel administration. The need to take care of the huge manufacturing concerns attracted to the state also led to the emergence of the public-private partnership enabled Agbara Industrial Estate. The state’s strategic location has therefore been rewarded with a huge foreign direct investment (FDI). Between 2011 and 2016, Ogun State accounted for 74.5% ($11.9billion) of the total FDI that came into Nigeria. And in 2015, its manufacturing strength accounted for 71.2% of the total of N180.1 billion invested in Nigeria’s manufacturing sector.

Ogun State in Nigeria’s Economic Framework
In the 2018 Ease of Doing Business (DB) in Nigeria report, we get a glimpse of how Nigeria’s governance environment has been compromised by her unitary constitutional framework (conducive to centralization), and weak institutions. Nigeria ranked 183 out of 190 in the 2020 Ease Doing Business report. This poor ranking has tremendous impact on individual states within the federation which has to contend with federal regulatory laws and statutes which limits their creativity and initiatives. Despite being a strategic economic corridor to the southwest, Nigeria and the West African subregion, Ogun state still had to contend with the overall national economic and business atmosphere in calibrating her own development. The DB report rank each state of the federation according to four indicators:
Starting a business
Dealing with construction permits
Registering property
Enforcing contracts

In (a), Ogun ranked 4th, 11th in (b), 28th in (c) and 20th in (d), out of the 36 states and the FCT. The good news is that, according to the report, there is no single state that dominates across the indicators. But Ogun is not among the five states—Kaduna, Enugu, Abia, Lagos and Anambra—which record the largest advance towards global best practices. The 2019 edition of the State of States report about fiscal sustainability in Nigeria provides another glimpse into the current state of Ogun state and her fiscal status. In the fiscal sustainability index, Lagos leads, and is followed by Rivers, Akwa Ibom and Kano. Ogun state came 6th. Yet, it has quadrupled its IGR from 17.5bn in 2014 to 84.6bn in 2018. And this gave it a percentage growth advantage over Lagos and Rivers. However, its debt profile as at 2018 stands at N98.7bn.

The 2018 Human Development Index which placed Ogun state second behind Lagos is further complemented by the Nigerian Poverty Index 2019 which revealed that the southwest and the south recorded the lowest poverty rates. Lagos had the lowest at 4.5%, followed by Delta with 6%, Osun (8.5%), and Ogun with 9.3%. Sokoto and Taraba had the highest poverty rates at 87.73% and 87.72, respectively. In the unemployment rate index, Imo had the highest unemployment rate of 48.7% and Anambra had the lowest at 13.1%. Ogun’s unemployment rate stood at 16.3%.

The deduction from these data is simple: Ogun state, like most states within the federation called Nigeria has not been given the adequate environment within which to realize their governance capacity on behalf of their citizens. And yet, each of them keeps struggling against the current of centralization and fiscal injustice. The revenue allocation formula ensures that the center is disproportionately allocated 52.68%, while a grant of 26.72% goes to the states. With its hold on the enormous exclusive list, the federal government has a taxing power through an access to the most lucrative revenue sources, while the states are left to depend on the center due to their weak fiscal capacity.

And so, more than ever, we come face to face with the governance challenge a governor like HE, Prince Dapo Abiodun has to face in not only coming to terms with the governance assets and deficits of his predecessors, but also fashioning a governance template that furthers the well-being of the citizens, within a constricting constitutional and fiscal framework that is disenabling.

Governor Dapo Abiodun’s Vision and Actions
We need to clearly state that a Governor is not applauded for the grandness of his vision or his capacity to achieve the minimum of administrative and governance requirements, like paying workers’ salaries. On the contrary, a Governor’s achievement derives from the administration’s ability to transform the good governance narrative in the state through a qualitative change in the quality of life of the citizens. This requires a synergy between vision and mission statement, on the one hand, and ideology and strategy on the other. Every vision needs a strategy backstopped by an ideology. And Governor Abiodun realized the urgency of this governance imperative. His vision is simple enough: “…to give Ogun State focused and qualitative governance and to create an enabling environment for a public-private sector partnership, which is fundamental to reliable economic development and individual prosperity of the people of Ogun.”

Professor Tunji Olaopa delivered this piece as Keynote Lecture at the Symposium organised by the Ogun State Government to mark the 45th Anniversary of the State’s creation on the 3rd of February, 2021. Olaopa is professor of public administration and public policy. retired Federal permanent secretary and Directing Staff, National Institute for Policy and Strategic Studies, NIPSS, Kuru, Jos.