Kwara State’s peaceful population, abundant natural resources, well-developed infrastructure and proactive investment-attraction policies have made it an attractive destination for investors
Kwara State is one of the 36 states that make up the Federal Republic of Nigeria, Africa’s most populous country. Kwara State shares her boundaries with the Republic of Benin at her west and the Niger River at her North.
The capital city of Ilorin is situated 306km inland from the coastal city of Lagos and 5OOkm from the federal capital, Abuja. Major towns include Offa and Jebba, located on the Niger River. Other towns include Patigi, Erin-lIe,lIoffa, Adeleke Igbewere, Ejidongari, Osi, Lafiagi, Gure, Afon, Kaiama, Isanlu-lsin, Omu-Aran, Egbejila, lIota, Iponrin and Igbaja.
Kwara State was created in May 1967, as one of the first of 12 states to replace the nation’s four regions. Originally the state was known as West Central State but the name was changed to Kwara, a local name for the Niger River. The size of the state has been reduced over the years, as new states have been created within the federation. The total landmass of Kwara State today is 32,500 square kilometres.
Kwara State is known as ‘The State of Harmony’ on account of the peaceful relations that exist among its multicultural and diverse population of about 2.5 million people. Followers of the three great religious faiths to be found in Nigeria, Islam, Christianity and traditional, coexist within the state.
States in Nigeria enjoy a high degree of autonomy. Each state, for example, can set industrial policy and independently seeks to attract investment. This is normally located within a broader national policy and must naturally comply with federal rules (with regard to import duties, for example). Energy policy is the sole preserve of the federal government although this is changing as the option of using Independent Power Producers (IPP) becomes more attractive. Each state is divided into Local Government Areas (LGAs) and, in the case of Kwara, there are 16 such LGAs.
Kwara State comprises rainforest in the southern parts with wooded savannah covering the larger part of the state. The soil is fertile and the state is well watered by the various tributaries of the Niger River which run through hills and valleys, none of which rise to any great height. The western section of the state is at a slightly higher altitude than the eastern.
This is a summer rainfall area, with an annual rainfall range of 1000 mm to 1,500 mm. The months of December and January coincide with the cold and dry harmattan period. Average maxi-mum temperatures vary between 300.C and 350.C.
Kwara’s central location has resulted in it sometimes being called the ‘Gateway’ state. Ilorin international Airport has undergone major upgrades and is now not only a passenger airport but a major cargo hub. Not only is Kwara State well situated within Nigeria, with connections south to the key harbour of Lagos and to the capital city of Abuja to the north-east, but it is well sited regionally within West Africa and within a relatively short international flight from Europe and the US. There is an extensive network of well-maintained roads. Kwara is working on maximizing its potential through the building of truck stops and logistics hubs. The Jebba Dam is an important source of water and hydro-electric power.
Unique selling point
Kwara State is known for its peaceful character, its innovation and its strong educational sector. In recent years it has come to be known as the home of commercial agriculture, as a result of the, New Nigerian Farmers initiative.
Also known as the Shonga project, after the name of the town close to where the commercial farming is being practised, the New Nigerian Farmers initiative has got Nigerians and foreigners talking about Kwara State in a new way. Kwara State has changed in the public eye from being a ‘civil service’ state to being the state where the Shonga farmers are succeeding. Kwarans believe this could happen on a broader scale in the Federal Republic of Nigeria, a land of immense agricultural potential. Milk products and rice currently make up US$1.2-billion of the nation’s US$4-billion food-importation bill- a situation that well-organised commercial agriculture has the potential to reverse.
In support of the Shonga project, processing facilities have been built, for example a dairy and a poultry abattoir. Refrigeration facilities and transport infrastructure form the next stage in the value chain.
The upgrading of Ilorin International Airport be in Europe within hours. This again opens up many other potential avenues to be explored, for example, in the cultivation and exportation of cut flowers, a very lucrative enterprise.
People, skills and culture
The principal groups residing in Kwara State are the Yoruba, Nupe, Bariba and Fulani. The skilled craftsmanship of the people of this central region has been evident for centuries. The, largest and most important pottery workshops in Nigeria can be found in the capital city of Ilorin. Proponents of the craft of traditional textile weaving are also very prominent: the Aso Oke style of hand-loomed cloth-making is world renowned.
The Yoruba are the largest population group in the south-western part of Nigeria while the Fulani comprise a significant proportion of the population of the north. Former Nigerian president Olusegun Obasanjo is a Yoruba; former president Umaru Yar’Adua was a Fulani.
The Yoruba stem from an ancient civilisation, the Oyo Empire, that came into existence in the eighth century with its headquarters in Ife, in what is now the neighbouring state of Osun. Historian Robin Hallett has described the bronze and terracotta works of art known as the Ife heads as one of the ‘supreme artistic achievements of mankind’. Oyo was at the height of its powers in the middle of the 18th century and was a trade conduit between the south and north.
The Nupe Kingdom was located to the north of the Niger River. According to Hallett, they were ‘industrial specialists’, with skills including glass-making, weaving, tailoring, blacksmithing and iron mining. One of the traditional skills of the Nupe is in the making of elaborate carved stools, using only one piece of wood. The Bariba people were once part of the Borgu Kingdom and about 80% of this group now lives in neighbouring Benin.
Tractor ploughing the ground in preparation for new planting season at Shonga Farm
The rich and varied cultures of Kwara State can be viewed at places such as the Esie Museum, Ogunjokoro and the Imoleboja Rock Shelter. The pategi regatta is a popular attraction, with boat owners proudly displaying their vessels and fishing and swimming contests. The Esie stone images are an important cultural artifact while various festivals are not only important to local communities but would prove fascinating to visitors. The Awon and Egungun festivals are just two examples. The tragic end of explorer Mungo Park’s expedition down the Niger River is commemorated at Jebba where his boat is on display and there is a monument.
The modern Kwara State is an outward-looking polity. Ilorin International Airport is just one symbol of this attitude. The recently opened branch of the Nigerian Stock Exchange is another. The state’s governor has addressed meetings in the USA and the UK, advising Kwarans in the diaspora of the opportunities back home and encouraging them to solicit investments in their home state. Companies such as Kwara Ethnix Designs (the furniture manufacturer) have their eyes on the London market for their high-quality products, utilising Ilorin International Airport to transport their goods.
Pottery worshop in Ilorin
The preferred method of growing the state’s industrial capacity is through public-private partnerships (PPPs). The state provides site services and associated support. Among the several current success stories are: Kwara Ethnix Designs, the Olam Nigeria cashew-nut processing facility, Dangote Flour Mills and the Chellarams motorcycle assembly plant.
With the state’s excellent natural resources, good infrastructure and the positive support and encouragement of the state government, the outlook for industrial and commercial investors is very good.
Education and research
For any state to be competitive in industry, it needs a good educational infrastructure and in that sense, Kwara State is well served. Kwara State University was inaugurated in 2009, joining the University of Ilorin (a federal institution) and AI-Hikmah University as the leading tertiary institutions in the state. Other facilities include Federal Polytechnic at Offa, a Federal Training Centre in Ilorin and State Colleges of Education at Ilorin and Oro. Ilorin also hosts the Kwara State Polytechnic and a School of Nursing. Two important religious centres of learning are the College of Arabic and, Islamic Legal Studies and the United Missionary Theological Seminary. The town of Offa is home to Adesoye College.
The University of Ilorin Teaching Hospital is the main medical institution in the state, supported by specialist and general hospitals, rural health centres and health clinics. An aviation college located close to lIorin International Airport aims to offer high-quality pilot training and the Kwara Football Academy is another specialist institution. Research institutes include the National Centre for Agricultural Mechanisation and the Agricultural and Rural Management Training Institute (ARMTI). Another Ilorin-based institute doing important work is the Niger River Basin Development Authority, which oversees issues pertaining to development in the broader region.
A new way of doing business
The administration of Kwara State has instituted special measures to control expenditure and prides itself on transparency in its account keeping. Fitch Ratings has given the state ratings on two consecutive occasions. A Budget Monitoring and Price Intelligence Unit (BM PIU) monitors all state budgets and scrutinizes quotations. Kwara State was the first state in Nigeria to voluntarily subject itself to federal government benchmarking exercise in accountability and transparency.
Nigeria is a federal republic with an executive president. The National Assembly comprises the 360-member House of Representatives (selected from constituencies around the country) and a 109-member Senate. Each of the country’s 36 states nominates three senators, and one senate seat is allocated to the Federal Capital Territory, the area that controls the nation’s capital city of Abuja. Nigeria’s legal system is based on English law and two types of customary law, ethnic and Islamic. Some northern states have chosen to introduce Sharia Law. Kwara State is not among them. The Supreme Court of Nigeria is the country’s highest court.
After a long period of military rule, Nigeria has been civilian led since national elections were held in 1999. Subsequent national elections have been run in 2003 and 2007. Nigeria’s population is estimated to be in the region of 149 million, representing a massive potential market for goods and services.
Population estimate: 149 million
Size: 924 000 square kilometres
Agricultural land: 81%
Major Languages: English (official), Yoruba, Igbo, Hausa.
Currency: Naira (May 2010: US$1 = N150)
International dialing code: +234
Internet domain: ng.
An Excellent Investment Destination
Kwara State is the only Nigerian state to have received two consecutive positive ratings from ratings agency Fitch. This is just one of the many good reasons why Kwara State stands and like a beacon as prospective destination for serious investors.
When Nigeria Telecommunications sector was opened up to competition in 2001, the response from the world community of investors was fairly tepid. One of the companies to win a mobile phone licence at that time, MTN, is now a continental giant; its current Nigeria subscriber base of more than 20 million is ample testimony to the good sense of investing in Africa’s most populous country.
Since 1999, Nigeria has held three national elections and democratic values are taking hold in the Federal Republic. Periodic unrest has been fairly localised, either in the north or in the Niger Delta. Kwara State has proudly lived up to its reputation as the State of Harmony, where the major religious communities have good relations with one another.
The centrally located Kwara State is ideally situated to serve Nigeria: it is just north of the megalopolis of Lagos, trucks travelling north-south pass through the state and it has road connections to Abuja, Kaduna and Kano beyond. In addition, Kwara has been investing heavily in its infrastructure, not least in the upgrading of Ilorin International Airport, which is now a fully fledged international facility able to handle significant volumes of cargo. The airport investment is the central plank of the state’s two-pronged strategy to grow the economy. The first component is to promote commercial agriculture. This in turn will produce enough produce to sustain an export-driven strategy.
The entire value chain is being addressed and investors are being encouraged to get involved at the level of farming (like the successful Shonga farmers who are already producing dairy products, crops and poultry), beneficiation (the state needs processing plants of every sort), transport (trucking and storage) and exportation to foreign countries. Ilorin International Airport’s location allows for relatively short flights to the USA and the UK. Typically, the go-ahead planners of Kwara State are not going to sit around and wait for pilots to be trained elsewhere; instead, the state has inaugurated a top-flight aviation college to be located in Ilorin.
Kwara State has a very good education system, with several universities, a teaching hospital and research institutions maintaining the state’s high reputation in this field. Investors will find it easy to find suitably qualified staff.
The state is richly endowed with agricultural and mineral resources. The primary focus at the moment is on promoting investment in agriculture and agri-processing, but substantial’ opportunities exist in the solid minerals sector as well.
Kwara has very good support services including hotels of international standard, banks, communications networks and data banks. A branch of the Nigerian Stock Exchange recently opened in Ilorin.
The unreliability of electricity supply has long been an obstacle to concerted investment in Nigeria. While this situation has not been entirely solved at national level, Kwara State has taken steps to secure a regular supply of power, particularly for its industrial estates. The work done on the Ganmo substation has had the effect of ensuring close to 24 hours of electricity per day, and this will continue to improve.
The Kwara State Government extends a number of incentives to serious investors. These include the provision of land and infrastructure, tax holidays and assistance with obtaining financing. In addition, the state is willing to construct infrastructure such as roads to facilitate development.
A recent example of this was the completion of a N2.9-billion irrigation project in support of the Shonga farming initiative. Investors willing to participate along with government in public-private partnerships (PPPs) will find a willing partner in the Kwara State administration.
Another area where the state has made things easier for investors is in respect of the Certificate of Occupancy (CoO). In some parts of Nigeria this document – and the difficulties associated with obtaining it became a major obstacle to development. Kwara State is now able to produce a CoO within two weeks and businessmen can start planning and building quicker than before.
Transparent and accountable
Fitch Ratings has given Kwara State positive ratings on two consecutive occasions: AA- for national long term and B+ for long-term local currency. This was based on the state government’s prudent budget management.
Tradingmarkets.com reported in 2009 that other positive factors were the administration’s new debt-management office, the consolidation of the state’s own-revenue source and the establishment of a trust fund to build reserves. Kwara was the first Nigerian state to be assigned a credit rating by an international rating agency such as Fitch.
A number of companies have already set up operations in Kwara State. Some are primary industries such as a major national producer of flour, others are in soap, detergents and pharmaceuticals, and there is a furniture factory that has been restored so well that it is now regarded as one of Nigeria’s top companies.
A significant investment came to fruition in June 2009 when Jebba Paper Mills started rolling again. This facility is the only producer of kraft paper in the whole of the ECOWAS region. Cashew processing and motorcycle assembly are other companies that are rapidly expanding the variety – and scope – of Kwara State’s manufacturing capacity.
Sectors in which Kwara hopes to attract investment include:
New Investors in Kwara State
A number of private-sector companies have successfully invested in Kwara
Kwara State has become an investment destination of choice-with a whole variety of commercial and industrial enterprises choosing to set up new businesses in the thriving state. The investment-friendly policies of the state government, coupled to Kwara strategic position, plentiful natural resources and well-educated workforce, are contributory factors in persuading entrepreneurs and corporations to set up their enterprises in the state.
In recent times, a number of companies have chosen Kwara as the place to build their brands and grow their businesses.
Dangote Flour Mills
The Dangote Group is one of the largest corporations in Nigeria. It is a diversified group with an historical emphasis on foodstuffs and agri-processing. Cement production, logistics and real estate are some of the other areas that the multi-billion-naira company now operates in, but it remains one of West Africa’s biggest processors of agricultural goods.
Dangote operates five flour and semolina mills in different locations through-out the Republic of Nigeria. Annual production of flour is approximately 1.6 million metric tonnes.
The flour mill operation in Kwara is wholly owned by the Dangote Group of Companies. The mill, located along Asa Dam Road, was established in 2003, and the factory went into full production in July 2006. The major product is flour with spaghetti and macaroni also being made on site. The installed capacity is 27 trailer-loads of finished product every day. Up to 30 trailer-loads of wheat are needed as feedstock on a daily basis.
The feedstock is sourced from within the drier parts of Kwara State where wheat is cultivated and from other regions in the northern parts of Nigeria.
Dangote Flour Mill employs about 450 workers which indicates that the company is performing well. Demand for the flour produced by the mill is high and sales figures have been very positive in recent years.
Kwara State Government provided incentives and a generally conducive environment to investment when Dangote made the decision to invest. The chief reasons cited by the company for the original decision to locate its plant in Kwara were:
Nearness to raw materials
Conducive enabling environment
Government support and encouragement
Provision of adequate infrastructure such as land, water, good roads and electricity
Availability of market for the finished products.
Jebba Paper Mill (MINL Ltd)
Jebba is a medium-sized town in the northern part of Kwara, situated on the southern bank of the Niger River. The town represents the northern-most point of the river that is navigable throughout the year. The main railway line from the coast to the north runs through the town.
Until 1994, one of the town’s most important industries and employers was the Nigerian Paper Mills, which was the property of the federal government. When the company closed its doors, the regional economy was negatively affected. In 2007, private investment company MINL Ltd agreed to take over the assets of the company from the state (and change the name to Jebba Paper Mills). It agreed to invest heavily in upgrading the plant’s machinery to get it up and running and to give it modern capabilities.
Jebba Paper Mills represents a strategic national asset as there are very few specialized paper-production companies in the country. Specifically, Jebba Paper Mills is the only producer of kraft paper in the whole of West Africa.
The first phase of the plant upgrade cost N3-billion while the total cost of the overhaul will be approximately N12-billion. The plant boasts the most modern electronic controls and systems, all overseen by state-of-the-art computers. Grammage is automatically controlled, as are factors such as moisture and other quality measurements. Hydraulic and flow circuits have been altered to expand capacity as well.
The company’s commitment to using scrap paper to create its product, apart from the obviously positive environmental implications, has the added benefit of increasing indirect employment opportunities for collectors of scrap paper.
The plant’s 2000 full-time employees are all drawn from the local areas surrounding the facility. The upgrading of the mill has had a very positive effect on the regional economy and the paper mill company has supplied piped water to several local communities.
Olam Nigeria Ltd has a significant presence in Kwara State and constitutes an important partner in the state’s drive towards industrialization and food self-sufficiency. Olam Nigeria is a subsidiary of the Singapore based Olam International, an agricultural products and food ingredients multinational with 8000 employees in 56 countries. Through the Olam Company, Kwara is connected to a distribution network of more than 4000 customers in 60 markets around the world.
In Kwara, Olam has established a cashew-processing plant at Ogbondoroko which produces exclusively for the export market. At least 5000 local farmers are involved in harvesting the raw product, which the company then purchases for beneficiation.
Plans to increase rice production in Kwara and Nigeria received a big boost with the opening of Olam’s 40,000.metric-tonne capacity rice processing factory at patigi in late 2009.
Olam declared that it wanted to produce more than 20 000 metric tonnes of rice per year by 2010, from its facilities scattered throughout Nigeria.
The Federal Government of Nigeria has a stated aim of making the country self sufficient in the production of rice and the establishment of rice-processing factories is clearly an important part of that process. The federal government has a Rice Intervention Fund Scheme and Kwara State is one of the chosen sites for the roll-out of this programme.
Tuyil Pharmaceutical is a major company in the pharmaceutical sector, with a presence in all parts of Nigeria. The decision of Tuyil to begin production in Kwara has extra significance, given the importance of pharmaceutical production in the national economy. The federal government is very aware that Nigeria’s pharmaceutical industry is relatively small and the installed capacity only caters for about 50.75% of the nation’s drug needs. The country is still largely dependent on the importation of drugs. As a result, a ban on the importation of a number of drugs has been instituted in order to stimulate local production.
The raw material requirements of the sector can be classified into heavy and fine chemicals. While the heavy chemicals are mainly mineral and petrochemical-based, most of the fine chemicals are agri-related and Kwara State has many of the relevant resources.
Tuyil Pharmaceutical decided to locate a manufacturing plant in Kwara State because of the peaceful environment and infrastructural advantages such as a good road network and adequate supplies of water and electricity.
Business Monitor International believes that signs for private-sector involvement in African healthcare are very good after the World Bank’s International Finance Corporation (IFC) unveiled a US$l-billion support package for the development of private healthcare on the continent. Although Nigeria is introducing a national health insurance scheme, BMI suggests that the increasingly popular concept of health savings accounts (HSAs) could provide a solution for many millions of Nigerians, particularly those employed in the informal economic sector.
An aspect of Tuyil’s corporate social investment was revealed in 2009 when it donated a building for the use of the secretariat of the Association of Resident Doctors in Ilorin.