Investment Opportunities in Oyo State, Nigeria

1. Investment Opportunities in Oyo State, Nigeria Presentation by His Excellency, Sen. Abiola Ajimobi Executive Governor of Oyo State at the New World Nigeria High Level investment & Business Summit 1 August 2012

2. Our Objective – Why we are here • Oyo State Government of Nigeria is represented at the New World Nigeria, High Level Investment and Business Summit for a number of reasons, some of which include: • To initiate a partnership and strong working relationship with the Bank of Industry, as well as the international development and investing communities and entrepreneurs. • To create awareness on the numerous investment opportunities in Oyo State with a view to attracting more private investment flows into key sectors of the State • To highlight the Government’s priority areas for investment promotion. These include: • Agriculture • Transportation Infrastructure • Manufacturing and Small to Medium Enterprises • Solid Minerals • Culture & Tourism • Power

3. Outline • This presentation will throw light on the following: • History and Economic Profile of Oyo State • Strategic Vision for Oyo State • Priority Sectors and Opportunities for Investment • Incentives for prospective Investors in Oyo State

4. Oyo State’s Antecedents Historically a Pacesetter State… …With abundant and largely untapped resources • Large arable land – 27,107.5km2 (approximately 10,466 square miles) • Large population of about 6.7 million with diverse skills and expertise • Access to world class educational and research institutions (UNIBADAN, NISER, IITA, etc.) • A number of natural tourist attractions • Large deposits of solid mineral resources • We have been known to set the pace in the following areas: • First Sky Scrapper in Africa • First Industrial Estate in Nigeria • First University in the Country • First Stadium in Africa • First Television Station in Africa • Host to one of the first sets of University Colleges in Africa • One of the oldest states in Nigeria • And many others Cocoa House First University

5. Over the years, certain potentials have also been identified in the economic landscape of the State... Economic Profile and Comparative Advantage of Oyo State Popularly known as the “Pace Setter” Oyo State: The Pace Setter *Source: Economic Associates 2010

6. Opportunities Challenges A review of the challenges and opportunities in Oyo State unveil the following… Despite these challenges , enormous economic opportunities abound • Poor infrastructure especially in the rural areas including electricity, transportation, etc • Low productivity and value chain addition especially in agricultural production and processing • High rate of unemployment among youths and women • Ageing farming population • Inadequate funding especially for major/large projects • Shortage of technical expertise in the public sector to drive a private sector led economy • Numerous investment opportunities in agricultural production, agro-allied industries and marketing of agricultural produce • Potentials for tourist attractions and development of the hospitality industry in the State • Exploitation and processing of solid minerals • Opportunities for infrastructural development – Logistics Center, Dry Ports, Free Trade Zone, and Okerete Transnational Border Market • Availability of a large market with a population of over 6.7 million people • Proximity to Lagos air and sea ports • Opportunity to leverage on abundance of skilled but low cost labor in the State • Higher security of life and property as well as a peaceful environment as necessary ingredients for investment flows • Relatively low cost of living fosters low overall cost of doing business

7. Having analysed the Opportunities and Challenges, this is our desire for Oyo State… Our Vision “A State in which people can be the best they can” Strategic Objectives Good governance (participatory, transparent and accountable), effective and efficient service delivery Agro-based economic nerve center for the West African sub-region Prime center for the development of critical technical and vocational skills in specialized areas such as agriculture, manufacturing and craftsmanship Preferred destination for national, regional and international trade, investment flows and leisure activities Determined to make the state physically functional, economically vibrant, socially harmonious and aesthetically delightful

8. Some of the ongoing economic/ business-friendly initiatives of Oyo State include… 1 Establishment of a PPP Unit Establishment of a functional socio-economic management team for the State 2 Preparation of a 10-year Development Plan in progress 3 Enhanced e-Governance Initiatives 4 Effective and efficient monitoring and evaluation framework for the State 5 Steadfast promotion of partnership with the Development community 6 Government has no business in business

9. Oyo State is willing to partner with Investors in exploiting the opportunities in these sectors Solid Minerals Transportation Infrastructure Agriculture Culture & Tourism/ Hospitality Manufacturing & SMEs Power Highlights of the current state of each sector and the aspiration of the State for each of the key focus sectors are presented in the subsequent slides

10. Sectoral ReviewAgribusiness and Food Processing – Current State • The State produces well below its full potential due to the following issues: • Ageing Farming Population • Up to 30% post harvest losses due to poor harvest handling/ storage facilities • Sub optimal agricultural value-chain (lack of processing companies) • Large scale subsistence farming • Inadequate infrastructural facilities and outdated farming methods due to lack of finance • Sub-optimal utilisation of dams for irrigation in the state • Unavailability of managerial expertise amongst others. • Agriculture is the major occupation and source of income for a larger portion of the people of Oyo state. • Oyo State is the 12th largest crop producing state and 15th largest livestock farming state in Nigeria. • Agricultural produce in the State includes: • Tree crops such as cocoa, oil palm; Arable crops such as cassava, yam, maize, rice and Fruit crops such as pineapples, orange, lime, pawpaw, tangerine, guava, banana and tomatoes, etc • Livestock farming is carried out on a small-scale basis.

11. Sectoral Review Agribusiness and Food Processing – Ongoing Initiatives & Investment Opportunities Goal To make agriculture a major driver of growth for the state’s economy, ranking amongst the top 5 agricultural producing states through a profitable, sustainable and technologically driven agricultural sector • Ongoing Initiatives • Construction of three agricultural storage silos (10,000 metric tonnes each) • Preliminary plans for the establishment of canning/ processing factory for key crops • Ongoing resuscitation of farm settlements and school farms in the State • Commercialisation of the Government-owned Fashola Farm • Plans for the development of a 1,377 hectare logistics centre which would be expanded to 15,000 hectares • Investment Opportunities • Agriculture • Fruits and vegetable production • Arable crop production • Aquaculture activities • Livestock farming • Farm machinery leasing • Agro-Processing – Value Chain Additions • Food and Cash crop processing i.e. cassava, oil palm, cocoa, maize, yam, etc. • Tomato paste and fruit juice processing – through the establishment of canning factories • Silo and storage facilities building and operations

12. Sectoral ReviewSolid Minerals – Current State • Oyo state is endowed with soil-based resources which include granite chips, red clay , sand and gravel that have high potentials in the construction industry • The State also has mineral resources including Amphibolites, Marble, Dolomite, Tantalite and Talc • Oyo State is and currently ranks 7th in terms of solid minerals production in Nigeria however, the potentials are yet to be fully explored • The state is also renowned for its impressive gemstone collection and deposits Although there are over 10 solid mineral types in Oyo State, the following are strategic and posses significant international industrial linkage Majorly, current exploitation is focused on marble. Thus leaving significant potential for the exploitation of other available mineral resources

13. Sectoral ReviewSolid Minerals – Ongoing Initiatives & Investment Opportunities Goal To significantly leverage the extensive solid mineral potentials for socio economic development of the State • Ongoing Initiatives • Plans for the establishment of a center for the processing of gemstones in Oyo State • Investment Opportunities • Exploitation of available mineral resources especially with the proven reserves of granite, marble & dolomite, kaolin, etc. • Investment in large scale industrial ventures and industrial clusters • Local and international trade of commodities in the State: Solid minerals • Opportunity to participate as a player in the logistics center which will ultimately be developed into a Free Trade Zone

14. Sectoral ReviewTransportation infrastructure – Current State Transportation in Oyo State is largely by land. Key transport infrastructure issues include: • Inadequate Road Network • Over 1,150km length of Federal Roads in the State • Over 2,345 tarred roads in the State • The State’s road network is still largely inadequate to support the large population, especially in the major cities. • Non-Motorable Roads A number of the major city roads are not motorable leading to frequent motor accidents and traffic congestion. • Low Investment Low investment in the rehabilitation and maintenance of existing infrastructure have resulted in low levels of access to basic amenities and high costs of doing business in the State. • The State has an airport in Ibadan, however the airport is currently sub-optimally utilised • Rail transport in Oyo State has ceased to be relevant in recent times although there are ongoing efforts to expand the rail facility in the State

15. Sectoral ReviewTransportation Infrastructure – Ongoing Initiatives & Investment Opportunities Goal To provide quality infrastructure and transport services for socio-economic transformation and sustainable development of the State • Ongoing Initiatives • Construction of modern terminus • Ongoing plans for the development of a master plan for Oyo State • “Keke Ajumose” scheme which provides tricycles to riders under the umbrella body of their association • Construction, upgrade & beautification of various roads within the metropolis (Circular road) • Planned construction of flyovers at key traffic interchanges • Investment Opportunities • Conversion of the under-utilized Ibadan airport into a cargo airport under a sustainable PPP model • Construction/rehabilitation of major roads under public private partnership • Deployment and Implementation of a mass transit scheme through a sustainable PPP model • Provision of multimodal transport services, including multi-storey car parking facilities

16. Sectoral ReviewManufacturing & Small – Medium Scale Enterprises (SMEs)– Current State • Oyo State currently accounts for less than 1% of total manufacturing in Nigeria. However, Ibadan is the industrial hub of the State with over 60% of the State’s manufacturing output • Oyo state contributed N4.2 billion to the total national revenue from manufacturing, making it the third highest in the south-western region. • Oyo State’s manufacturing industries currently operates below 20 percent capacity • A number of big players in the manufacturing industry have established businesses in the State. Some of such key players include • Nigerian Breweries Plc • British American Tobacco • Procter and Gamble • PZ industries • Various printing & publishing organisations • Oyo State ranks third among south-western state and 14th overall in the country with respect to dependence on trading • Oyo State has embarked on the establishment of enterprise zones across the State in a bid to have a structured market model to take care for unskilled workers and artisans

17. Sectoral Review Manufacturing & SMEs – Ongoing Initiatives & Investment Opportunities Goal To encourage and attract small to medium scale businesses and manufacturing from within and outside Oyo State. • Ongoing Initiatives • Ongoing activities toward the development of a Free Trade Zone to promote and develop manufacturing industries amongst others • Provision of incentives (such as land etc.) to attract foreign businesses and manufacturing companies • Ongoing plans for the facilitation of micro-finance loans to SMEs • Investment Opportunities • Public Private Partnership arrangements with the State Government resuscitate and manage the State-owned companies into commercially viable entities: • Cashew-nuts processing • Juice &Tomato processing • Electric Products manufacturing • Paper milling • Establishment of new manufacturing industries to take advantage of the numerous available resources in the State

18. Sectoral ReviewPower and Energy – Current State • Oyo State is also home to Nigerian Cables and Wires producing housing wires, armored cables, bare conductors, telecommunications cables and customised cables • Oyo State has the potential to support the retail distribution of electricity through the manufacturing of electric poles by Conpole limited, a company with majority share ownership by the State • Conpole (equipped with requisite equipments for production) has over the years performed sub-optimally and currently moribund. • The demand for electric power in Nigeria is estimated at a very modest 20,000MW, but we are only able to generate 4,000MW at the peak of our power generation • Oyo State in line with the general trend in the Country has constantly suffered huge supply gaps in a bid to meet electricity demand • The Ibadan Distribution Company draws approximately 11.5% of electricity from the National grid which is shared amongst five States and as such barely meets the demand • Despite huge supply gaps, monthly revenues for the Ibadan distribution company are in excess of $9.6m monthly. • Oyo State has potential for power generation through the exploitation of the power generation capabilities of the Ikere gorge, one of the 17 dams in the State which has a capacity of generating about 450MW of electricity.

19. Sectoral Review Power and Energy – Ongoing Initiatives & Investment Opportunities Goals To promote industrialisation and ensure stability of power supply in the State through IPP projects and embedded power generation • Ongoing Initiatives • Ongoing discussions with private sector players for the possibility of power generation in the State through the Ikere gorge dam • Discussions with interested parties for the resuscitation of Conpole • Investment Opportunities • Private sector investment in the Ibadan Distribution Company – following the renewed drive by the Federal Government to complete the privatisation process of the unbundled PHCN companies by 2012 • Investment in power generation through the establishment of independent power projects and captive power generation • Technical support to tap the 450MW potentials in the Ikere Gorge Dam as well as optimise other dams and rivers for hydroelectric power generation • Manufacturing of electrical materials from the availability of materials locally • Solar power generation

20. Sectoral ReviewCulture & Tourism/ Hospitality – Current State • Tourism in Oyo State (hotels and restaurants) contributes 0.49% to the State’s GSP, which translates to about N1.2b in 2010 (approx. $7.5m). • There is currently one UNESCO heritage site nomination in Oyo State. The Old Oyo National Park nominated since 1995 • Potential tourist attractions that have historical, cultural and artistic appeal in Oyo State include: • Ado – Awaye Suspended Lake • Captain Bower’s Tower, Ibadan • Royal Forest (Igbo- Oba) in Igboho; • Old Oyo National Park • Rock formation (Agbele hill) in Igbeti • Sogidi Lake in Awe • Alaafin’s Palace, Oyo • Agodi Park and Gardens, Ibadan • Samuel Ajayi Crowther’s Birth Place • University of Ibadan Zoological garden • National Museum, Ibadan • Alagba – The 324 year old tortoise in Soun’s Palace in Ogbomoso Alagba, 324 year old Giant Tortoise in Soun’s Palace, Ogbomoso Old Oyo National Park Erected in honor and memory of Captain Bower, the first resident colonial Administration of Oyo group of provinces in December 1936 as a result of his effort at maintaining peace and social development in the whole of Yoruba towns and cities. Captain Bower’s Tower Many of the tourist sites require investments in terms of infrastructural and aesthetic upgrade in order to attract sufficient tourism traffic in the state

21. Sectoral ReviewTourism/ Hospitality – Ongoing Initiatives & Investment Opportunities Goal To make Oyo State a preferred destination for tourism and leisure activities in Nigeria • Ongoing Initiatives • Signing of an MoU with hotel developers for the development of 2 world class hotels in the State which together with existing hotels barely meet the market demand in the State • Renewed drive towards the development of tourist sites in the State • Investment Opportunities • Public Private Partnership arrangements with the government to develop and manage existing tourist sites • Establishment of new tourist sites such as amusement and theme parks. • Provision of necessary support services such as • Accommodation: Many of the hotels in Oyo are below international standard and in most instances do not have standard facilities to support the demands of visiting tourists. • Restaurants, Bars: Most of the state’s tourist sites presently have little or no entertainment facilities such as restaurant and bars which are required to attract tourists. • Tour operators: Owing to its undeveloped tourism industry, there are presently no tour operators to provide tourist packages in Oyo State

22. The Federal Government of Nigeria along side Oyo State has put together exciting incentives to attract investors who are willing to play in the focus sectors… Federal Government Incentives Oyo State Government Incentives • Pioneer Status: 100% tax holiday for up to seven years granted to qualified eligible industries located in economically disadvantaged local government areas of the Federation • Corporate Tax Relief: Tax relief of up to 120% of expenses on research and development carried out in Nigeria and are connected with the business from which the income or profits is derived • Liberalisation of Ownership: investors can own up to 100% equity shares in any company • Repatriation of Profit: Foreign investors are free to repatriate their profit and dividends net of taxes • Guarantees against Expropriation: There is a guarantee that no enterprise will be nationalised by any government in Nigeria • Minimum Local Raw Material Utilisation: A tax credit of 20% is granted for five years for industries that attain the minimum level of local raw material sourcing and utilisation • PPP Incentives: The State is willing to partner with private investors to increase production capacity, and deliver quality infrastructure across various sectors • Access to land: Prompt access to land through timely issuance of relevant land title documents • Land at Discounted Rates: Available at highly discounted rates as incentives for investors • Personal Tax Relief: Availability of personal income tax reliefs of players in priority sectors of the State • Provision of Infrastructure: Provision of support infrastructure (where required) e.g. access roads, as part contribution of the State towards large projects. • Expeditious Processing: Expeditious processing of required regulatory consent and other regulatory requirements • Guaranteed Security: Extremely successful working relationship with security agents

23. Soliciting for the Sustainable Partnership for the Development of Oyo State Let us join hands on our drive to tap the significant potentials, create wealth for both the investor and the people of Oyo State. We look forward to welcoming you into Oyo State!