Toni Ogunbor: Economic Diversification, a Catalyst To Growth

The dwindling revenue of the federal government owing to the instability of the global oil market as most recently experienced at the peak of the outbreak of COVID-19 in Q2 and Q3 of 2020, resulted in a setback for the global economy and a humbling experience to all the oil dependent nations, especially Nigeria.

The Nigerian economy experienced a drop in oil revenue in the ‘80s after the oil windfall and has at other times been exposed, thereby reflecting the deficit of harnessing excess revenue. At the peak of oil revenue generation, there were minimal activities to diversify the economy or investment infrastructure like other oil dependent economies even as a member of the Organisation of Petroleum Exporting Countries (OPEC).

Lessons have been learnt over the years, but these have not yielded major changes in policies and implementations. While there is increasing agitation to diversify the economy and with the recent occurrence of major oil players going into renewable energy and fossil fuel, members of the organized private sectors and investors like business entrepreneur Dr Toni Ogunbor, have constantly taken advantage of rising demand in various sectors of the economy to diversify their businesses.

The recent calls to revive the agricultural sector in a bid to boost food production and self-sufficiency is producing results with investments by Nosak Group, a Nigerian business organisation with interests in diverse sectors of the Nigerian economy. The Group under the leadership of Dr Toni Ogunbor, the Executive Chairman and Chief Executive Officer of the organisation has constantly remained focused since it first began operations in the mid-’80s.

His business doggedness is an indication of his belief in the economy of this nation thereby constantly evolving ideas and innovations to improve the nation’s Gross Domestic Product (GDP). Most recently, is ongoing investments in the oil palm plantations with the acquisition of over 5,000 hectares of farmland in Edo State for backward integration. This is in addition to the existing 1,000 hectares of oil palm plantation of Saturn Farms Limited, a subsidiary of Nosak Group. At the heart of the plantation is a 5 tons per day palm oil milling plant that is also undergoing an upgrade to produce over 10 tons per day.

To complement the plantation activities, over 250,000 tenera seedlings have been prepared at various stages from prenursery to nursery and planting. The choice of hybrid tenera seedlings is to ensure maximum yield with its primary feature of bigger fresh palm fruits products. The hybrid seedlings are also known for earlier harvest between 22 – 24 months compared to 36 – 48 months of SIRM standard seedling. These hybrid seedlings will guarantee a return on investment with about seven to eight tons FFB (Fresh Fruit Bunches) per hectare in the first year of harvest.

As the pioneer player in the ethanol sector of the economy, Nosak Distilleries Limited has also taken measures on backward integration in the cassava value chain to boost the local sourcing of raw materials. This has so far seen the acquisition of about 10,000 hectares of farmlands out of about 40,000 hectares required for the cultivation and conversation of cassava to ethanol as well as starch and other derivatives from the staple tuber crop.

Backward integration in the cassava value chain will see the Group make diverse investments through its subsidiary, Premier Plantations Limited in five Nigerian states including Ekiti, Edo, Delta, Kogi and Kwara. This will in no small measure generate employment for youths across the states and increase both economic and socio-cultural activities.

The huge investments of Toni Ogunbor alongside multinationals and local manufacturers on backward integration to source raw materials locally is a catalyst that will jumpstart the economy in the long term as the nation aims to be self-sufficient in food production. Though such initiatives are capital intensive, the gains far outweigh the pains in the long run.

While the members of the organized private sector are embracing local production and manufacturing, it is evident that the government should champion favourable policies such as availability of funds at single-digit interest rates, access to land, corporation from local communities where these lands are acquired, low taxes or tax rebate and maximum security on agricultural investments. Again, the government at all levels need to support investors in combating issues of land encroachments from locals, which results in court cases that drag for a long period of time.

With massive investments in the agricultural sector and the right policies in place, Nigeria will gradually edge to attaining food security and become less import-dependent on food products and raw materials for manufacturing industries. The gains are immense with increased job opportunities for citizens across social classes. This will also see to the growth and expansion of Micro, Small and Medium Enterprises (MSMEs) utilizing various value chains of the sectors.