Ogun State Government has signed agreements for the execution of three Development Finance Institutions-funded projects in line with Governor Dapo Abiodun’s economic development agenda in the state.
The projects include the Ogun State Economic Transformation Project (OGSTEP), Rural Access and Agricultural Marketing Project (RAAMP) and Value Chain Development Programme (VCDP).
The state Commissioner for Finance and Governor’s Chief Economic Adviser, Mr Dapo Okubadejo, signed the agreements on behalf of the state while the Minister for Finance, Budget and National Planning, Dr (Mrs.) Zainab Ahmed, signed on behalf of the Federal Government.
Speaking on the projects’ significance, Okubadejo said OGSTEP deal worth $250m was a World Bank-funded project aimed at increasing the participation of the private sector in the state’s economy with focus on improving the business-enabling environment, strengthening agri-food value-chains and upgrading skills.
He noted that the project had commenced in 2017 with the payment of $5m as Project Preparation Advance (PPA) to support the state government in preparing for the formal application of the project.
“After a very rigorous evaluation and documentation requirements, which intensified from June 2019, OGSTEP was formally approved by the World Bank Board on February 18, 2020. Consequently, the main financing agreement and the subsidiary financing agreement were executed with the Federal Government of Nigeria,” he said.
The commissioner submitted that OGSTEP would make the state more attractive for private sector investments, thus increasing its internally generated revenue base.
He added that the World Bank would provide the much needed financial and technical support towards implementating various economic reforms and initiatives.
On the $45m Rural Access and Agricultural Marketing Project (RAAMP), Okubadejo disclosed that Ogun State, with three projects, was a prime beneficiary of six projects approved by the World Bank across the country on February 18, 2020.
He said, “RAAMP, which has the mandate of fixing select rural roads and markets across the three senatorial districts of the state, has been running at preparatory stage with state counterpart fund before the signing of the $44.23m credit agreement.
Ogun State and the Federal Government, according to him, signed the Subsidiary Loan Agreement on February 11, 2021 to finance rural roads and develop select markets for enhanced prosperity to local farmers, mainly youths and market women.
“The signing of the agreement for the upgrade, rehabilitation, routine maintenance, spot improvement and performance based maintenance, will culminate in the improvement of no fewer than 1495km of rural roads,” he said.
On the VCDP worth $15m, the commissioner stated that the project was being implemented in only nine states of federation with Ogun State as the only one from the South-West. He listed other states as Anambra, Benue, Ebonyi, Niger, Nasasrawa, Kogi, Taraba and Enugu.
“The objective of the programme is to enhance on a sustainable basis, Incomes and food security of small holder farmers engaged in the production, processing and marketing of rice and cassava in the eight participating LGAs in the state,” he said.
Okubadejo revealed that the state government had supported 8,534 small farmers to access improved farm inputs as well as linkage to the market with recommended seeds, fertilizers and agrochemicals, adding that over 1000 youths were trained on modern rice and cassava farming techniques.
He disclosed that rice production recorded an increased yield of 47 percent for VCDP beneficiaries from 1.5mt/ha to 3mt while cassava recorded increase in yield of 61 percent for VCDP beneficiaries from 18mt/ha to 32.3mt/ha.
The commissioner also said with Additional Financing (AF1) of $89.1m, which was provided to the programme by IFAD at the request of the Federal Government VCDP, the programme implementation has been extended by three years period, bringing its completion to December 31, 2022 and the loan closing date to June 30, 2023.
“The total amount is $136.9m of which $89.1m from IFAD Loan and $19.3m from co-financiers. The Federal Government of Nigeria (FGN) counterpart fund of $5.8m; State Governments counterpart fund of $12.4m; Local Governments counterpart fund of $0.6m; Beneficiary Contribution $7.2m and beneficiary savings of $2.5m for all the nine participating states,” he added.