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OYO STATE

PACE SETTER STATE

Known as the “pace setter state”, Oyo is in south-west Nigeria and borders the states of Ogun, Osun and Kwara, as well as Benin. With an extensive interstate road network and the ability to capitalise on high volumes of cross-border activity, the state benefits from a strategic location, enabling companies to receive shipments from the ports of Lagos, reach markets in the country’s northern and eastern regions, or supply customers in Benin and beyond. Businesses in the state still face challenges posed by infrastructure bottlenecks, but new policies, developed in conjunction with federal programmes, are helping to incentivise investment by strengthening Oyo’s competitive advantages.

Although links to neighbouring markets are a major attraction for investors, the local market holds sizable appeal as well, both in terms of potential consumption and labour supply. The last census recorded an estimated 6.59m, making it the fifth-most-populous state in Nigeria, according to the figures from the National Bureau of Statistics (NBS), which projected the state population to stand at 7.1m people in 2013.

Looking at demographic patterns, there is an equitable gender split with over 49% of the population being female, according to 2013 estimates. There is a strong bias in age, however, and like many emerging economies the population is young as around 47%, or 3.4m, of the population is under the age of 24. Meanwhile, population density was estimated to be 272 people per sq km in 2015.

 

Oyo State’s per capita income in 2015 was N56,903 ($314), ranking it 13rd in the country. The state offers significant opportunities for consumer-oriented firms, due to its high per capita income, along with Lagos, the Federal Capital Territory, Kaduna and Osun.

Although Oyo State does not benefit from the same level of hydrocarbons riches as some of the states of the Delta region, it still provides a number of natural attributes that allow for large-scale primary and secondary activity. NBS ranks it as the 14th-largest state in the federal republic with a total land area of 28,454 sq km. This area is split into two distinctive ecological zones, the western rainforest to the south and the intermediate Guinean savannah to the north. Both zones harbour an abundance of natural resources, including solid mineral deposits of gold, marble, clay, kaolin and granite, among others. There are also thick forest reserves and swathes of uncultivated agricultural land.

The equatorial climate is highly conducive to arable cultivation and livestock agriculture with average daily temperatures ranging from 25°C to 35°C, varying between wet (April-October) and dry ( November-March) seasons. The state receives a mean annual rainfall of 1194 mm in the north of the state and 1278 mm in the south, which feeds an extensive fluvial network that includes the Ogun, Oba, Oyan, Otin, Ofiki, Sasa, Oni, Erinle and Osun perennial rivers.

Natural resources are paramount to a state economy that is largely agrarian in nature. The local economy contributed 0.86% of national GDP , which left Oyo 18th out of 36 states in terms of economic output. In terms of non-oil activity, however, with oil and gas production excluded from the equation, its national position rises to 15th.

A closer look at the breakdown reveals that nine key sectors contribute to nearly 85% of GSP. At the top of the list is crop production, including both cash crops like cassava and oil palm and staples, which had a worth of N93.18bn ($587.03m) in 2011, or roughly 29% of GSP. Husbandry, livestock and fisheries are worth an aggregate N22.7bn ($143.01m), or roughly 7.08% of GSP. This is a comparatively large component in relation to other states – something that is reflected in the fact that Oyo State is one of the largest poultry producers in the country.

The second-largest source of state output is wholesale and retail trade with a 19.74% contribution to GSP worth N63.3bn ($398.79m). This makes Oyo the sixth-largest state contributor to national output in wholesale and retail activity, and is in part a reflection of both the high level of cross-border volumes and the rising rate of local consumption. While the local trading sector is still largely dominated by the grey market, efforts are being made to formalise transactions through public and private sector initiatives – with some success as evidenced by the arrival of large investors such as South African retail chain Shoprite, which recently established a presence in Ibadan.

Mokola Overhead Bridge, Ibadan.

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Although Oyo State does not benefit from the same level of hydrocarbons riches as some of the states of the Delta region, it still provides a number of natural attributes that allow for large-scale primary and secondary activity. NBS ranks it as the 14th-largest state in the federal republic with a total land area of 28,454 sq km. This area is split into two distinctive ecological zones, the western rainforest to the south and the intermediate Guinean savannah to the north. Both zones harbour an abundance of natural resources, including solid mineral deposits of gold, marble, clay, kaolin and granite, among others. There are also thick forest reserves and swathes of uncultivated agricultural land.

The equatorial climate is highly conducive to arable cultivation and livestock agriculture with average daily temperatures ranging from 25°C to 35°C, varying between wet (April-October) and dry ( November-March) seasons. The state receives a mean annual rainfall of 1194 mm in the north of the state and 1278 mm in the south, which feeds an extensive fluvial network that includes the Ogun, Oba, Oyan, Otin, Ofiki, Sasa, Oni, Erinle and Osun perennial rivers.

Natural resources are paramount to a state economy that is largely agrarian in nature. The local economy contributed 0.86% of national GDP , which left Oyo 18th out of 36 states in terms of economic output. In terms of non-oil activity, however, with oil and gas production excluded from the equation, its national position rises to 15th.

A closer look at the breakdown reveals that nine key sectors contribute to nearly 85% of GSP. At the top of the list is crop production, including both cash crops like cassava and oil palm and staples, which had a worth of N93.18bn ($587.03m) in 2011, or roughly 29% of GSP. Husbandry, livestock and fisheries are worth an aggregate N22.7bn ($143.01m), or roughly 7.08% of GSP. This is a comparatively large component in relation to other states – something that is reflected in the fact that Oyo State is one of the largest poultry producers in the country.

The second-largest source of state output is wholesale and retail trade with a 19.74% contribution to GSP worth N63.3bn ($398.79m). This makes Oyo the sixth-largest state contributor to national output in wholesale and retail activity, and is in part a reflection of both the high level of cross-border volumes and the rising rate of local consumption. While the local trading sector is still largely dominated by the grey market, efforts are being made to formalise transactions through public and private sector initiatives – with some success as evidenced by the arrival of large investors such as South African retail chain Shoprite, which recently established a presence in Ibadan.