Reforms to drive growth in Nigeria's south-western state of Osun

Having been established in 1991, the State of Osun is one of the younger states in Nigeria, and in recent years the state government has made ambitious efforts to expand and develop the local economy.

Named after the River Osun, linked to the Yoruba goddess of fertility, the state was carved out from the former territory of Oyo State during a boundary re-drawing in the 1990s. Over the past two and a half decades, Osun has grappled with many of the same challenges as other states in the country – under-maintained infrastructure, irregular federal funding and inadequate social services – but a spate of reforms launched under Governor Ogbeni Rauf Adesoji Aregbesola are aiming to address those issues. Aregbesola was elected to a second term in August 2014 and confirmed into office in November 2014.

Demographics

The most recent census, conducted in 2006, recorded a population of 3.4m, making Osun the 17th-most-populous state. The population of the state capital, Osogbo, at the time was 865,000, projected to rise to more than 2m by 2035. Other major population centres include Ife, Ede, Ilesa, Ejigbo, Iwo and Ikire. The gender split is equitable at around 51% male and 49% female, and, as is the case with many emerging markets, the population is young, with 60% of residents under the age of 24.

The state’s largest ethnic community is Yoruba, although it is also home to other groups, including Hausas, Igbos, Urhobos, Fulanis, Tivs and Nupes. English is widely spoken in business settings, while residents also speak a range of local languages and dialects, such as those associated with the Yorubas, Oyos, Ifes, Ijesas and Igbominas.

As far as religion is concerned, similar to the rest of Nigeria, the State of Osun has large populations of Christians, Muslims and adherents of traditional religions, although as in many parts of West Africa, there is a certain degree of syncretism.

Geography & Climate

The State of Osun sits in south-west Nigeria, bordered by Kwara State to the north, Ekiti State and Ondo State to the east, Ogun State in the South and Oyo State in the west. Its capital is Osogbo, although there are around 200 major towns spread across a total of 14,875 sq km. In the two decades since Osogbo was established as the capital, the city has seen significant growth, in part a result of an increase in migrant labour.

The State of Osun has two major ecological zones, including rainforest in the south and savannah in the north. There are many rivers and lakes, with these supporting a number of dams. The state has a climate suitable for the production of many cash crops, with annual rainfall of between 1000 mm and 1500 mm, while daily temperatures range between 28°C and 32°C. There are two predominant seasons: a dry season that runs from November to April and a wet season from April to November.

Government

As one of the 36 states, Osun is represented at the national level by three senators, out of a total of 109, and nine House of Representatives members, out of 360. The state is further broken down into 30 local government areas and three senatorial districts (Osun Central, Osun East and Osun West) at the federal level, each of which is composed of two administrative zones.

The legislative arm at the state level is called the House of Assembly, and it is mainly responsible for developing laws and supervising the executive branch (governor’s office). Members are elected by the people and serve their respective state constituencies. Osun’s executive authority is vested in the office of the governor, whose inhabitants serve four-year terms coinciding with presidential elections.

The state’s bureaucratic structure is modelled in part on that of the federal government. Tasks and functions are assigned to ministries, departments and agencies, with mandates for a wide variety of sectors and issues including the Ministry of Agriculture and Food Security, the Ministry of Education, the Ministry of Local Government and Chieftaincy Affairs, the Ministry of Finance, the Ministry of Health and the Ministry of Works, to name a few.

A number of specific bureaux also sit directly under the Office of the Governor, including the Bureau of Social Services and the Office of Economic Development and Partnerships.

Under the current constitution, funding is allocated to state governments by the federal government on a monthly basis, with the amount being determined primarily on the basis of population figures – something that has in the past made the national census a point of particular contention.

States are also able to raise their own revenues through personal income taxes, along with various household and corporate taxes and fees. In 2012, the State of Osun was also one of the first non-sovereign public entities in the country to turn to the debt markets (see Economy analysis).

Politics

In the State of Osun, elections for statewide office are conducted and supervised by the Independent National Electoral Commission (INEC), which has offices and a resident commissioner in every state, while local government/area council elections are conducted every three years by the State Independent Electoral Commission.

Nigeria has a multiparty system with 25 registered political parties, according to INEC, with the People’s Democratic Party (PDP) historically holding Nigeria’s presidency and dominating the national legislature since the first elections in 1999. However, in the 2015 presidential elections a newly created umbrella opposition party, the All Progressives Congress, successfully defeated the PDP incumbent.

Corruption has historically been cited as a key obstacle to doing business in Nigeria at both the federal and state levels; however, several measures in recent years have taken aim at everything from money laundering to bribery. The Economic and Financial Crimes Commission was set up in 2003 and has launched investigations into the public and private sectors. Electoral manipulation is also a concern.

Legal

As dictated in the Nigerian constitution, the chief judge of each state has the power to make rules governing the state’s courts. Each state is empowered to make its own set of civil procedure rules which gauge how commercial cases are litigated. In all states, both high courts and magistrate courts (lower courts) control breach of contracts.

While high courts can hear on cases of any amount, the threshold varies state by state for magistrate courts. The greatest delays tend to occur during the trial and judgment period – an average trial takes 13 months across the federation. This situation is mainly blamed on congestion and adjournments, often at the request of lawyers, but also due to judges travelling out of the state. Lawyers report that judicial transfers cause significant delays, in some states requiring that all cases begin again as new. To date, only Lagos State has enacted a specified commercial court system, and subsequently saw its average time to enforce contracts drop by nine months.

Natural Resources

Although the State of Osun does not have the same hydrocarbons resources as the Niger Delta region, it still benefits from a favourable climate and geography. The state’s equatorial climate makes it fertile ground for both crop cultivation and animal husbandry, while sizeable water resources provide suitable grounds for fisheries and the generation of hydroelectric power. The establishment of a number of plantations across the state has expanded the size of Osun’s forestry reserves to more than 90,000 ha. As in much of Nigeria, solid minerals remain largely unexplored, although the Osun government recently confirmed deposits of over 1m ounces of gold, with sizeable quantities of talc and feldspar (see Industry analysis). However, there remains a need for further geological mapping.

Cultural Destination

The State of Osun is a major cultural destination for Nigeria in general, and for Yorubas in particular, as the location of the UNESCO World Heritage site at Osun-Osogbo Sacred Grove. The Osun-Osogbo Sacred Grove consists of 75 ha of protected primary forest, and hosts a variety of shrines, monuments and art in honour of Yoruba deities. The Osun Osogbo Festival is celebrated every August and remains one of the most popular festivals in Nigeria, attracting tourists from all over the world. It recorded over 20,000 arrivals in 2013, according to the state’s tourism ministry. The state also has a series of iconic waterfalls within an hour of the capital. The most prominent are Olumirin Falls in Erin Ijesha, which attract more than 10,000 visitors a month.

As part of what is known as Yorubaland – territory historically settled by Yoruba peoples – the state also has strong links to the African diaspora community. The Yoruba diaspora consists of two major groupings: the first are relatively recent migrants dating back to major economic changes in the 1960s and 1970s, while the second is much older, dating back to the transatlantic slave trade, and is often found in countries such as Brazil, Cuba, and Trinidad and Tobago.

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The Report: Nigeria 2015

The State of Osun chapter from The Report: Nigeria 2015

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