the novone enterprise estates › novone enterprise estates (10.08.2015)_fgn… · 2015-10-08 ·...
TRANSCRIPT
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THE NOVONE ENTERPRISE ESTATES
FOR THE FEDERAL GOVERNMENT
OF NIGERIA FGN
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“Unemployment, notably youth un-employment features strongly in our Party’s Manifesto. We intend to attack the problem frontally through revival of agriculture, solid minerals mining as well as credits to small and medium size businesses to kick-start these enterprises.” - Inaugural speech by His Excellency, President Muhammadu Buhari following his swearing-in as President of the Federal Republic of Nigeria on 29th May, 2015
MR. PRESIDENT’S MARCHING ORDER
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MOTIVATION
“ A$er over two decades of intensive research, I am proud to present a novel, home-‐grown solu%on to the na;onal search for Food Security (Agriculture) and Sustainable
Industrializa%on, while delivering Quality Housing that targets Employment of the Youth
demography in a wholesale package that addresses several other concerns
in one fell swoop. ”
- Arc NYA-ETOK Ezekiel
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v Every Government at all levels is faced with Multi-faceted and Multi-dimensional issues and challenges: -‐ Dilapidated to insufficient infrastructure; -‐ Educa%on to Healthcare; -‐ Housing to unemployment; etc
v Wisdom therefore demands that we explore solutions and
approaches that are multi-pronged.
v We need now, more than ever before, to think outside the box and explore solu;ons that could be unconven%onal and yet effec%ve, sustainable, and targeted.
The SOLUTION? …Enterprise Estates!
Pause & Think
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CONSIDER THIS: • 90% of Nigerians live on $2 or less per day,
• That comes to about N12,000.00/month (average 30 days)
• And translates to N144,000.00/year, and N1,440,000 in ten years;
• In essence, house of N1.44m would require 10years of using 100% savings on a 0% interest mortgage facility;
• This will assume zero spending on feeding, clothing, transporta;on, et al, in ten years that would s;ll make a house of say N1.5 not affordable to over 90% of the populaLon.
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The Big Question is HOW do we:
ProducLvely Engage and Empower the Youth demography to drive the Agricultural and Industrial RevoluLon of Mr. President
As well as:
v Deliver on food security by comprehensively integra;ng farming within primary products;
v Step into the Housing Funding Gap challenge by innova;vely improving their economic capacity;
v Tackle the high levels of unemployment while developing skills and human capacity in a truly sustainable way;
v Counter rural-‐urban migra%on;
v Make realis;c headway in poverty allevia%on and Wealth Crea;on; and
v Above all, build a new genera;on of youths that will be ‘indoctrinated’ on Na%onalism, Patrio%sm, while inculca;on in them the spirit of enterprise.
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!The One-Stop Solution!
NOVONE ENTERPRISE ESTATES
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The Novone Enterprise Estates is a novel estate-‐based ini;a;ve specially adapted to holisLcally address the housing and other socio-‐economic challenges, parLcularly amongst the Low/No-‐income earning group in Nigeria.
The ini;a;ve involves crea;ng estates that are designed to serves as CoRage Industry clusters where each is equipped with an Enterprise Centre (EC) responsible for the processing of the produce/products from each estate. It u;lizes the concept of CoVage Industry clusters and forward contracts, to create sustainable appren;ceship estates, that primarily targets the moun;ng jobless Nigerian youths, consequently providing them with secure and sustainable income.
*no requirement of government annual subven;on for upkeep or maintenance.
Introduction
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Benefits The scheme is poised to be a trailblazer even in Africa, and has the following objec;ves, to: q Introduce a home-‐grown soluLon to Social Housing challenges;
¨ Strategically address the problem of food security through the crea;on of sustainable agricultural and agribusiness enterprises at the household level;
¨ Drive substan;al urban-‐rural migraLon;
¨ Generate widespread gainful engagement especially for the ac;ve work force (youth demography);
¨ Establish a plaXorm to house, train and develop a new genera;on of youths in modern agricultural prac;ces (‘Agripreneurs’) ;
¨ Serve as pioneer project to spearhead Industrial RevoluLon;
¨ Create what could become alternate economies through large scale produc;on of commodi;es like CATFISH (Nigeria spends about N123b impor;ng fish every year –FMARD)
¨ ARract private sector capital for investment; ¨ Building the capacity of the people through constant standard skill acquisiLon and training programs;
¨ Create the framework for an equitable society and social stability; and ¨ Achieve a robust win-‐win and sustainable approach to poverty alleviaLon, reduce the burden/pressure on Government, and allow them focus on other responsibili;es.
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The Enterprise Model
Ø Agro-‐Centred Estate Ø Located in Rural areas; Ø On-‐ site Processing Plant, built by established names;
Ø Housing units, fiVed with enterprise faciliLes such as small farms, beehives, fishponds, e.t.c. ;
Ø Tenancy based on set criteria and strict performance benchmarks;
Ø Social Landlords to develop and manage estate facility;
Ø Self-‐ sustaining system of producLon, processing, maintenance and revenue generaLon;
Ø Simultaneously solves housing challenges, urban populaLon congesLon, unemployment, food insecurity and health challenges resulLng from poor housing.
Ø A ONE STOP SOLUTION!
Housing Units
Collection Point
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Typical Block Floor Plan
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MAJOR PLAYERS
Government: THE FACILITATOR / REGULATOR
Social Landlords: THE FACILITY MANAGER
Private Investor: THE ENTERPRISE CENTER OPERATOR (E.C.O.)
The Youth: THE BENEFICIARIES (TENANTS / APPRENTICES)
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GOVERNMENT: THE REGULATOR
Ministry of Housing
¨ It is expected that this organ of the government will adopt and promote this Ini;a;ve as a laudable program of this administra;on to combat the Housing and Unemployment issues in the country.
¨ Endorsement of the Government will be important in aRrac;ng the required private sector par;cipa;on. Also, land alloca;on for the Ini;a;ve will be easier with the Ministry ensuring the buy-‐in of the Local Governments.
¨ As the Enterprise Estates Regulator, the Ministry will have adequate u;liza;on of her staff for the overseeing of the stakeholders (Social Landlord, ECO, private investor(s), and Tenants) –as may be necessary.
¨ This would guarantee the overall quality and transparency of all day-‐to-‐day dealings, as every stakeholder would serve as a check on the other, thus crea;ng administra;ve balance.
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SOCIAL LANDLORD: THE FACILITY MANAGER
¨ Social Landlords will be responsible for the development of the estates with the necessary support from the Government.
¨ Also, as the Facility Manager, the Social Landlord will not only play the role of coordina;ng the project execu;on, but will also be responsible for ensuring op;mal physical value and func;oning of the housing structures and ancillary facili;es a$er construc;on.
¨ He will be responsible for administering the tenancy concerns, monitoring compliance of tenants with contracts, and overseeing the remunera1on cycle between tenants and Social Landlords.
¨ He will liaise with the Enterprise Centre Operator for prompt and adequate payment for all services rendered by the tenants.
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E.C.O.: THE OPERATOR
¨ The E.C.O. would be a large manufacturing concern that requires the output from the estates as components of his produc;on.
¨ The E.C.O. will in turn: -‐ Provide technical support to the tenants; -‐ Ensure regular supply of required inputs to the tenants; -‐ Ensure controlled quality of their outputs; -‐ Purchase their outputs at a fixed but compe;;ve bulk market price for his final produc;on/processing; and
-‐ Provide appren;ceship/entrepreneurial trainings for the tenants
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SELECTION OF THE E.C.O.
¨ The Social Landlord and the Regulator will have joint responsibility for selec;ng appropriate ECOs from a pool of pre-‐qualified applicants for each Enterprise Estate.
¨ Companies that qualify as ECOs include: -‐ Fast foods restaurant chains with interest in backward integra;on,
-‐ Large scale agricultural organisa;ons that operate contract farming system as a strategy for expansion;
-‐ Large scale manufacturing companies that require outputs from the estate as input for their produc;on process; and
-‐ Export-‐oriented companies that desire to use Outgrower Contract terms as a strategy for ensuring steady product supply;
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TENANTS: THE BENEFICIARIES
¨ Occupants of the Novone Enterprise Estate will be carefully selected youths who are adequately qualified to live in the estates under the agreed terms and conditions.
¨ To ensure productivity and social management, tenants would:
v Be between 18 and 28 years in age; v Be physically fit; v Be literate (can at least read and write); and v Be single, or where married with a child no older than 1year.
v Tenure of tenancy will be not more than 1 year at any instance. Because the scheme is self- sustaining, property is LEASED, NOT
OWNED, and strict performance benchmarks are prerequisites for continued tenancy.
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FINANCIAL FLOW CHART Government/
Investors/ Donor
Agencies
ECO
Tenants
Management Charges (from tenancy considerations)
Social Landlord
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IN SIMPLE TERMS…
¨ The tenants develop/grow the inputs supplied by the E.C.O. in the convenience of a specialised and well constructed home, while the (E.C.O.) pays for these products and then processes them at the Enterprise Centre (EC).
¨ This presents a mutual ly benefic ial relationship, where produce (raw product), processing, final product, and income are all realized within one facility.
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¨ From financial analysis, the tenant can come from zero-income level and is assured of a net income of N30,000 – N45,000 after rent, ECO input, and service/facility management charge deductions. This comes close to twice the National Minimum Wage, with no extra demands on earnings for expenses like transportation.
¨ This initiative would have successfully delivered empowerment/engagement to at least 5,000 – 10,000 persons per estate, in direct and indirect engagements
FINANCIAL ANALYSIS
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Involvement of MDAs ¨ Ministries and Agencies will be criLcal parLcipants in:
¨ Finance: Working with the CBN and other finance-‐related insLtuLons, formulate monetary policies that will compel commercial banks to invest SME funds in the project, and SEC to invest Unclaimed Dividends and Dormant Accounts in the project which is seen to be stable, self sustaining, and profitable.
¨ Agriculture: To support the Agric component through development partners, and research insLtutes.
¨ Industry, Trade, and Investment: Through BOI and other strategic development partners, to support the ECO and the MPU for direct loaned and development grants
¨ Science and Technology: Through Tech AcquisiLon agencies, to develop new technologies for the MPUs and other domesLcated new technologies etc.
¨ Water Resources: Assist in developing the water component of the scheme, and the buy-‐in of her development partners and strategic service providers.
¨ Power: Assist in developing the power component of the scheme, and the buy-‐in of her development partners and strategic service providers.
¨ Ministry of Youth Development & NaLonal Youth Service Corp: Consider a new extension service scheme for corp members using the scheme model.
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OTHER STAKEHOLDERS
¨ Services Solution Providers: For Waste Management, Power, Water Provision and Reticulation, Telecoms Services, etc.
¨ Direct Foreign Investors: Exploring the investment potentials as the project is self sustaining and profitable.
¨ Private (Local) Investors: Exploring the investment potentials as the project is self sustaining and profitable.
¨ REDAN and other Private Developers: Taking advantage of the vast opportunities as Social Landlords and facility managers.
¨ Funding Institutions: Exploring the business opportunities in the project which is self-sustaining and profitable (notwithstanding the very high social impact of the scheme)
¨ Donor Agencies: Taking advantage of the avenue to providing useful aids towards national socio-economic development and Corporate Social Responsibility.
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CONCLUSION
¨ The Novone Enterprise Estate is an ini;a;ve that deserves the support of the Government and socially responsible individuals and corporate bodies.
¨ It is therefore our hope, expecta;on, and prayer that the Nigerian Government will use this ini;a;ve as a veritable tool to bring about a new dawn in housing delivery, job and wealth crea;on, unemployment and poverty eradica;on, food security, and social stability.
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Financial Analysis: Who Invests What?
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¨ This is based on the following assumptions: ¨ Using fish farming as an example;
¨ Each tenant having a fish pond attached to the house;
¨ Fishpond capacity is 500 fingerlings, 3 farming cycles per year or 1,500 fishes harvested annually by each tenant. This comes to 300,000 fishes per estate per year;
¨ Sold at N500 each to the Enterprise Centre. That is N150,000,000;
¨ Estimated production cost of N300 each or N90,000;
¨ Other business activities by each tenant @ N1,000 per day, or N60,000,000 annually; and
¨ Estimated production cost N400 per day
Financial Analysis: Tenant Income Projection
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Financial Analysis: Tenant Annual Income Projection
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PROJECT IMPLEMENTATION SCHEDULE
(WEEKS)
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NOVONE CONSULT LIMITED
5 OGUN STREET, AREA 2, GARKI
FCT, ABUJA www.novoneconsult.com