THE NOVONE ENTERPRISE ESTATES

FOR THE FEDERAL GOVERNMENT

OF NIGERIA FGN

“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

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

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

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.  

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.  

!The One-Stop Solution!

NOVONE ENTERPRISE ESTATES

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

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.  

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

Typical Block Floor Plan

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)

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.  

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.  

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  

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;  

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.

FINANCIAL FLOW CHART Government/

Investors/ Donor

Agencies

ECO

Tenants

Management Charges (from tenancy considerations)

Social Landlord

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.

¨  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

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.  

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.

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.    

Financial Analysis: Who Invests What?

¨  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

Financial Analysis: Tenant Annual Income Projection

PROJECT IMPLEMENTATION SCHEDULE

(WEEKS)

NOVONE CONSULT LIMITED

5 OGUN STREET, AREA 2, GARKI

FCT, ABUJA www.novoneconsult.com

project@novoneconsult.com