Etokowo Owoh
There is a genuine concern that Akwa Ibom State has been unable to outgrow its dependence on the civil service as the primary source of livelihood for its ever-growing population. Over the last 25 years, the refrain on the lips of successive leaders in the state has been the need “to grow an alternative economy” as a means of leapfrogging out of the civil service–dominated system. How much of this has been achieved is evident for all to see.
Recently, I spoke with a former ranking government official with responsibility for economic planning of the state. He said he would rather invest in treasury bills than in production. In his view, the enabling environment is not conducive to production. Governments in the state, past and present, appear to hold the view that “government has no business doing business.” The combined effect of these two positions is that the state is doomed to remain a consuming society rather than participate meaningfully in the real sector. My contention, however, is that until we overcome the inertia within the private sector, we will continue to have a large population trapped in poverty. The state itself will remain poor as an entity, despite significant revenue inflows.
Why do people on this side of the Niger bypass production in favor of speculative investments? Why does government accept the simplistic claim that it cannot be a driver of production, at least to some extent? The corollary question is: why do we consume what others labor to produce? And how proud can we be as mere consumers of goods produced by the sweat of other states and countries?
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The answers are not far-fetched. First, and most importantly, Akwa Ibom people generally exhibit a weak entrepreneurial culture. This is what one Indian professor described as a “low N-arch entrepreneurial drive.” Many people have a strong preference for civil service–related employment. We are risk-averse. When we consider investment, we tend to choose areas that demand little, if any, managerial acumen—businesses we can oversee passively, even if poorly managed—such as petrol stations, beer parlors, hotels, and real estate speculation. Even department stores, commonly referred to as “supermarkets,” are largely dominated by outsiders. These are symptoms of a weak entrepreneurial drive and a deep aversion to ventures that challenge us. Yet, there can be no gain without pain, and production remains a goldmine waiting to be tapped.
Where such conditions prevail, deliberate intervention becomes necessary. Otherwise, the state will remain only nominally rich despite its petrodollar revenues. The people will remain largely poor, afflicted by unemployment and helplessly dependent on others for survival. Capital flight will persist, as much of the oil revenue exits to other states.
There is little to gain from blaming the people. No one functions beyond their mental capacity unless they are willing to learn. It is the responsibility of government to intervene and create an enabling environment that encourages production-oriented thinking. The question, then, is what should government do to stimulate production and invigorate entrepreneurship?
In a context of inadequate infrastructure, the private sector can only thrive through industrial clusters, supply chains, skilled labor, and efficient logistics networks. Akwa Ibom lacks functional production clusters. Government-owned enterprises, rather than being privatized, have been left to deteriorate under poor corporate governance practices. The sight of these moribund businesses discourages others from venturing into production. The situation in Lagos and Ogun States is different; they have a long-standing history of industrial growth supported by private-sector management principles. Industrial production cannot flourish within the rigidities of a civil service system where accountability for actions or inactions is weak. Investors are cautious because private capital is both scarce and expensive.
The way forward is clear. First, government should privatize the businesses it currently owns and manages, recover the invested funds, and redirect them strategically. Second, it should develop industrial clusters as the first step in a phased 5- to 10-year industrial plan. These clusters could include petroleum and gas–based industries in the Eket–Onna–Ibeno axis; agro-processing clusters in the Abak–Oruk Anam–Ikono–Ini axis; a marine economy cluster in the Oron–Mbo–Ibeno axis (hence the need to fast-track the seaport project); tourism clusters in Uyo (kudos to Pastor Umo Eno on this front); and aviation-linked logistics around Victor Attah International Airport.
Third, enterprise villages should be established in each senatorial district to increase the volume of trade and reduce capital flight. Fourth, practical and hands-on SME reforms should be introduced, given that even developed nations rely heavily on SMEs for employment generation. Fifth, government should provide special financing for SMEs at interest rates of 5 to 8 percent, with less stringent collateral requirements. Sixth, efforts to secure reliable and independent power supply should be accelerated as a key industrial incentive. Seventh, existing political leaders who have benefited from public office should be encouraged to invest in the real sector to justify years of patronage. Eighth, government should actively woo private investors from outside the state to invest locally. Ninth, practical investment incentives – such as simplified land acquisition processes, 10- to 15-year loans with a three-year moratorium, and extensive global publicity-should be rolled out. Finally, deliberate steps must be taken to improve the ease of doing business in the state.
All these measures should be implemented within the framework of a clearly defined 10- to 15-year Industrial Plan, complete with measurable performance metrics.
Owoh is a Management Consultant and Investment Analyst
