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Nigeria: One Country Four Economies Discussion Points By Falalu Bello, OFR
v I thank my friend and Junior brother, Mr. Sam Nda-Isiah, for inviting me to speak at this important forum on what to do to reverse de-industrialization in Northern Nigerian. When the invitation was extended to me, I asked of the topic I am to speak on and I was not given any. All my brother wanted me to do at this Conference is to set the tone for the experts invited to do justice to the topic under discussion. My role therefore is not to talk of how industrialists are to access funds from the banking system nor even to talk on such general issues as the importance of finance to industrialization:
v I have been invited to contextually put Northern Nigeria amongst other regions in Nigeria and could easily have compared Northern economy and its Southern Counterpart. I have chosen not to go this route because, I want us all to see that geography, history and the Obasanjo administration and its reform agenda have created four (4) fairly distinct economies in Nigerian. We as Northerners need to appreciate where our economy currently stands amongst other economies in Nigeria so as to appreciate the kind of race we have to run if we are to remain relevant in Nigeria.
v On the basis of ownership and/or control of resources that make for economic development, post-Obasanjo Nigeria in terms of strength could easily be categorized into 4 economies as follows:
a) South West Economy; b) South East plus Delta Economy; c) Northern Economy; and d) South South minus Delta Economy
v The four economies mentioned above are fairly distinct with each growing at its own pace. The South Western economy is growing at a faster rate than all followed by South East plus Delta economy whilst those of the North and South South minus Delta could at best be described as stagnant. A simple analysis of these four economies is given below:-
a) South West Economy South Western Nigeria with a Land Mass of 76,852 square kilometres and population of 25.2 million today owns and/or control 60% of the nation’s industrial capacity, 44% of banking assets, 67% of insurance assets and is house to the nation’s three deep sea ports of Apapa, Tin Can Island and Roro; the busiest international airport of Ikeja, three thermal stations of Egbin, Papalanto and Omotosho. Today, its three major industrial estates of Agbara, Ikeja and Otta are all linked to gas under the West African gas pipeline plan and piping of gas is ongoing from Otta to Abeokuta. Added to these, the South Western population today is the most educated as western education came through there and education as a resource was democratized since the early sixties. Geographical location, democratization of western education, availability of resources enhanced in last 9 years and some empowerment during the Obasanjo administration have collectively enabled the South Western economy to rank as first of the four economies in Nigeria. Today, the South West as a region can boast of having a defined growing middle class and is perceived to have at least 20,000 of its indigenes with net worth of over N100m each. Take it out of Nigeria, the South West economy with is defined growing middle class and resources, will be one of the fastest growing economies in the world.
b) The South-East plus Delta The South Easterners plus their cousins across the Onitsha bridge control commerce in all parts of Nigeria and are thus largely employed. The region has clusters of small scale industries around Nnewi and Aba. The banking consolidation has assisted these people to now have ownership and or control of over 50% of Nigerian banking assets. It also controls 21% of the nation’s insurance assets and 20% of industrial assets. With this development, this region which has not had a commanding control over Nigerian economy will certainly begin to do that now. Commercial activities backed by finance can only grow the economy of South-East plus Delta. The growing strength of financial muscle of this region has been aptly demonstrated by the recent licensing of Micro Finance Banks. Of the over 600 MFBs recently licensed by the Central Bank of Nigeria (CBN), Anambra State alone had 74 whilst Yobe State had 1, Sokoto 5, Zamfara 6, etc. There exists also in this economy a middle class which will now grow itself in number and financial muscle and will almost certainly grow its economy inclusive particularly of small and medium sized industrial base.
c) The Northern Economy The North which geographically is 719,435 Square Kilometers or 79% of Nigeria’s landmass and has 75 million or 53.6% of Nigeria’s population has its economy as a consequence of various reforms introduced, been totally grounded. Today, the North has ownership and/or control of no more than 3% of banking assets and 2% of insurance assets and 10% of industrial assets. True, the North has a huge landmass but this has remained under exploited due to jettisoning of time tested policies of price support (as a result of abolishing of marketing boards without putting alternatives) and abandonment of extension services and quality control. Also, the North has a huge population but the population has remained largely uneducated and/or half educated because of near failure of governance in certain States and Local Governments. Currently its most distinguishing characteristic is grinding poverty. Recent poverty statistics indicate that the poverty level of States in the North has been on the increase in the last 9 years and reached over 80%. Its two commercial and industrial nerve centers (Kano and Kaduna) have seen industrial capacity utilization decline to an all time low of less than 10%. The textile, automobile and beverages companies that thrived so impressively in the 1970s and 1980s have collapsed rendering thousands jobless. Although hydroelectricity is generated at Kainji Dam and in lesser quantities at Shiroro Gorge and at several smaller sites, the entire mechanisms are run on very obsolete equipment and the performance is consequently very epileptic and unsuitable for meaningful economic activity.
d) The South South minus Delta The South South is largely in the creeks of Niger Delta and has therefore a small land mass of only 48,321 square kilometers and is populated by 13.6 Million people. Notwithstanding the fact that it is house to Nigerian Oil wealth, this region exclusive of oil company activities like the North is also backward economically. It controls no more than 3% of banking assets, 10% of insurance assets and no more than 10% of industrial assets on account of oil related industries that the indigenes do not control. Furthermore, its overstretched land mass has suffered considerable degradation and its aquatic life destroyed. As a region, its people and economy are worst off than the North as it lacks fresh environment, water and even good air to breath.
v Geography, history and particularly the reform agenda of Obasanjo’s regime have created above very dangerous economic structure in Nigeria. By design or by accident Northerners and South Southerners as peoples and regions have been made third and fourth class citizens. We may well choose to ignore these happenings and pretend that they have not happened but doing so will be at the peril of the Nigerian Polity. It is indeed in the interest of the South Westerners and the South Easterners for some affirmative actions to be taken to redress the situation else there will be no real peace in this country moving forward. The so called “religious disturbances” in the Northern States and the Port Harcourt conundrum of kids of less than 15 years carrying guns and terrorizing the population will not stop until these imbalances are consciously addressed and redressed. As the saying goes “where the poor does not sleep because of hunger, the rich too will not sleep because of robbery”.
v To complement whatever redress may be agreed to by the polity to help the grinding poverty and unemployment in the North and South South economies we the peoples of these regions need to also help ourselves as nobody will develop our regions for us. I see this Conference as one of the avenues that my be used to chart a course for the North. Undoubtedly, reviving collapsed and collapsing industries and building new ones will help. To be able to achieve these and grow the Northern economy, we MUST:
a) Democratize education by making it available to all our brethren in both quantity and quality. The system we are to evolve must include the “almajirai” and urban poor that cannot be wished away. There is indeed a correlation between education and development and it is only by educating our youth that they can begin to be productive and by so doing, we shall grow the middle class needed to sustain economic growth;
b) Consciously fight corruption and theft of government resources at all levels. So long as thievery continues to be perpetrated by Northern elites in government unchecked, so long we shall continue to drift further from the promised land. Furthermore, continuous thievery as we are witnessing in our recent history is preventing the emergence of a credible leadership in the North. We have in recent past had enough resources in our States and Local Governments to revert the ugly social trends in our Northern Society but the resources were and are being stolen;
c) Demand of the Federal Government for the development of energy sector in other areas as done to South West. For the North, this could be achieved by fast tracking the construction of Gembu and Zungeru Hydro Power Stations and upgrading of Kainji Stations by putting more turbines as well as extending the gas pipeline from Ajaokuta to Kano via Kaduna with a tee off at Funtua and Gusau so as to service existing industries and encouraging the emergence of others;
d) Demand for the moderation of certain policies of previous administrations which ruined Northern economy as implementation of undiluted market oriented reforms as we have seen do not bring about human development. Furthermore, any policy by any Government which hurts majority of its people no matter how good need be reexamined. Government should all be about improvement of the welfare of its citizens and not pauperizing them.
e) Make agriculture an economically viable activity as it is the only way that we can use in making our people have purchasing power to support any industrial rebirth as whatever is produced must be sold and for it to be sold, it needs a population that has purchasing power. Agriculture need to be made viable within the shortest possible time by:
i) Supporting price of agricultural produce by reintroducing price and quality support as done by the defunct Marketing Boards; and ii) Improving yield of farmers through extension services, use of good seeds and the research results lying on the shelves of our research institutes nationwide.
f) Erect on the gas pipelines to be laid jointly with our Governments and other Nigerians, at least three Urea plants in Kogi, Niger and Kaduna States as a means of making fertilizers available to our peasant farmers at affordable prices. Such a move will make available to our farmers fertilizers at no more than half of their current prices without any subsidy and the subsidy could go to its area of most need, price support.
g) To ameliorate the negative consequences of not having banking industry in our region, urgently work with our States and Local Governments to create in the next two years, 9 regional banks as follows which would ensure that all the Local Government headquarters in the North have bank branches in the next 4 years.
S/No. States to Cover Headquarters
1 Kaduna/Katsina Katsina 2 Kano/Jigawa Jigawa 3 Sokoto/Kebbi/Zamfara Sokoto 4 Borno/Yobe Damaturu 5 Yola/Taraba Yola 6 Bauchi/Gombe Bauchi 7 Benue/Plateau Makurdi 8 Nassarawa/Niger Lafia 9 Kogi/Kwara Ilorin
Additionally, our rich businessmen should be urged to set up as many unit banks as possible to complement the regional banks.
v Finally, distinguish ladies and gentlemen, one would want to humbly suggest on industrialization that our focus in the immediate future should be on small and medium sized industries that are to process for local or export markets, agro allied products. My choice for small and medium sized industries is informed by the fact that they require less capitalization to set up and also less energy and skill to run. Processing of agro allied products will impact positively on growth of agriculture, the mainstay of Northern economy. For now and until we move as a community from agriculture to industry, our growth economically is tied down to agriculture.
I do hope the above views and suggestions will help discussants and participants alike in analyzing the declension into which the entire Northern Region has been plunged over the last couple of decades. I hope this Conference will also set in motion a process of economic revival in the entire North and I sincerely commend Leadership for organizing this Confab.
Happy deliberations:
Falalu Bello, OFR
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