Nigeria’s sub-national units: The business case for Anambra
Anambra, Nigeria’s second smallest state by landmass, has manufacturing and trading hubs that are likely to keep growing as goods from First and Second World producers become even more unattainable for Africans who earn on a different economic spectrum. But last year, the state only attracted $10.2 million in FDI.
We do not have reliable figures, but it is safe to say that the East Asians in conjunction with their Southeast Nigerian trading partners have largely filled the gap. Therefore, it is time for the latter to prepare for the transition to a homemade manufacturing scene and Anambra as a place and an abstract institution is well-placed to spearhead this charge.
To achieve this, a better understanding of Anambra’s present and possible future significance to the rest of Africa requires a closer look at how Africa itself is evolving especially with the recent launch of the African Continental Free Trade Area (AfCFTA) agreement.
AFCFTA looks to create the world’s largest free trade area of 1.3 billion people covering 55 countries with a combined gross domestic product (GDP) valued at US$3.4 trillion. AFCFTA is an attempt to copy the European Union trade model that was initially used to great effect by the US that simply made itself a country instead of a continent with borders that would stifle innovation, trade, and investment.
So where would AFCFTA leadership come from?
What business classes have the continental spread to spearhead the implementation of AFCTA and deliver the data, insight, and productivity required for success? It is the Igbo and particularly those of Anambra state.
Anambra State must set the goal of leading Nigeria’s South-East into becoming the most patronised low-wage, low-cost producers for the African market. International exports to other continents are important but true progress will not be achieved without significant quantitative and qualitative improvements to intra-African trade.
Anambra as an institution consists not just of people and locations. It has established trading channels across the whole of Africa that can be repurposed and formalised to trade in a wide range of goods and services. It has to embrace and take charge of the AfCFTA process as much as possible for its benefit and that of the entire continent.
Anambra’s relative suitability for the role even when compared to entire nations is what makes it a very powerful and underrated investment opportunity. As long as Anambra invests properly in aggregating the information available to its trading channels and also mastering international relations and diplomacy to become the DNA of a successful AfCFTA, investing in Anambra State would be one of the quickest ways to achieve commercial success.
But there are challenges. Perhaps the biggest challenge of any state and indeed Nigeria at the moment is a lack of a clear national or state strategy. Anambra has to begin to think of growing its internal revenue outside the monthly allocation from the federal government. The sheer scale of the work involved in a task like this should be properly appreciated. Anambra State has limitations like everyone else, the work required to effectively plan and work on behalf of the continent even if only as a trigger, and shaper is best shared with competent partners.
In the Bible, Proverbs 27:10 says “Do not go to your brother’s house in the day of your disaster. Better is a neighbour who is near than a brother who is far away.” and that verse makes Delta State a worthwhile consideration in the search for a partner.
Delta, next door to Anambra, has a landmass of 17,698km², significant amounts of energy reserves, a vibrant multi-ethnic populace, and a highly competitive workforce that would be easy to improve to achieve industrial and trading excellence. It is also important to note that successful replication of the low-wage and low-cost model that lifted the Asian Tigers is partly dependent on cheap food, cheap rent, and energy, which would be very difficult to attain in Anambra given its energy reserves and landmass.
Nigeria has 36 states and at some point, they are all going to be available for industrial development so Anambra would do well to partner with Delta and position the union as the hub for everyone else while also staying abreast of the slow but certain evolution into e-commerce and a knowledge economy.
Finally, there is the issue of accountability, without which no serious investor will come to you. One way to hold governments at any level accountable is by ensuring that they are run on platforms of transparency, which is often powered by technology and policy. If we infuse technology into public service, we are likely to alleviate corruption and create opportunities for accountability. A good example would be insisting that filing of state taxes or registering for any state permits be done online and payments made to a bank. This process would help eliminate the physical interaction that could promote bribing and other forms of corruption.