What Next for Anambra State?
Anambra state in the South East of Nigeria has come a long way. Beset in the early part of this democratic dispensation by incompetent political leadership, political gangsterism supported by the Federal Government and the attendant negative impact on the social and economic lives of the citizens; Anambra was quite the basket case – the sick man of the South East.
Many today may forget that it was the violence in Anambra that once dominated the headlines of the national dailies the way the Boko Haram violence in the North now does. This changed with Peter Obi's ascension to political leadership of the state. His mandate that was denied him was finally restored, aided in no small part by the same political God Fathers of the former governor – who were the cause of the instability in the state in the first place – with whom they had a fall out.
The stability of the state has allowed the state to make strides on the economic front. Investment in its oil field has come to fruition and Anambra is now an oil-producing state, and that comes with a dilemma for Anambra's economic future.
The entrepreneurial culture in Anambra state has made it a magnet for trade, both on the national and regional level. The fiercely democratic ethos of its people ensured that the political system rejected God Fatherism. But with the discovery of oil, would this lead to a change in the direction of policy in the future that could harm the long-term economic viability of the state? Governor Peter Obi, unlike the other governors of nearby oil producing states, is known to be a frugal man.
Unlike the governors of Rivers and Akwaibom states, who both have private jets afforded the states by their oil money, Peter Obi flies commercial and prefers to go without an entourage because, as he put it, “they eat too much”.
Imo and Abia states have governors whose priority was building new "befitting" state government houses; Abia state government is reported to have earmarked N175 million for fencing alone! But as the governor's term ends this year, would this culture of frugality be the measure by which subsequent governors are measured; has Peter Obi raised the bar of governance in Anambra state permanently or will his exit see a revert to wasteful ways? Only time can tell.
But Nigeria's record is not encouraging. On discovering oil, Nigeria got the worst form of what is now called the Dutch disease. Nigeria abandoned other sectors – agriculture, trade, education, etc – and focused only on collecting royalties from oil mined by foreign firms. This would be devastating to Anambra if this is allowed to happen in the state. It could affect, terribly, the unemployment rate in the state and would fail to leverage on the economic advantage the state has in trade.
The people of Anambra have a responsibility, now more than ever, to guard against this. They should not get excited with the current status of the state as an oil-producing state. History has shown us that such discoveries in African countries have only led to increased poverty – the Equatorial Guinea that has one of the highest GDP per capita by virtue of its large oil wealth relative to its population, is one of the poorest countries in the Africa.
There is also a need for the people to ensure that they control the stake they have in the company that is to mine the oil. The prospect of any industry in the state being controlled by a monopoly is discomforting.
Policies made on the state's economy must not place precedence on oil over other economic activities in the state. The norm is for big companies, especially monopolies, to try to get laws that favour their operation above others. This should be acted against by the locals. As the company exploring the oil becomes more important, it may seek to lower costs and do things that harm other sectors and the environment.
In a country like Nigeria where the implementation of the law leaves much to be desired, too many big corporations have gotten away with the environmental degradation of oil spillage. Oil spills in the Niger Delta are not cleared up by the oil companies; it is cheaper not to as there is no incentive to. The attack on oil installations by locals also complicates matters. Oil companies can claim that the spillages are due to sabotage by militants in the Niger Delta.
The struggle between different communities for the oil resources can distract the people from engaging in productive activities. Neighbouring communities in the Niger Delta are almost constantly arguing over who should benefit more from oil exploration. The ownership of land is contentious especially in border areas between different ethnic groups, and this is made worse by the unreliable legal system that the country runs.
Anambra is seeing a prelude to this with the renewed conflict between the Aguleri and Ibaji communities. Even when the oil well is far from border areas, one group argues they should benefit from oil exploration because the oil well is located on their land and they suffer the effects of oil spillage; the other group argues that the oil would be reached just as effectively wherever in the neighbourhood that the oil company decides to locate the oil well. There is the case of legal discrimination that the country does not act against.
The communities where oil companies, refineries and indeed any other corporate concern – especially multinationals – are located insist that the locals must be employed more above others. Indeed companies are forced by this means to hire people that are not qualified for the available positions and they may also end up overstaffed and inefficient. All this unnecessary bickering gets citizens too engrossed in fights over handouts from the central government due oil production and act as a drag on the contributions of other economic activities in the state to the welfare of the people.
Our history also points to wastefulness of political leadership after the discovery of oil. The oil windfall made by the country during the Arab-Israeli War presented a new kind of problem – “how to spend it”. The other oil producing states are flush with oil money, and man are they spending it! Only mostly on unproductive endeavours.
Rivers state, a state with one thriving city and only one airport has about three private jets for the state governor. Governor Chibuike Amaechi has been praised for his investments in education in the state. This is a good development for the people of the state. But how sustainable is the funding for public education in the state if most of its earnings still come from the sale of oil.
It should be noted the increased oil output of Angola and Libya, not to mention America's own exploitation of shale oil due to improved refining technology, would lower Nigeria's earnings from crude oil in the near future. Anambra citizens should take note of this; their oil discovery has come at a time of rapidly changing geopolitics of oil resources.
How would the discovery of oil affect the character of Anambra citizens? Are they going to be less capitalist and entrepreneurial than they currently are? We have seen this happen in Nigeria where the discovery of oil has caused the government to abandon agricultural programs. Would future governors of the state follow this route or use the money made to promote trade and other economic activities in the state?
The government in the state, so far has done little to raise money from taxes and encourage investments, not only from foreign sources but also from businessmen from other parts of the country. This is the key to diversifying the economy of the state. Businessmen from Nigeria and other places within Africa must see the state as an investment haven with favourable tax laws and enforcement of civil laws for the state's campaign for foreign investments to be credible.
The state government must be willing to encourage “non-indigenes” to setup businesses in the state and be resident in the state, especially those groaning under multiple taxation and higher cost of living in states like Lagos and Abuja. This is the way of the future. It brings to mind France and Britain, who have been belligerent towards each other over centuries.
However, in the light of the European credit crisis, they both taunted each other – with France saying they would roll out the red carpet for English businessmen who they feel would leave the UK in the event of the UK opting out of the EU; and Britain saying they would do the same for French businessmen who they feel would leave France because of high taxes.
The current World Order is such that people no longer fight over territory to plunder; they fight instead over capital controlled by businessmen of whatever ethnicity. Anambra must do the same in order to build on the progress made thus far.
Before marketing the investment-friendly credentials of the state to foreigners, Anambra must first advertise the same credentials to Nigerians, then Ghanaians, the South Africans, then the rest of Africa and finally the world. And Anambra must first start with her neighbours, if only to demonstrate the benefits to them and set an example to be emulated in the rest of the South East, and indeed, the rest of the country. Abia state, for example, has a large concentration of entrepreneurs that have been laid to waste by an inept governor who, in a bid to distract from his incompetence, decided to sack “non-indegenes” from the state civil service.
Anambra should do all she can to encourage such businesses and small-scale manufacturing concerns that Abia is famous for, to set up shop in Anambra. By this act, Anambra would be leading the way for the region and setting an example on how to encourage prosperity by harnessing diversity.