South east Nigeria: A Call to action

Originally published on Ponzeal

Introduction

South Eastern Nigeria currently has the least amount of foreign direct investment across all regions of Nigeria. Nigeria received $93.3 billion between 2013 and the first quarter of 2020 with the southeast accounting for only $203.898 million or 0.22 percent. The south east lagging behind in investments shouldn’t be surprising, the region is plagued with infrastructure deficit, brain drain to other parts of Nigeria especially Lagos and Abuja, and government neglect.

In spite of these challenges, people of igbo origin in Nigeria and the diaspora have shown a deep yearning to invest back home. In July of 2019 a non profit — Alaigbo initiative launched on twitter with the objective to analyze challenges and develop workable solutions in igbo land. They also intend to support growth and development of communities in igbo land, build a cohesive society and preserve our igbo cultural heritage. This twitter account currently has over 1900 active followers of mostly Nigerian residents. In the diaspora, one such organization is Umu igbo Unite (UIU), a non profit organization with over 15 chapters in 15 major cities and over 1000 members across the United States. First generation Nigerian immigrants of igbo descent are also present in Europe, with Britain and Germany having a healthy population.

While a non profit approach has its place, i strongly believe that a profit driven investment approach has the best chance at improving igbo land. With a profit driven approach, we plan to fund ideas with Market creating innovations. These are innovations that create new markets that serve people for whom either no products existed or existing products are inaccessible (Christensen et al. 49).

Why Now?

Nigeria is currently in the worst state it has been in my lifetime. The current administration has brought nothing but pain, suffering and poverty across the country. On July 22nd 2015, president Buhari’s publicly indicated that he would treat regions that mostly voted for him better than regions that did not, in his infamous 97% vs 5% statement. He received the least support from the southeast region and his actions during his presidency has shown that he’ll continue to neglect the region.

Meanwhile, the southeastern leaders have had no real impact on their states. The Imo state governor is seen as illegitimate by his people. As of August 2019, Abia state hadn’t paid teachers salaries for over a year. A year later, the governor asked doctors to forfeit 16 months salaries that hadn’t been paid. Anambra and Enugu state governments haven’t made any significant improvements in their respective states. The only positive in the region looks to be the Ebonyi state government. The senators and house of reps members from the region have also been ineffective with none of them having any positive impact to boost security and trade in the region.

The only party left in the fight for a prosperous igbo land are the concerned individuals at home and in the diaspora. You and I, who do not have the resources to single handedly lead the process, but together we do. We have the numbers, and by contributing our finances, time, and efforts we can create a prosperous igbo land and reap its profits.

In a market, good investors make profit by investing in a commodity that is undervalued, uncovering its real value and selling it for its real value. I implore you to take a look at igbo land, look at Onitsha main market, the biggest market in West Africa and one of the biggest in the world with an estimated volume of trade at $3billion per year. The textile and shoe factories in Aba, Abia state and the tourism opportunities in Enugu. Take a look at the resolve of the people from the southeast, both in and out of Nigeria.

I strongly think the southeast is severely undervalued. This is why we are building a platform to help lower the barrier to entry for investors. To help the region achieve its real value and reap the benefits from the profits.

Opportunity

While there is an innumerable list of projects that beg to be funded in igbo land, we intend to start with a very common and well understood problem; Real estate.

Nigeria had a housing deficit of 17 million houses in August 2012 and requires 700,000 houses annually compared to less than 100,000 currently being constructed (Nigerian National Bureau of Statistics). Without counting Lagos, south east Nigeria is the most densely populated region in Nigeria and receives the least amount of investment. As a result, it is reasonable to assume that the south east is likely most affected by the housing crisis.

The people most affected by these housing problems are young people and low to mid income families in the cities like Onitsha and Aba. These are highly commercial cities with a decent amount of successful people as well as young vibrant youths who are starting out. Because these cities have more opportunities than most other cities in south east Nigeria, young people move to these cities for greener economic pastures. Young families are also affected as they haven’t had the time to build a strong economic base.

Companies also suffer from this housing crisis. Manufacturing companies need land for operations and without the investments to finance the purchase of lands, some of these companies never take off or scale.

The local mortgage schemes are insufficient. The Nigerian national housing fund has requirements that most Nigerians, especially individuals that are self employed cannot fulfill. Banks also charge high interest rates, standard chartered bank charges 15% with a minimum income earning of 350,000 naira a month. To put that number in perspective, Nigerian doctors are one of the highest paid professions in the country but a mid level doctor can expect to earn about N270,000 per month. Making this bank loan inaccessible to most Nigerians.

This is where we see an opportunity to help build modern multi tenants and multi family apartments. We plan to fund residential apartments that build vertically and maximally utilize available space. By crowdfunding the capital and giving out equity on the building, investors help fund the development and will receive dividends from the rent or profits from a sale.

Future Of Nigeria

It will be hard to convince investors to bet on any part of Nigeria without discussing the future of the country. Nigeria is in the most volatile state in my lifetime, there have been renewed calls for restructuring or a total breakup of the country. Socio-cultural groups across the country including Ohanaeze Ndigbo (southeast), Afenifere (southwest) and Middle Belt Forum have all called for restructuring of the country. Both leading political parties in the country, APC and PDP have had prominent members commit to restructuring. Even the Arewa Consultative Forum (ACF) is demanding a referendum on One Nigeria.

My prediction is that Nigeria will change significantly very soon. We will either restructure, break up or the currently ruling elite will violently crush the peoples wish and leave us with a true authoritarian country. Here are my predictions of the effects each of these scenarios will have on the southeast region.

Restructure

This is my preferred option. Together, all regions in Nigeria make a giant, while broken up we are smaller and incur the weaknesses that come with being small. If done well, restructuring will bring power closer to the people, security will be closer to the people and people will demand more from the state government than from the federal government. Laws in each region will cater to the local populations belief and culture. I predict that this will lead more Igbos in other parts of the country to migrate back home with their businesses and capital. I strongly expect the southeast region’s economy to grow and the price of land and property to rise with the economy.

Break up

Not my preferred option. I expect this to hurt the southeast economically in the short term. Igbo owned businesses in other regions that would have moved back gradually, might be forced to move back swiftly. Should this happen, they would sell off their assets at a discount, which leaves them with less capital to invest back home.

In the mid to long term, i think the economic effect will be the same as a restructured Nigeria. The economy will grow and the price of property will climb with it.

Things stay the same

I think the only way this option occurs is a violent clamp down by the government. The #EndSars protesters are not relenting, the economy is in tatters and the government is out of touch with the people. This means that young vibrant Nigerians have the time and motive to protest against the government while the government is too out of touch from the economic realities to handle the protests.

If this happens, the government will make more poor economic decisions while possibly dealing with outcry and sanctions from the international community. In this case, the southeast, like all other regions will suffer economically.

Conclusion

In two of the three possible scenarios, the southeast region will be prosperous in the long term. To help bring that long term prosperity, you and I will need to invest in the communities and the people. We can create innovations that would help move the region and people forward. One of the biggest and most pressing issues is the housing crisis, and luckily this is one of the most prosperous long term investments.

There is a common saying that timing is everything, and i think the time is now.

Fortune Nwoke