During a recent trip to South Korea, my admiration for this coastal Asian nation soared. Any visitor to South Korea would be amazed at the level of automation of the society which is a direct function of her high industrialisation status. Remember, South Korea is the home of Samsung, KIA, Hyundai, LG among other conglomerates originally called Chaebols (family-controlled conglomerates). They provided the impetus for a heavily industrialised South Korea of today. Though, most Chaebols started out as family-owned businesses, they enjoyed significant government support and patronage. In some cases, government of Korea had to intervene just so the conglomerates do not go to ruins. Ever since they have kept afloat and have become the pride of South Korea, providing the country’s biggest export earnings from automobiles to electronics.
In Japan, under the leadership of Emperor Meiji, the spirit of Fukoku Kyohei or ‘rich country, strong army’, was born to birth a new era of industrial revolution. Whether it is the Zaibatsu or Keirestu (Japanese conglomerates) from the 19th and 20th centuries that prefaced modern day Toyota, Mitsubishi UFJ Financial Group, Sony, Nissan among others, Asians have a rich history of industrialization spurred by family and deliberate government interventions.
These Asians have become models for emerging economies. Africans would do themselves well to understudy the amazing miracles wrought by these Asians in the complex sphere of industrialization. Africa is under-industrialised, not because of market size but by an amalgamation of several factors which a new report by the World Bank Group – Global investment Competitiveness Report 2017/2018, exposed and explained. The report said reducing risks in developing countries is key to driving the needed development and to spur investment and growth in these nations.
According to the investor survey report, political stability and security along with a stable legal and regulatory environment are the leading country characteristics considered by executives in multinational corporations before they commit capital to a new venture. These considerations far outweigh such issues as low tax rates and labour costs.
Investment incentives may help attract Foreign Direct Investment (FDI) but are generally effective only when investors are wavering between similar locations as a new base for their exports. The report says when investment is motivated by a desire to access a domestic market or extract natural resources, incentives are generally ineffective.
The report asserts further that the level of legal protections against political and regulatory risks, such as expropriation of property, currency transfer and convertibility restrictions, and lack of transparency in dealing with public agencies are key to FDI flows. The World Bank report adds that reducing these risks at the country level is a foundation without which reducing project-level risks will not lead to increased investment and growth in developing countries.
This is the context in which the industrialisation policy of Governor Udom Emmanuel of Akwa Ibom State deserves a disquisition. The governor made it clear that the plank of his governance would be the industrialization of a state that has remained largely a civil service state. Perhaps drawing from his private sector experience as an investment banker, Governor Udom has created within a short period of his leadership, oasis of industries which has brought FDI to the state, created thousands of direct and ancillary jobs and improved the skills set of the people.
A few examples would suffice here. Hitherto moribund industries such as the Peacock Paint factory has been resuscitated and now in full operations; a syringes manufacturing company was recently commissioned by the Vice President, Prof. Yemi Osinbajo. Nigeria is a heavy importer of syringes which is an abnormally because all the raw materials required to produce syringes are within our shores. The syringes company will produce initial 400,000 syringes with the capacity to produce a billion a year. Also commissioned was a Metering Solutions company which will ensure Nigerians get billed accurately by electricity companies. Jobs are being created so also is economies of scale built around these industries all of which put money in the hands of the people. Direct Foreign Investments are flooding the state. The National Bureau of Statistics (NBS) recently reported that Akwa Ibom State enjoys the second largest in- flow of direct foreign investments after Lagos. The NBS listed Lagos, Akwa Ibom, Ogun, Oyo, Rivers states and the Federal Capital Territory, Abuja, as the most investors-friendly destinations in the country in the first quarter of 2017.
A breakdown showed that the five states and the FCT attracted a total of $908.268m capital inflow in the first quarter of 2017. Lagos tops the list with 95 per cent of the capital, attracting inflow of $865.718. This is not surprising as Lagos is still by far the hub of commercial activities in the country. Next to Lagos is Akwa Ibom, which in recent years has become a major tourism destination. The state attracted $18.361m capital inflow pushing behind the FCT ($14.867m), Ogun ($5.351m), Oyo ($3.419m) and Rivers ($550,000) respectively.
The emergence of Akwa Ibom as a rapidly industrializing state is a direct function of the vision of Governor Udom. The former banker is quietly applying a domesticated form of the Asian and World Bank formula for industrialization by providing legal protections against political and regulatory risks through the state House of Assembly for investors. The peace and security in the state buoyed by political will on the part of the governor to lead the charge on industrialization, in the fashion of Asian leaders, have contributed to lifting the state to its new status ahead of hitherto more strategically located states.
The people of Akwa Ibom may not fully grasp the significance of the Udom industrial revolution mission but in years to come, these companies which are today regarded as start-ups considering their size and capacity would grow to become conglomerates especially when you factor the wisdom to float the companies as public-private-partnerships (PPP). This is the model that thrust the Chaebols and the Zaibatsus from family start-ups into global reckoning as conglomerates in what is today regarded as the Asian industrialization miracles.
What is happening in Akwa Ibom in the area of industrialisation is not an accident. It is a product of careful planning and commitment to a promise. During his inaugural speech on May 29, 2015, the Governor said one of his missions among others was: “To leverage and build on the uncommon transformation of the Governor Godswill Obot Akpabio administration; to transform the economy of our state via industrialisation and sustained public-private sector initiative, thereby opening up opportunities for growth and improved living standards”.
The recent ranking by NBS of the state as second only to Lagos in the area of investment capital inflow is a fulfilment of a campaign promise; the result of strategic thinking from a leader who sees opportunity where others see challenges. In this age, only frontier thinkers triumph in leadership. They rule the roost because they combine character and strategy. They are leaders for whom talk is not enough; you must walk the talk; you must show the way for others to follow. Governor Udom is writ large here. He is a leader who has matched effective thinking with productive action. Good leaders don’t just talk; they act, do and perform. Akwa Ibom governor has mastered this art and his people are the happier for it.
- Ekong writes from Lagos.