Igbo traders: Before these dewdrops become a deluge

By Chuks OLUIGBO

The other day I stumbled on a 2012 article on Sahara Reporters by Rudolph Ogoo Okonkwo of “Correct me if I’m right” fame entitled “The End of Igbo Business Model”. I’ll quote elaborately from that piece to establish the kernel of the writer’s concern:

“The Igbo business model of opening stores in markets across city centres is coming to an end. In a generation or two, there won’t be anything like that anymore. It would all go the way Mom and Pop stores disappeared in American cities where Walmart and Targets set up shop.

“The Igbo business model is simple. At the top is an importer. His job is to import items from overseas and have a chain of wholesalers move the goods across Nigeria. The wholesalers on their own have a chain of retailers who buy from them and sell at markets across Nigeria. In one swoop, the Chinese and Walmart will replace all the Igbo traders on this chain from importers to retailers.”

This may sound alarmist, but the realities are there, even if subtle. First, the Chinese have mushroomed everywhere in Nigeria. As I put it elsewhere, “Across all of Africa, Chinese presence can no longer be denied, nor can it be wished away. China is everywhere – in construction, education, telecoms, technology, oil and gas, transport, just name it – and it is not in a haste to leave. China is here to stay.”

Second, the boom in Nigeria’s formal retail sector – led by foreign retail chains such as Shoprite and Spar – has been widely reported. And it is continuing, with Whitey Basson, CEO of Shoprite, announcing plans to establish up to 700 shops in the country. Just recently, Adebayo Jimoh, managing director of Odu’a Group Limited, an offshoot of the Western Nigerian Development Company (WNDC), told BusinessDay that the Group is building a massive mall in the central business district (CBD) of Ibadan, the Oyo State capital, to be known as Heritage Mall. Estimated to cost N2 billion, the mall, with 18,640 square metres of lettable space, will debut on May 29, and Shoprite is the anchor tenant, occupying 4,750 square metres.

Third, big electronics giants, such as LG, continue to open outlets here and there to take care of their growing customer base. This may not be glaring yet, but traders at the Alaba International Market, easily the biggest electronics market in Nigeria, are already losing customers to these outlets. Many middle-income Lagosians, for instance, would rather walk into an LG outlet than go to Alaba. The reason is simple. As a banker friend told me, “I bought all my electronics from LG outlet at 23 Road, Festac. There, I’m guaranteed of the genuineness of the product, warranty, and a good price. Why risk going to Alaba where I might be sold Aiwa in the name of Sony?”

This is what seems to be happening: As the Nigerian middle class continues to grow, accompanied by growth in disposable income (see, for instance, Gregory Kronsten’s “Household incomes rising even if it is not always obvious”, BusinessDay, April 22, 2013), the formal retail sector is growing along with it, while the informal market is going, though gradually, almost unnoticeably, the other direction.

On the Chinese threat, here are samplers. Just recently, Olawale Tanimowo, a Lagos-based marketing communications executive, in an article published in BusinessDay (Tuesday, April 2), reported that in the last week of March, traders at the Oke-Arin Market in Lagos Island staged a peaceful protest against the practices of some Chinese traders who have practically taken over trading in the market. These Chinese, according to him, came in as investors but eventually began very dangerous practices that are making it impossible for Nigerians to sell. “As a matter of fact,” wrote Tanimowo, “Nigerians who wish to remain in business in that market are made to buy from these Chinese who are also competing with them in the same retail and wholesale business. What this means is that if a Nigerian trader buys a bale of lace material from these Chinese traders at N5,000, for instance, he or she is going to sell at a higher value for any margin to be possible. But this margin is being made difficult by the fact that these Chinese who are now representatives of other traders in home country get their goods at cheaper costs and would definitely sell at lower values.”

Similarly, to buttress his point, Okonkwo referred to a similar case around July last year where the Dealers of Bags and Leather Wears Association of Nigeria at Balogun Market in Lagos also held a protest march against some Chinese businessmen whom they accused of retailing leather products at a very cheap rate, thereby forcing the Nigerian traders to operate at a loss – what the traders termed “a systematic plan to undermine and kill off their business”. According to the protesting traders, they had been facing the problem for over five years – that is, since the Chinese came – and they wanted the Federal Government to come to their aid, saying if the activities of the Chinese were not checked, thousands of the local traders would lose their source of livelihood.

I do not, however, agree with Okonkwo that it’s just about Igbo traders, although I believe we are the most affected because we are in the heart of the business of buying and selling in the country. It’s also almost impossible not to add, in our blind pursuit of money, that we are the ones likely not to observe the change taking place, just as we have stubbornly closed our eyes to the threat to our lives in the troubled north of the country.

What can be done? Chase the Chinese away, or stop Shoprite and co from expanding? Not likely. Their presence is a positive for the Nigerian economy. Moreover, as Christo Wiese, CEO of Pepkor Ltd, is quoted as saying, “There’s enough for everybody. It’s a growing market.” But it’s possible for government to come up with some legislation to protect local traders, as being done in Ghana where the Ghana Investment Promotion Centre (GIPC) Law (Act 478, 1994) reserves small-scale retail businesses for Ghanaians. The law essentially enjoins all non-Ghanaians, including ECOWAS citizens, who wish to engage in trading to comply with the following: “To set up businesses outside places designated as markets, invest a minimum of US$300,000 in cash or in kind, register with the GIPC, obtain immigration quota and employ at least 10 Ghanaians in the business.”

Another way is for Nigerian traders themselves to key into the expanding formal retail market currently dominated by foreign retailers. This, reportedly, is already being done by some small neighbourhood stores who are adapting to the changing tastes of consumers by changing the profile of products they stock as well as the layout and design of their stores, with the ultimate aim of turning themselves fully into one-stop shops.

But for the Igbo businessmen, Okonkwo advocates: “It will be good if they begin to strategise now. It will be great if ten-year and twenty-year plans for transition are put in place. I believe that a plan to transition into manufacturing, turning Aba and Nnewi and Nkpor into manufacturing hubs will greatly keep the Igbo in play as the Chinese and Walmart take their places in Africa.” They either do this or be caught unawares as Balogun, Alaba International, Ochanja, Ogbete, and other markets across Nigeria “are turned into malls, theatres and football fields”. One cannot but agree.

Towards a win-win Sino-Africa relations

In spite of long years of romance with China, and notwithstanding massive Chinese investments in Africa, many analysts believe the continent is yet to position itself to truly benefit from its relations with the Asian country.

By Chuks OLUIGBO

Across all of Africa, Chinese presence can no longer be denied, nor can it be wished away. China is everywhere – in construction, education, telecoms, technology, oil and gas, transport, just name it – and it is not in a haste to leave. China is here to stay.

“Already, trade between Africa and China has grown at a breathtaking pace,” writes Kingsley Ighobor in Africa Renewal. “It was $10.5 billion in 2000, $40 billion in 2005 and $166 billion in 2011. China is currently Africa’s largest trading partner, having surpassed the US in 2009. The Chinese government is eager to cement China’s dominance by burnishing its image through initiatives such as a $20 billion credit to African countries to develop infrastructure and the African Talents Programme, which is intended to train 30,000 Africans in various sectors.”

Beyond these, Chinese construction firms are acquiring enormous construction contracts across Africa. The China Railway Construction Corp. (CRC), for instance, in February last year announced projects in Nigeria, Djibouti and Ethiopia worth about $1.5 billion in total. In September, it signed a $1.5 billion contract to modernize a railway system in Nigeria. In the same month, China South Locomotive and Rolling Stock Corporation, the largest train manufacturer in China, signed a $400 million deal to supply locomotives to a South African firm, Transnet. Hauwei, the Chinese telecom giant, operates fully in 30 out of 54 African countries. And China has made great inroads into Africa’s agricultural sector.

In Nigeria, the nation’s diplomatic relations with China dates back to 1971. Since then, many Chinese leaders have visited Nigeria and vice versa, and bilateral relations between the two countries have been smooth and steady, but especially since May 1999 when the country returned to constitutional democracy. China and Nigeria have since then signed a number of agreements on trade, economic and technical cooperation, scientific and technological cooperation, as well as an agreement on investment protection, and the two countries have set up a joint economic and trade commission.

And the volume of trade between Nigeria and China has grown exponentially. In 2012 alone, according to The Heritage Foundation, Chinese investment in Nigeria was $15.6 billion (the highest in sub-Saharan Africa). These investments, mostly contracts, were in the technology, transport, real estate and energy sectors. 53 percent were energy-related investments and contracts. Equally, according to the Debt Management Office, Nigeria owes China $678.9 million.

Opinions have been divided as to whether Chinese relationship with Africa is a one-way traffic or a win-win. Consider the new African Union headquarters in Addis Ababa, Ethiopia, a towering 20-storey building tagged "China’s gift to Africa” because China picked up the $200 million tab for the state-of-the-art complex. While Ethiopia’s late Prime Minister Meles Zenawi was prompted by that “gift” to refer to Africa’s current economic boom as a “renaissance” due partly to China’s “amazing re-emergence and its commitments to a win-win partnership with Africa”, Chika Ezeanya, a political commentator, considers it an “insult to the AU and to every African that in 2012, a building as symbolic as the AU headquarters is designed, built and maintained by a foreign country”. Yet Faida Mitifu, the Democratic Republic of the Congo’s ambassador to the US, told the Reuters news agency that “the good thing about this partnership is that it’s a give and take”.

On the positive side, in the case of Nigeria, analysts point to China’s efforts to help Nigeria diversify its economy. For instance, China has increased its volume of agricultural imports from Nigeria – cassava chips, sesame seed, etc – and as at 2009, there were an estimated 400 Chinese agricultural experts in Nigeria involved in the construction of small earth dams.

Yet, many believe the answer to China’s interest in Africa lies not in helping African countries grow their economies but rather in the ultimate need to ensure the expansion of the Chinese market by securing the source of cheap raw materials as well as ready market for finished products. China currently buys more than one-third of Africa’s oil. In addition, China’s industries are getting raw materials such as coal from South Africa, iron ore from Gabon, timber from Equatorial Guinea and copper from Zambia. Chris Alden, Daniel Large and Ricardo Soares de Oliveira, editors of China Returns to Africa, rightly note, “The overarching driver has been the Chinese government’s strategic pursuit of resources and attempts to ensure raw material supplies for growing energy needs within China.”

Conversely, Chinese products have flooded markets in Johannesburg, Luanda, Lagos, Cairo, Dakar and other cities, towns and villages in Africa. These goods include clothing, jewellery, electronics, building materials and much more – even little things like matches, tea bags, children’s toys and bathing soaps. In other words, China is re-enacting the era of the so-called legitimate trade in Africa – call it re-colonisation if you like. Thus, former US Secretary of State, Hillary Clinton, sometime ago warned against a “new colonialism in Africa” in which it is “easy to come in, take out natural resources, pay off leaders and leave”.

While the flooding of Chinese products into African markets is not bad in itself, the problem is that many of these products are of very poor quality, and their low prices are responsible for the collapse of local industries. For instance, in spite of massive intervention fund by Nigeria’s Federal Government into the textile industry in the country, textile factories across the country have failed to pick up because they cannot compete with cheap Chinese garments.

As already said, there is no wishing away Chinese presence. Rather, as Maged Abdelaziz, the UN Secretary-General’s special adviser on Africa, has admonished, Africa must develop a strategy for its dealings with not only China but other emerging economic giants such as Brazil and India if it is to truly benefit from its relationship with these countries.

Furthermore, in a recent editorial, a leading business and financial daily in Nigeria made a case for a purposeful engagement with China, saying Nigeria and other African governments need to exploit their relationship with China, and others, by aiming at improving economic diversification and competitiveness, and arguing that it is the only way to achieve a win-win relationship.

According to the editorial, while it is necessary to get benign loans to finance much-needed infrastructure, it is also good to realise that loans alone are insufficient. “Focusing on loans alone is to miss various opportunities that Chinese investments in construction, oil and gas, mines, and consumer products offer,” it said.

“Local private businesses and government need to focus on the strategy – priority sectors, favourable terms that develop skills and transfer technology – and the benefits of foreign investment, from China and elsewhere. These will help diversify the economy, create jobs, and reduce poverty. Economists say that as Chinese manufacturing moves up the value chain, export processing zones (EPZs) will be ideal for low-cost production,” it further said.

All said, there is no gainsaying that Chinese investments are for profit, and the Chinese are profitably employing their competitive advantage in price, risk appetite and access to credit. In concluding, the words of Patience Akpan-Obong, an analyst, are perhaps very instructive here: “I understand the allure of Chinese (foreign) investment for the Nigerian economy, both at the micro and macro levels. It promises an easy ride, jobs and growth, but China is not in Nigeria for missionary work. Heck, not even European missionaries in the first colonisation era returned home empty-handed! Perhaps it’s time that the Nigerian government reassessed its infatuation with China to ensure that it is truly an equal partner. If not, then it should have the courage to renegotiate the terms of engagement.” The same, needless to stress, goes for other African economies.

Igbos, think home! (2)

By Chuks OLUIGBO

When I published what I now regard as the first part of this article exactly two weeks ago ((March 7, 2013) where I harped on the need for Igbo people living outside Igboland to bring back home some of their investments, I was only a concerned Igbo son expressing a sincere passion over what I feel is the “wayward” lifestyle of my Igbo brethren whose investments are scattered all over the world, and yet their imprint is hardly felt at home – instead, and most regrettably, their homeland remains a backwater. But this has since then moved beyond mere expression of feelings. I’ll elaborate.

In the concluding paragraph of that piece, I submitted: “While these things may not be as straight-forward as I present them, and while I can’t claim that this is the final word, I believe it’s a starting point. Let others who have the good of Igboland at heart join this debate. Who knows, we might still be able to redeem Igboland from its present calamitous state...”

The response that I have got since then has been overwhelming. And it is that response that has convinced me that we are not totally lost, that Igboland can still be redeemed, that many Igbo sons and daughters living and doing business outside Igboland realise that something urgent needs to be done to redeem Igboland. I’ll reproduce some of the reactions here, beginning with some comments that appeared under the article on the BusinessDay website:

Edward Igbokwe: “Good article. All stakeholders please take note. Let’s work hard to reverse the curse. We have entrepreneurs waiting to set up in South-eastern states, but no receptive government (federal and state) action. I have made efforts to connect. Through technology transfer, we can create global quality value-added products and its associated employment creation. We can do it if we believe, and are willing to network. We are a blessed people.”

Charles Umunnakwe: “Cheap and reliable transport system is what makes an economy grow. There must be a cheap way of evacuating yams from, say, Abakaliki to Onitsha, and move manufactured goods from Aba to Onitsha without using the expensive unreliable roads in the region – a light rail system to link key commercial cities in the zone such as from Onitsha to Owerri to Aba which links up the Aba railway station; while from Afikpo links to Abakaliki to Enugu and down to Onitsha where the line started. As soon as cheap reliable transport is secured and the Enugu and Owerri airports become functional international airports, those Igbo Diaspora or even other foreigners shall come and invest in already available housing and industrial estates provided by the governments.”

Victor: “You’ve some very important points, and it seems we think alike. We need politicians that think strategically in Igboland and I think it will help if private individuals like us come together and register an NGO to advocate this specifically. I think Eastern Nigeria has many natural advantages to lead other regions if not for the politics following the civil war. We will have to co-opt the original Eastern Nigeria parts of South-South in economic integration with South-East. For example, there should be a double gauge rail line connecting the deep seaports of Ibaka in Akwa-Ibom, Onne in Rivers and Calabar deep seaports to Nnewi, Onitsha and Aba. The main factors keeping our people in Lagos are international airport and deep seaports for those importers/traders. Incidentally, Eastern Nigeria is where we have the most disposable income in Nigeria by virtue of 13 percent derivation, NDDC, Niger Delta Ministry. Eastern Nigeria also is nearer the north also for the market.”

These, as I’ve said, are not all the reactions. There are many more.

Then I got a call from Iyke Ogbonnaya in Umuahia, Abia State, who said he had been thinking along the same line and promised to join the debate by contributing articles that would go into the specifics of how this dream of bringing back the Igbo Diaspora to develop Igboland can be achieved.

I also went online to find out how much has been said about this topic, and I discovered, not unexpectedly, that many have been worried by this very situation many years before now. I was particularly impressed by the submission of Joe Nze Eto of the World Igbo Congress, an organisation whose objectives include to promote progress and development of Igboland. He wrote in 2012: “Although the Igbo is legendary for hard work, ingenuity and business sense, Igboland lacks significant industrial establishments in Nigeria, a land flowing with milk and honey…. Sons and daughters of Igboland now find themselves in the thick of economic and social centres throughout the world. The time has come for the Igbo to think home. The time has come for Diaspora Igbo to bring the bacon home and work towards a functional education system for the homeland. This was once the hallmark of the Igbo. We must work towards technical education. We must work for development and industrialisation. We must work toward the restoration of our agricultural systems. We must work to provide good health for our people.... We must tap into our proverbial talents and unique gifts of innovation and technology. We must revisit the war-time technologies of the Biafra era that ushered in PRODA in order to quicken the pace of industrial development in Igboland.”

For me, what all these point to is the fact that, to an extent, there is already that awareness that things are not right, that the Igbo urgently need a change of tack. I would also assume that the debate is on already. What is lacking, perhaps, is yet a formal forum to harness the numerous fantastic ideas being expressed. That, hopefully, will come – personally, I don’t believe in “all talk and no do”. We certainly need to go beyond words. But while we wait, first, the tempo of these expressions, these outbursts, must be sustained. Greater awareness, I believe, is the first necessary pre-condition for getting it right. We must not lose heart. Let’s keep the fire burning. And let those with specific ideas on the way out of the woods bring them to the table.

Igbos, think home!

By Chuks OLUIGBO

When, in the immediate post-Nigeria/Biafra Civil War years, Ukpabi Asika, then administrator of East Central State, told his fellow Igbos that “amnesty does not mean amnesia”, he meant to remind them that though the victorious Federal Government (or the rest of Nigeria, if you like) may have forgiven them, it certainly hasn’t forgotten – and it may never forget. But would he have envisaged that decades later, the Igbos would, unfortunately, themselves relapse into amnesia, forgetting totally the hard lessons of that brutal war? I doubt so. 

I do not wish to return in detail to the various ways the Igbos have exhibited their collective amnesia since the civil war ended. I have amply dwelt on that in an earlier article “Are Igbos suffering from collective amnesia?” which is available online. The bottom line is this: huge Igbo investments are scattered in all parts of Nigeria with the exception of Igboland. Igbo people are all over the place contributing to socio-economic development while Igboland remains grossly underdeveloped.

There is a sense in which one can argue that the civil war experience – particularly the ‘abandoned property’ saga – did inculcate some sense of responsibility into the Igbos. Many of them who had lived in fine mansions in the cities where they had established themselves prior to the war returned home as refugees to squat in mud houses with their relatives in the villages. Reason: they had no homes in their homeland. That sad experience brought about a new thinking – aku ruo ulo (literally, let the wealth be felt at home). The Igbos learnt to take part of their wealth to their native land – in the form of community development projects through the town unions, as well as big mansions. But that did not seem to have lasted for long before they reverted to their pre-war ways.

To re-echo the optimism of many a Nigerian leader, this country won’t break up – and nobody prays it does. It’s not our portion (permit me to go Pentecostal just this once), but supposing, just supposing, considering the vagaries of our daily existence in this hole of a country, something happens to Nigeria right now? Sorry to say, but given the unquantifiable loss the Igbos have suffered, in man and material, in riots across Nigeria since 1953, it would be most tragic if, this time around, the Igbos are caught napping, with all their eggs in one wrecked basket.

Igbos are a migrant people. That’s given. It’ll sound unnecessarily repetitive to restate the oft echoed sentiment that wherever you go and don’t find an Igbo person, then that place must be uninhabitable. Writing as early as 1957 in West Africa: A Study of the Environment and Man’s Use of It, R. J. Harrison Church did assert that the “Ibo are found in temporary work all over Nigeria, and some 20,000 are employed in Fernando Po”. The Igbos have never looked back ever since; not even the events of 1966-70 could hold them back.

As it is, it’s obvious, given their stakes in their various host communities in other parts of Nigeria, that the Igbos cannot possibly return home en masse – permanently. That can’t and won’t happen – not even for those Igbos living in the flashpoints of northern Nigeria. It’s not even desirable at this point. Of course, Igboland cannot even contain all the Igbo people were they to suddenly return home. Igboland is a land-hungry area. Land hunger was part of the reasons the people emigrated out of their traditional homeland in the first place. What can be done for now is for the Igbos to begin to consider taking part of their investments home. It may not be economically viable at first, but it will be, over time, and it’s something worth doing, however you look at it. I often imagine what Igboland would be if just a quarter of Igbo investments in Lagos alone is brought back to Igboland!

We can take a cue from the fact that there are many foreigners living and doing business in Nigeria who make huge profits here and repatriate their profits to support the economies of their home countries. Nigerians in other parts of the world are also known to do the same. In 2012 alone, it is estimated that remittances from Nigerians in Diaspora into the Nigerian economy are in excess of N3 trillion. Who says Igbos in other parts of Nigeria (and the world) can’t do the same for Igboland?

But first, the governors of the five South-East states must work consciously and painstakingly to woo rich Igbo Diaspora back to Igboland. All this empty media hype won’t go anywhere. The Indian model may be instructive here. Every year, the Indian government organises Pravasi Bharatiya Divas (Expatriate Indians’ Day), an annual jamboree of Diaspora Indians, which is also used to attract expatriate investment. The Indian government can do this because it places great premium on its Diasporans and what they can contribute. Shashi Tharoor, India’s minister of state for human resource development, admits: “The importance of diaspora financing – from the remittances of working-class Indians that have transformed Kerala’s countryside to the millions poured into high-tech businesses in Bangalore or Gurgaon by Silicon Valley investors – simply cannot be minimised, especially during a global financial crisis.” Yet, Tharoor makes a case for encouraging the Diasporans to do more, and giving them reasons to do more, because “when India allows its pravasis to feel at home, India itself is strengthened”. The South-East governors can take a leaf from this.

For their part, the Igbo Diaspora also have to show a willingness to come home to develop Igboland. Then they can begin by engaging their governors. The onus, as I’ve said, is on the governors to create the enabling environment in their various states to attract rich Igbo people to invest back home, but what if these governors lack the ideas? This is why the Igbo Diaspora cannot wait eternally for the governors. They can, as in the saying, be the mountain that goes to Muhammad. Igbos have developed swamps in the west and deserts in the north for too long, but that hasn’t moved Igboland an inch out of gross underdevelopment.

One other option for Igboland is to toe the line of regional integration that has become a fad across the country. As I have argued elsewhere, “To say that the states of the South-East need economic integration as much as other regions of the country – or even more so – is merely stating the obvious. There is no doubt that the South-East is among the least developed areas of the country – if not the very least – in terms of infrastructure, which is worsened by the virtual absence of federal projects in the region. This is one reason the Igbos of the South-East are scattered in all parts of Nigeria and the world where they contribute immeasurably to development, while their home region remains a backwater. Joining forces will likely reverse this trend. Working together, the South-East states, rather than wait eternally for a sleeping – or politics-playing – Federal Government, can pool resources and commence work on the direly needed Second Niger Bridge and such other projects, rehabilitation of the badly damaged interstate roads in the region, and development of other infrastructure that would bring the Igbos back home to invest.”

While these things may not be as straight-forward as I present them, and while I can’t claim that this is the final word, I believe it’s a starting point. Let others who have the good of Igboland at heart join this debate. Who knows, we might still be able to redeem Igboland from its present calamitous state; we might still be able to wrest Igboland from the grips of kidnappers, armed robbers and other criminals who have made visiting home a nightmare for many (especially since some pundits believe these crimes are rooted in the widespread joblessness in the land); and we might still be able to move all these Ebonyi children hawking all-what-nots at every bus stop in Lagos back to their state where they can contribute more meaningfully to the development of both themselves and their state. So help us God.