In Imo, our focus is on employment-led industrial policy, says Amaeshi

Kenneth Amaeshi is a Professor of Business and Sustainable Development at the University of Edinburgh, Scotland. He is currently on leave of absence at the European University Institute in Florence, Italy, where he is a Professor of Sustainable Finance and Governance.

He is also a Visiting Professor at the London School of Economics on Leadership and Financial Markets in Africa, as well as the Chief Economic Adviser to the Imo State Government, a part-time role he does pro-bono, as his contribution to the State.

He spoke with GODFREY OFURUM and DIKACHI ELEMBA in Owerri. Excerpts:

Do you think Imo has what it takes, economically, to stand as a state?

Imo State is a viable state. Like any other state, there is always room for improvement. As you know, Imo State has a large deposit of gas and other natural resources. Imo State also has viable sectors, like hospitality, education, and oil and gas. So, I normally describe Imo State as the case of the Elephant and the Seven Blind Men.

You can visit Imo State and think it’s all about hotels, so it is a hospitality state. But you can also say it is about oil and gas or you’ll say it’s about education.

We also have companies like Adapalm, Avutu Modern Poultry and Standard Shoe Industry. Although some of these companies are moribund, the present governor, Distinguished Senator Hope Uzodinma, is making significant efforts to bring them back to life. However, this revival needs to be done within the current scheme of things and in consideration of possible future trends.

So, you can’t say because you had company A in 1980 that that sector is still viable today. If you look at the current scheme of things, even your typical oil and gas firms have been overtaken by technology firms, in terms of the financial value they create. As such, we see the digital economy as a possible next step for Imo State.

And there are a lot of things that will support it for Imo State. For instance, we have a young population that can understand technology and key into it. The other thing is that the digital technology opens Imo State to the global economy. Digital economy is global, it helps you to transcend the limitations of space (or geography). For instance, someone can stay in Owerri and earn money from overseas, you don’t need to travel.

There are people here who stay in their homes and work for companies that are not based here. So, it will help a lot in empowering our people and addressing unemployment. And that’s what we are trying to do with our recently articulated industrial policy.

So, talking about the industrial policy, what areas is the state government going to prioritise under this policy?

Overall, our industrial policy is intentionally employment-led, because we want to strategically address the challenges of unemployment. This approach is a bit unusual because when you look at many industrial policies, they tend to be investor-led. Some of them were designed to lure investors in; and yes, it is a good strategy, but imagine a situation where investors come in, make money, but they don’t create enough decent and meaningful jobs. In that regard, the job element is always treated as a trickle-down effect, it’s kind of a secondary consideration. The attitude is usually one that says: “Once we have investors, irrespective of their potential to create large employment, jobs will automatically follow”. But how true is this claim?

What we are trying to do here is to turn this argument on its head and use a different model, which is employment-led. It doesn’t mean that we are not interested in investors that will bring in money, but we simultaneously need money, wealth, and jobs. In that sense, it helps us to address the challenges of unemployment. And unemployment is an African problem, notwithstanding the threats of climate change.

Yes, we talk about climate change today as a Western problem, yet Africa will suffer from it. As such, we are asked to mitigate and invest in adaptation technologies and mitigation technologies. But you also ask yourself, where will these technologies come from? The technologies are not usually from Africa, so we now become dependent on Western/foreign technologies. But that’s a different kettle of fish. In summary, whilst climate change has captured the imagination of the global north, high unemployment remains a major social problem in Africa.

I read something recently that suggests that about 60 percent of African youths are either unemployed or underemployed. You can now stretch that to different countries and sub-national governments in Africa. Any investment or industrial policy will now need to prioritise industries that can address these problems.

Secondly, we are also looking at digital technology as an emerging space. Then, there is also the issue of the real sector, as you mentioned. But for us, we would not want to deal with aspects that would require heavy machinery and high energy consumption for now, for obvious reasons. Nonetheless, sustainable energy generation is a top priority for the state.

In that case, renewable energy becomes an emerging space we can prioritise, but it requires a technical know-how. This is where our universities will come in. We need ecosystem-engineers, researchers that will help create some of these technologies as well.

We have so many artisans from Imo who are into finished leather production. In fact, they dominate the Aba finished leather cluster. How can we bring them in to tap into the Standard Shoe company?

The governor is someone who believes in the power of efficient markets. He came from the private sector. He believes in the market. So, it is not about compelling or forcing people to do things. Rather, it should be about creating incentives for people to take advantage of economic and market opportunities.

The question is, how do we lure the people in Aba to relocate to Owerri, for instance? A person in Aba who sees an opportunity in Standard Shoes will also probably see the need to be closer to this entity. The fact that the state has rescued the shoe business from AMCON, paid all the debts, and is repositioning it, should be a good signal to entrepreneurs and investors in this space.

There is a notion that government has no business being in business, but don’t you think that by providing infrastructure and other enablers that support business, government is also participating in business?

There is a difference between providing an enabling business environment and being an investor. Government can create an enabling environment by improving the ease of doing business among other things. And Imo State is currently engaging the State Action on Business Enabling Reforms (SABER) programme supported by the World Bank. At the national level, it is coordinated through the Office of the Vice President. With the milestones set, we will follow the right steps to enhance the ease of doing business in the state.

Talking about enabling environment, if you get to the industrial area along Onitsha-Owerri Road, you have about 290 industrial plots in that estate, but that place is lying fallow. What is your take on that estate?

I was there recently, when I paid a courtesy visit to the Nigerian Bottling Company, bottlers of Coca-Cola in Nigeria. If you also consider when that industrial park was set up, it was in the ’80s and so the situation then and the situation now are not the same. It could be that the park was meant for certain companies, but who says the park can’t house digital businesses?

But I know it’s one of those areas that the government is thinking hard on how to bring it into the equation. However, given the proximity of the industrial park to the city, I am not sure anyone would opt for industries that would pollute the city and have negative impacts on public health.

So, when you talk about industrial parks, we can talk about green industrial parks, where we are encouraging companies that are either reliant on renewable energy or they themselves are producing these technologies. But like I said, there are many things we are looking at; it’s just about priorities.

This government has been around for about 32 months. From the look of things, it is obvious the governor is passionate about infrastructure development. Infrastructure is also part of the enabling business environment, but we also need to know where we are coming from, because sometimes it seems we want to wish away the past. Political economy recognises what is called “path dependency”. In other words, the growth or performance of an economy is to an extent dependent on the past or history of that economy. So, where were we 10 years ago and where are we today?

We can’t wish away the past. This current administration inherited the state with its assets and liabilities, so the governor is now doing his best to take the state up to a point. A time will come when he hands it over to another governor, because government is a continuum.

Let me take you back to the Avutu Poultry Farm that is about to be revamped. What do you think will be the impact of that facility on the economy of the state?

I visited that farm in the ’90s when my dad was there as the administrative manager. Avutu Poultry Farm, when revived, will service local demands of poultry products. The hotels here would benefit from it. It will create jobs.

But again, it is important if you look at it from a value chain perspective. It can contribute to meeting local demands and also be part of our export story. There is a big market in Africa for poultry products. So, your point about Avutu Poultry Farm is correct and the state is working hard to revive it.

Inflows from outside ensure liquidity. What is the state doing to attract FDIs to the state?

We have the Imo State Investment Promotion Agency, headed by Dr Jude Nzeako, that is responsible for such. He is also very much involved in the state’s Industrial Policy. And recently too, part of what that agency does is that they have what is called “Investment Committee”. The committee meets monthly to look at ideas.

Sometimes people come to you with investment ideas and opportunities; sometimes, you also need to go outside to sell the state. So, it’s a two-way thing.

The committee looks at these proposals to know where they’re coming from, what they are offering, and whether what they want to bring aligns with the state’s Industrial Policy.

We are strategically pursuing these opportunities. However, some people will come to you with some project proposals, but when you investigate them, you’ll find out that they’ve not thought them through, or they do not have the resources to support their proposals.

Also reaching out to people in the diaspora is another way to convince people to invest in the state. But I agree with you on the need to be more proactive in doing that. However, it still goes back to the question: what sort of investors do we need, and what sort of investors will meet us where we are?

In my opinion, we need investors that will help us solve some of our big societal problems. If you say you want everything to be rosy before you come in, what problem(s) are you coming to solve? So, be part of the change you desire. That’s the way I’ll think about investors and where we are.

What strategies do you think would work to address unemployment?

I think freelancing can be a credible alternative to paid employment. Some people think that setting up a business is a big problem, but you can be a freelancer by selling your skills and services to those that need them.

I’ll give you an example. The young man who does my graphic work is in Lagos and I work in the United Kingdom and Italy. I call him anytime I need him, and he does brilliant work. He is more affordable than those in the UK and Italy are, but he also earns good money from what he does for me, above the local market rate even.

A young person in Owerri has a much more comparative edge over the person in Lagos. So, if you are in Owerri and you are earning $500 for your services, you are better off than someone in New York, who earns $2,000 a month, because of purchasing power and cost of living.

A lot of things can work for us. Imo State can even undercut Lagos if we have a number of young people who are freelancers that are into the digital space. That again is our comparative edge because we have young people. Imo State is cheaper in terms of cost of living, and we have the number, and nothing stops us from saying that Imo State can become a digital hub of West Africa – if not Africa. It is possible.

What other activities is your Office engaged in?

We have created the Imo Economic Digest – a quarterly journal that documents the economic activities and news about Imo State. We also have The Imo Economic Study (TIES) Series. It’s a fortnightly online programme aired through traditional and social media platforms, so that we can reach a number of people in and outside the state. People outside the state can also join on Facebook and other channels. We normally pick a topic and invite experts who work in that space to break it down and explore the commercial opportunities the space offers. We primarily explore opportunities in Imo State. We did one on logistics and we invited somebody from Coca Cola, and Frank Nneji of ABC Transport plc. It was very revealing.

Owerri is centralised and a very good logistics hub in the South East. We have an airport, and the state is close to Aba, Port Harcourt, Onitsha, Uyo, Calabar. Invariably, you can create warehouses here for distribution.

We have also investigated movie production. We invited some Nollywood stars who highlighted the investment opportunities in the sector. Surprisingly, with about N25 million one can produce a film. For example, there was a time my old school group was looking at what to invest in and we wanted to do it in Imo, but if we knew then that with N25 million we could produce a film, maybe a hundred of us could have contributed N250,000 each and we would have produced a film. Isn’t that amazing?

You don’t need to be an actor to invest in movie production. These are the additional things my office is doing. We are also now trying to do a 25-year Development Plan for the state. We are working with PricewaterhouseCoopers. The project was officially flagged off recently. The idea is that 25 years is a generation, and it is something beyond this government. And one of the ways we are pursuing it is to protect it and get it passed into law by the state legislature. So, even when the current governor leaves, it is handed over to the next governor.

The development plan must be flexible and principle-based. Governors may come with their policies, but if you create an idea that is principle-based, it gives room for flexibility. So, if Mr. A wants to build a factory, he will respect this principle, likewise Mr. B, who wants to build an airport. That way it becomes a principle-driven plan.

What would you like to tell those outside Imo State or those who look at the state from a distance?

It’s good to mention that Imo State is open for business. Sometimes, when you are out there, there is negative press and if you look at what the government is doing or even when you read what is out there, people are just focusing on one thing and that is insecurity. Nobody can say that the governor is not doing infrastructure or other things. If we can, in a way, showcase what the government is doing, it would also over time overshadow the negative press.

The insecurity is hyped. Our experience is not different from other states. That is not to say that I’m happy with the security situation. The point I’m trying to make is that Imo needs to be safe. If I’m in Edinburgh or Florence, I can move around anytime I like. So, people in Imo State should have that kind of freedom.

Amartya Sen, a Noble Laureate in Economics, argued that poverty is the lack of freedom. It means even if you have all the money in the world and you are not free, you are still poor. So, when people in Owerri, Okigwe or Orlu cannot travel to some parts of Imo after 7pm, they are poor, even if they have all the riches in the world. If you are not free, you are imprisoned by your situation.

Again, if we put ourselves in that notion of freedom, what does it feel to be a free person in Imo State? It can also help us to think whether I am a rich man or a poor man. That’s one thing I’ll leave as a message.

The other thing is that people should be more accepting than they currently are. Things might not have happened the way they wanted them to happen, but they have happened. There are people who would say that nothing good can come out of this government, and they are stuck with that idea, even when good things are happening.

I give you an instance. When somebody heard about the Federal Medical Centre (FMC) Owerri being upgraded to a Teaching Hospital, he said something like “Leave FMC alone, go and develop a new Teaching Hospital, after all FUTO has a lot of land, why not go and build a new one and forget about FMC?” This person obviously forgets that there are medical students who need this facility like yesterday. If you abandon the idea of the FMC as a medical school and start a new one, what will be the fate of the students?

When people have that biased mind, they will never see anything good; even the good thing, they will turn it around. Our people should keep an open mind.

Democracy is not a harmonious choir. It is contested and the contestation needs to be healthy. It is that tension in democracy that will help to produce the kind of innovation we need. Sometimes, we assume that we all need to agree. Then, why do you have different parties? Why do you have different ideologies? We need to show those ideologies to compete, and if we think a particular ideology does not work for us, we change. That’s how societies develop.

Margaret Thatcher, as the UK prime minister, operated from the ideology of small state, big business. She privatised many UK businesses. Ronald Reagan had a similar ideology about the same time in the USA.

When Tony Blair came in, his party – the Labour Party – moved back a bit from the ideology of the Conversative Party before it. So, Blair started talking about carrying people along, and said about 50 percent of the population must pass through the university. Blair’s government provided the enabling environment and policy support to make that work.

With the reemergence of the Conversative Party ideology in UK politics, people are now turning around to say we have so many people that went to university, we need to bring it down and talk about technical education. The current UK government, therefore, argued that you don’t need to go to university before you can earn a living and that is how they came up with the idea of apprenticeship. In that case, you can be working and studying at the same time.

So, the same can apply to us here. We don’t necessarily need to agree on all things, but the contestation must be healthy; it should be issue-based, and then let the best ideas win.

The final thing I’d like to say is that Imo is what it is. You can’t say, let’s destroy it or let’s even let it die, as long as we don’t like who is there. It’s like cutting our nose to spite our face, because in the next four years or eight years, Imo State will still be there. The state can only be whatever we want it to be.

Therefore, I’ll say Imo State belongs to all of us, let’s build it together, irrespective of who is there today.