Reviving North-South rivalry over economy

By OSCARLINE ONWUEMENYI


The perceived imbalance in the Nigerian economy came to the fore in an ugly way at the recent Leadership Conference on the De-Industrialisation of Northern Nigeria, held in Abuja. The conference, which attracted the best and the powerful in the region, questioned “the significant and de-industrialisation and stagnation of the North at a time the South is prospering and developing.”

It, subsequently, called for drastic policy measures, including moderation of certain policies of previous administrations, which it claimed ruined the northern economy, especially as perpetrated by the Federal Government,

A former governor of the defunct North Central State, Brig. Gen. Abba Kyari (rtd.), noted that “not too long ago, Kaduna and Kano were not only the political and commercial capitals of the North; they were its industrial heartlands as well.

“Today, both cities are industrial wastelands. Kakuri in Kaduna and Bompai in Kano are replete with closed factories. The textile industry, the largest employer of labour has lost over 300, 000 workers, which means that over 300, 000 families have lost their means of livelihood. The multiplier effect means that any figure between three and five million have lost their breadwinners.”

Kyari said the ‘de-industrialisatio’n and ‘de-agriculturisation’ of the North had reduced people in the region to penury.

According to him, “Northern Nigeria is home to the wretched of the earth. Illiteracy, malnutrition, infant mortality and death from easily preventable diseases mark the stark reality in the region.”

He heaped the blame on unpatriotic leadership and defective policies of government, saying that “policies have been wrong-headed and wrong-footed. They have been characterised by seeking salvation through a dependency on multi-lateral institutions, foreign investment and foreign aid at the national level, incompetence and corruption at all levels.”

Late in 2006, the Central Bank of Nigeria’s Governor, Professor Chukwuma Soludo, came out with a post mortem report on Nigeria’s economic restructuring programme. Titled ‘Reforms and Outcomes,’ it was an overview of the prevailing trends in the Nigerian economy. It was chilling in its conclusion and was a clear confirmation of what many had always known but never contemplated in such graphic details. In summary, it concluded that “poverty is essentially a Northern phenomenon.”

It further stated that 70 per cent of bank credits in the country are held within the Lagos and Ogun axis, while the North holds a paltry 8.5 per cent. In terms of bank deposits, while Lagos State alone accounts for 48, the entire North had less bank deposits than the South-South alone. The report further pointed out that the Northern problem lies with a chronic dependency syndrome, dependency on government and a near-total absence of private sector-led wealth creation culture.

The Managing Director and Chief Executive Officer of Unity Bank of Nigeria Plc, Mallam Falalu Bello, was more war-like in his condemnation of the economic prosperity of the South West and South East regions of the country, to the detriment of the North and other regions.

Bello stated this in a paper titled: “Nigeria , One Country, Four Economies” He said peace would elude the country until regional economic imbalance was addressed. According to him, “The so-called religious disturbances in the Northern states and the Port Harcourt conundrum of kids terrorizing the population will not stop until the imbalances are consciously addressed and redressed.”

He added that it is indeed in the interest of the South-Westerners and South-Easterners for some affirmative actions to be taken to redress the situation “else there will be no real peace in this country moving forward.”

Bello blamed the reform agenda of the President Olusegun Obasanjo for creating “very dangerous economic structure,” which had worsened the situation of the North.

He said, “Geography, history and particularly the reform agenda of Obasanjo’s regime have created very dangerous economic structure in Nigeria. By design or accident, Northerners and South-Southerners as peoples and regions have been made third and fourth-class citizens. We may well choose to ignore these happenings and pretend that they have not happened but doing so will be at the peril of the Nigerian polity.”

He noted that the economic dominance of the two regions had seen them control a combined 94per cent of the nation’s banking assets, 88 per cent of insurance assets, and more than 90 per cent of industrial assets.

According to him, The South West with a land mass of 76,852 square kilometers and population of 25.2m today owns and or controls 60 per cent of the nation’s industrial capacity, 44per cent of banking assets, 67 per cent of insurance assets and is home to the nation’s three deep sea ports of Apapa, Tin Can Island and Roro. The region, he added, also has the busiest international airport in the country, three thermal stations of Egbin, Papalanto and Omotosho as well as three major industrial estates of Agbara, Ikeja and Ota. Added to these, he said, democratisation of education, availability of resources and economic empowerment during the Obasanjo administration have collectively enabled the South Western economy to rank as the first of the four economies in Nigeria.

He added, “The South West as a region can boast of having a defined middle-class and is perceived to have at least 20,000 of its indigenes with net worth of over N100 million each. Take it out of Nigeria, the South-West economy with its defined growing middle class and resources, will be one of the fastest growing economies in the world.”

Bello further noted that the South-East (plus their cousins across the Onitsha bridge) control commerce in all parts of the country and are thus largely employed. “The region has clusters of small-scale industries around Nnewi and Aba . The banking consolidation has assisted these people to now have ownership and control of over 50 per cent of Nigerian banking assets. It also controls 21per cent of insurance assets and 30 per cent of industrial assets,” he added. With this development, he said the region, which had not had a commanding control over the nation’s economy, will certainly begin to do that now.

He noted, “Commercial activities backed by finance can only grow the economy of the South-East plus Delta. The growing strength of financial muscle of this region has been aptly demonstrated by the recent licensing of micro-finance banks. Of the over 600 MFBs recently licensed by the Central Bank of Nigeria , Anambra State alone has 74, whilst Yobe State has one, Sokoto has five and Zamfara has six.”

On the other hand, he said, the North which covers 719,435 square kilometres or 79 per cent of the nation’s landmass and had 75 million or 53.6per cent of the population has its economy totally grounded as a consequence of various reforms introduced. “Today, the North has ownership and control of no more than three per cent of banking assets, two per cent of insurance assets and 10 per cent of industrial assets.”

He added, “True, the North has a huge landmass but this has remained under-exploited due to jettisoning of time-tested policies of price support (as a result of abolishing of marketing boards without putting alternatives and abandonment of extension services and quality control.”

Bello said that though the North had a huge population, it had remained largely uneducated because of near failure of governance. “Currently, the most distinguishing characteristic of the North is grinding poverty, recent poverty statistics indicate that the poverty level of states in the North has been on the increase in the last nine years and reached over 80 percent. Its two industrial and commercial nerve centre ( Kano and Kaduna ) have seen industrial capacity utilisation decline to an all time low of less than 10 per cent.”

He urged the government to moderate certain policies of previous administrations which ruined Northern economy, noting that, “ the implementation of undiluted market-oriented reforms as we have seen do not bring about human development; any policy of government which hurts majority of its people no matter how good need be re-examined.”

Most of the speakers, however, noted that the North must turn its focus on industrialisation, with emphasis on the development of small and medium-sized industries, to process agro-allied products for the local and export markets. The choice, he said, is informed by the fact that small and medium-sized industries require fewer capitalisations to set up and also less energy and skill to run.

“Processing of agro-allied products will impact positively on growth of agriculture, the mainstay of Northern economy. Until we move as a community from agriculture to industry, our growth is tied down to agriculture,” he said.