Towards Southeast’s Next Economic Transformation

guest columnist

Sam Amadi

On September 28 and 29, the Governors of the Southeast held a security and economic summit to develop strategies to address the crisis of livelihood in the region that manifests as high insecurity and economic stagnation. The summit had many powerful keynote speakers, including the Director of The World Trade Organization, Ngozi Okonjo-Iweala, whose plenary speech focused on how the region can tap into its resources and the changing nature of global economics to reposition itself as a successful competitor in global trade. She challenged the Governors of the region and its economic and political leaders to work in concert and in alignment with the federal government to create wealth and security for the region. The highpoint of the event is the demonstrated commitment of the Governors of the region to pursue economic development and security for the region. It was satisfying to behold all of them together in a summit with experts to seek solutions to the governance and development challenges in the region.

It was a pageant of good rhetoric and resplendent dressing. But more than words are needed in the Southeast. We need good visions and the right actions. It is true that the region outperforms the rest of the country in critical human development indicators. It has the lowest poverty rate of any region, including multidimensional poverty. It has far lower number of out-of-school children than any other region. Its per capita GDP is better than most of the regions. But its relatively good economic performance is bad compared with its factor endowment and its past performance. Nigeria’s economic performance has been terrible in recent time. So, bettering the other regions in this regard does not mean great performance. The truth is that the southeast should be far ahead of the national average in every economic and human development indicator more than it is now. But it is not. More worrisome is its insecurity index. Although it is no where close to those of Northwest and Northeast, it is a jump from where it used to be a few years ago when it was adjudged as by far the most peaceful and secure region in Nigeria. Things fall apart.

With its mineral resources and well-educated, entrepreneurial people, the region should be fast industrializing and enhancing Nigeria’s export trade. But it is not doing so. How should the Southeast begin to redeem itself and move more assuredly towards its destiny as the nation’s economic powerhouse? The path to this future goes through the past. We need to go back to the 1960s when Eastern Nigeria was the fastest growing economy in the world, outperforming the likes of Singapore, Bangladesh, and Taiwan. There was something different about that burst of entrepreneurial energy by the government of Eastern Nigeria under M.I. Okpara and Nnamdi Azikiwe and a clique of well-educated technocrats. That something is politics.

Many people have argued that economic development itself is a handmaid of politics or at least related to politics in an inseparable way. That is why it used to be called political economy before Adam Smith. The great performance of Eastern Nigeria in the 1960s is because it has a more development-oriented politics. The region was a something like a developmentalist state. Today, under the ideological sway of neoliberal economics, it is no longer fashionable to describe a state as a developmentalist state. But strangely, most of the real economic transformations we have witnessed in the world occurred in countries that were somewhat developmentalist and not neoliberal, whether England, starting from the 1820s (as recognized by Karl Polanyi) or the United State under Alexaner Hamilton as Secretary of Treasury, or even East Asia the likes of General Park (as argued by Chalmers Johnson, Robert Wade, and Peter Evans). 

Chalmers Johnson in his classic “MITI and the Japanese Miracle: The Growth of Industrial Policy claims Japan as a developmentalist state and shows the elements of developmentalism which is the idea of the function of state as the pursuit of development in the form of ‘techno-industrialism’. One core element of developmentalism is that the economic policymaking is based on ‘plan -rationality’, rather than ‘market-rationality’. Developmentalist economies are planned economies without the autarchy. The state creates a pilot agency to coordinate transition to advanced productivity through a level of coherence and coordination that the market cannot achieve. The heart of the success of developmentalism is elite consensus on a developmental bargain that is oriented towards industrialization. The ruling elites are both nationalistic and technocratic in engaging the business community in an institutionalized way that guarantees economic transformation, not rent seeking.

Whether in Japan, Taiwan, China or Eastern Nigeria, the logic and positive outcomes are the same: the state focuses on economic transformation in terms of marketable goods through transition from agriculture to industry and commits to reducing constraints and activating catalysts for industrial development. Micheal Okpara did the same in Eastern Nigeria in the 1960s and the result was a harvest of industries that grew the GDP exponentially. Professor Anya O. Anya described the explosion as follows: “there were numerous industrial projects scattered over the length and breadth of Eastern Nigeria. In one frenetic burst of energy, a wave of maniacal and frenzied activity was on-going over Eastern Nigeria. … by January 25, 1963, the Michelin Factory at Port Harcourt was opened. The tire factor was a USD 3,000.000 undertaking. On March 22, the headquarter building of the Universal Insurance Company was opened in Enugu. On May 10 the Nigerian Gas Company was commissioned at Emene near Enugu. On May 16, the Aluminum Factory at Port Harcourt was opened. On August 24, the Glass Factory became operative in Port Harcourt. On October 18, the Aasbestos Cement Factory was opened in Emene” 

The explosion of industrial projects was possible because the leadership had a clear ideology and the passion and commitment to implement techno-industrial transformation. They also constructed a political settlement that managed political power in a manner that contributed to productivity and high human development. Peter Evans calls it ‘embeddedness’. Political power in Eastern Nigeria of the 1960s was embedded in the society. Political power in Southeast in 2023 should be similarly embedded to drive economic transformation and human security in the region.

The developmentalist logic and strategies of the Eastern Nigeria region were similar to those of Western and Northern Nigeria. These regions achieved transformation of their socioeconomic conditions under leaderships that share much in common. Leaders of the 1960s learnt well from the developmentalist state theories of the period. The pedigree of both Awolowo and Okpara are similar to the point that they were both visionaries and theoreticians of some note. They read through the literature of development and conceived their politics as an instrumentalization of a particular development ideology. M.I. Okpara called his ‘democratic socialism’ in the same manner that Deng styled the new China political economy beginning from 1978 as ‘socialism with Chinese characteristics’. Apart from their ideological orientations, their achievement was helped by the political structure of the period. Regionalism and the sort of incentives it created for positive competition between the regions and local ownership of development ensured that politics worked for economic and social transformation. There was significant elite consensus, which some economists identify as the main reason for effective implementation of a development agenda. 

Let us get it clear. Eastern Nigeria could not have become the fastest growing in the world in the early 1960s if it did not have a politics that suited its development objectives. One notable feature of that politics is that it was both corporatist and solidaristic, rather than individualistic and divisive. The Premier had a group of technocrats who populated the Eastern Nigeria Development Corporation (ENDC) to provide technical insights and local political leaders who had local accountability to guarantee effectiveness of development projects.

Today, in the Southeast and elsewhere in Nigeria, the Governors have everything to themselves. They are not surrounded by the best and brightest, and they govern alone without a collectivist political base. When we elect Governors, we grant them the states for four years to do as they wish. In the past, the party that is rooted in the local community wins the election. The Premier leads the party and the technical team to work for the people and with the people. But today things have changed.  There is a huge democracy deficit. Leadership is isolationist and self-serving. The ruling class is not a leading class. There is no development-oriented leading class animated with a passion for any kind of development agenda. In the past, the focus was development and personal interest was served as in the course of implementing the development agenda. Today, politics is a personal quest and development may be  an accidental outcome. 

The southeast’s next transformation requires that we reduce this democracy deficit that results in development deficit. Until we can recreate the kind of politics of the 1960s in the Southeast, we will not experience the same level of economic transformation.