A recent report on Foreign Direct Investments (FDI) in Nigeria, estimated at $93.3billion between 2013 and the first quarter of 2020, showed that the South East region received the least amount of $203.898 million or a paltry 0.22 per cent. This is considered grossly inadequate considering the fact that the region has many of the nation’s top entrepreneurs. Data from the National Bureau of Statistics (NBS) revealed that with FDI of $152 million in 2013 and $151million in 2014, Enugu State reportedly got the highest investments within the period. Abia had a total of $9.7billion between 2013 and 2014 and Anambra $38billion. Imo had less than $10billion while Ebonyi had none.
Experts have blamed the low inflow of FDI to the region on unfriendly tax regimes, poor quality infrastructure, government’s flip-flop policies in the South East and the attitude of political leaders in the zone. The NBS report showed that South East only outperformed the North East and North West within the same period with capital importation of $39.4billion(0.04 per cent) and $29.9billion(0.03 per cent), respectively. South West received the largest, $81.8billion or 87.70 per cent of the total FDI, South South, $470.6 million (0.50 per cent) and North Central, $10.7billion (11.51 per cent).
The poor business environment and lack of political will to industrialise the region by the Federal Government and the governments of the South East states might have been responsible for the low investments in the South East during the period. The report should serve as a wake-up call on the governors of the region to provide the enabling environment that will make the region an industrial hub. A World Bank’s report last year on the Ease of Doing Business, which gave Nigeria an improved rating in the index, ranked the South East low in its region by region index, citing lack of coordination among the political leaders in the zone, poor infrastructure and multiple taxation, among other factors.
We believe that this is the time for entrepreneurs from the region to ‘think home’ and invest more in the South East. This is one of the best ways they can attract more investments to the region. We enjoin the governors of the region to create the right investment climate and offer tax waivers and other incentives that will attract investments. Henceforth, they should encourage indigenous investors to invest in the region. Investment in the region should be made to attract high returns because no investor goes to where return on investment is low. The governors of the region can borrow a leaf from Ogun State, which has become an industrial hub in the South West region. It is home to manufacturing and agro-processing investments in the country. According to the Manufacturers Association of Nigeria (MAN), 74.42 per cent of manufacturers’ investment of N691billion in 2014 went to Ogun State. From 2015 -2019, the state had over 70 per cent of FDI, while Apapa and lkeja in Lagos shared the remaining investments. Among other benefits, Ogun State earns a lot of revenue from taxes. The South East states should draw investment lessons from Lagos and Ogun states to boost their economies. In addition to improving business environment, they must develop industrial clusters. Lagos, Ogun and Kaduna states have used industrial clusters to attract investments and grow their revenue base.
Unfortunately, most of the industrial layouts that should have served as industrial clusters in the South East have been converted to personal estates and hotels. Without doubt, lack of strategic direction for industrialisation and mobilisation of investments may continue to hamper the inflow of investments in the South East. Therefore, we call on the governors of the region to create a conducive environment for business to thrive in the zone. In spite the obvious constraints inhibiting investments in the South East, we believe that the Federal Government has a role to play in changing the situation by initiating projects that will promote economic development of the region. Currently, fiscal policy of the Federal Government makes manufacturing in the South East noncompetitive because the importation of some manufacturing inputs is restricted to Lagos. This is why a number of manufacturers from the South East zone have large investments in Lagos and Ogun industrial areas.
In this regard, the dredging and completion of the South East seaport, including the second Niger Bridge will enhance economic activities in the zone. At the same time, the South East governors must develop a well defined investment opportunities platform that investors can access on a website. It is heartening that Ohanaeze Ndigbo has set up the “Alaigbo Stabilisation Fund” in partnership with the governors of the South East region. Let them use the avenue to boost investment opportunities in the zone.