24th Anniversary Lecture: Building Akwa Ibom State of Our Dream Through Industrialization
29 Sep 2011: Edet B. Akpakpan
About the early 1950's when the world turned attention to the backwardness of Africa, Asia, and Latin America, industrialization was seen as the logical solution to the problem. Economists and concerned 'statesmen' at the time argued that industrialization was the main factor that distinguished the 'developed' from the 'less-developed' countries. Industrialization, it was argued, had the potential for creating jobs, increasing incomes and reducing poverty, earning foreign exchange, and reducing external dependence, among other advantages. Following these arguments, less-developed countries (LDCs) were advised to initiate the processes of industrializing their economies using what was then the logical strategy for emerging nations, namely import substitution. And, because the LDCs in general lacked indigenous industrialists, the governments assumed the roles of investors and came to dominate the processes.
Over time, the industrialization processes in most LDCs, especially in Africa, stalled. The nascent industries turned out to be dependent on external markets for major inputs, high-cost, and uncompetitive. Critics blamed a lack of comparative advantage and government involvement for the failure and launched a successful campaign for privatization. And, because the indigenous business class in most of the LDCs was still not ready for major industrial activities, the withdrawal of governments, coupled with the arrival, about that time, of information and communications technology (ICT) and the claims about its transforming effects, the enthusiasm for what was now considered conventional industrialization, waned. But thanks to greater awareness about industrial matters, and the realization that industrialization still holds the key to success in economic and social transformation, there is now a renewed interest in the processes. This is the situation in Akwa Ibom State today.
The State Government's Industrialization Policy
ln the 2011 Budget Proposals presented by the Executive Governor of Akwa lbom State, His Excellency, Chief Godswill Obot Akpabio, the State Government summarized its policy objective as 'improving the living standard of our people' and creating 'more employment opportunities by establishing industries'. The strategies outlined for the purpose include:
- Reinvigorating agriculture and agro-allied industries by making the sector attractive and responsive to global developments;
- Expanding and diversifying the resource base of the state economy through the encouragement of public-private partnerships in industrial investments;
- Stimulating a variety of industrial enterprises in the oil and gas sector;
- Re-engineering the public service to make it more efficient and productive through major reforms and succession planning; and
- Enthroning best practices as an abiding principle of public sector administration and ensuring effective and efficient application of our limited resources through prioritization.
Subsequently, His Excellency has repeatedly indicated the plan of his administration to focus on industrialization in this second term in office, and has demonstrated commitment to the plan by actions so far taken, including today’s very important brainstorming session.
Coming after the remarkable achievements in the area of infrastructure, especially the massive reconstruction of roads in various sections of the state covering 'over 600 kilometres', and the significantly improved electric power supply thanks to the commissioning of the state's independent power project, most development practitioners would agree that the focus on industrialization at this stage is as it should be. Industrialization is necessary at this stage in the struggle for the development of the state because although it is not a panacea for socioeconomic backwardness, as some scholars have pointed out, it has strengths that are essential for success in tackling the problem. Two of these are its positive effects on productivity in the entire system which is a key factor in the improvement of incomes and reduction of poverty, and the opportunities it provides for the diversification of an economy's output. These potential contributions are the reasons countries and communities often strive to industrialize their economies as we have seen in Nigeria over the years. The Government of Akwa Ibom State has taken the right step, and the Government's investment in the development of the key components of economic infrastructure, roads and power supply, prior to industrialization removes a major aspect of the usual bottleneck in the industrialization of less-developed economies and societies. Therefore, we can agree with the state government that Akwa Ibom is ready for the crucial next stage in the development process - industrialization. This brainstorming session is expected to produce ideas that should help in translating the government's vision into reality. This paper intends to draw attention to some of the issues we need to consider.
The Industrialization Programme
In the 2011 Budget Proposals the impression is given that the state's industrialization programme hinges on the development of the Ibom Industrial City (IIC) on the Atlantic coast in Mbo. In the special second inauguration edition of the Ibom Diary (May 2011 Vol. A, No.2), more information is given about the industrialization programme. The IIC, described as 'a manufacturing and oil & gas business resort', remains 'the bedrock of industrialization in the state'. It will house 'a dockyard, watercraft repair facilities, fertilizer plant, petrochemical industries, a power plant, a refinery, etc'. In addition, the government plans to stimulate industrial enterprises in the other parts of the state. This consists of a support programme for 'the building of at least one cottage industry in each of the 31 local government areas' in the state.
The government's proposals are great ideas. They should produce the expected transforming effects when completed. Our worry would be the probability of completion. But with His Excellency's promise that 'no single project started by this administration will be uncompleted' (State Budget 2011, p.6) and the administration's performance pedigree in the delivery of the infrastructure projects, we should perhaps not worry much about the implementation of the projects in the programme. What I think the rest of us should rather do at this stage is to take a long hard look at the programme as it stands and try to identify areas that need modifying and strengthening so that when it is delivered, as we expect it will be, we should have the Akwa Ibom State of our dream.
As a contribution, I would suggest we look at the model of industrial development the government wants to use - the private-sector driven model. There is provision for public-private partnerships, but the impression is given that in all cases the potential private partners will have to come forward to signal a desire for cooperation. The private-enterprise model is reasonable, it has worked or, more accurately, worked for some time, for many countries, and it is the preferred model of neoclassical economics and the powerful international organizations (e.g., the International Monetary Fund and the World Bank) and the powerful countries (e.g, the United States of America, Britain, Germany, Japan, and France) that support its propagation. Unfortunately, the model or, more precisely, the version of it we have been made to accept, has consistently failed to work in Nigeria and indeed the entire Africa.
The main problem with the version of the private-sector model we have been trying to operate is that it is based on unrealistic assumptions, especially the assumption that there are in our societies the private men and women with relevant production knowledge and skills who only need to be induced to undertake the investments that lead to a variety of industrial enterprises, or that there are investors around the world who can easily be induced to move their resources into Africa for investment in projects that would transform the host economies and societies. The fact that these conditions do not exist is the main reason past efforts in this country - including the variety of private enterprise assistance schemes of the 1960's, the indigenization and enterprise promotion programmes of the 1970's, the structural adjustment programme of the 1980's and the privatization programme that began in the early 1980's - railed to produce the expected results.
As a consequence of its assumptions, the version of the private sector-driven model we have adopted gives the government a near passive role in the economy. This role is inappropriate in the world in which we are today, a world dominated by a few technologically, economically, and politically powerful countries whose products make a mockery of our efforts. To successfully industrialize our economy today we need a more active and purposeful involvement of government than we have seen in this country since independence - the kind of involvement that produced the strong industries of Germany, USA, Japan, and Brazil. I would therefore encourage our government to consider a more proactive role in seeking out potential private sector partners, in negotiating technology agreements and developing technological capabilities, and initiating enterprises where private sector partners may not be forthcoming.
Preparing For Take-off
As in every major undertaking, the industrialization programme needs adequate plans for take-off. This involves translating the strategies that have been outlined into the concrete plans of action that should take us to where we want to be in the next three years. This activity may have started, in which case the ideas we generate today would help mainly in streamlining plans and filling gaps. For the desired change, the plans prepared for the implementation of the various strategies should be sufficiently detailed. In particular, there should be a prioritized action matrix in which should be seen the specific project titles and costs, the location of each project, project objectives (both strategic and operational), expected outputs of the projects, key activities to be carried out in implementing the projects, the stakeholders and their roles, and the time frame for completion. This is the kind of planning we must do to be able to make a difference in the management of public resources. It is a tough approach to government business, and uncommon, but it is the only way of giving meaning to the government's strategy of 'enthroning best practices as an abiding principle of public sector administration and ensuring effective and efficient application of our limited resources'.
A culture of preparing and using prioritized action matrices in management promotes efficiency and effectiveness. By forcing public officers to specify the objectives of projects, expected outputs, key activities, and the other components outlined in the previous paragraph, a faithful use of action matrices should generate discipline, cost-consciousness, and concern about results in the use of public resources which are the key issues in best practices.
The state government, as was observed earlier, has demonstrated the capacity to implement its projects, and so we should have little worries here. But because we are dealing with an industrialization programme the elements of which often involve proprietary knowledge and skills that are usually held in secrecy, sometimes absolute, success will require new approaches, new skills, and new tactics. For example, because of the effects of technology contracts on the performance of local enterprises, it will be necessary to know the technology contracts that local industrial enterprises enter into, and the terms of the contracts, and sometimes to offer assistance in the negotiations. These activities require that the government has access to and is able to tap from a pool of technical expertise, legal and business knowledge, and negotiating skills that may sometimes be beyond the immediate government departments. I have argued for a greater role for the government in the state's industrialization process. Neoclassical economists and other advocates of the free market philosophy will be uncomfortable with this. To these colleagues I would say that such a role is consistent with the provisions of the Constitution of the Federal Republic of Nigeria. In Chapter 2, section 16, for instance, the Constitution requires the government to:
- harness the resources of the nation and promote national prosperity and efficient, dynamic and self-reliant economy;
- control the national economy in such manner as to secure the maximum welfare, freedom and happiness of every citizen on the basis of social justice and equality of status and opportunity; and
- without prejudice to its right to operate or participate in areas of the economy, other than the major sectors of the economy, manage and operate the major sectors of the economy; among others.
The Constitution requires further that 'the State shall direct its policy towards ensuring that the economic system is not operated in such a manner as to permit the concentration of wealth or the means of production and exchange in the hands of few individuals or of a group’. It seems to me that it is only by the kind of role being proposed here that these constitutional requirements can be satisfied and, therefore, to do less would be indefensible the prevailing economic philosophy notwithstanding.
Industrialization holds the key to the development and transformation of any society in today's world. By deciding to focus on industrializing the economy of Akwa Ibom State in its second term the present government demonstrates awareness of what it takes to build a truly modern, harmonious, and peaceful society. What remains is for the rest of us to pledge support and to stand ready to help.
May God help us.
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