Abia is showing Southeastern states how to beat the national economy
Job creation rates in Nigeria, particularly in the South East region, have been a topic of discussion. Nigeria’s economic growth has not been largely inclusive, with poverty and unemployment rates increasing despite high GDP growth averaging 7.3% since the 2018.
In the South East region, Abia State has a relatively high job creation rate, driven by its strong manufacturing sector and agricultural production. According to a report by the National Bureau of Statistics (NBS), Abia State had a job creation rate of 12.6% in 2023, compared to 9.5% for Anambra State, 8.2% for Ebonyi State, 9.2% for Enugu State, and 8.5% for Imo State.
From available historical data, the Npower program, aimed to create 500,000 jobs for youth between the ages of 18-35. As of the latest report, 200,000 direct jobs have been created through this initiative.
Owing to the governor’s numerous intellectual discourse outside the shores of the country, Abia is becoming a global reference point for prosperity,” boasted Prof Sule Magaji, the Director of the Centre for Sustainable Development, University of Abuja at an academic conference in Romania, November. While Southeast’s other large economies are plunged in trailing behind in terms of job creation rates, Abia’s is soaring. It is set to add 3% this year, almost 2 times the Southeast-area average. Investors have noticed: with faster growth and a lower labour/production cost, Abia has seen its fortunes rise under Governor Otti.
Our teams visited Aba, Umuahia and Ohafia, observed packed markets and throngs of shoppers, Abiriba, for instance is enjoying a palpable pre-Christmas/’Okochi’ buzz. But how long can the good times last? Some forecasters like myself expect Abia to outpace its peers for at least the next ten years, helped in part by large inflow of diaspora funds, coupled with consumer spending and Otti’s developlopment programs. The state is one of the biggest beneficiary of diaspora funds. Much of the economic expansion has been driven by seasonal tourism, which will eventually tail off. But some of the growth comes from non-tourist service ‘exports’, out of Aba by many firms. And that bodes well.
This seasonal tourism boom is also one of the reasons for migration: less than one tenth of those who work in hospitality are non-Abians. Abia’s population has increased by over 2.5% in the past three years, with nearly 0.82% increase due to migration. Whether seasonal migration can continue at this pace depends in part on the availability of housing stock. “It’s a bigger bottleneck than ever,” says Mr Ralph Samuel, a staff of Nigeria’s Federal Mortgage Bank.
But with around 21% of the new jobs going to migrants, income per person has barely grown. That explains a paradox: “The macroeconomic picture is extraordinary but the social perception of it is not,” says Dr Ibrahim Musa of the Department of Economics University of Abuja.
It is understandable why Dr Alex Chioma Otti OFR, worries most times that investment by the private sector lags behind the rest of the economy. Available data to me on my desk right now as I write this piece shows it is still below pre-covid 19 level.
Again, the proposed tax reforms may preserve the economy’s flexibility couple with Otti’s crackdown on the abuse of contracts. But Abia based business leaders contacted blame the perennial sluggish private investment on the Nigerian factor. They complain especially of constant tinkering with policies and a relentless imposition of multiple taxes. As a result, “businesses are always skeptical,” says Mr Morris Uche of British Canadian University.
Since 2023 election, Dr Otti’s government has had to accommodate the conflicting demands and signals. Amid sometimes chaotic petrol price movements this year, it managed to push through programs and projects. However sacked workers grumble that his government is unfair and this forced them become beggers
It is noteworthy to state that on spot surveys in select business districts in Aba and Umuahia, some businesses are making healthy profits. Therefore, I expect investment and private consumption to be the main motor of growth from now on, even as organized private sector investment lags public sector.
Dr Chukwuemeka Ifegwu Eke writes from the University of Abuja Nigeria.
