The city of Aba in the South East of Nigeria is an enigma of sorts. Here is a city which has never been a regional or state capital, yet it stands tall among other urban industrial cities in Nigeria. It is a sprawling industrial town renowned for enterprise and entrepreneurship.
Aba, often referred to as the Japan of Africa, was built up – through the sheer enterprise of the people – into what used to be one of the most-renowned industrial centres that capture the commercial enterprise, ingenuity and entrepreneurial spirit which define the geographical entity called Igboland in Nigeria.
The city is known for its skilful artisans, including tailors, footwear makers and other entrepreneurial endeavours, and the quality of their products used to be in serious competition with imported goods from Italy or France, especially in the areas of shoes and clothes.
Aba shoemakers are renowned across West and Central Africa. They dominate the ladies’ shoe and men’s leather sandals market. Nextzon Business Advisory Services, in a report, revealed that “the shoemakers control between 60 and 70 percent of the ladies’ shoe market in Nigeria”.
Aba, renowned for the ingenuity and the industry of its people in handicraft, including shoe-making and manufacturing, fashion and design, steel works (machines, tools and equipment) fabrications, has, however, become a shadow of its old self. Other major economic activities in the city include textiles, pharmaceuticals, plastics, cement and cosmetics.
As a commercial centre, it is a Mecca of sorts for traders within Nigeria and neighbouring West Africa. Aba as a product is a brand. Thus, goods produced in the city have earned the popular nickname ‘made in Aba’.
It will be recalled that due to this city’s potential for industrial greatness, Ngozi Okonjo-Iweala, in her first stint as minister of finance, invited Paul Wolfenson, the former World Bank president, to Aba to assess how the bank could help the city.
Global competitiveness is all about manufacturing and entrepreneurial abilities of nations. If indeed Nigeria has any prospects of manufacturing, it has to have a place for the low-tech end of manufacturing, which is where Aba becomes critical.
Analysts say that for Aba to reach its full potential as a commercial and manufacturing city, developing Aba with its industrial clusters should be the next critical step, and this cannot be achieved without constant power supply.
Industrial and commercial activities, which Aba is reputed for, have seen a significant decline over the years, due largely to the poor power situation.
As at 2005, there were about 165 major industries in the city. However, due to epileptic power supply, the number of industries operating in the city at present is less than 30 with the attendant massive job loss. Industries in the city gave way to armed robbery and kidnapping. No day passed without the banks in the city being robbed and people getting killed in a most callous manner. These attacks became a feature of the city. Banks, markets and schools were shut down sometimes. This epidemic of kidnapping and violent armed robberies, which ruled the city in the recent past, could be traced to the unemployment resulting from the shutdown of industries.
While power holds down Aba, Chinese shoe manufacturers are moving to Ethiopia, because there’s power, leather and skills. Huajian, a Chinese shoe factory in Ethiopia, employs 2,000 people out of which 1,670 are Ethiopians.
Ethiopia is taking advantage of this increase in demand for leather products – it earned $65.8 million from leather exports between December 2012 and June 2013, from total exports of $2.8 billion in 2012. Huajian plans to invest $40.3 billion over five years in Ethiopia.
Since 1973 Ethiopia has commissioned eight hydro-electricity projects with a combined generating capacity of 8,722MW. The Gilgel Gibe III Dam, commissioned in 2013, generates 1,870MW, while the Millennium Dam, to be commissioned in 2017, will generate 5,250MW.
While Ethiopia moves ahead steadfastly with plans to supply its 82 million people with power, sources close to BusinessDay are warning that the current standoff between Geometric and Interstate Electric, which threatens to scuttle the embedded power generation model for Aba, is putting Nigeria’s entire power privatisation exercise at an elevated risk of implosion.
“The BPE has somehow been railroaded into committing an illegality by selling Aba ring-fence during the privatisation exercise as part of the Enugu Disco, while ignoring a subsisting valid contract/lease agreement between the FG and Geometric Power,” said an energy analyst speaking on condition of anonymity with BusinessDay.
“This calls the entire privatisation process into question. If the government cannot honour an earlier agreement to Geometric, why should any of the Gencos and Discos expect that agreements signed today would be honoured by a future Nigerian government? I think the new private owners and their bankers should be extremely worried by this development,” the analyst said.
The confusion over Geometric’s legitimate right to generate and distribute embedded power to Aba adds to the negative perception of Nigeria as a jurisdiction with scant rule of law, which is a difficult place to do business. In the World Bank’s latest ease of doing business ranking, Nigeria fell 9 places to rank 147 from 138 the previous year.
Our sources have pointed out that the Nigerian Electricity Regulatory Commission (NERC), the power sector regulator with extensive powers, has been quite timid and less than assertive on this matter, making it seem like the regulated entity (Interstate Electric) is dictating the terms of engagement to NERC.
Sources say that Interstate Electric, which has vehemently opposed Geometric Power’s distribution of power to the ring-fenced Aba metropolis from its 141MW plant located in the city, has arrogantly waved off any suggestion that Enugu Disco, purchased by Interstate, could be supplied with excess power from Geometrics’ plant.
Meanwhile, the firm (Interstate) has been unable to undertake one cent of capital expenditure upgrade to Enugu Disco to improve power supply to the 16 business units which make up the Disco, ex Aba.
“I believe these firms signed up to improve aggregate technical losses and upgrade the distribution systems,” said another source.
“It is curious that NERC has refused to sanction Interstate for its abysmal performance since it took over operation of Enugu Disco, yet it (NERC) is looking the other way as the same entity (Interstate) seeks to take on more responsibility in the form of Aba that it is obviously ill-equipped to handle,” the source said.
By Our Reporters
