N10trillion legacy industries rot away amid low earnings, unemployment

The five states in the Southeast may have seen higher unemployment rates overall and declining revenue due to the careless closure of long-standing businesses.

According to The Guardian, the five states—Abia, Anambra, Ebonyi, Enugu, and Imo—not only rank among the states with the lowest revenue per capita in the country, but they also have some of the highest rates of youth unemployment.

However, there are remnants of prestigious establishments scattered throughout the East that date back to the 1960s, under the leadership of Dr. Michael Okpara, the erstwhile Premier of the Old Eastern Region, who established a solid economic basis for the region’s prosperity.

A few of the businesses valued at an estimated N10 trillion are the Golden Guinea Breweries in Umuahia, the Ceramics Industry in Umuahia, Abia Hotels, and the Hotel Presidential, Niger steel, Niger Gas, the Premier Cashew Industry in Oghe, Eastern Plastics Ltd all in Enugu state; Premier Breweries, Onitsha, Anambra state; several cocoa and farm settlements among others.

Stakeholders reckoned that the legacy companies are some of the missing links between the economic woes and potential of the region, but for the nonchalant disposition of successive administrations.

Findings showed that unemployment rate has been proportionate with demographic growth in the region. Generally, the National Bureau of Statistics (NBS) report showed that Nigeria’s population rate rose to 216.7 million, with an unemployment rate of 4.2 per cent in Q2 of 2023. The report, based on the new Nigeria Labour Force Survey (NLFS) stated that about 12.5 million people were unemployed. More realistic surveys suggest that at least one or two in every three Nigeria are unemployed.

The NBS report put the population of the Southeast region to about 18 per cent of the entire population of the country with about 36 million people .

A further breakdown in the population of the individual five states of the region over the percentage of their unemployed, showed well over 6.5 million people in the region not employed.

Besides the high rate of unemployment, reports on internally generated revenue (IGR) also showed steady decline in fortunes. The region led from behind after the Northeast in 2022, and there are indications that the 2023 figures are not any different.

The revenue profile of its five states combined is marginal in comparison with Lagos, the economic capital of the country. Specifically, while Lagos State realised N651.15 billion in earnings for 2022, the five Southeast states generated a paltry N114.5 billion of the national figure of over N1.9 trillion. A breakdown of the figure includes Imo, with N19.3b; Enugu N28.7b; Abia N20.1b; Ebonyi N12.4b and Anambra N33.9b.

For the first quarter of 2023, the total IGR for Southeast states was N27.97b, with states’ performance showcasing Abia with N5.04b; Enugu N2.32b; Ebonyi N4.42b; Imo N3.16b and Anambra N13.03b.

An Economist, Dr Levi Oranusi, said the numbers are a contradiction when placed side-by-side with the industrial potential of the region.

Oranusi noted that going by their current market value, moribund investments in those states are worth more than N10 trillion.

He said: “Golden Guinea for instance, is a massive investment comparable to the Nigeria Breweries that turned in N402 billion revenue in the third quarter of 2023.

“These investments in their present locations are in the heart of the Southeast region. If you go to Hotel Presidential in Port Harcourt, it ranks among the best and remains highly competitive. The one in Enugu could have played such a role for the Southeast if it is working.

“These establishments in other states of the federation are revenue earners, employment creators and what have continued to impact development. These are the essence of investments, not what we have presently in the Southeast.”

A finance expert, Prof. Chiwuike Ubah, toed a similar line when he said that the impact of these abandoned investments, “untapped potential of economic growth and job creation” could not be overemphasised.

The University don said: “Imagine a bustling landscape, thriving industries, active with jobs that sustain livelihoods. The direct and indirect economic activities associated with these investments would have injected vitality into the Southeast, providing employment opportunities and boosting income levels.

“The ripple effect wouldn’t stop there, it would extend to the establishment and sustenance of a myriad of cottage industries and other businesses along the value chain, fostering a vibrant ecosystem of entrepreneurship.

“Sadly, the abandoned industries, warehouses and dilapidated structures now stand as reminders of lost opportunities. The unemployment rate and poverty levels in the Southeast persist, stubbornly resistant to improvement in the absence of these operational industries. The dreams of countless individuals and families remain unfulfilled, limited by the absence of these once promising ventures,” Ubah said.

Findings by this paper indicated that the region could have easily solved her unemployment and revenue challenges and probably continued as a blossoming economy, had successive governments that inherited these establishments after the Nigeria/Biafra war and when the old eastern region was carved into two (Southeast and South-south regions) continued to fund and maintain them.

For instance, while the governments of Rivers and Bayelsa states have continued to run and maintain the Presidential Hotel in Port Harcourt, taking it to an enviable international standard with employment for over 500 people; the one in Enugu that was built at the same time has become obsolete.

The four-floor 100-room edifice located inside Enugu urban can best be described as a carcass as block works remain the only identity it has acquired now. The glass windows, roof, electronics, and other appliances have been removed or stolen. The place degenerated to the point of providing safety for criminal elements and other notorious activities in the state.

Recently, Governor Peter Mbah indicated interest in rehabilitating the hotel but started by carving out portions of the premises for sale to private developers.

When outrage greeted the exercise, the state government responded that it had given “approval for Enugu State Housing Development Corporation (ENSHDC) to sell an undeveloped area of the hotel lying fallow for more than five decades without adding any value to the hotel.”

At the time Golden Guinea Breweries (GG) in Umuahia, Abia state, was fully operational, it had over one million people engaged directly and indirectly including staff, drivers, artisans and distributors.

The brewery was founded in 1962 and first named Independence Brewery was a notable indigenous competitor to foreign manufacturers in the country. It produces Golden Guinea beer, Eagle Stout, Bergedorf beer and Bergedorf Malta.

Following a fire incident of 2003, the brewery closed for over 16 years and used the period to search for funds and inventors.

After 16 years, about N1.2 billion capital was injected through Pan Marine Investment Company as a core investor.

Although production and business activities resumed in 2019, the challenges posed by poor economy, foreign exchange increase, increasing labour and other costs, competition among competing brands affected it to the point that sales fell below expectations.

It was gathered that this scenario affected payment of salaries and procurement of production inputs. Currently, skeletal activities go in the company; but funds are needed to restore full production.

The Modern Ceramics Umuahia (MOCERAM) is another establishment by the government of the Eastern Region under the Premiership of Michael Okpara as part of the industrial revolution of that era. The factory operated optimally until the outbreak of the Civil War in 1967 which affected its operations.

The factory was reactivated in 1972 but collapsed completely in 1996 due to obsolete equipment, vandalisation and asset stripping by successive management over time.

It was privatised in May 2003 by the Abia State Government to UCL Resources and Investments Ltd (UCL) and became UCL-Modern Ceramics Industries Limited (UCL-MOCERAM).

Under the present arrangement, UCL owns 80 per cent of Modern Ceramics Ltd, Abia State government, five per cent with the remaining 15 per cent reserved for undisclosed investors.

The Premier Brewery in Onitsha employed over 1,000 people directly when it was in operation. The industry has long been privatised. Its board of directors led by Chief Arthur Eze had made several efforts to get the place back to work.

Sometime this year, the board had come with a statement that its reactivation efforts suffered setbacks due to policy issues and was therefore, in the process of acquiring new technical partners. That is where the brewery has remained since then.

A public affairs analyst, Dominic Uwaga, told our correspondent that lack of political will and commitment to enthrone lasting legacies that could benefit the people were responsible for the inability of the establishments to work again.

He added that “multiple taxation, over dependence on oil revenue, poor patronage of local products, new culture of buying and selling, importation of virtually everything” has relegated industrialisation to the background in the region, stressing that successive leaders have played lip service on things concerning the region.

“It is very sad that when you go to the southwest, there is what they call the O’dua Investment, which is a consortium of establishments of those who ruled the region before now. Their present governors came under Odua Investment to make these establishments work, employ their people and generate revenues.

“This is not the case with our so-called governors. When they started the Southeast governor’s forum, one felt that they came together to address this challenge but that has not been the case. The present crop of leaders seems uninterested or unable to revisit these moribund industries that were established by their predecessors. It is obvious that if those companies were put back to life, they would contribute in no small measure to alleviate the acute unemployment and the rising incidence of crimes in the zone.”

Beyond employment and revenue generation, an entrepreneur, Chika Ugwu stated that reviving the industries could make the region an economic giant.

He stated that there was need for governors of the region to look inwards and tackle their challenges, stressing that the method of “waiting monthly for allocation to drop from the federal government has proven to make us slaves to the powers at the centre.

“But if we can look at these industries, develop them, and get our farm settlements to work, it will bring a new dawn in the southeast. The good thing is that the structures laid several years ago are still there. All we require is the political will to put them back to work.”