With a meagre six per cent Foreign Direct Investment (FDI) inflow going to the South-East region in the last four years, the region’s economy may be descending a steep slope faster than its stakeholders want to acknowledge.

The challenge is not unconnected with the growing cases of kidnappings, killings, and sit-at-home on Mondays, coupled with the unfriendly tax policies of current administrations.

Findings showed that the numerous challenges, though not peculiar to the region, are responsible for investors’ loss of interest in the region. Worst still, there is a rapid relocation penchant among existing businesses, all angling for safer environments outside the zone.

It will be recalled that insecurity peaked in the once peaceful region in 2021 following the arrest and detention of the leader of the Indigenous People of Biafra (IPOB), Nnamdi Kanu, with hoodlums operating in the guise of pushing for his unconditional release, making life and businesses uncomfortable for residents.

While members of his IPOB started with the declaration of Mondays’ sit-at-home in the region in solidarity with detained Kanu, infiltrators and breakaways from the group have since created other dire scenarios that have lured the entire region to a precarious edge.

So far, no less than 148 active Mondays have been spent on ‘holidays’ for trade and businesses since August 2021. And while insecurity thrives, scant attention has been given to infrastructure that could attract investors to the region such as roads, electricity supply, and healthcare among others.

In May, a team of investors on a visit to an agricultural settlement in Nimbo, Uzo Uwani Local Government, Enugu State, was attacked by hoodlums, who were operating in the guise of protecting Biafra farmlands against invaders.

While two policemen and three vigilante members, who accompanied the investors to the area lost their lives attempting to shield the guests, it was the last heard of the prospective investment.

In January last year, the federal government-owned National Horticultural Research Institute in Mbato, Okigwe, Imo State, shut down with workers sent home after gunmen invaded the facility in commando style and whisked away its head, Dr Ugochukwu Onyegbule.

Onyegbule was alleged to have ordered the removal of posters that were calling for sit-at-home by an agitating group operating along Okigwe, Umulolo, Ihube, and Aku axis.

Although many had hoped that his abductors, who also took away his vehicle would return to ask for ransom for his release, nothing has been heard about him to date, despite reports made to the Police in Imo and Zone 9, Abia State.

The research Institute, which is the only one in the South-East region with the mandate to conduct research into genetic improvement, production, processing, storage, utilisation and marketing of tropical fruits, vegetables, spices and ornamental plants of both nutritional and economic importance, has been under lock and key since then, and failing in fulfilling the core objectives for which it was set out.

There are many other institutions which have relocated from their original base to safer environments or shut down for some time to await improved security. Some high courts that were originally sitting in rural communities have also relocated to urban areas for fear of attacks and abductions.

For instance, the Ikerike Police Division in Enugu South Local Government relocated to the Uwani Police Station in the last one year following a series of attacks. High courts in Awgu and Ezeagu Local Governments have continued to have their hearings in Enugu due to insecurity.

Also, the Federal College of Education, Eha-Amufu, Isiuzo Local Government, Enugu, shut down for about one month last year over alleged insecurity created by frequent clashes between herdsmen and natives.

The Okigwe-Arondizuogu–Akokwa–Uga Road has also remained abandoned in the last two years, following its occupation by hoodlums, who have turned it into a centre of abductions for ransom and killings.

Associate Professor of Development Finance, Nnamdi Azikiwe University (UNIZIK), Awka, Christopher Kalu, affirmed that several businesses had relocated outside the South-East due to insecurity.

Kalu, who was part of a research team investigating businesses affected by insecurity in Nnewi, Awka, and Onitsha, said the exodus of businesses presupposes that FDI would also not come to the region.

He said: “No Investor will invest in an economy or a hostile region. The scenario in the region is not accommodating. This is also a region where people don’t go to work on Monday. It is a region where every Monday, we run from here to there because of insecurity. The whole five states of the South-East region are not exempted, that is why we cannot see any inflow of FDI,” he said.

Indeed, FDI is the inflow of investments into a country over a period. Nigeria recorded a total of $456.70 billion in capital importation from 2020 to 2023, according to the National Bureau of Statistics (NBS). These include $27.53 billion in 2020; $82.40 billion in 2021; $177.47 billion in 2022 and $168.03 billion in 2023.

Checks conducted by The Guardian for the four years, however, showed that the five states of the South-East region received a total capital importation of about six per cent (5.8 per cent) over the national figure. The investment profile for the region totalled $265.89 million. These include $66.09 million in 2020; $4.47 million in 2021; $36.97 million in 2022 and $154.09 million in 2023.

A further breakdown showed that except for Abia and Anambra States, the three other states such as Enugu, Ebonyi and Imo states did not attract any foreign investment within the four years (2020 – 2023). Abia state did not attract any importation in 2022; it however, attracted a total of $210.17 million in the following order: $56.07 million in 2020; $0.01 million in 2021 and $154.09 million in 2023.

Within the same period, Anambra State received investments totaling $55.72 million in the following order: $10.02 million in 2020; $4.73 million in 2021; $36.97 million in 2022, and $4 million in 2023.

Comparably, within the same period that South-East region recorded $265.89 million (5.8 per cent) in capital importation, some regions such as South-West recorded $20.29 billion (about 82.80 per cent); South-South region $92.07 million (about 0.20 per cent); North West $12.6 million (0.03 per cent); North Central $4.94 (11 per cent) and North-East $4.52 million (about 0.01 per cent).

Apart from the unease created by insecurity, a Finance Expert, Prof. Chiwuike Uba, stated that the region maintained poor indices over time, especially in the ease of doing business when compared to other regions in the country and lamented that the development would not encourage any investor.

Uba pointed at the level of tax being imposed on the residents, saying it was contributing to the poor economy of the region. He explained that some of the taxes have defied convenience and ability to pay and in the long run, discourage people from investing.

The Guardian observed that some of the taxes paid by businesses in the region include Purchase (consumption) tax; Income tax, Pay As You Earn (PAYE), property tax, Ground rent, Withholding tax, Business Permit, Business premises registration, Environmental assessment, Parking Permit as well as other rates and levies collected by local governments, land and health ministries and Capital Territory Development Authority, while fines, including sealing of businesses, await those who default in their payment.

Specifically, Enugu State on June 1, this year, added the land use charge for property within the urban and rural areas. Already, the government stated that it had identified over 800,000 properties in the state that should pay the land charge, stressing that the locations of the buildings were used to determine payable amounts.

Recent reports from the Business Environment and Competitiveness Index (BECANS), the World Bank Subnational Ease of Doing Business Report, and the Presidential Enabling Business Environment Council (PEBEC) indicate that the business environment in the South-East region ranks poorly in Nigeria.

The 2023 PEBEC report stated that “except Abia, which improved its Ease of Doing Business score and ranking, all other South-East states experienced a decline in their rankings and scores.”

Uba stated that to enhance the ease of doing business, regulatory processes must be streamlined, adding that implementing clear and investor-friendly regulations can help attract more FDIs.

“Unfortunately, instead of concentrating on improving the ease of doing business in the region to raise Internally Generated Revenues (IGRs), most of the governments of the region have resorted to introducing new taxes, resulting in the disruption of existing businesses in the region.

“Rather than escalating taxes and levies, the government can offer tax benefits, subsidies, or grants to attract investors to the area. This can become instrumental in luring investors and fostering clusters of businesses and industries, thus propelling economic growth in the region,” he said.

The World Bank Consultant explained that “beyond mere rhetoric and globe-trotting, the states must collectively and individually revamp infrastructure to provide a conducive business environment essential for prospective investors”.

He added that the current state of healthcare and educational infrastructure in the region falls short of the necessary standards, stressing that any serious investor would carefully consider these foundational issues before making any investment.

Lamenting the impact of insecurity, especially the weekly Monday sit-at-home in the region, recently, National Publicity Secretary of Ohanaeze Ndigbo, Dr Alex Ogbonnia, said: “Ndigbo have become uncomfortable with the sit-at-home syndrome in the South-East region”, stressing that, “the persistent sit-at-home has caused the Igbo more harm than good”.

“The primary duty of a freedom fighter is to defend and protect his people and not the contrary. It is inconceivable how the destruction of the Igbo economy through intermittent sit-at-home syndrome will resonate with the central philosophy and aspirations of the Igbo in the present Nigeria.”

To address the ugly trend, governors of the South-East region, who met last month after a long time, resolved to work together to improve the economy and security of the region.

Part of their decision is to collaborate on areas of mutual interest as well as have common investment policies and practices to attract patronage from within and outside the region.

Chairman of the South-East Governors’ Forum and Imo State governor, Hope Uzodimma, also stated that they would interface with the federal government to secure the release of Nnamdi Kanu as a way to enhance security as well as discuss other pressing issues concerning the region with President Bola Tinubu.

Uzodimma, expressed readiness of the forum “to identify young Igbo entrepreneurs and groom them towards mega business ventures; instituting a united and credible voice capable of speaking for the business community in Igbo land; liaising with international, national, regional, state agencies to create an enabling and conducive environment for investments in Igboland, among others.” (The Guardian)

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