An Agent For Sustaining Infrastructure Development And Economic Transformation In Akwa Ibom State

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An Agent For Sustaining Infrastructure Development And Economic Transformation In Akwa Ibom State

Abstract

Industrialization is the process of transforming raw materials with the assistance of human resources and capital goods into one based on manufacturing of goods and services.   It   is   clear   from   the   above   concept   that   Akwa   Ibom   State   is   not industrialized  even  with  its  current  effort  in  developing  relevant  infrastructural facilities that will enable industries to take-off. On its creation in 1987, there was absolutely nothing on the ground for the young state to lean on in terms of industry that will assist the state in developing its infrastructure, for economic transformation. Few industries inherited from the old Cross River State from where Akwa Ibom was carved  out  had  become  dilapidated  with  obsolete  machinery  and  technology. Attempts to reactivate or privatized them proved abortive as investors got wind of the status of its machineries. Infrastructural facilities such as roads, power (Energy), water,   telecommunication,   housing   etc   were   completely   not   available,   hence industrialization effort could not succeed in the face of these deficiencies and the much expected economic turn-around continue to elude the state even till this day. The above theme, for the Nigerian society of Engineers’ Week, Eket branch, is to bring to fore the need to industrialized Akwa Ibom State so that the current trend of massive infrastructural development can be sustained and its profile changed from a “Civil Service State” to an industrial and privately driven economy.
When  this  is  achieved,  citizens  will  have  employment,  jobs  and  wealth  will  be created and the entire state will enjoy immense transformation economically.

1.00      INTRODUCTION

Industrialization is the process in which a society or country transforms itself from a primarily agricultural society into one based on the manufacturing of goods and services. In this perspective, individual labour is often replaced by mechanized mass production and craftsmen are placed by assembly lines in the industries. Characteristics  of  industrialization  includes  the  use  of  technological  innovation  to solve problems as opposed to superstition or dependency upon conditions outside
 
human control such as weather, as well as more efficient division of labour and economic growth.
Industrialization is really an agent for sustaining infrastructure development not only in Akwa Ibom state but all over Nigeria and beyond. This theme is quite appropriate to our current situation and it will go a long way to inform our policy makers of the need to create or revisit existing industrial base in the state if we are really serious   to have sustainable infrastructure for development and economic transformation.
This paper will examine the industrial base in Akwa Ibom State before and

after the state was created, types of industries in the State, their current status and how they have contributed to sustaining infrastructure development and economic transformation. The paper will also examine challenges facing industrialization in the State  and  how  it’s  impacted  on  infrastructural  development  before  proffering  the way forward through recommendation.
 

1.10  AKWA IBOM STATE IN NIGERIAN MAP

Akwa  Ibom  State  was  originally  part  of  the  then  South  Eastern  state immediately after the war. The state was later carved out from Cross River State in
23rd   September,  1987  and  was  tagged  “Nigeria  21st   State.  Geographically,  it  is

located in the Nigeria Delta region with a population of 3,920,208 with a land area of

6,980sq km. and has 31 Local Government Areas.

The state has Uyo as its capital city with major urban cities that include Eket, Ikot Ekpene, Ikot Abasi and Oron. It has three major ethnic groups of Ibibio, Annang and Oron.


2.00    Industrial Development in Akwa Ibom State before its creation

Before the creation of Akwa Ibom State in 1987, the government of the then south  Eastern  State  and  Cross  River  State  had  established  some  large  scale industrial enterprises in the “Mainland” (Now Akwa Ibom State) part of the State. These industries were established with the sole aim of improving the state economy, creation of employment and creating sustainable infrastructure.
Ten   Governments   owned   large-scale   industrial   out-fit   were   established

between 1972-1980. Below are the industries:

S/N

INDUSTRY

YEAR               OF ESTABLISHMENT

LOCATION

PRODUCTS

1

Pamil Industries

1972

Abak

Palm            Kernel

Oil/Cake

2

Asbestonit Ltd

1972

Oron

Asbentos sheets

3

Champion Breweries

1974

Uyo

Beer/Malt

4

State Seafoods Ltd

1975

Ibeno

Fish/Shrimps

5

Plasto Grown Nig. Ltd

1976

Uyo

Plastic Product

6

Qua Steel Product Ltd

1978

Eket

Steel Product

7

Peacock Paint Ltd

1979

Etinan

Paints

8

Sunshine Batteries Ltd

1980

Ikot

 

Ekpene

Automotive

 

battery

 

9

International      Biscuits

 

Ltd

1980

Ikot

 

EKpene

Biscuits

10

Quality Ceramics Ltd

1980

Itu

Ceramic products

 

 

 

Also  federal  government  established  two  large-scale  industries  in  the  State  and

 

jointly own one with foreign investors. These industries are as shown below:

 

S/N

INDUSTRY

YEAR               OF ESTABLISHMENT

LOCATION

PRODUCTIONS

1

Nigeria            Newsprint

Manufacturing  Co.  Ltd

(NNMC)

1982

Oku-Iboku, Itu

Newsprint

2

Alluminuim         smelter

 

company (ALSCON)

1988

Ikot Abasi

Aluminium

 

Products

3

Exxon Mobil Production

 

Unltd

1961

Ibeno

Oil and Gas

4

Exxon Mobil OSSO Gas

 

condensate plant

1993

Ibeno

Petroleum

 

Condensate

 

At the  moment,  nine  of  the  above  set of  the  state  owned  industries  have been abandoned and at various stages of dilapidation. Effort by state government to privatized them did not yield any fruit as the plants had become obsolete and the machinery   needed   to   be   replaced   with   modern   technology.   Only   Champion Breweries out of the ten has been reactivated by core investors. The investors have so  far  invested  over  N500  million  in  the  company  and  beer  production  has commenced. The installation capacity of the plant is 500,000 hectoliters and efforts are  being  made  to  expand  it  to  1  million  hectoliters.  The  only  two  Federal Government-owned industries located in the state are not also functioning. These are Nigeria Newsprint Manufacturing Company Ltd (NNMC) and Aluminium Smelter Company (ALSCON).   NNMC has an installed capacity of 100,000 tons of Newsprint annually. The company produced only 13,300 tons of Newsprint in 1992 and stopped production in 1993.

ALSCON is an integrated plant with installed capacity of 193,000 tons annually of various intermediate aluminium products such as alluminium Billets, ingots, coiled rolled  sheets  and  foil.  Its  major  raw  materials  are  natural  gas  which  is  available locally in abundance, and imported bauxite. The employment potentials of the plant is very high. As at 1996 the completed sections employed a total of 1,480 people.

ExxonMobil production unlimited and the Oso condensate project are the only visible petroleum large-scale industrial outfit in the state that is jointly owned by the Federal Government with foreign partners. As can be seen from the above table, Exxon Mobil started operation in the state since 1961 and is involved in oil and gas exploration and exploitation while the Oso project which is still owned by Exxon produces condensate, a variant of natural gas for export. These industries are successful because they are private-sector driven and they have influence immensely the economic lives of indigenes through employment opportunities and through support services created by the company for the citizens.

2.10 Industrialization and its Potentials in Akwa Ibom State

From  the  above  definition  of  industrialization,  it  is  very  clear  from  that concept   that   Akwa   Ibom   State   is   not   industrialized.   Although   we   have   few abandoned and neglected industries that were established in the 1970’s and 1980’s, such effort cannot portray the State as industrialized.
Nevertheless, the potentials for industrialization for sustaining infrastructure do exist in the state:
Akwa Ibom State in several fora has been described as a labour-surplus economy with abundant natural resources. Despite this status, the economy of the state and its people is heavily leaning on Civil Service with no industry established to exploit the natural resources base of this region. It was observed during the colonial era  that  the  exploitation  of  the  basic  resources  in  the  State  signaled  economic activities under the then Eastern region.
During   this   period,   the   state   earned   much   needed   revenue   for   the

modernization  then  of  Eastern  Nigeria  through  the  development  of  agricultural produce such as rubber, palm and cocoa.
Industrial potentials of the state can be found in agriculture, heavy industries,  medium  and  small-scale  industries.  In  the  areas  of  agriculture,  for instance, food processing industries will go a long way in providing employment and also ensuring that citizens in the state are better fed. More importantly, agricultural products like cassava, yams, palm produce, etc can be fully developed for exports thereby creating the much needed  economic transformation for the entire citizenry.

 


2.1.1    Fishery and Tourist Industry:

These  are  industrial  sectors  that  are  sustaining  the  economy  of  some countries in Europe and Asia. Akwa Ibom State currently has exploitable potentials in this area that can turn around the economy of the state. Presently, we have fishery terminals  and  activities  at  Ebughu  in  (Mbo),  Uta  Ewa  (IKot  Abasi)  Ifiayong  and Ibiaku (Uruan), Oron and Ibeno.
Fishing is one of the major occupations of people in the riverine communities

of  the  state.  Out  of  Nigeria’s  coastline  bordering  on  the  Atlantic  Ocean,  129
 
kilometers is within Akwa Ibom State. The Cross River estuary borders the state on the east while the Niger Delta estuary borders it on the west. In addition, rivers which flow through the state are cross River, Imo River, Ikpa River and Qua Iboe River.  Off-shore  deep  sea fishing  is  carried  out in  territorial  water  in  the  Atlantic Ocean.  The  sea  water  is  also  very  suitable  for  industrial  fishing/shrimping.  In addition, fishing is undertaken in the various inland rivers and fresh waters. Fish production data in Nigeria reported by the Federal Ministry of Agriculture shows that in 2000 Akwa Ibom state produced 87,586 metric tons of fish, the highest in the country out of a total of 42,649 metric tons. Fishes and sea foods which are mostly undertaken by artisans are used as food to provide animal protein. They can also be used to produce fish meal for livestock feeds and fish oil for medicinal and other industrial uses. All these remain to be commercially exploited as there is very low level of industrial fishing. Tourism activities also include hospitality business, such as hotels as well as leisure and entertainments services. It is necessary to also stress the fact that the state can develop the tourist industry. The state is blessed with tourist potentials both natural and man-made. There exist the Ibeno/Okoroete sand beaches,  the  famous  Qua  Iboe  Church  at  Ibeno,  the  Oron  museum,  the  raffia weaving and carving in Ikot Ekpene and the Opobo Boat yard as well as the National Accelerated  fish  production  project  at  Uta  Ewa.  These  places  which  have  been
‘abandoned’ can be rehabilitated into a viable industry for economic transformation.

There are several hotels and restaurant operated as small and medium enterprises in the state. However, there is only, one internationally rated 5-star hotel in  the  state;  the  Ibom  Meridien  and  Golf  resort.  With  this  in  the  State,  the government and the private sector cannot attract enough patronage internationally. To the hotel, despite, the huge investment and infrastructural facilities to the hotel.
Currently, projects envisaged by government to develop the tourist industry of the state to create employment, wealth and reduce poverty are as follows:
Amusement/Leisure  Park and  Tourism  Gallery at Uyo (Ibom Tropicana and

Entertainment Centre).

Development of beach resort facilities into international standard at Ikot Abasi and Itu.
Development of a recreational park and seafood Depot in Oron
 
Development of Mary Slessor Memorial Park at Ibiono Ibom

 

Finally, Tourism can be developed   to generate foreign exchange earnings through (i) improve tourism infrastructural facilities   (ii) attract and promote private sector investments in tourism and in tourist infrastructure.
(iii)      Carry out a baseline economic survey of the tourism sector to obtain a deeper insight into what it will take to support tourism as a viable business venture in the state.


2.1.2     Industrial Layouts and Development Centres

Government has established industrial layouts in different parts of the state as a way forward for industrialization and infrastructure development for economic transformation. The industrial layout in Uyo is located along Aka /Nung Udoe road where  the  Champion  brewery  is  located.  Another  layout  in  Uyo  is  at  Itam/Ikot Ekpene road. Presently, these layouts have been provided with road infrastructure to encourage  investors.  It  also  have  the  raw  material  research  laboratory  and  raw material display centre. The state government has also established undeveloped industrial layout in selected L.G.A’s at Abak, Oron, Ikot Ekpene and Ikot Abasi, these layouts are still lying fallow. It is worth mentioning here that the federal government has established in the state: the industrial development centre and the Raw material research and development centre. These efforts, by the Federal government were meant  to  provide  support  service  to  investors  and  industrialists  but  these  noble venture has not been realized as there are no activities in these centres.
Apart from the attempt to reactivate the existing ailing industries, the state government planned in 1993 to establish some basic industries as part of its contribution in  creating an enabling environment for industrialization and infrastructure development. Cement packaging plant, palm oil, and palm oil refining plant  to  produce  fatty  acids,  establishment  of  papin  manufacturing  plant  and  a starch plant, were the industries earmarked for 1993 (Akwa Ibom State 1993).
 
3.00   Current status of Industrialization and infrastructure development

On  creation  of  Akwa  Ibom  State  in  1987,  the  new  state  inherited  a  good number of industries from the old Cross River State. The military government in the state did virtually nothing to sustain these industries. Infrastructural facilities such as road network, power (energy), water, communication and housing were grossly inefficient, inadequate and unattended to by the military administrators that rule the new  state  for  over    a  decade  before  our  current democratic  experience  came  to rescue the state.

An Agent For Sustaining Infrastructure Development And Economic Transformation In Akwa Ibom State
 

3.11      Democracy and Industrialization

The emergency of democratic government in 1999 was a welcome relief. The incoming government was highly enthusiastic, visionary and was ready to quench the thirst of the citizen who were long yearning for infrastructure development and industrialization  of  the  state.  The  state  government quickly role out key  areas  of development intervention which include:
 
 

 

1)        The creation of enabling environment for industrialization and private sector growth
2)        Improved   telecommunication   services   through   taking   substantial   equity position  in  ECONET Wireless  service  and  encouraging  the  establishment  of MTN in the state
3)        Increased urban roads

4)        Supporting ADB-finance water projects for 8 Urban centres

5)        Investment in IPP project

6)        Taking promotional equity position in private refinery and other oil and gas industries
7)        Building a five-Star hotel for tourism promotion and

8)        Privatization of the ten ailing industries

These were great vision that led a good foundation for the ongoing infrastructure development and attempt for industrialization of the state.
It is worth noting here that democracy has change life and the thinking of the citizens of the state through infrastructure development.


3.12    Government Role on Industrial Promotion

In her attempt to industrialized the state the government since 1999 had promoted  a  number  of  industries  that  will  turn-around  its  industrial  base  among them are:
1)        Akwa Ibom Petrochemical company Ltd,
 
2)        Fertilizer plant

3)        Gas Plant

4)        Cement Bagging

5)        Poultry project

6)        Catfish Project

7)        Roofing tiles

8)        Industrial processing zone (IPZ)

9)        Aircrafts Hanger project and

10)      Akwa Plant and Equipment Ltd.

These  are  industries  which  would  have  change  the  economic  life  of  an average Akwa Ibom citizen and launch the state into ‘an Industrial haven’ but these vision is still a dream which is yet to be materialized. The politics of (dis)continuity has   further   incapacitated   the   realization   of   these   industries   in   the   state   as succeeding administration has done nothing to bring them to fruition since they were promoted in 1999 till date.


3.13    Current Effort on infrastructure development

The current massive infrastructure development in Akwa Ibom State has reversed   the   theme   of   our   NSE   week.   The   Government   has   proved   that infrastructure  development  comes  first  or  is  an  agent  for  industrialization  and economic transformation instead. The state government currently has embarked on the provision of those infrastructures that would help boost industrialization in the state. Since the advent of the present democratic dispensation, Akwa Ibom has been lucky with deliberate and determined efforts made by its political leaders at changing the face of the state. For the past seven years, the present administration has not only continue where his predecessor stopped in terms of provision of infrastructure, but has done more to ensure the steady transformation of the state. In order to succeed in its plans for massive infrastructure development, the present government said  in  2007  that  he  has  set  aside  80%  of  its  budget  for  the  provision  of infrastructure. These projects include those the present government inherited   such as the independent power plant, the international airport, the 5-Star Meridian Hotel, road projects and those initiated  by the government.
 
 

The inter-ministerial direct labour committee was set up by the government as an interventionist  agency  for  the  provision  of  infrastructure  in  the  rural  community across the council areas.   Currently, the state is determine with a renewed zeal of putting in place those infrastructures that would not only transform the face of the state but change its profile from a ‘civil service state’ to an industrial and privately driven economy.
The  state  has  approached  with  political  will  such  infrastructure  as  massive road  construction,  construction  of  flyovers,  urban  renewal,  Tropicana  galleria, erosion control, IPP, renovation and construction of primary and secondary school buildings.
From the foregoing one can appreciate the fact that the state government has done a lot on infrastructural development which on the other hand is an agent for industrialization and economic transformation.
 
 

4.00    Industrialization Challenges

We have highlighted industrialization potentials in Akwa Ibom State earlier in this paper but despite the existence of this potentials, industrialization of the state could not be fully realized because of some challenges.


4.11    Lack of Relevant Infrastructure:

There  are  some  prerequisite  for  achieving  industrialization  in  any  region globally  and  in  fact Akwa Ibom  State  cannot be  an  exemption. Absence  of  basic infrastructure like good roads, constant supply of power, water, telecommunication is enough reason to discourage a would-be investor or industrialist from establishing an industry in the state. If a potential industrialist is allowed to provide these basic infrastructure, the cost implication will definitely discourage investor as the expected return on such investment might not outweigh the perceived costs overtime. In Nigeria, the cost of electricity supplied by investors has always imparted negatively on their profit profile and because of this, many companies have relocated to neighbouring countries where electricity is adequate for industrialization.
 
4.12    Wrong Political Decisions:

We were made to belief that government is continuum but this is not always the case in some states of the Federation and also in Akwa Ibom State. Succeeding government that is not in tune with the preceding regime always take a decision that frustrates developmental projects of it predecessors. In Akwa Ibom State certain industrial  projects  started  by  previous  regime  cannot  be  completed  because  of wrong decisions to terminate such projects. The much talked about Ibom Science Park, Amakpe petroleum refinery, Akwa Ibom Refining and Petrochemical company, Aircraft repairs and overhaul (MRO) etc are some industrial projects which political decisions have terminated to the detriment of economic development of the state and its citizens.
The  reintroduction  of  onshore  /offshore  oil  dichotomy  by  Obasanjo  regime was a political decision that impacted negatively on industrial and infrastructural development in  the  state.  That policy  was  a serious  set-back  as  the  government could not complete or realized its development projects in the state.


4.13    Financial Constrain

It  has  been  reported  that  in  Akwa  Ibom  state,  savings  are  generally  low because  incomes  are  also  low.  Based  on  this  fact,  investible  funds  in  industrial project are difficult to obtain.   Potential industrialists in the state may not have the required collateral to secure such funds. On this premise, it becomes the task of government to search for funds to support investors since private savings are low in the state. While there exists several government schemes designed to facilitate the procurement of funds, potential state industrialist are reluctant and afraid to go for it. The shortage of industrial credit, especially medium and big-range credit for financing  plant  for  construction  and  the  purchase  of  machinery  and  equipment remain a serious problem.


5.00    Impact of industrialization

The importance of infrastructure for sustained economic development is well recognized.  Infrastructure  is  a  comprehensive  term  that  comprises  of  necessary inputs, which are said to be the contributing factors in the development process. For
 
the growth and development of industry we require power, roads, transportation, communication, banking and insurance etc. all these facilities together are known as infrastructure of the economy. Hence development of infrastructure is necessary for the development of an economy. It plays an important role in the industrialization of any region. On the other land, industrial development of any region also affects the development of infrastructural facilities. Maizels (1963) had concluded that industrialization  plays  a  crucial  role  in  the  development  of  a  country  by  raising income, by creating and widening employment opportunities by expanding trade and commerce  and  thereby  increase  the  pace  of  capital  formation  and  technology changes. Simon Kuznet (1948) look at industrialization as the permanent growth of the proportion of the non-agricultural sectors within national economy running with considerable increase of the total industrial production as well as with the spread of up-to-date technology. Jozsef Bognar stated that industrialization is an economic and  social  process  affecting  not  only  the  technological  standards  of  the  given country  but  also  the  habits  of  the  consumers,  the  way  of  thinking  and  the organization  of the  actions, processes and  events in the life of the society. Kerr (1962)  pointed  out  that  industrialization  helps  to  create  an  increasing  level  of general education for all, not only because it facilitates flexibility among the work- force, but also because     as income rise, natural curiosity increases for formal education. Prased  (1957) was of the view that the impact of rapid industrialization will by no means be confined only to economic sector of the people’s life, influencing effectively the rate and process of   saving and employment, but also shaping the social  life  favourably,  providing  the  base  for  further  industrialization.  Thus,  the process  of  industrialization  in  a  particular  region  not only  influence  the  economic sphere of people’s life by raising income and employment opportunities but it also influences the social and cultural life with increased opportunities for education, superior housing, public health and other infrastructural facilities.


2)       Health and Quality of Life:

Industrialization  changes  human  health  and  thus  affect  the  quality  of  life, morbidity, mortality and broader population dynamics.
 
Many industrial processes have the effect of concentrating harmful material near human settlement.


3)       Social Stratification

Social   impacts   of   industrialization   can   be   illustrated   by   how   the   new international  labour  has  tended  to  create  particular  clusters  of  jobs  in  particulars places. For example in cities, a polarized or dual labour market structure seems to be emerging. Well educated professionals take advantage of lucrative Jobs positions and have well paying career posts that include better benefit (e.g. retirement plans, paid   holidays   etc)      and   security   (e.g.   life   insurance,   health   insurance   etc).


6.00   RECOMMENDATION

1.        Industrial     and     infrastructural     development     projects     have     suffered abandonment over the years due to failure of succeeding government to complete projects initiated by their predecessors. These may be projects that would have changed the economic lives of the people and that of the state but  because  of  disagreement  amongst  the  political  leaders  the  state  and indeed the people suffered. As a matter of policy, I am suggesting that the house of Assembly should promulgate a law that will make it mandatory for succeeding governments to complete projects initiated by their predecessors.


2.         The industrial potentials of the state can be tapped through the following:

(i)      Government should develop industrial blue print that will encourage investors and industrialists. Industrial strategies should be inward looking, import-substitution industrialization and export –led industrialization.
(ii)    Enabling  and  conducive  environment  should  be  provided  by government Youths and communal restiveness should be checked as investment cannot thrive in the face of incessant closures and clashes where industries are established.
 
(iii)     Government should establish a sustainable maintenance plan for all infrastructures in the state for enduring industrial growth and economic development.
(iv)      Development of more industrial estates is necessary especially in Local Government Areas. This could be done either by the state or in partnership with private sectors. This will develop infrastructures in the rural areas, create employment and prevent rural urban drift in Akwa Ibom State.


7.00   CONCLUSION

Development of relevant infrastructure is a prerequisite for industrialization. In Akwa Ibom State, Road infrastructure is a huge success, telecommunication is in place  through  GSM,  potable  water  is  not  provided,  power  (Energy)  is  not  just available, housing is in short supply no railway and seaport, poor drainage system is still  causing  flood  all  over  the  state,  banking  sector  is  not  assisting  long-term investors, insurance sector will not take industrial risk, the list is a long one. From the above deficiencies in infrastructure development, Akwa Ibom State is about 10% qualified for industrialization. Without the provision of adequate sustainable infrastructure, industrialization will continue to be a lip service from our leaders and the much expected job creation and employment for economic transformation will be a mirage.
 
REFERNCES

Sunday W. Peters, Edet, and Iwok and Okon Uya, Akwa Ibom State. The land of promise, 1994

Akwa Ibom economic empowerment and development strategy. Volume 1. 2004

The other side of Anger. Pastor Anietie Ukpe,2012

Lavopa, A and Szirmai, A (2012). Industrialization, employment poverty.


UNEF 2011, towards a green economy: pathways to sustainable development and poverty eradication

Bagnar,  Jozsef,  Economic  policy  and  planning  in  developing  countries  Akadomirai
Kiado, Budapest.

Maizelu,  A  (1963)  industrial  growth  and  world trade,  Cambridge  University press, London PP31