Around November 2014, I had the privilege of discussing the state of Arochukwu Micro Finance Bank with a senior member of the board. I simply wanted information on the health of the bank against the backdrop of its long rumored liquidity and solvency challenges. My intention was to see how the institution will reposition to enable it access the N220billion Central Bank of Nigeria intervention facility specifically targeted at the development of Small and Medium Enterprise (SMEs) in Nigeria. it will be recalled that a major precondition for accessing the facility is that microfinance Institutions that wish to participate must be viable and functional.
With palpable frustration, the board member told me that so much had been done to revive the institution with very little results to show for it. He was particularly unhappy that all those who have been hired as financial experts to turn around the dwindling fortunes of the bank as managers had not delivered on their mandates, a situation that has worsened the banks’ balance sheets and is now enmeshed in the grip of Non-performing loans (NPLs), which logically threatens its survival and sustainability as a micro financial intermediary
However, unfortunate as the situation seemed, I was quick to point out that the problem of the bank may not be completely that of management failure, but having to operate in an economically challenging environment with limited opportunities for investment and increased returns. It is well known in finance literature that an investment is only as good as the stability of the environment in which it operates. Arochukwu as a community faces some very unique economic and locational challenges that do not promote free flow of trade, sustained industrialization and rural development, all of which combine to make investments extremely risky.
Specifically, it is obvious that Aro as a community is almost land locked and surrounded by tributaries of Cross River and the Atlantic Ocean which contributes very little, if any, to its economy. Second, Aro remains a destination and not a route to any other city or community. You are either returning home to Aro or leaving it back to where you came from. Such locational challenge comes with the disadvantage of limiting migrant population growth necessary in sustaining aggregate demand that promote investment, urbanization and the development of rural economy. Other economic challenges include lack of basic infrastructure like roads, steady power supply, and lack of small and medium scale industries that can absorb the unemployed and grow income on a sustainable basis. In the absence of the foregoing, any loan made by the microfinance bank is simply used for consumption period! This is exactly why the Non-performing loan stock is growing and recovery rate is disappointing.
Consequently, Aro is neither a completely rural community, thanks to the increasing investments by Aros themselves regardless of the hash economic climate) nor a city-community( no thanks to government sustained neglect) and therefore does not leverage on the economic advantages that come with both. It stands to reason that solution of the aforementioned economic challenges goes beyond what community, individual or philanthropic effort can successfully address, it requires deliberate and sustained government investment, such huge investment in infrastructure and other economic sectors can only be realized through effective political participation at all levels of government.
Politics is often described as the superstructure, while economy is the substructure. This connotes that economic development relies very much on political advancement, though; policy sequencing in this regard remains a topic of immense theoretical and empirical debate in development literature. For purposes of this analysis, I will regard politics as the harbinger of economic development in our community for two main reasons. First, the issue of infrastructure deficit which we have identified can only be addressed by leveraging on state resources which comes through politics. Second, industrialization can only be addressed through the political action of upgrading Aro from a rural community to an urban center with intra city roads and other infrastructural appurtenances that come with urbanization. Investors can only be encouraged to pull resources into Aro only if they are guaranteed the market and appreciable return on investments permitted only by availability and functionality of basic infrastructure in our community.
Having said that, historical evidence indicates Aros have not been wanting in political engagement right from the pre-independence to even the immediate past republic. History records that Aro political “Rock Stars” like Dr. Alvan Ikoku, Mazi Sam G Ikoku, Mazi Nwakama Okoro, Mazi Chris Ukpabi and many others too many to mention here have always engaged in the Nigerian political process from the local government to the national level. While we see such monuments as the General Hospital, some secondary and primary schools, a College of Education (technical), prison facility and a seemingly planned community as milestones of that era, we are also reminded of the unfinished assignments of that class of politicians. For instance we still see a dilapidated Aro-Chukwu/Ohafia Road that seems to have defied all known approaches to see it off the ground. We still behold abandoned railway buckets with inscription “Arochukwu” which has become relics; a general hospital that cannot afford an effective first aid treatment, a security system that cannot respond to the minutest distress call and a prison facility that is light years away from civilization. All these amply suggest that there has been a break in transmission in terms of infrastructure development and upgrade of existing ones between the past political actors and current ones.
Therefore, the challenge before our new political kids in town, led by Mazi Mao Ohuabunwa, Mazi Chikwe Udensi, Mazi Alex Otti, Mazi Jideofor Kanu and many others too numerous to mention here, would be how to reestablish a functional link between the past and the present in terms of building new infrastructure and consistent upgrade of the aging ones. Also, time is now to begin a structured leadership succession between the current class and future political leaders so that we do not suffer the long break in transmission that characterized relationship between the past and present Aro political leaders. As the new political kids in town aspire to take over political leadership in our community, we do not pretend that their task is anywhere new easy, as political dynamics is changing with political awareness among Nigerians spreading like harmattan haze, and state resources on a free fall owing to oil price crash. North withstanding the enormity of the task ahead, we are prepared to give them our full support to ensure they emerge victorious in the coming elections provided we are conscious of the following political booby traps.
First, we must realize that we are in a political community that is very heterogeneous and we do not command the majority. Therefore we need to engage in some strategic horse trading with our neighboring constituents to ensure victory for our candidates. This is where am slightly apprehensive of the emergence of too many of our candidates in the forthcoming elections. While others celebrate it, I am weary that if we are not strategic about how we negotiate our interests, we might stretch our votes too thin to decisively guarantee the victory of candidates we consider very strategic in the coming elections. We therefore have to turn our cherished “eggs in different baskets”(apologies Orji Ogbonnaya Orji) “to a few strategic eggs in one basket” to ensure their safety in the forthcoming elections. More importantly, our politicians must work tirelessly to ensure that Aro is upgraded to an urban center in the state to ensure rapid economic growth, industrialization and development. See you in Easter!
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