Photo by Godswill Frank, Photorock Governor Victor Attah (in white shirt and tie with microphone) guides economic summit attendees through Akwa Ibom's five-star hotel under construction.

By Kevin Lambert and James Overly

The forgotten continent
In the world of international business, Africa has been traditionally the last place to invest. Businesses would invest in microscopic islands in the South Pacific before they would send any money to Africa. While a torrent of global investment dollars has been flowing to China and other Asian countries in recent decades, only a trickle has found a home in Africa. The United States has been no exception; over the last several decades, Africa has accounted for only one to two percent of its private direct investment.

Nor is this news. Africa’s reputation as a kleptocracy and a money pit are practically the only stories that make it to the international media. Even carefully worded official reports perpetuate this image. "Africa’s slow growth and stagnation," says a 2003 Congressional Research Service report, "have been attributed to slow accumulation of both human and physical capital, low productivity growth and pressures from high population growth rates."

The future looks brighter, however, and for several reasons. As the old-style socialist African heads of state have faded away, the prevailing wisdom is that trade is going to trump aid. The United States Trade and Investment Initiative, known as the African Growth and Opportunity Act (AGOA), was signed into law on May 18, 2000. The Act offers tangible incentives for African countries to open their economies and build free markets. President Bush, speaking on June 30, 2005, said that, "overcoming extreme poverty will require greater trade. While aid and debt relief can create better conditions for development, it is trade that provides the engine for development."

Reflecting this trend, AGOA incorporated trade and investment as the leading development tools for the 37 eligible countries in Africa. So far, it has shown some success. In 2002, the United States exported almost $5.9 billion to sub-Saharan Africa, and imported $18.2 billion from the region.

Photo by Godswill Frank, Photorock Uzoma Henry Onyekuru, General Manager of the Nigerian Stock Exchange, chats with Governor Attah, center right, at the stock exchange groundbreaking ceremoney

In order to benefit from AGOA provisions, African countries had to meet certain responsibilities. They must, in essence, become capitalist economies. Their national development strategies have to prioritize trade, which must be established as their engine of economic growth. As U.S. Trade Representative (now director of the Office of Management and Budget) Rob Portman said in a February 2006 speech, "African governments [must] evidence a durable commitment to free markets, to the rule of law, to regulation that supports rather than impedes trade, and to sound macro-economic policies." In other words, government control of business, perhaps the strongest disincentive for investment, was going to have to be dismantled.

Some parts of Africa are going to have troubles adapting to those provisions, but the government of Akwa Ibom has a running start, having begun a similar policy with the election of Governor Victor Attah in 1999. Through a combination of financial acumen and clever initiatives, the governor – and Akwa Ibom – are showing remarkable progress, to the point where Nigeria’s President Olusegun Obasanjo has publicly stated that the governor’s efforts are "making Akwa Ibom Nigeria’s investment destination of choice."

The foundations for a new economy
Governor Attah’s vision for Akwa Ibom’s development is ambitious: it aims at no less than bringing Akwa Ibom into the 21st century in a decade or less. It seeks to redress the neglect of 40 years under Nigeria’s military governments by laying the foundation for modern industrial development.

"The kernel," says Frank Okon, the governor’s special assistant on technical matters, "is the ‘backward’ investment in Akwa Ibom State; by providing the ‘enabling environment’ for investors to come, thereby providing jobs for the artisans and professionals alike." The governor started things off with a power plant, without which nobody would invest anything. Okon points out that "this is the framework which will have to be built on by successive governments. But the platform is surely in place."

"We came [into office]," says Governor Attah, "at a time that the global economy was taking ascendancy and the underlying critical success factor remained reforms. There have been real success stories, like China and Malaysia and Botswana, to impress the necessity of adopting reforms. However, there is a global consensus that government alone cannot undertake socio-economic transformation. The private sector and the voluntary agencies must also be involved. Accordingly, we had to remodel our strategies away from past patterns, which emphasized one set of actors."

The first foundation for a healthy investment climate is security and good governance. Governor Attah is using that to build an investment infrastructure sturdy enough to handle the big financial players from everywhere on the planet. Almost all great leaders are builders. Few of them have had a career in architecture to bolster them.

Photo by Godswill Frank, Photorock Artist's rendering of the new Uyo branch of the Nigerian Stock Exchanges.

Governor Attah has a cautionary tale for those who try to attract foreign investment to a spot that isn’t ready for it. "(It was) a particularly challenging experience. A prospective American investor visited Uyo [before I took office], against the advice of even his wife. On arrival in Uyo, he needed to assure the wife of his safety. It took over seven hours to make the trip to Port Harcourt and back to make a telephone call. Since his departure from Uyo to the USA, he is yet to return; and I learned that he had confided in his trip promoter that if it took seven hours to make a single international call, then his profit margin could be better imagined. I took the cue instantly."

When you play in the big leagues, you have to have the amenities that big league players are used to. So the governor went to some investors with the idea to build a hotel, where the big players of the world could sit and do their deals in their sort of environment. There were certainly other reasons for the five-star hotel, (see following story) but that was certainly one of them.

The local banking sector in Akwa Ibom was moribund, because the economy was stagnant. There were no companies and no jobs. Now the government has money and is spending it. The influx of oil revenues and consequent government spending has rejuvenated the banking sector. In fact, one piece of evidence of that reinvigoration came during the economic summit when one of the presidents of one of the local banks told the gathering, "We are looking for bankable projects."

The outside world’s reaction to this has been illustrated by the fact that OPIC and the IFC (The private sector arm of The World Bank) both have made their first non-petroleum related loans in Nigeria to investment projects in Akwa Ibom.

Akwa Ibom gets a stock exchange
In March, 2006, Governor Attah broke ground for a new branch of the Nigerian Stock Exchange. This will enable private investment and stock trading by local investors.

Instituting a stock exchange is a big step. The international business world sees this as a sign that a region has arrived.

A functioning stock exchange is an important plank in the structure of an economy. When investors analyze a host country, the presence of stock exchange will tell them a lot about what kind of a business base they can expect.

Finally, it must be noted that the Attah administration has constructed this massive infrastructure without adding to Nigeria’s external debt.

Attention to investors’ needs
Through the State Ministry of Economic Development, the Ministry for Lands Use and AKIIPOC, (Akwa Ibom’s investment commission) the government meets investors’ needs expeditiously. Land is readily made available, as are licenses and other formalities.

Investors laud the governor’s understanding of business needs and his follow through on commitments. "He does what he says he is going to do," say several large investors in the state. According to Ime Ekanem, CEO of IME Computers, "Governor Attah is an incredible and aggressive visionary who is committed to long term investment that will benefit the Akwa Ibom people and Nigeria in general." And tellingly, Paul Morgan, CEO of Deamar USA, the U.S. firm building Akwa Ibom’s flour mill, stated, "Neither Governor Attah nor his staff have ever asked us for a dime."

Governor Attah has been described as the state’s best salesman. He often heads delegations to foreign countries to talk to potential investors. This senior level attention to investment indicates to potential investors that interest in their activities starts at the very top of the Akwa Ibom government.

The intense efforts to improve infrastructure, communications and government functioning all attest to Akwa Ibom’s efforts to become Nigeria’s investment destination of choice.

Reflecting on this, Governor Attah said, "It is our belief that the foundation for sustained economic transformation has been laid," the governor says. "This has been acknowledged even by outsiders. In 2004, the state economy received an ‘A’ rating by Global Credit Rating Company, a sovereign rating company."

‘Mega-project’
Of all the development projects underway, perhaps none manifests Governor Attah’s vision and commitment better than the combination five-star resort, 18-hole championship golf course, and river marina "mega-project." Reports on the status and promise of these projects can be seen on the following page.