Ugwuanyi: Putting Enugu on the Global Startup Map, By Laurence Ani

The true test of any state policy can be gleaned from the outcome it yields, not the measure of applause or publicity its announcement attracts. Indeed, the results may take months – and even years – to materialize, but they still serve as validation nonetheless.

This truth is reinforced by a report released last week by StartupBlink, a Swiss-based research centre that publishes an annual global startup index. The report shows that Enugu is ranked 978 in the global 1,000 cities with the most vibrant startup ecosystem. The report further lists Enugu as Nigeria’s fifth biggest startup city behind Lagos, Ibadan, Abuja and Port Harcourt.

Besides the number of startups, the organisation used parameters such as the presence of support services that “provide resources, networking, and access to capital” in its ranking. The ease of doing business in startups’ operational location  was also an important indicator considered by the research organization whose chief executive officer is Eli David, a former accountant and business consultant at KPMG.

Given how inscrutable statistics often seems to the data shy majority, the significance of Enugu’s inclusion in the 1,000 Global Startup Cities might be easily lost. But statistics do actually matter, particularly in the sense that it serves as a progress report that either validates or subtly disavows economic policies, shedding light on those intangible threads between actions of governments and the arising consequences. 

Enugu’s impressive feature on the global startup map is the result of the Governor Ifeanyi Ugwuanyi administration’s scrupulous implementation of investor-friendly programmes over the years. For instance, as the effects of Covid-19 took a heavy toll on businesses last year, Governor Ugwuanyi introduced a tax-exemption policy for small businesses. This helped entrepreneurs weather the economic storm created by the pandemic, thus preserving countless jobs that will have otherwise been lost.  

Indeed, few things in recent times have exposed the folly of running a country’s economy almost solely on earnings accruing from the sale of a volatile commodity like petroleum as starkly as Covid-19. However, long before the pandemic, the governor viewed a diversified income stream in the face of declining revenue accruing to states from the Federation Account as an imperative, and the commitment to creating one reflects in his inauguration speech. “Since it is a knowledge-driven economy and not oil-driven economy that rules the world, I believe that this is another great opportunity for Enugu State and Nigeria to look inwards and harness those potential, which free oil money has blinded us from exploiting. It is an opportunity to live to our full potential and leave the feeding bottles of the federalism syndrome.” 

These were no platitudes. Even though investing in job creation initiatives and incentivizing entrepreneurship does not yield the kind of buzz that regularly make the headlines, the Enugu State governor has consistently invested in MSMEs and introduced policies that nurture them to growth. The Enugu SMEs Micro Credit Lending Programme has emerged as an important initiative in this regard, offering a lifeline to entrepreneurs in the state. The programme was created to give entrepreneurs in the state an opportunity to access a maximum loan of N300,000 at nine percent annual interest to grow their businesses with a one month moratorium.

Enugu offers a good example of how a combination of sustained investment in nurturing small scale enterprises and removing all stifling bureaucratic structures can launch a state’s economy onto a growth trajectory. For instance, since 2015, the Enugu SME Center has trained over 35,000 micro, small and medium enterprises owners and aspiring entrepreneurs including women and youths. It is thus no surprise that Enugu was one of only nine states that recorded a reduction in unemployment rates, according to a National Bureau of Statistics report released in 2019. The report had noted that the feat was “despite an increase in the national unemployment rate”. 

It is significant that these feats were recorded despite Enugu’s rather meager revenue from the national purse. As an NBS 2019 report outlining every state’s net earnings from the Federation Accounts Allocation Committee from 1999 to date shows, Enugu State has received FAAC’s tenth least amount for the period. Remarkably, the report also gave a detailed breakdown of states’ internally-generated revenue for 2019, where Enugu ranked as the state with the ninth best IGR profile, besting even oil-rich states with the massive 13% derivation revenue. Indeed, Enugu State’s robust IGR growth has been a consistent feature since 2015 under the Governor Ugwuanyi administration. 

The findings published by StartupBlink, which comes about two years after a World Bank report ranked Enugu as the third best state to start a business in Nigeria, is further proof that Governor Ugwuanyi’s vision to make Enugu a major economic hub is yielding dividends. The World Bank Doing Business in Nigeria 2018 report had put Enugu State only behind Abuja and Lagos. The report analyzed business regulations in four areas namely: starting a business, dealing with construction permits, registering property, and enforcing contracts.  

Ugwuanyi’s commitment to help fledgling businesses flourish is also underscored by his inauguration of the Enugu State Ease of Doing Business Council in 2018. Besides being shaped by the understanding that difficult business environment remained a major factor often cited by investors as the reason Nigeria is hardly a choice destination for foreign direct investment despite its huge potential, the council’s creation was, according to the governor, prompted by this dire prognosis: “Most small businesses in our local communities die before their fifth anniversary.”

This enabling air for businesses championed by the governor has increasingly bred a generation of tech-savvy youth in Enugu eager to tap into the vast opportunities offered by ICT. The inauguration of the Enugu State Tech Hub and Youth Innovation Centre in March this year is a nod to that emerging reality. The presence of the tech hub in Enugu, and the likely emergence of startups it would spur, will further cement the city’s image as an innovation-friendly city. 

There are strong expectations that the Enugu tech hub will attract the attention of global tech giants just like Lagos had when Facebook established its African hub, the first such in Africa, in 2018, in collaboration with CcHub (Co-Creation Hub), and as it did with Google’s tech-oriented boot camp in 2017. That is because besides the training and mentorship the centre offers youths, its physical space creates an opportunity for persons who share similar interests in technology to work together on projects. Even youths who are not so tech-savvy would be trained, and also offered a temporary office space in the co-working tech cluster, where they will receive mentoring.

Like the numerous other positive statistics Enugu State has racked up in the past six years, the StartupBlink report on Enugu is proof yet that growth is seldom ever mere happenstance. It is often a product of painstaking planning away from the misleading allure of the limelight. There is also a hardly acknowledged, but no less important fact: the most enduring and impactful projects are not necessarily those with a concrete or spatial presence.

Laurence Ani, former editor of ThisDay – The Saturday Newspaper, and Saturday Telegraph, is a senior communications aide to the governor of Enugu State.