The 2020 pandemic opened the eyes of dependent countries to hundreds of business opportunities in their backyard. Abia, one of the South-Eastern states is a sign that there are hundreds of untapped investments in the state.
For instance, foreign investors trooped into the state after the 2020 COVID-19 pandemic, making it the third most destination for foreign investors in Nigeria.
Although it attracted no investment in 2019 and it was incredible to see the state rose to the third most attractive investment destination by 2020, according to data obtained from the National Bureau of Statistics (NBS), Abia State brought in $56.1 million worth of investments.
What does this mean?
Depending on monthly allocation is killing a lot of states, they must look inward to boost Internally Generated Revenue (IGR).
This also means that foreign investors can come into the state to tap into business opportunities on ground which need urgent attention.
Note:
The businesses highlighted in this post aren’t exclusively meant for foreigners, Nigerians who have the financial capabilities can also come in.
12 Things Investors Should Know Before Investing in Abia
As an investor, you must know and understand your proposed business environment and community. As such, here are the most important things you need to know about God’s Own State:
1) Abia was created on August 27, 1991, out of Imo State
2) The name of the state was formed from the initial letters of four groups of people, namely: Aba, Bende, Isuikwuato and Afikpo, to get “ABIA”
3) Umuahia is the state capital while the industrial capital is Aba.
4) Aba is one of the most populated towns in Nigeria largely because of its industrial activities.
5) It is one of the states that make up the South Eastern region and also a member of the Niger Delta region.
6) It houses the biggest cattle market in Nigeria, though Kano state is contesting this claim.
7) Abia state shares boundaries with seven states. To the North are Ebonyi, Anambra, and Enugu; to the South is Rivers; to the west is Imo, and to the East are Akwa Ibom and Cross River.
8) Aba is the former outpost of the British during the colonial period until Nigeria gained independence in 1960.
9) According to the 2016 projected population by NBS, Abia was 3,727,347, but unofficially, the population of the state is over 4 million.
10) Its agricultural hub centres are Aba, Umuahia, and Bende, though cultivation is done in all the towns and villages in the state. In fact, a typical Abia family has a small garden of vegetables within their compound.
11) The indigenous language of the state is Igbo while the official language is English Language, Pidgin English is also popular among residents
12) Because of its borders with seven states, Abia has access to major airports, thereby making transportation faster and easier.
For instance, the Cargo Airport in Owerri is between 50 to 60 minutes drive from the state capital and Aba while it takes between 100minutes to 120 minutes to get to Port Harcourt International Airport.
Apart from that, there are boats and canoes that connect the state with coastal areas.
Crude Oil Exploration
Abia is one of the oil-producing states with more than 100 oil wells that have not been fully explored.
At the time of this research, most of the oil exploration licenses are being held by Shell despite the fact that the state has a large chunk of crude oil deposits spread across the state
As an investor whether as a foreigner or a Nigerian, you can apply for an oil exploration license in the state.
We’ll tell you more on how to go about this and the necessary requirements in another blog post
Gas Production
In the 1990s, millions of Nigerians either use kerosene or firewood, or charcoal, today thousands of Nigerians have switched to using cooking gas.
So, gas production in Abia state is another business opportunity investors can explore.
Textile Manufacturing
The industrial town of Aba in the state is known for its incredible textile production. As an investor who can invest heavily in machinery to boost production, manufacturing textile materials will reduce Nigeria’s dependence on the importation of textile products.
What happened after the 2020 pandemic attests to this fact. During the period, Abia state attracted $56.1 million, it came behind Lagos and the Federal Capital Territory (FCT), Abuja, with investment inflows of $8.3 billion and $1.3 billion respectively.
During the pandemic, there was a short supply of face marks because of restrictions regarding importations, Aba became the manufacturing hub for the production of face marks and other Personal Protective Equipment (PPE).
Instead of importation, the textile manufacturing firms in Aba became the suppliers PPE.
Aba supplied Victim Support Fund, a non-governmental organisation (NGO), owned by Toyosi Akerele and chaired by TY Danjuma.
“At a point, China came to Aba to mop up all the once they have sold before the pandemic, to meet increasing demand in their country. When people could no longer import from China, Aba began mass production,” the Director-General of Abia State Marketing and Quality Management Agency Sam Hart was quoted as saying by Business Day Newspapers.
This means that textile production in Aba has not been fully explored.
Pharmaceuticals Production
With arable land filled with green leaves as one of the major products for making pharmaceuticals products, Abia is a great destination for investors can explore.
Soap Making
This is one of the lucrative businesses in Abia. There are lots of soap-making factories in the state, supplying major markets in the states it shared boundaries with, but this sector has not been fully explored. There are lots of money for investors to make from this in the state.
Auto Components
Abia through its industrial hub in Aba produces local auto components that can compete favourably with most of the imported ones.
This is an investment opportunity for car manufacturing companies in Japan, Germany, the USA, and India should tap
Plastics
The state has the raw materials for the production of plastics which mean nearness to the major materials for production.
Cosmetics
Some of the leading cosmetics manufacturing firms in Abia include Anochemical Cosmetics Industries Ltd, Maxxim Cosmetics Limited, and Zan Cosmetic Industry Limited, but the markets is huge that these three companies can not effectively meet the high demand within and other neighbouring states.
Agricultural Packaging
One of the challenges faced by Nigerian exporter of agricultural products is packaging that meets international standard.
Sometimes ago, a Canadian-based Nigerian man said Canadian markets prefer yam tubers from Ghana than Nigeria simply because of the packaging.
Abia ‘s land is rich and fertile, meaning investors can come in to invest in the food chain by exporting agricultural produce like yam, plantains, oil palm, maize, potatoes, cocoyam, cashew, and cassava to the international markets.
Similarly, the rice production of Abia has not been fully harnessed. Rice consumption in Nigeria is high such that hardly can a day pass without an average Nigerian family consuming rice. This is a huge investment opportunity in God’s Own State.
Cocoa
Cocoa is a major raw material in the production of chocolate and so many other products that are still being imported into Nigeria.
And here is a state that produces cocoa for this chain, why not consider an investment in this line.
Footwear
Because of Nigeria’s penchant for imported footwear and shoes, some of the shoes that are made in Aba, Abia State, bear lines like, “made in USA”, “made in Italy”, “made in Turkey” among others.
Interestingly, Aba shoes manufacturing companies have the potential to meet the demand of Nigeria’s market if: 1) they continually get support from the government and 2) there are favourable investment policies that encourage foreign investment.
For instance, we saw this manifest in November 2016, when the government announced a partnership with the Turkish government after the Abia-Turkish Investment Forum, the partnership is worth $100 million USD, according to The Guardian.
Abia state houses over 50,000 shoemakers, according to Governor Okezie Ikpeazu during the official launching of the partnership.
Yet more investors in footwear making are needed to fill in the large gap between the market demand and production.
Tourism Investment
Abia houses major tourist centres in the South-East. Some of them include Ojukwu Bunker in Umuahia, The Amakama wooden cave, Azumini Blue River waterside, National War Museum, Church of Jesus Christ of Latter-Day Saints, Museum of Colonial History in Aba, and traditional festivals like Ohafia War Dancers and Akpe Festival in Umuahia among others are tourist centres to behold.
Most of these attraction centres need investors to come in the area of partnership to make them more attractive and salable to the world.
And building and entertainment centre at the tourist locations is another plus for investors
Mining Sector
In the mining sector, the state has deposits of Iron Ore, Kaolin, Limestone, and Gypsum which are yet to be fully explored because of the attention of the government is majorly on crude oil.
Early comers into the mining sector in Abia will get value from their investment because it attracts little attention.
Education
Government-owned institutions are in decay, no wonder even university professors now prefer to send their kids to private institutions.
For someone who is looking at a long-term investment, establishing a private university in Abia is one of the areas you can consider joining the growing list of higher institutions in Abia.
Infrastructural Sector
This is the most technical sector for the foreign investors because most time government officials prefer to award contracts to family members or companies owned by a friend.
To win a government contract in Abia, just like every other state and the federal government, you must have a powerful insider who can influence government decisions.
Is It Safe To Invest in Abia?
Even as we sell Nigeria to the rest of the world, we also take our time at InfomediaNG Business Solutions to let prospective investors know the major challenges of doing business in Abia State. Some of the hiccups of investing in the state include:
- IPOB threat
- Threat from oil-producing communities
- Bureaucracy
- Bribery among government officials
- Power supply
IPOB Threat
IPOB means Independent People of Biafra, it’s a body headed by Nnamdi Kanu which wants a breakaway state from Nigeria.
Because of the proscription of the organisation and clampdown by the government’s military, members of the IPOB have gone violent. One of their violent orders is enforcing sit-at-home order after Kanu was rearrested and sent to the DSS cell.
Recently, IPOB members have reportedly killed policemen, soldiers, and attack government institutions, so traveling with uniformed security personnel may even put your life at risk unless you want to travel with fortified soldiers.
As such, we urge investors in Abia to be careful and take their personal safety very important when traveling to any of the South-East states.
Threat From Oil Producing Communities
Although, attack on oil installations in Abia state is rare, yet some of the oil-producing communities in Nigeria feel they’ve not got their share of their natural resources.
As such, we urge foreign investors in crude oil and gas production in the state to clearly understand the terms and conditions before signing contracts in this sector in order to avoid loss in investment.
Crude oil and gas production is a prominent activity, as it contributes over 39% of the State’s GDP.
Don’t be caught in the tricks by the government and community demand, let both parties know and liaise with the core community because these are the people that can make or mar your investment goals.
Bribery Among Government Officials
On the transparency index, Nigeria is poor due to bribery among government officials. This is another challenge of doing business in Abia.
But you can walk your way through it to achieve your investment goals. Most times, you may face stiff challenges if you failed to rub hands with government officials.
Power Supply
This isn’t peculiar to Abia, it’s a general problem to Nigeria’s economy. If you’re investing in Abia State, be ready to provide alternative power supply because supply from the privatised distribution companies will frustrate you.
Processes of Doing Business In Abia State
- Make a company seal
- Register your company at the Corporate Affairs Commission (share capital of N10 million is preferable)
- Register for income tax and VAT at the Federal Inland Revenue Service (FIRS)
- Pay stamp duty
- Sign the declaration of compliance before a Commissioner for Oaths or notary public
- Register for personal income tax PAYE at the Abia State Internal Revenue Service
- Pay registration fees for business premises into a state government account
- Obtain business premises permit at the Abia State Ministry of Commerce and Industry
Featured Image credit:
- Nairametrics