Writer: ONYEKACHI PAUL
Not a single startup from the South East Nigeria was named among the top 10 Nigerian startups that raised funds as at December 2022.
The list of top 10 Nigerian startups that raised funds as at December 2022:
- Flutterwave ($250 million)
- Moove ($181.8 million)
- ThriveAgric ($56.4 million)
- TeamApt ($50 million)
- Reliance Health ($40 million)
- Vendease ($30 million)
- Umba ($17.5 million)
- Omnibiz ($15 million)
- Bamboo ($15 million)
- CredPal ($15 million)
(Source: Nairametrics)
Look at the list again, aren’t you worried over the state of South East startup ecosystem?
On August 9, 2021, the Indigenous People of Biafra (IPOB) instituted a sit-at-home protest in response to the detention of their leader, Mazi Nnamdi Kanu.
Initially designated solely for Mondays, this ‘protest’ has since been extended to encompass any day Mazi Nnamdi Kanu is scheduled to appear in court. This August marks the culmination of two years since his prosecution and imprisonment by the Federal Government of Nigeria.
The dilly-dallying surrounding this case has led to the sit-at-home protest snowballing into violence; attacks on the citizens and their property.
At some point, IPOB, the proponents of the sit-at-home came out to declare ‘no-more sit-at-home’, due to growing agony among the people and the business community.
The budding startup ecosystem appears to be the worst hit. The sit-at-home protest could be one of many reasons for the lackluster startup ecosystem in the South East Nigeria, but it’s definitely a huge blow for young minds who perceived the once calmest region
Prof. Charles Soludo, the Governor of Anambra state, estimates the state loses about NGN19.6 billion naira each day there is a sit-at-home order.
Ben Kalu, Deputy Speaker of the House of Representatives estimates the sit-at-home has cost the south East Nigeria about N4 trillion in two years.
Also, Sunday Punch, reports the sit-at-home in 2023 alone has cost the region 144 working days.
There is a believe that South East Nigeria has the highest diaspora population of any ethnicity in Nigeria. Igbos far and wide as a matter of habit troop en masse to their home town during festivities. The beehive of activities especially during festive period has declined as most Easterners are concerned about the security situation.
This norm has greeted impacted the hospitality sector.
Economic Implications
The first report on the Multidimensional Poverty Index (MPI) was published by the United Nations Development Programme (UNDP) in 2018. The MPI is an indicator used to measure poverty across several criteria. Analysis by subregions reveals that Abia, Anambra, Imo, Enugu, and Ebonyi had MPI values of 0.088, 0.050, 0.083, 0.123, and 0.265, respectively.
The recent 2022 MPI report from the Nigeria Bureau of Statistics (NBS) shows a significant increase, with Abia, Anambra, Imo, Enugu, and Ebonyi having MPI values of 0.109, 0.101, 0.142, 0.234, and 0.320, respectively.
Although four more dimensions have been added to the computation of the MPI in 2022 compared to 2018, the data indicates that poverty has greatly increased in the southeast. However, it is difficult to ascertain if the sit-at-home policy has significantly contributed to the increase in poverty but it’s sure an enabler.
A DevEast foundation report highlighted the following impact on the eastern economy:
– Businesses lose every Monday of the week to the sit-at-home protest and an extra day when
– Mazi Nnamdi Kanu goes to court, which means the sit-at-home approach has led to the loss of about 4-5 working days per month.
– Customers outside the Region are forced to find alternatives as the South East has trade relations with neighbouring towns.
– Trading Businesses Lost Upwards of N655bn to N3.8tr in 24 months.
-The sit-at-home protest negatively impacts students’ academic progress across all levels of education
Speaking to Mercy (real name withheld), an Assistant Branch Manager with one of the Tier 1 banks described in vivid details how the sit at home has affected the South East region:
“The sit-at-home mandate has its greatest impact on demand, supply, and financial transactions. For instance, clothing items—particularly sought after by buyers from the northern regions—have undergone a shift in purchasing patterns.
Previously, buyers favored Onitsha due to its proximity in comparison to Lagos.
Prior to the implementation of the sit-at-home directive, northern traders would typically set out from their base on Saturdays, ensuring their presence at the Monday markets.
The Easterners, predominantly Christians hence markets are closed on Sundays. They would conduct their shopping on Mondays and depart on Tuesdays. However, the sit-at-home order has compelled traders from the north to divert their travels towards Lagos due to heightened stability and security. Unfortunately, this shift has resulted in lost business opportunities for traders in Onitsha.
Additionally, businesses with the financial capacity are compelled to establish outposts in neighboring states, notably Delta State, specifically Asaba, in order to cater to their customer base. Consequently, this shift has spurred a noticeable upswing in the hospitality industry in Asaba.
Given the volatile nature of currency exchange rates, time has become an indispensable factor in consummating trades. Instances have arisen wherein traders travel with substantial sums of money, sometimes totaling as much as N10 million, on Sunday nights. Their objective is to arrive in Asaba the following morning, enabling them to deposit funds so as to transfer to their foreign counterparts.
This has affected farm produce as well. Most farm produce have a very short shelf life. This means the one-day delay would lead to massive wastages”
Pamela Aneke, a banker with First Bank Plc, also corroborated her account.
She said, “Traders and schools are the hardest hit by the sit-at-home order. Commercial banks are not left out. Customers are becoming dissatisfied with banking services as it takes a longer turnaround time to resolve complaints. This has led to a negative customer experience and a loss of revenue for the banks.”
How it has affected education?
The South East has always prided itself as the beacon of academic excellence. Southeastern states have been consistently ranked among the top ten performing states in the federation in the West African Examination Council (WAEC) exams organized nationwide.
The disruption in academic activities has necessitated that school administrators devise means to ensure students catch up on lost time. Most schools have resorted to holding weekend classes for their students. For instance, students of Federal Government College (FGC) Enugu have to be in school on Saturdays to cover up for lost time.
The economic and social impact on the Southeast has been catastrophic, to say the least. Mazi Nnamdi Kanu, in a recent statement from his lawyer, has abolished all forms of “sit-at-home” and has declared Mondays as Economic Empowerment Days (EDD).
It is imperative that the leaders of the Southeast take proactive steps to stem the tide before it is too late. There have been several pronouncements from the governors of the Southeast on the cancellation of the “sit-at-home,” but fear still lingers in the hearts of the populace.
Startup ecosystem as the worst hit
While the South East Nigeria startup ecosystem is navigating the challenges posed by poor infrastructure, low government’s interest and snobs by investors, the sit-at-home protests have compounded the issues.
In a chat with Techeconomy, Chukwudi Edoga, the founder/CEO, Digital Dreams, said:
“I think the first sit-at-home really affected businesses in different areas. As a tech company, the first effect is in lower productivity. The hours teams can sit together, ideate and come up with excellent products and designs reduces causing delays. These delays affect the clients also and further causes delay in payment for services rendered.
“Looking deeper, there is an awful air of insecurity leading to exodus of talent from south east. From experience, I can count the number of experience developers and designers that have left the Enugu ecosystem. It is difficult to build a great startup in Enugu and impossible to build without talents around you. So, it is crazy the amount of hemorrhage of talents happening in the southeast exacerbated by the sit-at-home situation.
“Also, the south east is losing as an investment destination. It is well known that money is a coward and doesn’t go to places where there is fear. With the current situation it is quite harder attracting investment in a business or project in Enugu. One of my friends narrated an experience with an investor who stopped progressing with investment discussions once he learnt that his startup is situated in Enugu. The sit-at-home situation coupled with the incessant kidnapping has really been a cog in progress for businesses within the region”.
Also commenting, Nkemjika Uwaezuoke, Creative Director, Splendid Place Events, has this to say: “As an event Entrepreneur, the Sit-at-Home has affected my business a great deal. Most events that should hold on Enugu are either cancelled or experience Low turnout”.
The solution to save the Startup ecosystem in South East Nigeria is surely that one you have in mind. A stitch in time saves nine.
[Feature Image Credit]
