By Nnaoke Ufere, PhD
A critical yet consistently overlooked question in Nigeria’s industrial and regional development discourse is this: Why have the Southwest and North surged ahead as hubs of productive entrepreneurship—driving technological innovation, large-scale manufacturing, advanced agriculture, and high-value industries—while the Southeast and the broader regions where its businesses operate remain trapped in a cycle of unproductive enterprises?
Despite the Southeast’s renowned entrepreneurial energy, its economy and indigenous enterprises remain dominated by trading, importation, repackaging, distribution, rudimentary assembly, and the resale of goods manufactured elsewhere—instead of engaging in the kind of large-scale industrial production and innovation that drives regional development and economic power.
This stark contrast demands urgent reflection, not only for understanding regional disparities, but for reshaping the Southeast’s economic future and Nigeria’s broader path toward sustainable and inclusive industrialization.
The Southwest has built a diverse and resilient economy with strong foundations in finance, technology, media, and manufacturing. In finance, institutions such as GTBank, Ecobank, and First Bank—three of Nigeria’s most influential banks—have solidified the region’s dominance in banking and financial services.
In the technology sector, fintech giants like Flutterwave and Paystack—founded by entrepreneurs from the Southwest—have revolutionized digital payments across Africa with their innovative financial solutions.
Similarly, the media landscape has been profoundly influenced by Southwest-led institutions like Channels TV, Punch Newspaper, and The Guardian—all of which have played key roles in journalism, broadcasting, and shaping public opinion.
In the manufacturing sector, companies like Doyin Group, Drugfield Pharmaceuticals Limited, and the Odu’a Investment Company Limited—a regional economic integration conglomerate owned by the Southwest states—play a pivotal role. Odu’a has substantial investments in real estate, agriculture, and industrial enterprises, reflecting the region’s leadership commitment to value-added production and long-term wealth creation.
In agribusiness and small to medium-sized manufacturing, the Southwest’s industrial sector is shaped by companies that produce value-added consumer goods and services, which are then distributed nationwide and exported to neighboring countries.
The North is home to Nigeria’s largest industrial and agricultural enterprises, with Northern entrepreneurs dominating key sectors such as oil refining, cement, steel, and agriculture. Dangote Group is the largest producer of refined petroleum products, steel, and cement in Africa, while BUA Group is a dominant force in cement, sugar, and food processing.
In agriculture, Dantata Foods and Allied Products leads in grain processing and dairy production, ensuring that Northern Nigeria remains a key player in food security. In steel manufacturing, KAM Industries is a major producer of galvanized roofing sheets, nails, and reinforcement bars, contributing to Nigeria’s industrial backbone.
In contrast, the Southeast’s economy—along with the broader Igbo business network across Nigeria—is largely driven by entrepreneurs who act as middlemen or agents for external manufacturers, rather than as producers or industrial innovators. Investment in large-scale industrial production and innovative manufacturing remain limited, restricting long-term economic transformation and value creation.
The highly praised Igbo apprentice model, far from fostering true economic innovation or industrial advancement, has largely become a self-replicating cycle that churns out an ever growing army of unproductive traders, middlemen, resellers, and manufacturers’ agents. The Igba-Boi system ultimately reinforces a culture of buying and selling that prioritizes short-term gains over long-term production, technological advancement, and large-scale value creation.
This model, while generating individual wealth, is largely and fundamentally unproductive because it does not create significant value beyond market intermediation. This is one of the liabilities and enduring vulnerabilities of Southeast entrepreneurship.
When I raised the glaring disparity between the Southwest and North versus the Southeast with economists, business leaders, and state officials, their responses followed a familiar and predictable pattern. Politicians and business elites from the Southeast were quick to invoke the well-worn explanation: the M-word—marginalization—and the accompanying narrative of economic sabotage by the federal government.
In my view — and one shared by many experts — marginalization has become a convenient scapegoat, obscuring the prevalent structural and strategic shortcomings within the Southeast business community. A closer examination reveals deeper, more complex factors—rooted in economic and cultural norms, values, and expectations—that may offer a more compelling explanation for the disparity in entrepreneurial pathways.
These factors—more than institutional marginalization alone—may better explain why entrepreneurial talent in the Southeast is frequently diverted into unproductive or even destructive ventures, trapped in low-value commercial or trading redundancy, while the Southwest and North continue to lead in more productive, innovation-driven enterprise.
Productive, Unproductive, and Destructive Entrepreneurship
Entrepreneurship is often heralded as a catalyst for economic growth and social development, yet as economist William J. Baumol argued in Entrepreneurship: Productive, Unproductive, and Destructive (1990), not all entrepreneurial endeavors contribute to long-term economic success and inclusive prosperity.
In my research on the allocation of entrepreneurial talent and behavior, published in PLOS ONE (Ufere 2021), Journal of Business Research (Ufere 2020), and World Development (Ufere 2012), I argued that the way entrepreneurial talent is developed, mobilized, and channeled into productive, unproductive, or even destructive pathways is not solely dictated by institutional structures of marginalization as posited by Southeast business leaders and politicians.
While institutions shape opportunities and economic incentives that guide entrepreneurial behavior, including in Nigeria—and in many cases, reinforce inequalities by privileging some groups while marginalizing others—the more influential forces are the cultural norms, expectations, and values that define entrepreneurial communities across the Southwest, North, and Southeast.
Culture: The Key to Entrepreneurial Destiny
The culture of a society shapes the destiny of its entrepreneurship. In cultures that value strategic thinking, delayed gratification, long-term investment, and innovation, entrepreneurs naturally gravitate toward productive sectors like manufacturing, technology, agriculture, and finance.
These productive entrepreneurs create jobs, drive industrial growth, develop innovative solutions, and generate long-term value—becoming the engine of sustainable economic progress and regional competitiveness.
In contrast, cultures that prioritize quick profits, low-risk ventures, instant gratification, short-term gains, and a “get-rich-quick” virtue foster unproductive entrepreneurship. Business activity in such environments centers on trading, importation, and acting as intermediaries for foreign manufacturers. There is little incentive to build enterprises that require patience, resilience, and long-term commitment—discouraging the pursuit of innovation or local industrial development.
Even more damaging is destructive entrepreneurship, where individuals exploit weak institutions, legal loopholes, or criminality—thriving through cybercrime, drug trafficking, oil bunkering, fake products, tax evasion, and black-market trading. This erodes public trust, weakens institutions, and distorts development. All regions in Nigeria have their share of such destructive entrepreneurs.
Four Case Studies of Unproductive Enterprises Rooted in the Southeast
Four of the Southeast’s most well-known businesses are largely unproductive, yet they’ve contributed meaningfully to job creation, wealth circulation, and sustaining commercial networks.
However, without a shift toward innovation, industrialization, and competitive enterprise, such companies risk keeping the region stuck in trading dependency instead of driving it toward production and global relevance.
All efforts to reach these four companies for comment were unsuccessful as of the time of publication.
Innoson Vehicle Manufacturing (IVM)
Innoson Vehicle Manufacturing (IVM) is often cited as an Igbo success story, but labeling it a true manufacturer is largely a mischaracterization.
While IVM does fabricate sheet metal into vehicle bodies, make seats and steering wheels and plastic parts locally, critical components that define a vehicle—such as the design, engine, transmission, drivetrain, suspension, braking system, electronics, battery system, and electrical systems—are all imported and merely assembled in-house, according to company insiders.
IVM may facilitate commerce and provide jobs, but it does not yet create original designs, adopt automated manufacturing processes, develop new technologies, or build self-sustaining industrial capacity.
As of 2024, IVM produces fewer than 10,000 vehicles annually—far below the scale needed for long-term economic viability. Even highly automated, branded auto manufacturers must produce at least 100,000 units per year across multiple models to remain competitive and self-sustaining.
In addition, IVM operates a high-cost, labor-intensive, and largely manual production model, which continues to struggle with high defect rates, excessive inventory carry costs and persistent quality control problems.
According to customers, its vehicles are often unreliable and come with high maintenance costs, raising concerns about its long-term profitability. Without government patronage as its primary buyer, the company’s competitiveness and economic sustainability remains highly uncertain.
The checkered history of vehicle assembly in Nigeria serves as a cautionary tale for IVM. Once-thriving companies like Volkswagen Nigeria, Leyland Nigeria, Peugeot Automobile Nigeria (PAN), National Trucks Manufacturers (NTM), and Steyr Nigeria have all shut down. Today, they exist only as relics of a bygone era. Though PAN is being revived as DPAN through efforts by Dangote and others, its long-term viability remains uncertain.
I fully support IVM’s growth and want it to thrive as a national success story. To do so, it must evolve from a government-dependent assembler into a fully integrated, automated manufacturer—backed by a bold strategy, strong investment, cost-efficient production, top-tier quality, and a customer experience that drives brand loyalty and mass-market appeal.
Coscharis Motors
Another prominent Igbo-owned business, Coscharis Motors, follows a similar model. Although widely regarded as a success story, its core operations center on auto franchise representation—primarily serving as a distributor for foreign brands like BMW.
Its vehicle assembly activities involve low value-added processes using Semi-Knocked Down (SKD) kits, where major components such as the engine, drivetrain, and chassis arrive pre-assembled, leaving minimal work to be done locally. This model involves little or no transfer of critical design and manufacturing technology, limiting its impact on local industrial capacity.
Beyond the automotive sector, it also represents other foreign manufacturers in the ICT industry. However, despite its size and influence, Coscharis engages in little actual innovation or manufacturing, limiting its role in driving industrial development in Nigeria.
At its core, Coscharis remains more of a trading business than an industrial enterprise. The company’s business model is heavily dependent on the importation and resale of foreign products, which comes with several disadvantages.
First, it reinforces Southeast’s economic dependence on foreign manufacturers, as the value-added production, technological advancement, and job creation remain concentrated in the countries producing these goods. Instead of fostering local expertise and industrial capacity, the company primarily facilitates wealth transfer to international firms while extracting profits from a rent-seeking distribution model.
Furthermore, relying on vehicle and ICT imports exposes the business to exchange rate volatility, high import duties, and supply chain disruptions—challenges that have become increasingly severe in Nigeria’s unstable economic climate.
Without significant investment in local production, research and development, or indigenous innovation, Coscharis remains vulnerable to global market shifts and policy changes that could restrict imports or favor local manufacturing.
Ultimately, while Coscharis is a financially successful enterprise, its lack of industrial development limits its broader economic impact. It exemplifies a recurring challenge in Southeast’s business ecosystem, where large-scale trading often overshadows the push for genuine industrialization.
Without a shift toward production, businesses like Coscharis risk stagnation, contributing little to Nigeria’s long-term economic transformation and Southeast’s competitiveness.
Zinox Technologies
Similarly, Zinox Technologies, often touted as a Southeast tech success, primarily operates as a low-value-added assembler of computer components, not a genuine technology innovator or manufacturer. Its core business model depends largely on licensing agreements and representing foreign brands, with little focus on developing proprietary technology or local R&D.
While this model may generate short-term revenue and visibility, it offers little in terms of building long-term technological capacity or competitive advantage. Zinox also represents foreign solar power providers but contributes minimally to local value creation or domestic manufacturing in that sector.
This dependency on foreign technologies and minimal local innovation makes the company’s current trajectory unsustainable in the long run. Without a shift toward in-house design, manufacturing, and intellectual property development, Zinox risks being permanently locked into the lower rungs of the global tech value chain—vulnerable to shifts in foreign partnerships, exchange rate volatility, and rapidly evolving global competition.
For Zinox to become a true tech leader, it must invest in local innovation, skilled workforce development, and the creation of homegrown products with regional and global relevance.
Geometric Power
Unlike many other ventures, Geometric Power (GP) represents a rare attempt at productive entrepreneurship in the Southeast. Once a symbol of Igbo entrepreneurial ambition, it now struggles for survival.
At its launch, it attracted the elite of Igboland and was hailed as a symbol of success and regional pride. The rapturous celebration was loud and full of hope. Yet, that initial promise has since faded, leaving behind a sobering reminder of unfulfilled potential.
Today, many Igbo leaders interviewed—who once hailed the launch of GP—have become increasingly pessimistic. Yet most remain reluctant to speak publicly, wary of backlash from vocal Igbo apologists on social media.
The company’s original vision—to provide stable and affordable electricity to nine of Abia State’s 17 local government areas, including the industrial hub of Aba—has faltered badly. Consumers and customers have grown disillusioned with Geometric Power due to its erratic power supply and high costs. Nearly all industrial and commercial clients have voiced frustration over the company’s unreliability and poor customer service.
This failure reflects flawed economic and revenue modeling, inefficient tariff management and revenue collection, inadequate market and customer analysis, poor risk management in the gas supply chain, operational inefficiencies, and a lack of strategic focus.
Today, GP struggles to operate at full capacity, with turbines idle, according to insiders with knowledge of the situation there. It can only generate as much power as its limited customer base can afford, leaving it severely constrained by irregular demand, high production costs, gas supply risks, and operational bottlenecks.
These constraints render it financially challenged. It has faced severe financial crises, including a near-collapse in 2023 when it was unable to pay an alleged N869.21 million debt owed to the Transmission Company of Nigeria (TCN).
Without the favorable and protective regulatory framework recently signed by the Abia State government to expand Geometric Power’s market scope and boost investor confidence, the nearly $1 billion already invested—and the company’s long-term survival—would remain highly uncertain.
To remain an independent entity and avoid becoming a state-owned enterprise, Geometric Power must overcome a wide range of challenges—including unreliable gas supply, operational inefficiencies, limited market access, weak tariff and revenue collection systems, financial instability, infrastructure vulnerabilities, and complex regulatory demands.
Addressing these issues is critical to achieving its goal of delivering consistent and reliable electricity to Aba and surrounding areas. I’m rooting for it to succeed.
Vulnerabilities of the Igbo Trading Economy
Nigeria’s shift toward state autonomy and protectionism threatens to dismantle the Igbo trading economy. As other regions bolster their industries, they may adopt exclusionary policies—licensing fees, zoning laws, and import restrictions—that push Igbo traders out of key markets like Lagos, Kano, Port Harcourt, and beyond. The growing restrictions in Lagos today foreshadow a broader exclusion under state-controlled economic policies.
Regional governments could prioritize their own people, mirroring Malaysia’s New Economic Policy, which marginalized the Chinese business class, or Indonesia’s Ali Baba System, which forced Chinese traders into joint ventures with indigenous Indonesians. If Nigerian states follow suit, Igbo trading dominance could vanish within a decade.
With media influence and political power, Igbo traders could be reframed as economic exploiters—much like the Indian traders in Uganda, Kenya, and Tanzania, who saw their businesses collapse due to expulsion and boycotts.
The federal government could deal the final blow by implementing national policies that choke trade-dependent businesses:
- Import bans on electronics, textiles, and auto parts—sectors dominated by Igbo traders
- Massive investments in domestic manufacturing, cutting off Igbo supply chains
- Foreign exchange restrictions, making it impossible for traders to access dollars
- Heavy taxation on non-manufacturing businesses, disproportionately hurting Igbos
Why the Southeast Must Change
The Southeast’s trade-driven economy, once vital for post-war recovery, is now outdated and unsustainable. While trading has demonstrated Igbo entrepreneurial strength, it lacks the capacity to drive long-term growth, large-scale employment, or innovation.
Without a strategic shift toward industrial production, innovation, and value creation, the region risks permanent economic underperformance—not from a lack of talent, but from misaligned priorities. As the global economy moves toward knowledge and manufacturing, the Southeast is falling dangerously behind.
A cultural transformation is urgently needed—one that prioritizes long-term investment over short-term gains. Until political, business, and cultural leaders embrace this change, structural stagnation will persist.
The Only Path to Survival: Industrialization
The Igbo economy is at a breaking point. To secure its future, the Southeast must urgently transition from a trading-based model to one built on industrial production. This shift requires bold leadership and a new generation of visionary entrepreneurs. Key steps include:
- Invest in manufacturing to avoid permanent middleman status.
- Transform the apprenticeship system to train industrialists, tech innovators, and manufacturers, supported by targeted financial and policy tools.
- Forge economic alliances with local industries rather than operating in isolation.
- Craft a political strategy to anticipate and counter restrictive policies.
- Launch a Southeast Venture Capital fund, managed by private firms, to back scalable, productive ventures—not as charity, but as investments.
- Invest in R&D and education to develop competitive, innovative products.
- Adopt proactive leadership, with Southeast leaders championing productive entrepreneurship and enacting policies to support it.
Without this transformation, the Southeast will remain commercially active but structurally weak, losing both economic power and political relevance. True power lies in creating, not just trading. If action is delayed, the Igbo trading empire will collapse, leaving the people economically and politically sidelined in a nation they once helped drive. The warning signs are unmistakable—the time to act is now.
