Identity Economics: Social Networks and the Informal Economy in Nigeria (African Issues, 25) 1847010164, 9781847010162

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AFRICAN ISSUES

AFRICAN ISSUES Meagher

• Globalizing networks and crumbling states have turned African informal economies into sources of dynamism as well as disorder. Through an ethnography of informal economic governance, this book reveals how ties of ethnicity, class, gender and religion restructure economic networks in response to contemporary economic challenges, leading to fragmentation and violence as well as new forms of order. Identity Economics redresses the marginalization of Africa in contemporary theories of economic informality and is essential reading for understanding the role of informality in growth and economic governance in Africa. Kate Meagher is Lecturer at the Development Studies Institute, London School of Economics & Political Science Contents: Introduction: Social Networks & Economic Ungovernance in Africa – Beyond the Cultural Turn: Rethinking African Informality – Oracles, Secret Societies & Hometown Identities: An Institutional History of Igbo Economic Networks – Unleashing Popular Entrepreneurship: Informal Manufacturing & Economic Restructuring – The Scramble for Weak Ties: Restructuring Informal Enterprise Networks – Negotiating the Web of Associational Life: Popular Associations & Networking Strategies – Collective Efficiency or Cutthroat Cooperation?: Networks of Accumulation & Networks of Survival – Informality, Cliental Networks & Vigilantes: Producers’ Associations & the State – Missing Link or Missed Opportunity?: Social Networks & Economic Development in Africa – Appendices Cover photo: Umuehilegbu Industrial Shoe Zone (aka Bakassi), Aba, Nigeria, 2009 (© Darlington Oguaka)

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An imprint of Boydell & Brewer Ltd PO Box 9, Woodbridge, Suffolk IP12 3DF www.boydell.co.uk and 668 Mt Hope Ave, Rochester, New York 14620, USA www.boydellandbrewer.com

identity economics

• In the era of liberalization African economic networks are often equated with criminality, greed and alien values. These apocalyptic perspectives gloss over the historical and institutional complexity and developmental accomplishments of popular economic networks struggling to fill the gaps left by liberalized markets and receding states.

SOCIAL NETWORKS & THE INFORMAL ECONOMY IN NIGERIA

Why have informal enterprise networks failed to promote economic development in Africa? Using Nigerian case studies, this book challenges the prevailing assumption that the problem of African development lies in bad cultural institutions and shows that informal economic governance is shaped by culture and the disruptive effects of rapid liberalization, weak states and political capture.

identity Economics SOCIAL NETWORKS & THE INFORMAL ECONOMY IN NIGERIA

Kate Meagher

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AFRICAN ISSUES

Identity Economics

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AFRICAN ISSUES

Identity Economics Social Networks & the Informal Economy in Nigeria KATE MEAGHER The Ethiopian Red Terror Trials KJETIL TRONVOLL, CHARLES SCHAEFER & GIRMACHEW ALEMU ANEME (EDS) Diamonds, Dispossession & Democracy in Botswana KENNETH GOOD Published in the US & Canada by Indiana University Press Gender & Genocide in Burundi The Search for Spaces of Peace in the Great Lakes Region PATRICIA O. DALEY Guns & Governance in the Rift Valley Pastoralist Conflict & Small Arms KENNEDY AGADE MKUTU Becoming Somaliland MARK BRADBURY Undermining Development The Absence of Power Among Local NGOs in Africa SARAH MICHAEL ‘Letting them Die’ Why HlV/AIDS Prevention Programmes Fail CATHERINE CAMPBELL Somalia Economy without State PETER D. LITTLE The Root Causes of Sudan’s Civil Wars DOUGLAS H. JOHNSON Asbestos Blues Labour, Capital, Physicians & the State in South Africa JOCK McCULLOCH Killing for Conservation Wildlife Policy in Zimbabwe ROSALEEN DUFFY Angola Anatomy of an Oil State TONY HODGES Congo-Paris Transnational Traders on the Margins of the Law JANET MACGAFFEY & REMY BAZENGUISSA-GANGA Africa Works Disorder as Political Instrument PATRICK CHABAL & JEAN-PASCAL DALOZ The Criminalization of the State in Africa JEAN-FRANÇOIS BAYART, STEPHEN ELLIS & BEATRICE HIBOU Famine Crimes Politics & the Disaster Relief Industry in Africa ALEX DE WAAL Published in the US & Canada by Heinemann (N.H.)

Peace without Profit How the IMF Blocks Rebuilding in Mozambique JOSEPH HANLON The Lie of the Land Challenging the Received Wisdom on the African Environment MELISSA LEACH & ROBIN MEARNS (EDS) Fighting for the Rainforest War, Youth & Resources in Sierra Leone PAUL RICHARDS

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AFRICAN ISSUES

Identity Economics KATE MEAGHER Lecturer, DESTIN London School of Economics

Social Networks & the Informal Economy in Nigeria

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James Currey is an imprint of Boydell & Brewer Ltd PO Box 9, Woodbridge Suffolk IP12 3DF

HEBN Publishers Plc 1 Ighodaro Road, Jericho P.M.B. 5205 Ibadan, Nigeria www.hebnpublishers.com

www.boydell.co.uk

and of Boydell & Brewer Inc. 668 Mt Hope Avenue Rochester NY 14620, USA www.boydellandbrewer.com

© Kate Meagher 2010 First published 2010 1 2 3 4 5 14 13 12 11 10 All Rights Reserved. Except as permitted under current legislation no part of this work may be photocopied, stored in a retrieval system, published, performed in public, adapted, broadcast, transmitted, recorded or reproduced in any form or by any means, without the prior permission of the copyright owner The right of Kate Meagher to be identified as the author of this work has been asserted in accordance with sections 77 and 78 of the Copyright, Designs and Patents Act 1998 British Library Cataloguing in Publication Data Meagher, Kate. Identity economics : social networks & the informal economy in Nigeria. — (African issues) 1. Informal sector (Economics)—Africa. 2. Social networks—Economic aspects—Africa. 3. Economic development—Africa. 4. Informal sector (Economics)— Nigeria—Case studies. 5. Social networks—Economic aspects—Nigeria—Case studies. 6. Economic development— Nigeria—Case studies. I. Title II. Series 330.9’6-dc22 ISBN 978-1-84701-016-2 (James Currey paper) ISBN 978-978-0813734 (HEBN paper) The publisher has no responsibility for the continued existence or accuracy of URLs for external or third-party internet websites referred to in this book, and does not guarantee that any content on such websites is, or will remain, accurate or appropriate.

This publication is printed on acid-free paper Typeset by Long House Publishing Services, Cumbria, UK in 9/11 Melior with Optima display Printed and bound in Great Britain by CPI Antony Rowe, Chippenham and Eastbourne

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DEDICATION

To three generations of Mustaphas: To Baba who showed me the road to Aba, To Raufu who taught me to understand what I found there, and to Asma’u and Seyi who always waited patiently for me to come home.

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CONTENTS

List of Figures & Tables Acknowledgements Abbreviations

Introduction

Beyond the Cultural Turn

Oracles, Secrets Societies & Hometown Identities Unleashing Popular Entrepreneurship

The Scramble for Weak Ties

Negotiating the Web of Associational Life Collective Efficiency or Cutthroat Cooperation?

1

2

3

4

5

6

7

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Social Networks & Economic Ungovernance in Africa

ix x xiv

1

Rethinking African Informality

11

An Institutional History of Igbo Economic Networks

27

Informal Manufacturing & Economic Restructuring

56

Restructuring 83 Informal Enterprise Networks

Popular Associations & Networking Strategies

105

Networks of Accumulation 121 & Networks of Survival

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Contents

Informality, Cliental Networks & Vigilantes Missing Link or Missed Opportunity?

8

9

Producers’ Associations & the State

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Social Networks & Economic Development in Africa

164

Epilogue

179

Appendices Bibliography Index

181 183 201

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LIST OF FIGURES & TABLES

FIGURES Fig. 1 Fig. 2 Fig. 3 Fig. 4

2.1 4.1 4.2 4.3 4.4 4.5 5.1 5.2 5.3 6.1 7.1 7.2 8.1 8.2

The Location of Aba, Nigeria Map of Pre-colonial Igboland Location of Bende and Mbaise Areas of Igboland Map of the Shoe and Garment Clusters in Aba, Nigeria TABLES The Size of Informal Economies in Developing and Developed Regions, 1999–2000 Indices of Devaluation and Consumer Price Inflation in Nigeria, 1991–1999 Size of Aba’s Informal Shoe and Garment Clusters, 2000 Patterns of Labour Use within Firms Levels of Inter-firm Subcontracting Distribution Networks and Destinations of Products Occupationally Advantaged and Disadvantaged Communities Class Backgrounds of Informal Shoe and Garment Producers Female Participation in Informal Shoe and Garment Production Rates of Participation in Various Types of Popular Associations Social Differentiation among Shoe and Garment Producers Associational Strategies and Accumulation in the Shoe and Garment Clusters Shoe Production Sub-clusters and their Associations Social Characteristics of the Major Shoe Production Zones

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xvi 31 49 53

14 57 60 67 69 76 91 95 99 108 124 127 148 149

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ACKNOWLEDGEMENTS

African informal economies first captivated my attention over twenty years ago, when my M.Phil supervisor sent me off to a remote market just across the northern Ugandan frontier with what was then Zaire, to ‘see what was going on there’. What I found was a far cry from the atomized exchange in smuggled agricultural products and subsidized commodities that economists of the day were describing in their campaign to ‘get the prices right’. Instead, in a clearing surrounded by thatched rural market stalls, I came upon a bustling international market, involving a vast regional trade in coffee, gold, US dollars and smuggled imports from the world market. This ‘Wall Street in the bush’ was the hub of a complex system of commodity trade, transnational import and export smuggling, and ‘transit trading’ networks that stretched across several countries in East Africa and onward to the middle East and the world market, drawing in wealthy business people as well as small-scale traders from Kenya to West Africa. Although unknown to international development authorities and unrecorded in national statistics, this unassuming rural bush market influenced real exchange rates between local currencies and the dollar, and diverted gold and coffee produced in one country into the export statistics of another. Subsequent encounters with the informal economy in West Africa reinforced my sense that African informal economies are as much about African commercial organization and accumulations strategies as they are about price distortions. Nearly a decade of empirical research on grain markets, commodity smuggling and parallel currency markets in Nigeria confronted me even more strongly with the ways in which informal economic activity was structured by networks, often ethnic or religious, which served as an impressively efficient framework for organizing economic activities outside the state, but often worked at cross-purposes with the formal economy. During the 1990s, research collaboration with the University of Montpellier, the Club du Sahel and a range of West African research laboratories exploring the developmental implications of regional cross-border trading networks gave me the opportunity to interact with Francophone researchers from West Africa as well as France, who shared a stronger historical and ethnographic perspective on the economic processes at play. It was through the insightful and empirically x

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grounded work of John Igué, Johny Egg, Javier Herera, Agnès Lambert, Jérome Coste and others, as well as reading the work of francophone influenced scholars such as Ebrima Sall and Janet MacGaffey, that I learned to move beyond notions of flows and prices to conceptualize these activities in terms of social networks. These influences have underpinned my ongoing research as well as policy engagement on the positive as well as negative role of the informal economy in regional integration, popular livelihoods and economic change. In West Africa in particular, I found that these networks linked into a pre-colonial history of business systems and indigenous commercial institutions developed to enhance predictability and economic efficiency in true new institutionalist fashion. Marginalized by colonialism, many of these large-scale networks and institutions were informalized, disrupted, and reconstituted, but not destroyed. I remain perplexed that this historical evidence, so brilliantly and accessibly presented by at least two generations of Africanist economic historians has been almost totally ignored by economists and political scientists who now dominate scholarship on African informal economies. This denial of history leads to an understanding of informal economic organization based on rational choice assumptions and culturalist stereotypes. Such approaches tend to obscure the complex institutional logics of African informal governance, and widen the gap between the intentions and the effects of policy. In the course of trying to piece together the historical, institutional and political factors that shape contemporary African informal economies, two issues have caught my attention. The first is the question of whether these expanding informal economic systems could lead to the development of production as well as trade and service activities, and the second, inspired by the work of Alejandro Portes on economic informalization, relates to how African informal economies are shaped by global processes of economic restructuring and state withdrawal. Efforts to address these questions turned my attention from the powerful informal trade and finance networks of northern Nigeria, to the small-scale enterprise networks of south-eastern Nigeria, where informal manufacturing began to flourish in the 1980s. As I delved into the inner workings of Igbo informal manufacturing in south-eastern Nigeria, I was struck by the contrast between the institutional dynamism and productive resilience of the informal activities I was researching, and the growing tendency among academics and international organizations to represent African informal economies in terms of criminality and cultural dysfunction. In the era of liberalization, increasingly globalized informal economic systems of trade, migration and remittances have been associated less with African development than with conflict, state failure and economic decline. Earlier notions of popular entrepreneurship have given way to alarmist images of ‘shadow states’, war economies, criminal networks and occult practices, popularized in such films as Blood Diamonds and District 9 where African economic practices are linked with violence,

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greed and alien values. These apocalyptic perspectives gloss over the historical and institutional complexity and surprising developmental accomplishments of many popular economic networks that struggle to fill the gaps left by liberalized markets and receding states. They also ignore the severe pressures of rapid liberalization, poverty and state neglect under which such networks are forced to operate. This book represents an effort to bring these issues back into the debates surrounding the nature of informal economic governance in Africa. This book also aims to redress the intellectual marginalization of Africa in the theorization of contemporary economic informality. As informal forms of coordination become central to processes of economic development and restructuring, expressed in the rise of such concepts as ‘embeddedness’, social networks and social capital, Africa has been marginalized from cutting-edge research on these issues. Although Africa was the cradle of the informal economy concept, and the crucible of economic understandings of social networks and ‘embeddedness’ via the work of Karl Polanyi, Philip Curtin and anthropologists of the Manchester School, contemporary scholars of informal or ‘non-state’ forms of organization treat African societies as culturally inadequate and ‘structurally irrelevant’ to the new global processes underway. In the 1970s, while Western scholars were just discovering the petty retail end of the informal economy, African scholars such as Anthony Asiwaju and John Igué were engaged in pioneering research on the macro-organizational dimensions of contemporary informal economies, including regional cross-border trading networks and parallel exchange-rate effects which only began to filter into Western scholarship in the 1990s. Yet in contemporary research on the informal economy and social networks, Africa is either conspicuous in its absence, or treated as a special case. There is a sense that informal economic processes in Africa are somehow different from what is happening in the rest of the world, and have little to contribute to our understanding of the regulatory capacities of informal norms and institutions in globalizing economies. In the process, scholarship on African informal organization has become isolated from the theoretical mainstream. This book offers a reminder that Africa still has much to teach us about the theoretical as well as the empirical dimensions of informal economic governance in the modern era. There are many I would like to thank for making this book possible. I have drawn on the assistance, wisdom, resources, and patience of so many people and institutions in the course of research and writing that the finished product feels more like a gift than an accomplishment. For intellectual guidance and insightful discussion, I am grateful to Barbara Harriss-White, Gavin Williams, Peter Gibbon, Anthony Heath, Judith Heyer, Teddy Brett, Ukoha Ukiwo, Ike Okonta, Francie Lund, Jo Beall and Obi Nwakanma, among others. For funding the research on which this book is based, I would like to thank the Harold Hyam Wingate Foundation, Wenner Gren, the Centre for Research and Documentation in

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Kano, Nigeria, and Nuffield College at the University of Oxford. I am grateful to the British Academy, with particular thanks to Ken Emond, for financial and institutional support during the writing process, to the African Studies Centre at the University of Oxford, and to the Oxford branch of Coffee Republic, where most of the writing was done. During fieldwork in Nigeria, I benefited from the kindness and social insights of many. The executive and staff of the Centre for Research and Documentation in Kano were enormously helpful in facilitating my research clearance, as well as providing a lively intellectual environment that helped me to hone the understanding of my findings. In Aba, officials of the various local government offices, the Aba Chamber of Commerce, the Aba branches of NASSI and MAN, and the management of numerous multinational and local formal sector firms were helpful in introducing me to the Aba informal economy. For helping me to navigate the winding alleys and social complexities of the shoe and garment clusters, I am deeply grateful to Emmanuel Madu (Onwuesziemunzonanjo for short) and Odii Ejiogwu, whose dedication, friendship and sheer stamina were an inspiration. I am also grateful to Wilfred Chuks Nmaokei, David Ahuchogu and Ada Nnaoma for their perseverance and precision in the administration of questionnaires, and to the small team of enumerators who assisted me in the census of the Aba garment cluster. The chairmen and executives of the producers’ associations of the Aba shoe and garment clusters introduced me to the history and organization of their activities, and generously facilitated my investigations within their respective clusters. To the shoe and garment producers of Aba with whom I spent my days, I extend both my gratitude and my admiration for their humour and their cynicism, their constant toil and their faith that one day things will be better. My stay in Aba could not have been more pleasant, thanks to the generous hospitality of Mr. Gabriel and Mrs. Blessing Ezeabikwa and the members of their compound, who welcomed me into their home with a warmth I shall never forget. In putting the final product together, I am grateful to Douglas Johnson for his patience, and to Lynn Taylor and Frances Kennett for all their help in sorting out the details. Special thanks go to Mina Moshkeri for helping me with the maps. I am also indebted to friends and family in Toronto, Ilorin, Kano, Zaria and Oxford for their encouragement, support and hospitality, especially Drs.Yahaya Hashim and Judith-Ann Walker, Justice Pat Mahmoud and A.B. Mahmoud (SAN), Dr. Patricia Daley, Mrs. Hajara Adamu and Gillian Williams. Special mention goes to my family in Toronto and beyond, who are a part of everything I do, and to Molly, who remains a part of me. Finally, from the bottom of my heart, I wish to thank my children, who have endured what must have seemed an interminable process of research and writing not only with patience, but with touching sweetness and concern; and my husband, Raufu, who taught me to understand Nigerian social realities viscerally as well as intellectually, and who came through when the going was toughest.

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LIST OF ABBREVIATIONS

ACCIMA

Aba Chamber of Commerce, Mines and Industry

AMATA

Ariaria Market Traders Association

NAE

National Archives, Enugu

NAFDAC

Nigerian Agency of Food and Drug Administration and Control

NASMSLAPI

Nigerian Association of Small and Medium-Scale Leather and Allied Products Industrialists

NASSI

Nigerian Association of Small and Medium-Scale Industrialists

NDE

National Directorate of Employment

NEPA

Nigerian Electric Power Authority

NLC

Nigeria Labour Congress

NUTGWN

National Union of Textile and Garment Workers of Nigeria

SMEDAN

Small and Medium-scale Enterprise Development Agency of Nigeria

UAC

United Africa Company (later merged with Lever Bros. to become Unilever)

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Figure 1 The Location of Aba, Nigeria

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Introduction

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Social Networks & Economic Ungovernance in Africa

1. An Informal Economy Paradox The town of Aba in south-eastern Nigeria is famous for two things: a dynamic informal manufacturing sector, and an infamous vigilante group known as the Bakassi Boys. Propelled by embedded entrepreneurial practices of the local Igbo ethnic group, Aba has become an icon of informal economy-led growth, reflected in the term ‘Aba-made’ – a popular Nigerian expression for cheap manufactured goods. In the town’s burgeoning shoe and garment clusters, complex supply, subcontracting and credit networks, animated by relations of kinship and community, turn out a wide range of high fashion goods, ranging from the latest ladies’ sandals and handbags to designer jeans, suits and undergarments. Despite their local origins, these goods often sport high street labels, including GAP, St. Michael’s and Tommy Hilfiger, or stamps reading ‘made in Italy’ or ‘London, Paris, Rome’. In the weeks before major festivals such as Christmas or the Muslim Eid, Aba’s shoe and garment clusters are transformed into hubs of international trade. The town bustles with traders from across Nigeria and as far as Ghana, Côte d’Ivoire and the Democratic Republic of the Congo, who wind their way among the thousands of makeshift workshops to purchase consignments of goods for export to low income consumers across West, Central and Southern Africa. By the year 2000, the informal shoe and garment clusters in Aba had a combined annual turnover of nearly 200 million US dollars and employed some 50 thousand producers, workers and apprentices, all without the assistance of the state. This dynamic interdependence between local producers and traders from across Africa, Muslim as well as Christian, was shattered in early 2000 by a violent ethnic riot led by a local vigilante group known as the Bakassi Boys. The Bakassi Boys were themselves a product of Aba’s small enterprise clusters, originally formed by the town’s informal shoe 1

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Introduction

producers to maintain order and protect property rights in the face of crippling levels of local insecurity and an inefficient and corrupt police force. Extortion rackets and armed robbery had become so rampant that they were frightening away visiting traders and threatening the livelihoods of informal producers. Despite its brutal methods, the vigilante group proved highly successful in restoring security in Aba, to the relief of citizens and visiting traders alike. But on 28 February 2000, in the wake of ethnic riots in the north of Nigeria, the Bakassi Boys led an attack on Hausa and other northern migrants in Aba. In two days of slaughter, over three hundred northern Nigerian migrants and sojourners were killed, property in the Hausa quarters was burnt, and thousands of Hausa and other Muslim migrants were forced to flee their homes. Although peace was restored after a few days, the vigilante group had shattered the harmonious business environment that it was supposed to protect. In the shoe and garment clusters, the Aba riots severely disrupted business during the critical sales period attached to the upcoming Eid festival, and frightened away northern Nigerian customers for up to a year afterwards. Why did such a dynamic centre of informal enterprise degenerate into ethnic and religious violence? How did popular initiatives to protect property rights end up intensifying risk and undermining the conditions for economic growth? The disturbing tale of these two Nigerian enterprise clusters raises the wider question of why, across Africa, social networks have tended to exacerbate the regulatory problems of weak and corrupt states, when social networks in other parts of the world are associated with flexibility and economic efficiency in the face of contemporary economic uncertainty. The successes of Asian ‘network capitalism’ and Europe’s densely networked enterprise clusters have promoted a view of networks as a novel form of economic governance uniquely suited to the challenges of liberalization and globalization (Hamilton 1996:215; Pyke & Sengenberger 1992; Castells 1996; Powell 1991). Even in developing countries, where states and markets are weak, social networks and ethnic ‘embeddedness’ are said to provide an informal mechanism of economic coordination capable of filling gaps in state provision (Schmitz & Nadvi 1999; Stiglitz 2000). While communal ties were once viewed as fetters on economic development, a burgeoning literature on social networks, social capital, and informal institutions now argues that, in contexts of state and market failure, ‘social ties of immigrant, ethnic, and other bounded communities can, under specified conditions, furnish the resources for firms to prosper in a modern setting’ (Granovetter 1995:130). Yet in Africa, the regulatory performance of social networks has been uneven. Opinions are divided about their ability to cope with the demands of economic restructuring. On the one hand, geographers and anthropologists have argued that social networks have been more effective than states in leading African economies into the 21st century (MacGaffey 1991; Hansen & Vaa 2004; Igué & Soulé 1992). Attention is

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Social Networks & Economic Ungovernance in Africa

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drawn to Africa’s vast ethnic trading networks and dynamic informal sectors which provide livelihoods, housing, and access to goods and services in the face of crumbling official economies. A profusion of empirical research details Africa’s informal success stories, ranging from popular livelihood and ‘Sungusungu’ security networks in Tanzania (Tripp 1997; Paciotti & Mulder 2004), to global Somali remittance networks (Lindley 2005; Little 2003), and the ethnically embedded informal import networks of Nigeria and Niger that ease the plight of structurally adjusting West African consumers by bringing in cheap consumer goods, used clothing and used cars (Beuving 2006; Grégoire 1992; Hashim & Meagher 1999). Stereotypes of traditionalism and underdevelopment give way to notions of competitive indigenous structures with an ‘aptitude for development in a global macro-economic environment’ (Gregoire & Labazee 1993:15). Instead of obstructing reform, Africa’s rich array of popular associations and enterprise networks are celebrated as a force for economic development and economic restructuring from below. Others have been less sanguine about the developmental potential of African network governance. In recent years, the proliferation of social networks in African societies has been associated less with growth than with economic decline and social disorder. The renowned network sociologist, Manuel Castells (1996:134) describes Africa as a ‘black hole’ in the network society: ‘because tribal and ethnic networks were the safest bet for people’s support, the fight to control the state...was organized around ethnic cleavages, reviving centuries-old hatred and prejudice.’ Enthusiastic accounts of ethnic enterprise and transnational trading networks in such centres of informal activity as Nigeria and the DR Congo have given way to dark tales of ‘shadow economies’, ethnic militias, and the smuggling of drugs, arms and conflict diamonds (Reno 2000; Duffield 2001; Roitman 2004). Instead of re-energizing economic activity and filling the institutional gaps left by failing states, social networks in African societies are seen as harbingers of ‘the coming anarchy’ (Kaplan 1994), and the ‘criminalization of the state’ (Bayart et al. 1999). A growing number of development specialists argue that Africa’s informal economies do not contribute to growth and economic restructuring so much as entrench the cycles of greed, violence and poverty that trap African societies in ‘the bottom billion’(Collier 2007). Explanations of why African social networks have performed so poorly in the era of liberalization and ‘network capitalism’ have tended to locate the problem in Africa’s dysfunctional formal or informal institutions. This has fostered highly essentialist views of African social networks, which are portrayed either as ‘social capital’, deploying traditional solidarities against the ravages of corrupt states and global marginalization, or as ‘social liabilities’, regulated by clientalism and parochial divisions. In these analyses, there is little appreciation of the variations among social networks within or between different African

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societies, or of the ways in which ruthless liberalization, poverty and state withdrawal have affected the regulatory capacities of African popular networks. This book will cast new light on processes of network development and network failure through an account of the triumphs and travails of two remarkably dynamic enterprise clusters in the informal manufacturing hub of south-eastern Nigeria. Moving beyond notions of primordial values and path dependence, it will explore the interplay of culture, agency and power in shaping the complex trajectories of informal economic governance in contemporary Africa. In the process, this book will explore how the growing reliance on non-state forms of economic organization to fill regulatory gaps often creates new vulnerabilities. While political science research on ‘identity politics’ has signalled the risks of ethnic mobilization for political stability, proponents of ‘social capital’ and embeddedness have been extolling the virtues of identity based forms of economic organization. Strong ties of kinship and community are celebrated as a means of lowering transaction costs and solving collective action problems without the intervention of the state. Yet the promotion of ‘identity economics’ as a non-state solution to regulatory challenges tends to ignore the vulnerability of popular organizational initiatives to survivalist pressures and political capture, particularly in the context of ethnically divided societies. With a view to moving beyond debates about whether African social networks are motors of community based development or cliental predation, this account of Nigerian informal enterprise reveals how an environment of rapid liberalization, institutional decay and political opportunism can lead complex and vibrant social networks towards dysfunctional outcomes, turning ‘identity economics’ into part of the problem rather than part of the solution.

2. Economic Informality in Nigeria There are a number of reasons for choosing Nigeria as a site for examining the governance implications of Africa’s expanding informal economies. Not only is Nigeria the most populous country in Africa, with a population of over 140 million people: it boasts the continent’s largest and most dynamic informal economy. World Bank analysts estimate Nigeria’s informal economy at 58% of GNP, marginally outstripped only by Zimbabwe and Tanzania, but with an economy over five times as large (Schneider 2002). All of Nigeria’s three major ethnic groups – the Hausa, the Yoruba and the Igbo – and some of the 300 or more minority groups, have well developed ethnic trading networks that serve to fill the growing gaps in the country’s ailing formal economy through the development of local as well as global connections. Nigeria is also of growing strategic importance with regard to contemporary trends in global oil supplies. Long a major oil exporter to the United States, and particularly prized for

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its high quality ‘Bonny light’ petroleum, Nigeria has become increasingly important as Western countries reorient oil supply networks towards the West African Gulf of Guinea in response to growing conflicts with the Middle East (Soares de Oliveira 2007). Understanding how expanding economic informality influences processes of economic governance has implications for global as well as national and regional economic stability. So far, Nigerian trajectories of informal economic governance are not encouraging. For all its entrepreneurial vitality, Nigeria is increasingly regarded as more of a threat to global economic security than a solution. According to the journalist Karl Maier (2000: xviii), ‘To most outsiders, the very name Nigeria conjures up images of chaos and confusion, military coups, repression, drug trafficking, and business fraud’, turning the country into ‘a giant, heaving multiethnic symbol of the archetypal Third World basket case’ (ibid.: xxi). Since the introduction of economic restructuring policies in 1986, and the transition to democracy in 1999, the country has been drifting towards economic and infrastructural collapse, and has been plagued by bloody ethnic and religious conflicts. The country’s unstoppable informal economy has gained global significance less through its developmental accomplishments, than through the rise of narcotics trading networks and internet fraud, conventionally known in Nigeria as ‘419’ (Smith 2006; Ellis 2009). Petroleum extraction is increasingly threatened by the rebel activity in the Niger Delta, where environmental degradation has destroyed local livelihoods, and disaffected youth turn to sabotaging pipelines, kidnapping and vigilantism as protest and alternative livelihood strategies (Okonta & Douglas 2003; Omeje 2006; Ukiwo 2007; Nwajiaku 2005; Peel 2009). The imposition of Shari’a law in several states in the Muslim north of Nigeria has added to the spiral of instability, as well as drawing Nigeria into the sights of the global ‘war on terror’. Expressing a growing sense of alarm in the international community, a recent article in The Times of London (1 August 2009) entitled ‘Nigeria on the brink’ suggests, ‘What happens in Nigeria matters not only to Africa: it affects the huge diaspora in Britain, distorts the oil market, drives international criminality and opens the gates to extremism and terrorism.’ Yet, in the Igbo areas of Nigeria, perched at the edge of the Niger Delta, the challenges of economic restructuring appear to have stimulated a more constructive trajectory. Far from erupting into chaos and lawlessness in the face of weakening states and rapid liberalization, the Igbo heartland of Nigeria has been most famous for the rise of dynamic enterprise clusters, particularly in the towns of Nnewi and Aba (Forrest 1994; Brautigam 1997; 2003). Dramatic references to Igbo involvement in the international narcotics trade have tended to obscure the much wider involvement of Igbo informal business networks in legal trade and production activities. As Deborah Brautigam notes in her well known study of the area, the Igbo are one of the few African informal business groups to have made the transition from trade to manufacturing. In the

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wake of Nigeria’s economic restructuring programme, which has precipitated a decline in formal sector manufacturing across the country, these bustling Igbo towns have fostered a flourishing of local manufacturing activities, ranging from auto parts in Nnewi, to shoes, garments, cosmetics and light engineering in Aba. While Nnewi is dominated by large- and medium-scale firms, most of which are formally registered, the enterprise clusters of Aba are overwhelmingly informal and small-scale (Forrest 1994; Oyelaran-Oyeyinka 1997). In fact, the dynamic enterprise clusters of Aba have all of the hallmarks of an informal economic success story. The economic vitality of these informal enterprise clusters owes a great deal to their embeddedness in the Igbo ethnic group, a stateless society in pre-colonial times, and in modern times a group famous for the density and dynamism of its community based networks. Igbo social organization has underpinned the development of complex local credit and subcontracting networks, and increasingly globalized supply and distribution networks stretching across Africa, and reaching as far as Europe, Asia and North America. The question to be addressed here is why, despite their cultural strengths and demonstrated economic capacity, these extraordinary enterprise clusters have succumbed to a dynamic of economic decline and violent vigilantism. Is their inability to compensate for the failures of the Nigerian state a product of cultural dysfunction or of vulnerability in the face of policy failure and state neglect?

3. Investigating the Invisible Economy This book seeks to contribute to debates about African informality through an ethnography of informal economic governance in southeastern Nigeria. Adopting an empirically grounded approach, it challenges contemporary representations of African informality as invisible modes of governance that defy rational classification and theorization. In her celebrated book, Marginal Gains, Jane Guyer (2004) notes that African popular economies have become increasingly incomprehensible to the modern observer, and uses the term ‘bewilderments’ to describe the anomalous logics of indigenous economic practice. Mark Duffield (2001:143) describes African informality as ‘a huge area of economic pursuit that now lies beyond the realm of conventional calculation’, and argues that to investigate it, ‘one is forced to enter a world of oxymorons, metaphors and strained meaning where the search for new concepts and accurate modes of expression is as urgent as the need for objective research itself’ (ibid.:141). With characteristic bravado, Jean-François Bayart (2005) goes so far as to suggest that African informal economies are impenetrable to social scientific investigation, justifying a recourse to assumptions, anecdotes and cultural hermeneutics to tease out the inner

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logic of unofficial economic organization in African societies. Chabal and Daloz (2006:215) simply declare that, ‘Somewhat like a black hole the informal is best assessed by its effects.’ In recent years, however, these assertions of incommensurability have been overtaken by events as rapid informalization and the emergence of new investigative methods bring the informal realm into fuller public and statistical view.1 In the face of more tolerant official attitudes and the sheer scale of informal activity in many African cities, the non-formal dimension of economic life has become increasingly accessible to empirical research. Amid the proliferation of popular livelihood systems, trading networks, and remittance arrangements, the regulatory role of embedded social forces has also loomed larger, making them more susceptible to systematic analysis. With a view to dispelling the ‘shadows’ surrounding informal economic governance in Africa, the pages that follow will cast new light on what Christian Lund (2007:10) has called ‘twilight institutions’, contributing to the objective of ‘demonstrat[ing] that the twilight is certainly not beyond detailed and vivid empirical analysis’. This study of Nigerian informal enterprise clusters will take up the challenge of detailed empirical analysis by exploring the institutional history of indigenous economic networks, followed by a focus on the ways in which these networks have been restructured by changing political and economic conditions generated by the development of the Nigerian state. By tracing the historical and contemporary processes of non-state regulation in the continent’s largest and most dynamic informal economy, this book offers a lens into the inner workings of informal economic governance in contemporary Africa. It challenges the essentialism and cultural determinism of much of the current research on African informal economies, which tends to blur and stereotype rather than clarify the complex institutional dynamics of African informal organization. Attention is directed to the complex web of factors shaping African informal economies, involving relations of community, class, gender and evangelical conversion in popular struggles against marginalization and governance failures. The material for this study was gathered during fieldwork undertaken in south-eastern Nigeria between October 1999 and September 2000, with 1

There is a wide methodological literature, dating back as much as thirty years, on studying and measuring the informal economy, in Africa and elsewhere. To mention just a few examples, see Igue, J.O. (1977), ‘Le Commerce de contrebande et les problèmes monétaires en Afrique occidentale’, CEFAP, Université Nationale du Bénin, Cotonou; Ellis, S. & J. MacGaffey, (1996), ‘Research On Sub-Saharan Africa’s Unrecorded International Trade: Some Methodological and Conceptual Problems’, African Studies Review, 39 (2), 19-41; Charmes, J., (1998), ‘Women Working in the Informal Sector in Africa: New Methods and New Data’; New York: Statistics Division of the United Nations Secretariat, International Labour Office; Sethuraman, V. (2002) ‘Women and Men in the Informal Economy: A Statistical Picture’, Geneva: International Labour Office; Schneider, F. (2002), ‘Size and Measurement of the Informal Economy in 110 Countries Around the World’, Paper presented at Workshop of Australian National Tax Centre, Canberra, Australia.

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return visits in 2001, 2005 and 2007. The organizational features of Igbo enterprise networks were traced through a combination of in-depth interviews, survey methods, life histories, social mapping, and historical research. This process involved close interaction and discussion with over one hundred informal producers in the crowded workshops and sweltering heat that set the scene of their daily grind. My powers of participant observation were sharpened by the invaluable skills of my research assistants, who helped me overcome linguistic and social barriers, and on several occasions drew my attention to the invisible signs of social affinities too obvious for locals to mention, and too subtle for an outsider to notice. The vivid detail of individual accounts was supplemented by two surveys covering a total of 253 firms across the two clusters in order to reveal aggregate effects, as well as by regular interviews with the leadership of informal producers’ associations operating in the shoe and garment clusters. With a view to placing informal enterprise networks within a wider economic and political context, local interviews and surveys were contextualized through discussions with a range of actors at the level of the formal economy, the state and international NGOs. These included local as well as international large-scale shoe and garment firms operating in Aba and in the national commercial centres of Kano and Lagos. Additional insights were gained through discussions with officials in Nigerian formal private sector associations such as the Aba Chamber of Commerce (ACCIMA), and the local branches of the Nigerian Association of Small and Medium-Scale Industrialists (NASSI) and the Manufacturers’ Association of Nigeria (MAN). Interviews were also held with relevant local government officials and with officials of the State and Federal ministries concerned with labour and with small-scale industry. Documents and interviews were also obtained from regional officers and consultants involved with UNDP and UNIDO funded informal economy projects operating in Nigeria. Information on the history of Igbo enterprise networks was obtained through historical interviews with old and retired shoe and garment producers, research in the Nigerian archives in Enugu, and published historical studies. Drawing together a rich array of empirical material, this book offers an ethnographic account of the organizational legacies, informal restructuring strategies, and volatile institutional consequences of two of Nigeria’s largest and most successful informal enterprise clusters. Following this introductory chapter, Chapter 2 explores the problems of theorizing African informality in the context of rapid informalization, culturalist stereotypes, and new concepts that tend to blur the boundaries between the formal and informal economies. Moving into the empirical case, Chapter 3 examines the ‘historical legacies’ of Igbo economic networks from the pre-colonial period to the present, as well as the specific history of Aba’s informal shoe and garment clusters, which have been shaped in distinctive ways by their origins in

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two different Igbo hometown communities. Chapter 4 analyses the impact of contemporary economic restructuring policies on the embedded communal networks of the shoe and garment clusters, with a specific focus on supply, labour, subcontracting, credit, and distribution networks. It considers how rapid entry and intense competition triggered by economic reform have affected the organization of embedded enterprise networks. The ways in which individual shoe and garment producers have attempted to restructure their networks in the face of the new pressures and opportunities of economic reform policies are detailed in Chapters 5 and 6. Chapter 5 examines the use of personal ties in the restructuring of identity based enterprise networks, precipitating a growing recourse to weaker ties of friendship, religion, school membership and class in the organization of enterprise networks. Rather than broadening participation in informal manufacturing activities, this scramble for weak ties is shown to intensify processes of differentiation and social exclusion among informal producers, with particularly negative effects on women and poor producers. Chapter 6 considers how informal producers attempt to fill gaps in weakened business networks by forging new ties through participation in popular associations. Producers are found to deploy distinctive networking strategies relating to participation in hometown unions, conversion to evangelical Christianity, and membership in friendship societies, giving rise to divergent processes of social resistance and incorporation. Chapters 7 and 8 detail the impact of popular networking strategies on economic change and political stability within the wider society. The way in which new networking strategies have shaped structural processes at the level of the cluster as a whole is explored in Chapter 7. Crosscutting networks of class, gender and evangelical Christianity are found to produce increasing differentiation into ‘networks of accumulation’ and ‘networks of survival’, threatening rather than promoting cooperative forms of economic governance within the clusters. Chapter 8 considers the potential of informal producers’ associations to establish binding frameworks of collective action among clustered firms by examining the efforts of producers’ associations to pursue collective interests through linkages with the formal economy, international NGOs and the state. Attention is focused on the role of poverty and informality, rather than culture, in creating an environment of institutional vulnerability, clientelism, and political opportunism that culminated in the violent activities of the Bakassi Boys vigilante group. Finally, a concluding chapter revisits the question of why social networks have failed to promote development in Africa. Drawing on examples from a range of African countries, this final chapter examines the strengths and weaknesses of informal economic networks, with a focus on the role of culture, agency, and the state. It argues for a more balanced assessment of what informal social networks can do, and what

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they cannot, and undertakes a reassessment of the kind of enabling environment necessary to foster their developmental potential. Ultimately, this is as much a story of how African social networks have gone right, as of how they have gone wrong. Tracing the hidden institutional world of Nigerian informal enterprise brings the reader face to face with the local solidarities, indigenous commercial practices, livelihood pressures, and precarious associational strategies that underpin the globalizing dynamism as well as the fragility of African economic networks. Rather than confirming suspicions of deep-seated parochialism and violence, or reviving a populist faith in Africa’s entrepreneurial autonomy, this account shows how indigenous enterprise clusters, remarkable for their economic efficiency and organizational complexity, are being destroyed by reckless liberalization and state neglect.

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Rethinking African Informality

1. Introduction Efforts to decipher the dynamics of African informal economic networks have been complicated by the collapse of the informality paradigm. Amid processes of deregulation, globalization and weakening states, informal forms of economic organization have become so pervasive, and so deeply intertwined with formal economic structures that the old notion of an ‘informal sector’ or ‘informal economy’ has been called into question. Informal economic arrangements based on social ties and embedded institutions have entered into the heart of contemporary economies through processes of subcontracting, moonlighting, transnational migration, and diminishing state involvement in popular welfare and employment. Far from illuminating these processes, contemporary research on African informality is dominated by references to the ‘blurring’ of institutional processes, and the growing ‘illegibility’ of indigenous regulatory arrangements (Arnaut & Højbjerg 2008; Lund 2007). As Christian Lund (2007:3) explains, ‘Organizations and institutions that exercise legitimate public authority, but do not enjoy legal recognition as part of the state, are out of focus.’ The ensuing scramble for conceptual tools to frame the impact of informalization on economic and political processes has given rise to a bewildering array of new concepts, such as ‘real economies’, ‘twilight institutions’, ‘shadow states’, and ‘transboundary formations’ (Callaghy et al., 2001; Lund 2007; MacGaffey 1991; Reno 2000). The search is on for a concept to make African informal economies more legible. Social networks have offered a compelling concept for moving beyond dualistic notions of informality. Networks focus on the organizational role of social ties that shape economic behaviour outside the state through embedded relations of solidarity and trust. By the mid-1990s, many leading informal economy scholars in Africa and elsewhere had largely abandoned the informality paradigm in favour of social networks, or related concepts focusing on the regulatory role of social ties (Roberts 11

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1994; Mingione 1994; Portes 1994; MacGaffey & Bazenguissa-Ganga 2000). Social networks have gained momentum as a means of theorizing the wide range of non-state economic arrangements unleashed by global processes of economic restructuring, including ethnic entrepreneurship, popular livelihood systems, transnational trading and remittance networks, and global commodity chains. Despite undeniable advantages in deciphering complex processes of informal organization, the enthusiastic adoption of social networks has generated new difficulties. On the one hand, the widespread popularity of the network concept has left many critical social scientists increasingly suspicious of its analytical value. Some have expressed concerns about the theoretical shortcomings of social networks, which many analysts have found essentialist and under theorized (Emirbayer & Goodwin 1994; Martin & Sunley 2001; Grabher 2004). The organization theorist, Nitin Nohria (1992:3) points out that the ‘indiscriminate proliferation of the network concept threatens to relegate it to the status of an evocative metaphor, applied so loosely that it ceases to mean anything.’ On the other hand significant reservations have been expressed about the distorting effect of contemporary network approaches on the understanding of African society (Hart 1998; 2002; Meagher 2005). Criticizing their ahistorical and essentializing tendencies, the historian Frederick Cooper (2001:206) argues that contemporary notions of solidarity and trust, connections and flows ‘fail to ask what is actually happening in Africa’. This chapter will examine the issues surrounding the collapse of the informality paradigm and the rise of social networks as an alternative concept for the analysis of contemporary informality. It will begin with an examination of the role of informality in contemporary processes of economic change, in Africa and beyond, with a view to explaining why a focus on informality remains relevant in the context of liberalizing and globalizing economies. This will be followed by an outline of contemporary network approaches to non-state governance, emanating largely from the new economic sociology and the new institutional economics, and a consideration of how these perspectives have been used in the analysis of contemporary African informal economies. Finally, it will reconnect the study of African informality with an approach to social networks that moves beyond the culturalist tendencies of prevailing approaches to non-state governance, with a view to defining a more effective framework for the analysis of informal enterprise networks in Nigeria.

2. Reconsidering Informality in the Global Era There has been a marked tendency in recent scholarship to treat the anomalies of pervasive informality as a peculiarly African problem, born of a cultural and political environment hostile to the existence of

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Westphalian-style states and formal economic institutions. Beatrice Hibou (1999:80) and others contend that ‘the division into formal and informal spheres is thus not a useful distinction in Africa, since illegal practices are also performed in the formal sector, while so-called informal economic networks operate with well-established hierarchies and are fully integrated into social life.’ Many commentators on contemporary Africa view widespread informality as an embedded cultural phenomenon in an environment in which local institutions that have never really ceded authority or legitimacy to the state. In the process, informality is construed as an aspect of indigenous political and economic culture, involving the contestation and subversion of formal structures as an avenue to power and wealth. In her meticulous ethnography of economic regulation in west-central Africa, Janet Roitman (2004:13) emphasizes the political and often violent character of unofficial economies in the region: ‘Many of those who partake in economic activities based in these unregulated spaces subvert extant patterns of redistribution; they exercise claims to wealth through violent means...’ While highlighting the political character of economic informality is a point well taken, it should not detract from an awareness of the wider economic context of informalization. The reality is that rapid informalization is a global rather than a uniquely African phenomenon, linked as much to market reforms as to unruly societies and non-performing states. From this perspective, a political understanding of informality must embrace the subversion of formal institutions from above through processes of liberalization and globalization, as well as forms of contestation from below. An understanding of the processes animating the organization and expansion of unofficial economies in Africa must therefore situate the phenomenon of informality within a wider global perspective. In their seminal book on the informal economy, Portes, Castells and Benton (1989) linked processes of informalization to global economic restructuring, which has turned informality into a central rather than a peripheral feature of contemporary economic change in developed as well as developing countries. As a major ILO report has observed, ‘Contrary to earlier predictions, the informal economy has been growing rapidly in almost every corner of the globe, including industrialized countries – it can no longer be considered a temporary or residual phenomenon’ (ILO 2002:1). Recent statistics by the World Bank and ILO on the size of informal economies in various regions of the world show that it now constitutes a significant proportion of economic activity globally, and has reached overwhelming proportions across the Third World, suggesting that the informalization of African societies is as much about global as about local processes (ILO 2002; Schneider 2002). Table 2.1 shows that in OECD countries, informal economies now account for nearly 20% of GNP, rising to over 40% across Africa and Latin America. ILO statistics on employment outside agriculture show that in Asia as well as Africa and Latin America, the unofficial economy employs

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Table 2.1 The Size of Informal Economies in Developing and Developed Regions, 1999-2000 Region Africa Asia Latin America OECD

% of Non-Agricultural Employment

% of GNP

72 65 51 —

42 26 41 17

Source: Schneider 2002; IDRC 2008.

more people than the official economy. Although Africa stands out as the most informalized region of the world, with over 70% of the nonagricultural labour force earning their livelihoods informally, this is clearly not out of line with prevailing trends across much of the Third World. The informalizing dynamics of contemporary Africa represent an extreme in a wider global trajectory of rapid informalization, not a peculiarly African governance strategy. Deciphering informal governance processes in Africa thus calls for a clearer understanding of how rising informality is shaped by global processes of economic change. Despite its growing global prominence, confusion surrounding the meaning and relevance of the informality concept have undermined its value as a means of thinking about the processes at play. Debates throughout the 1970s and 1980s branded informality as a ‘fuzzy concept’ (Peattie 1987), and contributed to growing disenchantment with the term from the early 1990s. Ironically, definitional disputes had largely been overcome by this stage. Across a range of disciplines, the meaning of informality has settled on the notion of ‘extra-legality’, yielding a widely accepted definition of the informal economy as ‘income generating activities that take place outside the regulatory framework of the state’ (Castells & Portes 1989:12; see also Feige 1990; De Soto 1989; Harding & Jenkins 1989). Unfortunately, this belated conceptual clarity was overtaken by events as rapid informalization began to blur the empirical boundaries between official and unofficial spheres. From global commodity chains to ‘conflict diamonds’, recent research has shown how goods originating in unregulated or illegal Third World contexts are integrated into formal sector production and distribution systems, demonstrating the emergence of ‘an economy in which interrelationships rather than distinct sectors are the norm’ (Klein 1999). These developments have led a growing number of scholars, in Africa and elsewhere, to question the relevance of the informality concept to the complex structure of liberalizing economies and contracting states (Hart 2006; Sindzingre 2006; Little 2003; Roitman 2004; Portes & Haller 2005). On the one hand, leading informal economy scholar Alejandro Portes

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(1994; Portes & Haller 2005:409) argues that deregulation has erased the division between formality and informality: ‘Where the state does not regulate anything because it is at the mercy of market forces, there is no formal economy. Hence, the formal/informal distinction loses meaning...’ On the other hand, the intelligibility of the informal economy has been further eroded by the realities of economic collapse and state failure in many developing countries, turning the state as well as the informal economy into increasingly ‘fuzzy concepts’ (Elyachar 2005). In the words of Mark Duffield (2001:170), ‘As the competence of the nation state has been attenuated with the emergence of new centres of authority, what the law is, and who represents and upholds it have become blurred and ambiguous.’ Even Keith Hart (2006:27), the originator of the ‘informal sector’ concept, now claims that ‘the collapse of the state in many Third World countries has led to the whole economy becoming informal... When most of the economy is “informal”, the usefulness of the category becomes questionable.’ Conversely, others argue that far from being rendered obsolete by the disruptions of contemporary economic change, the informal economy is now more relevant than ever. This view is attested to by the recent spate of books and articles with titles such as Reconsidering Informality (Hansen and Vaa 2004), ‘Informality Revisited’ (Maloney 2004), and ‘Rethinking the Informal Economy’ (Chen 2006). Studies of popular governance in urban Africa have shifted attention from the erosion of formal sector boundaries and regulatory norms, to the varied ways in which the reins of economic coordination and service provision are being taken up by non-state forces (Lourenço-Lindell 2002; Simone 2001; Rakodi 2001). Veteran scholars of popular organization, Karen Tranberg Hansen and Mariken Vaa (2004:14) observe that ‘Without a doubt, given the changing processes at work in the informal economy, new ways of doing things are emerging, turning conventional social organizational practices on their head...’ Less optimistically, researchers connected with the World Bank and the ILO have put the informal economy firmly back on the development agenda as they grapple with the realities of mounting risk and deprivation in the paradoxical circumstances of extreme deregulation and widespread informality. A growing literature is emerging to examine the implications of pervasive informalization for taxation, social policy and gender inequality in developed as well as developing countries (Chen 2006; Heintz et al., 2008; World Bank 2007; Bajada & Schneider 2005; Schneider & Enste 2002; Kabeer & Cook 2008). Labour activists link the distinctive effects of informality to the lack of access to formal structures of livelihood and protection, while more mainstream economists are concerned with the corrosive effects on society of widespread evasion of the law. Far from eroding the relevance of the informality concept, economic reforms, faltering states and the flourishing of nonstate forms of organization have put the informal economy at the heart of contemporary issues of economic governance and restructuring.

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In short, even where economies operate largely beyond the law, informality matters. The key issue is not the boundary between the official and unofficial spheres, but the distinctive organizational dynamics and power relations that characterize non-formal forms of order. Yet the dualistic informality paradigm has become too blunt an instrument to capture the growing complexity and heterogeneity of contemporary unofficial economies; we need to break the black box of the informal economy. Particularly in the developing world, where vast areas of urban enterprise and national resource flows take place completely outside the control of the state, ‘informality has become too central ... to be relegated to the sphere of negative phenomena – ‘the “not formal” (Elyachar 2005:73).’

3. Informality is Dead! Long Live Social Networks! The result has been a paradigm shift in the study of informality. Social networks have moved centre stage in the analysis of unofficial forms of economic organization, emerging as a means of investigating the informal economy in terms of what it is, rather than in terms of what it is not. As Keith Hart (2006:33) has observed, ‘We need to know...what social forms have emerged to organize the informal economy’ and to ‘examine the institutional particulars sustaining whatever takes place beyond the law.’ Rather than constituting a lack of regulation, informality has been reconceptualized as an alternative terrain of regulation operating outside the framework of the state: The issue is not one of regulation per se but of the form of regulation. All markets are regulated… so the issue is the balance between formal regulation based, ultimately, on the state, and informal regulation based on personal relation such as those of kinship, friendship or co-ethnicity. Personal relations and the cultures that sustain them may, under certain conditions, prove more efficient in regulating economic activities than do formal structures giving those activities that are regulated socially a competitive edge over formally regulated ones. (Roberts 1994:8)

The ability to explore regulatory processes at play inside the informal economy, and the notion of the state as ‘only one candidate among many’ for the organization of economic life, have reinvigorated academic and policy interest in informal economic governance, in Africa and beyond (World Bank 2007:24; Raeymaekers et al. 2008; Guha-Khasanobis et al. 2006). Prevailing views on the role of social networks in economic organization represent a blend of concepts from economic sociology, economic anthropology, institutional economics, organization theory and political science. Brought together under the auspices of the ‘new economic sociology’ and the ‘new institutional economics’, economic thinking about social networks has been galvanized into an influential analytical – some might say

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‘theoretical’ – framework for the analysis of contemporary processes of informal economic change. Sometimes overlapping with the concepts of ‘embeddedness’ and ‘social capital’, a key feature of these perspectives is their emphasis on the ability of social networks to provide an effective basis for economic development outside the framework of the state. These developments have had positive as well as negative consequences for the understanding of contemporary informality. Although social networks have proved invaluable as a means of tracing informal organizational processes, they have also introduced new conceptual blindspots. In particular, notions of networks as a form of ‘social capital’ have embedded a range of functionalist and culturalist assumptions in contemporary network thinking. A tendency to gloss over the role of state support, or the lack of it, in shaping network performance, and a consequent reliance on cultural explanations of network failure have had a particularly problematic effect on the understanding of African informality. ‘Social capitalist’ perspectives on the organizational role of networks have generated a rich tangle of related but sometimes contradictory notions of how networks govern. Some scholars represent networks as informal organizational structures which restrict opportunism through ‘embeddedness’ in ‘strong ties’ of communal solidarity, reciprocity and social sanctions (Coleman 2000; Portes & Sensenbrenner 1993; Granovetter 1995). Others highlight the anti-structural properties of networks, viewed as ‘weak ties’ that operate across social cleavages to promote agency and provide access to new sources of information and resources (Granovetter 1973; Hannertz 1980; Long 2001; Burt 1992). Effective network governance has increasingly been viewed as a balance between norms of group solidarity and more instrumental linkages across social cleavages – what Woolcock and Narayan (2000) call ‘getting the social relations right’. Similar notions of ‘bridging and bonding’ ties (Narayan 1999) or ‘fragments and flows’ (Geschiere & Meyer 1998; Castells 1997) emphasize the dependence of effective network governance on appropriate combinations of ties. There is also a lack of consensus as to whether networks constitute provisional arrangements in times of crisis, or superior organizational solutions to the challenges of contemporary society. New institutional economists, such as Douglass North (1990) and Joseph Stiglitz (2000) argue that networks provide small-scale ‘second best’ solutions in situations of underdevelopment or state incapacity. Stiglitz (2000:64) explains that ‘when markets are thin and incomplete, a thick network of interpersonal relations functions to resolve the allocative and distributive questions.’ By contrast, perspectives from sociology and organization theory contend that networks are superior forms of organization to markets or states, particularly in conditions of globalization and economic instability (Castells 1996; Hakansson & Snehota 1995; Johanson & Mattsson 1991; Powell 1991). As Walter Powell and Laurel Smith-Doerr (1994:381-2) explain, ‘networks are softer and lighter on their feet than

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markets or hierarchies.’ Notions of Asian network capitalism and corporate restructuring present a view of networks as efficient forms of organization, often effacing the fact that these networks operate within a framework of formal institutional support, rather than outside it or at its margins. The burgeoning literature on industrial districts and enterprise clusters draws on social capitalist conceptions of networks to explain the rise of dynamic small-firm economies in times of economic restructuring (Pyke & Sengenberger 1992; Rasmussen et al., 1992; Schmitz & Nadvi 1999; van Dijk & Rabellotti 1997b; Petrobelli & Sverrisson 2004; Schmitz 2004). Enterprise clusters represent sectoral and geographical concentrations of firms cooperating in the production of a particular commodity, such as shoes, furniture, or surgical instruments (Schmitz 1995). Cluster scholars argue that a dense web of socially-embedded inter-firm networks create a novel form of governance described as ‘cooperative competition’ (Best 1990), or ‘collective efficiency’ (Schmitz 1992), in which ‘the organization of economic relations ... tends to be intertwined with social relations; that is to say, the boundary between the spheres of business and community tends to blur’ (Sengenberger & Pyke 1992:19). Unfortunately, the boundary between formality and informality also tends to blur. Early cluster studies emphasized the role of formal as well as informal institutions in the development of dynamic enterprise clusters. In addition to socio-cultural embeddedness and interfirm ties, ‘institutional networks’ involving linkages with local and regional government, banks and technical training institutions were key to setting clusters on the ‘high road’ to industrial development, as opposed to the ‘low road’ of low quality goods and sweated labour (Amin & Thrift 1994; Benton 1992; Pyke & Sengenberger 1992). In studies of Third World clusters, however, the role of the state and formal sector was often ignored or underplayed. Instead, notions of the hostile formal sector environment in developing countries, and the incremental efficiency of interfirm networks created the impression that socio-cultural relations were the driving force behind small-firm dynamism. According to van Dijk and Rabellotti (1997a:6), ‘the accumulation of skills, know-how and knowledge take place in a spontaneous and socialized way’. It was even suggested that dynamic small-firm economies ‘might emerge in the immeasurably vast and poorly understood informal sector’ (Sabel 1986; Nadvi & Schmitz 1994). More recently, attention has shifted from ‘bottom up’ cultural networks to weak ties with outside buyers, linking clusters into new information, technology, and markets that can turn local production systems into dynamic nodes within global commodity chains (Giuliani et al., 2005; Humphrey & Schmitz 2002; Petrobelli & Sverrisson 2004; Schmitz 2004). Yet, the ability to form effective strong as well as weak ties is seen as a product of cultural capacities for cooperation and intergroup relations, rather than depending on the formal institutional environment in which

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those networks are embedded (Schmitz & Nadvi 1999; Sverrisson 2000). The question is whether embedded socio-cultural networks are sufficient to promote spontaneous enterprise development in all contexts.

4. Social Networks and the ‘Cultural Turn’ While social capitalist perspectives tend to celebrate the developmental capacities of social networks, many also recognize that social networks can have a ‘downside’ (Portes & Landolt 1996). In addition to providing an informal framework for greater economic efficiency, networks can also operate as mechanisms of parochialism or collusion that disrupt economic development. In other words, under certain conditions, networks constitute social liabilities rather than social capital. Despite the economic virtues of embeddedness, Granovetter (1995) and others point out that economic efficiency can be stifled by ‘too much’ embeddedness (Portes & Landolt 2000; Uzzi 1996). Avoiding excessive entanglement in communal ties is said to depend on ‘cultural tool kits’, involving embedded work ethics and associational norms that foster entrepreneurial development. These embedded institutions and cultural repertoires allow East Asians to strike the right balance between communal solidarity and productive goals, while less culturally advantaged identity groups, such as south Asians, Africans and Black Americans are dragged down by a combination of redistributive pressures and internal social divisions. Castells (1997) and Fukuyama (1995; 2001) draw similar conclusions, warning that the economic strengths of social networks are disrupted by the inability of some social groups to form weak ties across social cleavages, leading to the formation of closed parochial networks and a propensity to communal violence. As Fukuyama (2001: 14) explains, a society’s social capital ‘concerns not the internal cohesiveness of groups, but rather the way in which these relate to outsiders’. Where cultural norms restrict inter-communal ties, efficient networks require exit rather than embeddedness. Portes (Portes & Landolt 2000; Portes & Rumbaut 2001) notes that Latino entrepreneurs adopt strategies of exit from communities that are too tightly knit by anglicizing their names, moving to new neighbourhoods, or converting to evangelical Protestantism. In addition to the problems of parochialism, a second area of concern relates to the propensity of networks to promote ‘secrecy and concealment’ or ‘conspiracies against the public’ which undermine respect for law and order. New institutionalist analyses of mafias (Gambetta 1993; Varese 2001) and of chaotic transitions to market economies, especially in Eastern Europe (Feige & Ott 1999; Nee 1998) have found that instead of acting as informal frameworks of economic efficiency, social networks can act as vehicles of corruption and opportunism. Richard Rose (2002:8) cautions against the tendency ‘to assume that informal social capital and formal

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organizations interact in ways that have positive outcomes... the counterargument is that informal networks can be “anti-modern”, insofar as they are used to corrupt formal organizations, [as in] the role of the Mafia in Southern Italy or Russia.’ It is argued that in some areas, such as Eastern Europe, Central Asia and Africa, market-friendly informal norms and institutions either failed to develop, or were destroyed by authoritarian or dysfunctional states. In such circumstances, social networks are associated with the development of ‘delinquent community’ and ‘bandit capitalism’ rather than economic efficiency. Whether the problem is ‘too much’ embeddedness, or a propensity to collusion, recognizing that networks can act as ‘social liabilities’ focuses attention on the limitations of informal organization in some societies.

5. Africa in the Network Society While contemporary network perspectives recognize that social networks do not always promote economic development, negative outcomes tend to be attributed to the influence of dysfunctional cultural values. In African societies, this ‘cultural turn’ in economic analysis may well be a turn for the worse. To what extent does attention to the regulatory role of norms, values and cultural repertoires help us to understand the tendency towards ‘network failure’ in contemporary Africa? Do current debates about the developmental capacity of African social networks advance our understanding of the potential as well as the limits of African informal organization? In contemporary research on Africa, two contrasting perspectives have emerged regarding the developmental potential of Africa’s informal economic networks. The first argues that African entrepreneurial networks constitute social capital limited only by the constraints of dysfunctional states, while the second contends that African social networks represent social liabilities that are inimical to economic development. Network optimists represent African social networks as embedded solutions to Africa’s otherwise intractable problems of state and market failure. Grounded in historical and anthropological research, these perspectives emphasize the role of trust, communal solidarity, and embedded indigenous institutions of reciprocity, credit and social sanctions. Accounts of popular livelihood networks and informal systems of housing, service provision and social welfare support across urban Africa draw on Scott’s notion of the ‘weapons of the weak’ to emphasize the triumph of local organizational solutions in impossible conditions (Hansen & Vaa 2004; Lourenço-Lindell 2002; MacGaffey 1991; Tati 2001; Tripp 1997). Where states have ceased to function, the profusion of social networks is viewed as a source of ‘stateless order’ (Little 2003) or what Vlassenroot and Raeymaekers (Vlassenroot & Raeymaekers 2008) refer to as ‘governance without government’. Peter Little’s (2004:164) masterful

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account of Somalia’s ‘economy without a state’ highlights the impressive economic accomplishments of clan-based cattle, trade and remittance networks, which ‘have helped to keep the Somali economy afloat’. Detailed research on Tanzania (Tripp 1997), south-eastern Nigeria (Brautigam 1997), and the Congo (MacGaffey 1991) emphasizes the economic agency of popular livelihood networks which have succeeded in ‘substituting for the state’ and ‘changing the rules’ in the face of state incapacity and corruption. These enthusiastic perspectives also emphasize the growing role of social networks in integrating Africa into the global economy. Numerous studies show that, across the continent, indigenous ethnic and religious trading networks have ‘gone global’: Mouride traders of Senegal now ply regular routes to Italy and New York (Ebin 1993; Riccio 1999; Malcolmson 1996); Congolese traders have extended their circuits to Paris and Italy (MacGaffey and Bazenguissa-Ganga 2000); and Dubai, Indonesia and China have become centres of informal trade across Africa. Moreover, Janet MacGaffey has repeatedly suggested that informal trading networks may be stimulating local productive investment, noting ‘the dominance of the second economy in housing construction, transportation and small retail and service enterprises’, and hints at the possibility of a shift into manufacturing (MacGaffey & BazenguissaGanga 2000; MacGaffey & Windsperger 1990). Selected research reveals the emergence of relatively active production clusters from informal trading and small-firm networks, including a basket cluster in Kenya (Ngau & Keino 1996), an auto parts manufacturing cluster in the southeastern Nigerian town of Nnewi (Brautigam 1997), and an informal computer cluster in Lagos (Oyelaran-Oyeyinka 2007). Far from descending into ‘structural irrelevance’ as indicated by Castells (1996), the authors suggest that Africa is preparing to take her place in the ‘Network Society’. The prevailing policy stance of network optimists is to encourage a more ‘enabling’ business environment, usually involving ongoing liberalization and decentralization in order to give African networks ‘space’ to operate, along with the development of a minimalist state to guarantee property rights, contracts and security – disturbingly similar to neo-liberal policy recommendations. By contrast, network pessimists argue that African informal networks are plagued by logics of poverty, parochialism, and predation, blocking developmental outcomes. In her work on manufacturing networks, Abigail Barr (1999) suggests that African informal enterprise networks constitute a poverty trap owing to a tendency to form redistributive ‘riskminimizing’ networks rather than more ‘productivity-enhancing’ networks across class and ethnic cleavages. Studies of African enterprise clusters suggest they suffer from poorly developed inter-firm and external linkages, leaving them ‘weak and undynamic’ (Schmitz & Nadvi 1999), or ‘underdeveloped compared to those we find in other parts of the world’ (Sverrisson 1997:186).

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A more dramatic view of network dysfunction has arisen from a burgeoning research on ‘war economies’ and ‘the criminalization of the state’, dominated by political scientists and political anthropologists who see social networks as threats to Weberian processes of state formation (Bayart 2000; Collier 2007; Duffield 2001; Keen 2008; Reno 2000; Roitman 2004). In place of trust and communal solidarity, attention is focused on ‘violent modes of accumulation’ (Roitman 2004), ‘the instrumentalization of disorder’ (Chabal & Daloz 1999), and ‘cultural repertoires’ of trickery, witchcraft, patrimonialism, and primordial loyalties. Far from fostering constructive solutions to state failure, African social networks are seen as vehicles of: picaresque individuals who are the true pioneers of modern Africa. Smugglers, diamond diggers, currency changers, fraudsters and simple migrants all find ways of evading laws, frontiers and official exchange rates. … To a considerable extent, it is through such social types and their practices that Africa inserts itself into the international system, such as in the forms of illegal migration, the drug trade or fraud. (Bayart 2000:260)

Patrimonialism and predation rather than popular empowerment are associated with the rise of networks that are inimical to the development of rational economic institutions. Bill Reno’s (2006:31) notion of the ‘shadow state’ turns networks into deviant mechanisms through which, ‘rulers manipulate markets to manage clients and punish and deny resources to others. ... These activities fuse the exercise of political power to violent predation in informal and clandestine markets.’ Analyses foreground a cast of warlords, militias, predatory rulers and disenfranchised youth, who capture informal economic networks for personal gain rather than popular welfare. Some commentators have begun to emphasize the transformative potential of violent economic networks, where motives of hardened greed combine with legitimate grievance and survival, ultimately clearing away the wreckage of dysfunctional post-colonial states to open the way for new processes of social transformation and development (Duffield 2001; Keen 2008; Nordstrom 2004). However, transformative possibilities rest on Tillyian notions of African social networks as forces rooted in violence and organized crime rather than in Weberian ideas of productive economic ethics. Blurring the distinction between war and peace, legal and illegal goods, informal traders and warlords, informal regulation is represented as an amoral realm where anything can happen: The war orphan selling Marlboro cigarettes and the old woman carrying tomatoes into food-impoverished communities along informal routes are linked into the same system as the man who is carrying out $20 million worth of gems. ...as dangerous, illegal, and exploitative as this trade can be, it is often the means by which citizens gain the currency to buy industrial necessities, agricultural supplies, and development goods’. (Nordstrom 2004:217)

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These contradictory perspectives feed into a tendency to essentialize rather than differentiate and decipher African non-state networks. Instead of considering trade, manufacturing or war as giving rise to distinctive network dynamics, or exploring how embeddedness in particular ethnic, class or gender relations shape network performance in various ways, commentators tend to reduce African networks to a broad cultural logic characterized by popular entrepreneurship, or parochialism and predation. Issues of the institutional content and history of specific economic networks are weakly considered, if at all. Africanist geographer Gillian Hart (1998:341) laments the tendency of contemporary network approaches to gloss over the ‘enormous diversity, complexity and fluidity’ of institutions in developing societies, and points out that ‘… diverse local trajectories also display unexpected twists and turns that defy notions of embeddedness and path dependency.’ Instead, contemporary perspectives either celebrate African economic networks as social capital to the extent that they promote livelihoods and accumulation independently of the state, or denounce them as social liabilities where they fail to do so. These functionalist tendencies are exacerbated by the propensity to view African social networks as hidden sources of empowerment. Whether they are represented as vehicles of popular agency or predatory might, informal forms of organization are increasingly seen as ‘sites of power capable of reshaping the character of states in the world today’ (Nordstrom 2001: 216). An impression of inexorable force is created by notions of overwhelming social agency, incalculable commodity flows, boundless connectivity, and unconstrained authority. Such images cloud an awareness of the limits of informality – the realities of powerlessness, fragmentation and vulnerability that arise when embedded social forces are cut loose from the protection and institutional resources of the state. In the end, we are left with a concept of networks that has lost its focus on institutional content, power relations and the nature of relations with the state. What is lost in the process is the fine-grained analysis of informal organization that the concept of social networks was originally intended to promote.

6. Deciphering Informal Governance in Africa Moving beyond the essentialist tendencies of contemporary network thinking involves a transition from a functionalist problematic of ‘social capital’ and ‘social liabilities’, to an institutional problematic that reconnects networks with social and historical processes. Critiques of the essentializing logic of social networks and social capital (Ben Fine (2001) have paid less attention to the fact that social networks involve a much older and richer conceptual repertoire that has been crowded out of the contemporary theoretical discourse. In the study of contemporary

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informality, this earlier African network literature has been all but forgotten, and with it a kind of network thinking that was less about embeddedness and primordial loyalties, than about disembedding, deviations from path dependence, and the development of new forms of economic and social identity. Classic research by economic historian Philip Curtin on Juula trading networks of Senegambia, and by the anthropologist Abner Cohen on Hausa trading diaspora in the southern Nigerian town of Ibadan highlighted the role of ethnic and religious trading networks in the development of cross-cultural trade and efficient market institutions in West Africa (Cohen 1969; 1971; Curtin 1971; 1964; see also Lovejoy 1980; Asiwaju 1976). During the same period, cultural anthropologists and network sociologists of the Manchester School explored the role of social networks in new processes of economic realignment associated with urbanization and contemporary class formation, turning Africa into a crucible of network change rather than an archetype of network failure (Long 1968; Mayer 1961; 1964; Mitchell 1969; Peace 1979). In contemporary times, cutting edge research on the role of social networks in economic governance has shifted from Africa to East Asia and Eastern Europe (Deyo et al. 2001; Amin & Hausner 1997; Grabher & Stark 1997), focusing attention on the complex factors that shape network success and network failure in the era of liberalization. This institutionally fine-grained perspective is captured in an incisive volume by Gernot Grabher and David Stark (1997) under the simple rubric ‘legacies, linkages and localities’. These three dimensions of network organization provide a framework for examining both the developmental and the dysfunctional dynamics embedded in social networks, as well as identifying processes of continuity and change. The notion of ‘legacies’ focuses attention on the specific institutional features embedded in a given network. From this perspective, broad cultural traits are less important than specific institutional content – whether networks emerged from artisanal, agricultural or criminal groups, and whether they are organized around commercial, redistributive or subversive values. Grabher and Stark argue that the negative performance of economic networks in post-socialist societies is associated with the fact that they have been shaped, not by the artisanal traditions and cooperative institutions associated with Italian enterprise networks, but by the unproductive and opportunistic practices of the second economy and the nomenklatura. Specific realities of occupational history and class as well as ethnic origins are shown to shape the embedded values and practices of a given network, with the result that very different types of networks may develop within the same cultural context. The focus on ‘linkages’ highlights the way in which social networks are affected by economic and political change. Moving beyond notions of path dependence, ‘linkages’ point to a more dynamic assessment of the diverse network strategies used to restructure networks in response to

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changing circumstances. This may involve religious conversion, joining an ethnically-mixed social club, or sourcing apprentices from a nonrelated customer, creating what the economic geographer Allen Scott (1998:97-8) calls ‘branching points’: conjunctures at which network members may form new connections to tap into organizational alternatives. Alternatively, in times of change, networks may be unable to develop new linkages, or even to maintain old ones, owing to a lack of economic or social assets, leading to a situation of atrophy or collapse of existing networks. While there is a persistent tendency to theorize the restructuring of networks in terms of changing patterns of strong and weak ties, more incisive approaches analyse network change in terms of the social and institutional content of ties rather than their strength or weakness (Blokland & Savage 2001; Gold 2001). By focusing on shifts among ties of class, gender, ethnicity, religious sect or political affiliation, the understanding of network change moves beyond vague notions of strong and weak ties to a consideration of ‘how the dramatic changes to such networks … can create new processes of social exclusion and class formation’ (Blockland and Savage 2001:225). Finally, the notion of ‘localities’ focuses attention on how the organizational capacities of networks are shaped by the wider institutional fabric in which they are embedded. As Meric Gertler (1997:55) reminds us, ‘the traits and attitudes we commonly understand as being part and parcel of inherited cultures are themselves… conditioned by surrounding social institutions and regulatory regimes… which are actively shaped by the prevailing macro-regulatory context.’ This highlights the question of whether particular networks develop within a supportive and coherent institutional framework – what Peter Evans (1996) refers to as ‘synergy’ – or in a context of state neglect and institutional chaos. As Evans (1996:1129) points out, the state plays a key role in shaping networks, either by supporting them, by neglecting them, or by hijacking them for its own purposes: For ‘normal’ Third World states that lack the kind of powerful, autonomous bureaucracies that enabled East Asian industrializers to create synergistic ties with entrepreneurial groups, clientelistic capture is the natural consequence of tight public-private ties involving elites.

In other words, successful economic networks are not defined by their autonomy from the state, but are critically shaped by the nature of their relationship with the state at the local as well as at the national level. In contexts of formal institutional collapse characteristic of many parts of Eastern Europe, Central Asia, and Africa, the proliferation of social networks is less likely to lead to informal regulatory efficiency than to ‘…a cacophony of orientations, perceptions, goals and world-views that confounds even minimal cohesiveness’ (Grabher and Stark 1997:11). Instead of ‘network governance’, institutional outcomes in these chaotic settings tend towards organizational uncertainty and opportunism that

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can only be described as ‘ungovernance’ (Leander 2001). From this perspective, network success and network failure are as much about power and the state as they are about culture. And informality is as much about vulnerability as it is about alternative forms of order. Drawing on a more complex understanding of culturally embedded institutions, shifting social linkages, and precarious relations with the formal and global economies, an institutional approach to network analysis offers new tools for interpreting the dynamics of informal organization in contemporary Africa. This represents a return to the objective of using networks to explore the complex institutional terrain of the informal economy in terms of what it is, by seeking, not to essentialize, but to ‘unravel networks’ specific processes and structures’ (Dicken & Malmberg 2001:353). In short, to break the black box of the informal economy, we must begin by breaking the black box of the social network.

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An Institutional History of Igbo Economic Networks

1. Introduction Historical explanations of Igbo economic dynamism are a source of controversy. On the one hand, some have argued that the embedded cultural institutions of a stateless society provide a blueprint for economic growth and democratization in the era of state withdrawal. Peter Little (2003) attributes the resilience of the Somali economy to the ability of indigenous institutions to create ‘stateless order’. Similarly, Deborah Brautigam’s (1997:1065) account of emerging Igbo entrepreneurs in the town of Nnewi traces their success in ‘substituting for the state’ to a range of cultural and historical features, including stateless organization, a strong achievement orientation, and community-based networks of apprenticeship, credit and business information. A contrasting view of the developmental implications of Igbo cultural traits highlights an institutional history of political fragmentation, secret societies and brutal oracular religions to identify the Igbo with a propensity to criminality and economic ungovernance (Harnischfeger 2003; Smith 2004; Bayart et al., 1999; Reno 2004). Reno (2004:610) suggests that the ‘bond of clan lineage’ has helped the Igbo ‘to a commanding position in the world heroine traffic... It is this capacity of stateless societies to integrate into global commercial networks that make them so immune to methods of control the officials in strong states prefer.’ The reality is that neither of these alternatives captures the complex historical trajectory of Igbo economic networks. Far from constituting a culturally defined infrastructure, the indigenous economic institutions of Igbo society have undergone important shifts in response to the pressures and opportunities of colonialism and the post-colonial era. This chapter will trace how the institutional legacies of Igbo commercial networks in general, and the networks of Aba’s shoe and garment clusters in particular, have been shaped by historical experiences from the pre-colonial era to 27

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the eve of economic restructuring. Contrary to notions of socio-cultural path dependence, history matters, even in the informal economy. As in much of Africa, the evolution of economic institutions in Igbo society has not been smooth. Igbo economic networks have not followed the linear processes of institutional evolution described by new socio-economic perspectives, in which informal practices gradually ‘crystallized’ into formal institutions (Granovetter 1992; North 1990). Igbo economic networks have been the product of more fragmented processes of institutional development, characterized by interrupted state formation at the onset of colonialism, followed by institutional dualism nurtured by indirect rule, the marginalization of local business groups, and shallow post-colonial formal institutions. In the ongoing struggles of popular forces for economic access, indigenous institutions have continued to develop and adapt to new conditions in ways that do not so much run parallel to the formal economy as intersect and intertwine with it. Rather than nurturing forms of economic organization based on embedded practices and parochial identities, however, Igbo economic networks reveal processes of embedding and disembedding which have promoted the development of efficient market institutions and commercial relations across community, ethnic and national boundaries. This chapter presents four key phases in the development of Igbo informal enterprise networks. The first concerns how pre-colonial commercial networks were moulded by the interaction of stateless communities with inter-communal institutions such as title societies and oracular religions. The second relates to the ways in which indigenous entrepreneurial groups have reorganized existing networks and institutions in response to their economic and social marginalization during the colonial period. The third focuses on the impact of post-colonial change and the Nigerian Civil War on the development of Igbo informal entrepreneurial networks. And the fourth zeroes in on how these wider institutional legacies have shaped the specific development of Aba’s informal shoe and garment clusters between their emergence in the late colonial period and their rapid growth from the end of the 1970s.

2. Igbo Entrepreneurial Networks in the Pre-colonial Era The best known facts about the Igbo are that they were a stateless society in pre-colonial times, and that they suffer from severe land scarcity. These facts have contributed to a surprising lack of research on Igbo society until comparatively recently, despite a striking economic dynamism. The prevailing assumption appears to have been that stateless, land-hungry societies tell us less about African economic and political development than agriculturally dynamic societies with centralized states. As Northrup (1978:3-4) points out in a fascinating account of pre-colonial economic organization in south-eastern Nigeria:

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Historians of Africa have tended either to ignore ‘stateless’ societies completely or to write of them in timeless anthropological terms or to force them into more familiar moulds of political centralization by speaking of trading ‘empires’ or ‘incipient state formation’.

In the case of the Igbo, land shortage and small-scale social and political organization have not diminished their capacity for institutional innovation and economic development. Prominent Igbo historians such as Professor Afigbo (1981) and the late Professor Dike, have highlighted the need to focus more closely on the institutional mechanisms through which a stateless society such as the Igbo participated in large and complex cultural and economic networks during the pre-colonial period.1 2.1 Social and Economic Institutions in a Stateless Society The Igbo represent a large constellation of independent communities who are indigenous to south-eastern Nigeria in the area between the Niger and Cross Rivers. While these groups shared linguistic and cultural commonalities, they did not adopt a collective ethnic or political identity until the late colonial period (Isichei 1976:19ff; Nnoli 1978). To the dismay of colonial administrators, the largest political unit, across most of pre-colonial Igbo society was the community, or ‘hometown’, comprising a main settlement surrounded by smaller hamlets and villages. While clans made up larger units of social identity, and formed the basis for variations in dialect, they did not function as political units until they were adopted by colonial officials as the ‘traditional’ administrative framework of indirect rule (Afigbo 1981:313). Despite their decentralized political organization, Igbo groups were neither isolated nor unfamiliar with long distance systems of economic organization. The Igbo developed extensive structures of small-scale production and trade in the centuries before colonialism, spurred by the need to relieve problems of population density and extreme land shortage (Afigbo 1981:132; Onwuejeogwu 1981:11). Even in pre-colonial times, the Igbo had one of the highest population densities in Africa, comparable to Rwanda. Despite successive migrations into adjacent areas, the core Igbo areas remained plagued by severe problems of soil infertility, erosion, and a lack of sufficient land to make a living from agriculture. In the face of political fragmentation and extreme land shortage, the Igbo pursued a strategy of local specialization and trade. Among Igbo communities, regional systems of exchange grew up on the basis of communal patterns of specialization in agriculture, crafts and ritual healing. Inter-regional long distance trading networks also developed. To the south, Igbo groups traded agricultural produce to the coastal Ijaw, Efik and Ibibio of the Cross River and Niger Delta in return for salt and fish. 1 As Axel Harneit-Sievers (2006) has pointed out in his perceptive new book on Igbo identity, these historical accounts sometimes reflect a bias towards particular centres of Igbo power, but they also reflect a vast and meticulous historical knowledge of the area.

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Trade with the Igala north of the Niger involved the exchange of slaves and ivory for luxury goods such as horses, beads and bronze, linking the Igbo into the wider Hausa and trans-Saharan networks (Afigbo 1981:132; Northrup 1978: Ch. 2). Archaeological evidence from Igbo-Ukwu in northern Igboland shows that as early as the ninth century, the Igbo were linked into systems of long distance trade extending deep into West Africa. By the fifteenth century, luxury goods brought in through this northern trade were found to originate from as far away as India and southern Europe (Isichei 1976:14; Northrup 1978:16ff). These extensive trading networks were underpinned by institutional developments within Igbo society. In the face of political decentralization and land shortage, Igbo groups developed institutions that facilitated entrepreneurship, economic specialization and linkages between communities. The practice of community based occupational specialization characteristic of Igbo society deviates from occupational patterns in agriculturally dominated African societies, where occupational diversification is the norm (Berry 1985; Pedersen 1996). The tendency towards non-agricultural specialization has been linked to the problem of land pressure, as the historian Elizabeth Isichei (1976:29) explains: ‘Various forms of craftsmanship were widely diffused in Igboland, but were most developed among the Igbo of the heartland. Possibly, there was a correlation between a dense population and land shortage, and the development of other forms of economic activity.’ Institutions of marriage and inheritance also facilitated commercial development. Most Igbo groups required marriage outside one’s village of origin, thereby creating an important mechanism for kinship connections among village groups and clans (Isichei 1976:79; Meek 1933:6; Forde & Jones 1950:18). In addition, the Igbo developed a distinctive inheritance system which concentrated resources in the hands of the eldest son, creating an effective basis for capital formation. While land remained lineage property, all or most of a man’s personal estate and land rights was passed on to his eldest son, with the result that subsequent sons were forced to seek their own living in crafts or trade (Forde and Jones 1950:21; Meek 1933:42). This deviates importantly from the tendency in many African societies for inheritance to disperse rather than to concentrate wealth (Sam 1998), and has been identified by Silverstein (1983: 45) as an important basis for enterpreneurial development in Igbo society.2 By the beginning of the eighteenth century, groups of professional traders, craftsmen and ritual specialists existed across Igboland, 2 Interestingly, the most economically successful Igbo groups, such as the wealthy trading community of Abiriba; the successful industrial community of Nnewi; and the Aro, home of the dominant Igbo oracle in pre-colonial times, have distinctive marriage practices. Instead of the exogamous marriage patterns characteristic of the Igbo, these communities have adopted strict customs of endogamy, leading to further concentration of business connections and resources within the community (Dike and Ekejiuba 1990:174; Northrup 1978:99; Silverstein 1983:152).

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Figure 2 Map of Pre-colonial Igboland

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particularly in the northern and eastern Igbo areas (Afigbo 1981:139ff; Isichei 1976:29ff). Communities tended to specialize in particular activities, encouraging high levels of economic interaction among Igbo towns. The Nri in northern Igboland specialized as traders and ritual healers. The Aro of eastern Igboland were traders and agents of a powerful oracle. The people of Awka, Nkwerre and Abiriba were widely known as skilled blacksmiths, who made implements for farming, war and ritual use. Akwete was known for specialized cloth production, and Inyi for pottery. Craftsmen as well as traders travelled across Igboland selling their wares, leading to an increasing separation of professional trading and craft groups from agricultural pursuits. The Aro, for example, did not farm at all, but bought food from adjacent agricultural communities. The Awka smiths were divided into two groups, which alternated between travelling abroad in Igboland to practise their craft, and staying home to till the land (Isichei 1976:28). In order to minimize unproductive competition, craft and trading groups within a given town developed territorial trading arrangements in which particular wards or lineages plied their trade in particular parts of Igboland (Dike & Ekejiuba 1990: 200-02). Practices of occupational specialization were accompanied by well developed institutions of apprenticeship, which give Igbo entrepreneurs a competitive edge over other Nigerian groups even today (Meagher 2001; Silverstein 1983). In his insightful work on the origins of Nigerian capitalism, Tom Forrest (1994:177) emphasizes the effectiveness of the Igbo apprenticeship system. He notes that, in addition to skills training, Igbo apprenticeship provides start-up capital at the end of the training period, particularly in trade and costly crafts. It also socializes the trainee into the ‘Protestant’ virtues of denial, hardship and discipline, which are seen as crucial to business success. In line with the kinship-based organization of Igbo craft specialization, apprentices were normally relatives or townsmen. Long before the advent of colonialism, this range of local institutions contributed to the emergence of highly developed craft industries. Craftsmen from northern Igbo areas could work bronze into fine ritual and ceremonial objects, while smiths of the north and east were capable of producing implements of high quality. By the ninteenth century, Igbo smiths were able to repair and even manufacture simple guns (Afigbo 1981:141; Dike and Ekejiuba 1990:114). As Northrup (1978:21) observed: Thus it is apparent that before the arrival of the first European traders major segments of south-eastern Nigeria had already attained a significant level of economic and commercial development. Important craft industries specialized in the production of metal products, cloth, beads, and pottery, often exhibiting great skill of design and execution. The economy in many places had developed beyond subsistence production to production for exchange, and the products of the hinterland farmers, fishermen, and hunters, as well as craftsmen, supported a vigorous commercial life.

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2.2 Pan-Igbo Institutions and Commercial Development While community-level institutions played an important role, the remarkable levels of entrepreneurial development among the pre-colonial Igbo owed even more to what Silverstein (1983:26) refers to as ‘Pan-Igbo’ institutions. Unlike the lineage-based institutions outlined above, PanIgbo institutions tended to operate across the lines of hometown and clanbased identities. A central factor in the development of these larger-scale social and economic institutions among the Igbo was the rise of centralized religious systems. In Igboland, it was religious authority rather than centralized states that created the basis for economic systems that transcended the bounds of kinship and community. The two most important sources of centralized religious authority arose among the Nri of north-western Igboland in the ninth century AD, and later among the Aro of the eastern Igbo area. The Nri community, located in what is now Anambra State, were at the centre of a religious system that spread across Igboland between the ninth and sixteenth centuries. The widespread adoption of the Nri ritual system made Nri religious authorities central to the legislation and interpretation of Igbo law and custom (Dike & Ekejiuba 1990; Onwuejeogwu 1981). The Nri administered the title system in western Igbo communities, and officiated at all rituals connected with the Earth Goddess, which included ritual cleansing, resolution of disputes between settlements, and establishment of new markets. It has even been suggested that the judicial and religious authority of Nri priests extended into the adjacent Igala ethnic group, where the Nri were said to play a role in crowing the Igala king (HarneitSievers 2006:49). The more martial Aro religious and trading ‘empire’ emerged in eastern Igboland during the seventeenth century. With a core cultural sphere in the upper Cross River region in what is now north-eastern Abia State (the area known as Bende Division during the late colonial period), Aro religious and commercial institutions spread across Igboland to become the dominant pan-Igbo authority at the eve of colonialism. Aro economic influence was intertwined with their ritual role as agents of a powerful oracle known as ‘Ibini ukpabi’, or ‘the Long Juju’, which served as the highest court of appeal across much of Igboland during the eighteenth and nineteenth centuries (Dike and Ekejiuba 1990:130; Northrup 1978:137; Oriji 1982:531). Combining their religiously based judicial authority with commercial skill, diplomacy, and military might, the Aro built up extensive trading networks throughout Igboland, becoming by the eighteenth century the leading long distance traders in the Igbo hinterland. Aro ascendancy represented a particularly striking case of networkbased organization and institutional innovation across kinship lines. The Aro themselves were not an Igbo group, but represented a blend of three distinct ethnic groups – the Akpa, the Igbo, the Ibibio – melded into a

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single hometown identity which was not regarded as Igbo until the middle of the twentieth century, well after the emergence of an Igbo ethnic identity (Dike and Ekejiuba 1990:63; Forde and Jones 1950:56). The economic dominance of the Aro as specialized traders was dependent on linkages with neighbouring Igbo-speaking agricultural groups – the Utoto and Ihe – from whom they bought food, and with Igbo-speaking warrior groups – the Abam, the Edda and the Ohafia – who served as mercenaries to enforce Aro interests (Afigbo 1981:241; Isichei 1976:28ff; Northrup 1978:116). Their extensive religious and commercial influence was backed by networks of oracular agents and Aro settlements scattered across Igboland, as well as by networks of alliances with towns and trading groups along their trade routes. As the historian Axel HarneitSievers (2006) observed, ‘The Aro combined the various institutions of translocal connections… into a network of unprecedented scale and density.’ However, Aro influence also had a dark side, involving their central role in the slave trade. Their predatory relationship with the Igbo hinterland, which involved the encouragement of slave raiding and other institutions of slave procurement, may have contributed to their inability to consolidate their extensive coordinating role into the formation of a centralized state. While both the Nri and the Aro failed to galvanize the Igbo into a single ethnic or political identity, they contributed to the emergence of a sociocultural framework in which Igbo groups saw themselves as linked together through religious and economic ties, operating across the narrow bounds of kinship and community. As Dike and Ekejiuba (1990:163) observe, ‘religion provided a normative basis for mediating the expansion of community and interregional networks.’ Igbo oracles played a central role in winning the economic cooperation of different Igbo communities (Austen 1987:95; Dike & Ekejiuba 1990:219; Oriji 1982:531). They also provided a widely accepted framework for the enforcement of contracts and the settlement of disputes through oaths and blood pacts. Religious authority even played a key role in market regulation. The cult of the Earth Goddess, practised across Igboland and administered by Nri priests, provided an accepted regulatory framework for markets, including the imposition of ritual peace on market days, with heavy sanctions against theft or fighting (Oriji 1982; Northup 1978). The subsequent development of inter-regional markets for long distance trade drew on the regulatory role of these older religious sanctions, strengthened by the religious and economic authority of the Aro. The anthropologist Simon Ottenberg (1958:313) argued that ‘The oracle systems… integrated sections of Ibo society beyond the local level more than did any other kind of Ibo organization.’ These centralized religious systems gave rise to a second important set of Pan-Igbo institutions: title and secret societies. Title societies originated from Nri and spread across western and northern Igboland (Dike and Ekejiuba 1990; Onwuejeogwu 1981). Secret societies emerged

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among neighbouring Cross-River peoples and diffused into Aro society and thence to eastern and southern Igbo communities (Northrup 1978; Oriji 1982). Both title and secret societies conferred significant judicial powers and privileges on members, as well as encouraging an orientation towards economic competition and personal achievement. Holders of high titles were accorded central roles in leadership and dispute resolution. They were also exempt from physical labour and immune to assault by other Igbo communities – a protection backed by powerful religious and social sanctions, including costly forms of compensation in money and human life (Isichei 1978; Northrup 1978). Secret societies also carried out a number of public functions, including maintaining the security of roads, and the collection of trading debts – activities also supported by strong but socially accepted sanctioning powers (Dike and Ekejiuba 1990: 288; Oriji 1982). Northrup (1978:109) even cites a case of a European trader who joined a secret society in order to benefit from their effective debt collection machinery. Both title and secret societies ‘constituted an instrument of integration beyond community boundaries that were intrinsically linked to the expansion of trade’ (Harneit-Sievers 2006:45). As Northrup (1978:15) remarks, ‘the citizens of southeastern Nigeria during the centuries under study were… much more concerned with trade than with tribe.’ 2.3 The Institutional Infrastructure of Pre-colonial Igbo Trade The array of community based and Pan-Igbo institutions described above were used in the establishment of an extensive market infrastructure despite the absence of a centralized state. Long distance trade could be a dangerous business in pre-colonial Igboland, an area rife with slave raids, local wars, and lacking in any centralized provision of security or commercial infrastructure. These gaps were filled by a range of local institutional innovations. Armed convoys, organized rest houses, marital alliances, fictive kinship, and indigenous credit systems were key institutional mechanisms for overcoming the risks of long distance trade in a fragmented and insecure political environment (Isichei 1976; Northrup 1978). Interestingly, these arrangements bear a striking resemblance to descriptions of long distance trading networks of pre-colonial African societies with centralized states, such as the Hausa and the Juula, who used similar institutional mechanisms and social alliances to facilitate trade across the ethnic and political patchwork of West Africa (Curtin 1975; Lovejoy 1980). With regard to security, long distance traders from Igbo communities deployed a range of techniques to meet the needs of inter-group trading relations. While armed convoys provided their own protection, access to resting places and protection for smaller groups of traders travelling outside their own clan territory required the deployment of less aggressive institutional mechanisms (Afigbo 1981:135; Oriji 1982). Judicious marriages along one’s trading route were used to secure accommodation,

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food and protection within the clan territory of one’s in-laws. Traders also made use of blood pacts (igbandu) as a ‘technique…by which bonds of kinship were simulated or expanded’ (Isichei 1976:65). Blood pacts were a form of fictive kinship which made the participants responsible for ensuring each other’s accommodation and safety while in their respective territories. Friendship bonds, formalized through gift exchange, and patronage relations with powerful local individuals, were also widely used to secure protection, accommodation and assistance along a trading route (Dike and Ekejiuba 1990:290; Northrup 1978:96-7). Religious sanctions and accommodation practices available to members of title and secret societies provided further protection for long distance traders. It was an abomination to attack Nri priests and holders of high titles, who were distinguishable by facial marks or ritual regalia such as spears or staffs (Onwuejiogwu 1981). Similarly, Ekejiuba (1995:136) points out that ‘As well known traders and agents of the widely famed Ibinukpabi oracle, the Aro enjoyed unrestricted travel privileges; other Igbo ritual specialists, doctors and blacksmiths, enjoyed travel privileges over more restricted areas.’ In addition, title and secret society houses could be used as resting places for association members from other towns, a practice similar to the ‘landlord system’ of the Hausa and other West African groups. In effect, membership at the top levels of Igbo title and secret societies conferred on participants a ‘Pan-Igbo commercial passport’ (Oriji 1982:533), supported by an institutional infrastructure of resting houses, immunity from attack and binding social ties. This framework of protection across community lines supported the development of a remarkable market infrastructure, including roads, currencies, credit systems and networks of local and regional markets. During the late nineteenth century, European explorers were struck by the good quality of the road networks in Igboland, which involved bridge construction and the collection of tolls in some areas for road maintenance (Northrup 1987; Oriji 1982). Trading currencies, involving cowries, manilas, brass rods and copper wires, were also well developed in pre-colonial times. Economic historian Felicia Ekejiuba (1994:138) demonstrates that ‘by the end of the nineteenth century, Eastern Nigeria had well developed, multiple-currency systems.’ Regulated by flexible exchange rates, these currencies provided a monetary framework that united the diverse Igbo and non-Igbo ethnic groups of eastern Nigeria into a single trading zone (Northrup 1978:157; Afigbo 1980). Credit networks based on the ‘trust system’ operated across clan as well as ethnic boundaries, linking Igbo communities with the trading peoples of the coast (Dike and Ekejiuba 1990; Harneit-Sievers 2006:45). Goods were given out on credit to established trading partners – a relationship formalized through blood pacts, gift exchange and occasional social visits. Credit systems were backed not only by the establishment of social ties between traders, but by powerful sanctioning

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mechanisms against default, involving the authority of secret societies to seize property of defaulters and even sell them into slavery (Oriji 1982:533). The creditworthiness of new trading partners was established through a combination of experience, familiarity with other ethnic groups in the region, and personal introduction by established trading partners – a system inconveniently resistant to European attempts to bypass coastal middlemen in order to deal directly with the people of the Igbo hinterland. This pan-Igbo commercial infrastructure supported the development of an inter-regional system of markets (Northrup 1978:112). Local markets observed the four day market cycle traditional to the Igbo, while interregional markets, established later by the Aro, followed a monthly cycle. The large inter-regional markets boasted a commercial infrastructure capable of handling large volumes of trade and meeting the needs of long distance traders from a range of coastal and hinterland ethnic groups (Dike and Ekejiuba 1990:241ff; Isichei 1976:92; Northrup 1978:152-3). At the Bende market, the oldest and most important of the Igbo inter-regional markets, warehouses and hotels were provided for visiting traders, and stalls rented to retailers. Special courts were set up in the market where judges sat to resolve disputes. Enforcement of market regulations was the responsibility of local officials of the market town, but their judicial authority over traders from outside their territory was derived from a wider framework of religious and economic institutions. These included the institutionalized behavioural obligations and sanctions associated with the market deity, and the religious, commercial and political preeminence of the Aro. The Aro exercised considerable control over the operation of inter-regional markets, and had the power to move the market to another town if local officials failed to maintain order and conform to Aro market regulations (Dike and Ekejiuba 1990; Northrup 1978). Through this institutional matrix of social relations, religious sanctions and economic infrastructure, the decentralized polities of Igboland were bound together by ‘a dense network of tiny capillary veins’ (Isichei 1976:67). These social and economic institutions underpinned the development of an extensive trading infrastructure of roads, markets, credit systems, security arrangements, contract enforcement, and intergroup institutions of dispute resolution. Whether these economic networks were capable of transforming the local economy from exchange based to productive growth is unclear, but they were sufficient to promote the expansion of trade and the development of highly specialized smallscale manufacturing during the pre-colonial period (See Northrup 1976; Dike and Ekejiuba 1990:324). 2.4 The Informalization of Igbo Economies Whatever assessment is made of their long term developmental trajectory, it is clear that pre-colonial Igbo economic networks represented dynamic economic systems that transcended the limitations of narrow primordial

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identities. Indeed, the most striking feature of Igbo economic organization is its remarkable capacity for institutional innovation across kinship and community lines. Multiple linkages based on religion and social status, as well as community, coalesced in ways that underpinned the development of crosscutting identities. Neither the Aro nor the Igbo represented primordial identities; on the contrary, as Paul Lovejoy’s observed among the pre-colonial Hausa, ‘Ethnicity was a product of participation in a dynamic economy’ (1980:143). The complex historical interplay of communal identity, religion and voluntary associations generated processes of disembedding as well as embeddedness that supported the development of rational economic institutions within the framework of a stateless society. This point is emphasized by Northrup (1978:230): In southeastern Nigeria the long process of commercial development … occurred with little regard for large state structures or for national or ethnographic frontiers… It was economics not ethnicity, trade not rulers which governed the main lines of this region’s pre-colonial past.

While Northrup maintains that pre-colonial Igbo networks were an example of market development without a state, Dike and Ekejiuba (1990), Stevenson (1968) and others argue that the governance activities of centralized religious authorities such as the Nri and the Aro constituted early stages of state formation. Whether these processes would have led to the development of a centralized Igbo state will never be known, owing to their decisive interruption by the advent of colonialism. The formal incorporation of Igboland into the British Empire in 1885 was followed by intense efforts on the part of the British to crush the commercial, religious and assumed political authority of the Aro (Afigbo 1981; Dike and Ekejiuba 1990; Isichei 1976). This involved efforts to destroy Aro influence through brutal military campaigns culminating in the dynamiting of the ‘Long Juju’ oracle during the Aro Expedition of 1901. Contrary to impressions that Igbo trading networks collapsed in the face of imperial ‘free trade’, it took several decades of military force, political and economic repression, and punitive sanctions to dismantle the economic systems and sanctioning powers of Aro-centred commercial organization. The slave trade and the Long Juju persisted for more than a decade after their formal elimination, leading to a second destruction of the Aro oracle in 1912 (Afigbo 1981). Pre-colonial currencies also resisted the introduction of British currency despite several attempt to demonetize them. As Ekejiuba explains: ‘it required over fifty years of coercive legislation for the older currencies to be fully retired. …manilas continued to circulate up to 1952, forty one years after they ceased to be legal tender’ (1994:142). In place of Igbo commercial systems, colonial rule imposed new legal and economic systems, involving the development of new road networks, new court systems, new trade routes, new currencies and new means of social advancement, all backed by the force of the colonial state.

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Ultimately, these efforts led to the destruction of the institutional authority of the old system, while leaving behind vestiges of embedded social and economic practices. In the process, the British colonial system converted the emergent economic institutions of pre-colonial Igboland into informal economic institutions, disconnected from rather than embedded in the new processes of state formation that came to shape the development of the formal economy in south-eastern Nigeria.

3. The Colonial Restructuring of Igbo Social Networks The colonial conquest and informalization of Igbo economic institutions did not convert them into timeless institutional relics, but introduced new processes of change. As observed by a colonial official during the 1950s, ‘In a tribe such as the Ibo, with the yeast of ambition at work in such large sections of it, no custom, whether in regard to land or other social aspects, can be assumed to be static’ (Chubb 1947:58). Indeed, the Igbo responded energetically to the new pressures and opportunities of colonialism. On the one hand, the social and economic marginalization of native Africans under colonialism encouraged the persistence of informal institutions to meet popular needs neglected by the colonial administration, including access to adequate employment, credit, social security and development assistance (Afigbo 1981:269). On the other hand, Christianity, western education and the colonial administration replaced pre-colonial status systems with new avenues of social and economic advancement. The result was a reshaping rather than a replacement of informal social and economic institutions as Igbo communities sought to get by, or gain access to new opportunities. The impact of colonialism on the development of Igbo informal institutions involved three major changes. These are the reconfiguration of Igbo identities in the context of administrative changes, the development of the ‘Igbo diaspora’, and the emergence of new forms of indigenous associations in response to the institutional terrain of colonialism. 3.1 The Reconfiguring of Igbo Identities The lack of preexisting state systems among the Igbo triggered a succession of administrative reforms as the British sought an effective framework for indirect rule. The central problem was the need for largerscale administrative units with a measure of popular legitimacy. The administrative boundaries of Igboland were redrawn several times between 1906 and the early 1950s (Isichei 1976:140ff). Towns were grouped into native court areas, and court areas into districts and provinces. Administrative reforms during the 1930s attempted to ensure that native court areas coincided more closely with preexisting clan boundaries, in order to rein in the corruption and inefficiency associated with the arbitrary boundaries of earlier administrative efforts (Afigbo 1981:321-3).

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This led to the creation of clan councils, based on careful research into clan boundaries, despite the fact that Igbo clans had never operated as administrative political units in pre-colonial days. The colonial government encouraged clan councils to federate into larger units in order to pool their development resources. The new administrative structure of clan courts and Native Authorities represented a colonial effort to return to ‘traditional’ forms of organization at the local level, but ended up creating new political units that had never previously existed among the Igbo. Over time, however, the new larger-scale structures, particularly Native Authorities and Divisions, became units of social identification (Isichei 1976:140ff; Melson & Wolpe 1971:24; Smock 1969:23). As Isichei (1976:141) explains: As time went on, the artificial units – the Divisions – came to acquire an emotional reality and loyalties of their own – like the American States. Owerri Division is a striking example, and so is Mbaise, which is an entirely artificial creation, going back to the Native Authority formed in 1941. Her component towns were, in pre-colonial times, frequently at war. But in time, Mbaise too became a unit for local attachments and loyalties.

Given their importance for gaining access to economic resources and political representation, these larger artificial administrative units became a basis of social identity which often superseded the original village group, particularly among Igbo migrants in urban areas. These identities were consolidated in the emergence of new types of associations among Igbos resident outside their home area, who would adopt their town identification at home, but often grouped together under native authority or divisional identities when living in other areas (Melson and Wolpe 1971:24-5; Smock 1969:23). This tendency towards amalgamation of identities culminated in the emergence of a collective Pan-Igbo identity in the course of the 1950s. 3.2 The Igbo Diaspora In addition to a reconfiguration of internal identity groups, colonialism brought about a dramatic expansion of Igbo migration to other parts of Nigeria and beyond. While the Igbo have historically had a significant presence among the coastal peoples of south-eastern Nigeria, owing to the influences of trade, slavery and intermarriage, their expansion into western and northern Nigeria took place largely in the context of colonialism. Propelled by economic and population pressures, the Igbo rapidly took advantage of new economic opportunities available across Nigeria, moving to locations across the country ‘as traders and entrepreneurs, and as clerks, skilled workers and professionals in public services, parastatals and commercial firms’ (Anthony 2000:423). While Igbo groups migrated widely within Igboland, particularly to the new urban centres such as Aba, Enugu and Port Harcourt, the bulk of Igbo migration was outside the Igbo hinterland to western and northern Nigeria, as well

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as to neighbouring countries such as Ghana, Cameroun and Fernando Po – a dispersion which has been dubbed the ‘Igbo diaspora’ (Onwubu 1975). The Igbo diaspora created a network of Igbo inhabitants in nearly every corner of Nigeria. The 291 Igbos enumerated in Lagos in 1911 rose to 1609 by 1921, and to 31,887 by 1953. By the 1950s, there were 167,000 Igbos in northern Nigeria, making them the largest southern ethnic group in the northern region (Anthony 2000:423; Isichei 1976:209). There were substantial Igbo minorities in non-Igbo cities as far flung as Ibadan, Zaria, Lafia, Maiduguri, Gusau, Kafanchan and Makurdi. The 1953 census recorded that 15 % of the Igbo population lived outside Igboland, making the Igbo the largest migrant population in Nigeria, both in proportionate and absolute terms (Iro 1986:37; Melson & Wolpe 1971:8). The rapid expansion of the Igbo diaspora was a product, not only of population pressure at home, but of the prior development of social ‘blueprints for migration’ in pre-colonial Igbo social organization (Silverstein 1983:130). The organization of craftsmen and traders into itinerant groups with specialized territories created a framework for migration that did not rupture linkages between migrants and their home areas. Precolonial institutions requiring the annual return of migrants to their home town for festivals were well established among the Aro, and spread to other Igbo groups over time (Dike and Ekejiuba 1990). As Silverstein (1983:355) shows in her study of Nnewi entrepreneurs, systems of apprenticeship also followed a diasporic pattern, in which masters settled apprentices in other parts of Nigeria in order to widen their networks and avoid problems of oversupply in a given area. 3.3 The Development of New Types of Associations While political, status and economic associations played a central role in pre-colonial Igbo society, the advent of colonialism led to a significant restructuring of Igbo associational practices. The dismantling of precolonial systems of authority under colonial rule, and the emergence of new institutions of social and political advancement, precipitated the decline of title and secret societies (Isichei 1976; Meek 1933). The aura of secrecy and pagan practices surrounding these societies met with strong disapproval from colonial administrators and Christian missionaries alike, both of whom encouraged their decline (NAE, AbaDist 15/1/16, 1921). In their place, three new types of local associations emerged: hometown unions, church meetings and contribution clubs. While these three types of associations are now regarded as ‘traditional’ forms of Igbo social organization, and certainly have some roots in pre-colonial institutions, they did not emerge until the middle of the colonial period (Forrest 1994:178; Silverstein 1983:86-9). Hometown unions, also known as ‘improvement unions’, developed during the 1930s and 1940s, largely in response to the needs of the Igbo diaspora. Developing originally among urban migrants, hometown

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unions rapidly became institutions of local patriotism oriented towards hometown development and political advancement (Isichei 1976; Smock 1969). Modelled in many ways on title societies and age-grades, hometown unions provided a hierarchical framework oriented toward local development, economic achievement, and the advancement of local elites in the Nigerian political and economic system. Minimal membership involved participation in the ‘family meeting’ or lineage association, which was obligatory (Isichei 1976:220). Beyond this was a whole pyramid of meetings corresponding to the village, town, and sometimes the division levels. Branch associations were located in major centres of Igbo migration, and an obligatory general meeting was held in the home town once a year during the Christmas holidays (Smock 1996). Church meetings constituted a second new type of association. After early resistance, Christianity spread rapidly among the Igbo, with Catholic, Anglican and Presbyterian churches becoming well established throughout Igboland by the middle of the colonial period. Church meetings, which emerged in the 1930s, were particularly popular among women, and involved regular gatherings to organize church activities and discuss members’ problems, often involving collections to carry out church functions (Isichei 1976). Although they were initially more common among Protestant women, church meetings later became common among all churches in Igboland, Protestant and Catholic alike. A third type of association that developed during the colonial period were contribution clubs, more commonly referred to as rotating credit associations, or isusu clubs. These developed in answer to the difficulty of accumulating capital on small incomes. Few Igbos had access to bank loans because of high collateral requirements and restrictions on African access to credit, while the rates charged by local money lenders were too high for most small borrowers. Like hometown unions, contribution clubs drew on pre-colonial institutions of pooling resources, involving severe sanctions against defaulting on contributions (NAE, AbaDist, 14/1/272, 1933). Contribution clubs could either operate as independent organizations, or could be embedded in other associations such as hometown unions or church meetings. While these new forms of indigenous organization helped to meet popular associational and economic needs among the Igbo, they met with considerable suspicion on the part of the colonial authorities. Colonial administrators disapproved of their ability to enforce membership and contributions, and insisted that participation in indigenous associations should be voluntary. Official correspondence after the early 1930s is full of complaints about the compulsory tendencies and pagan practices of hometown unions, and the extortionate character of contributions clubs (NAE, AbaDist, 9/1/1527 1951; AbaDist, 14/1/272 1933; UmuDiv, 3/1/98 133; UmuDiv, 3/1/612 1947). An annual report from Aba Division in 1952 warns of the ‘grave social evil of Isusu clubs’ (NAE, AbaDist, 9/1/1543 1952). These associations’ lack of registration and their ability to compel

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membership and contributions through threat of fines were seen as clashing with colonial law, in which no such obligations and fines existed (NAE, AbaDist 14/1/272). Systematic efforts were made through court decisions and legal reforms to weaken the sanctioning powers of local associations, since the indigenous capacity to enforce participation was seen as a ‘threat to the voluntary status of such agencies’ (NAE, UmuDiv 3/1/98; UmuDiv 3/1/612). 3.4 Social Change and the Development of Small-Scale Manufacturing Pre-colonial institutions of hometown based occupational specialization persisted into the colonial period, adapting to the new framework of social and economic organization. Isichei (1976: 215) notes that ‘especially from the fifties on, many Igbo came to specialize in various types of workshops and small-scale industry (the latter on a very low technical level).’ Smallscale producers entered manufacturing activities both from indigenous specializations, and sometimes from positions in formal employment in local and multinational firms, bringing in new technical skills from the formal economy. While old occupational specializations endured in many areas, including ironworking in Awka, and cloth production in Akwete, new specializations also emerged. Nnewi became known for transport and auto parts trade, Abiriba for the trade in cloth and second hand clothes, and Item for the sewing and selling of singlets and second hand clothes (Isichei 1976; Forrest 1994). Colonial officials, concerned with the need to reduce the pressure on land, increasingly expressed a desire to promote small-scale industry in the Igbo areas. This was particularly marked in the 1940s and 1950s, owing to the need to reduce imports during the Second World War, and the subsequent need to reduce unemployment and supplement incomes in the wake of post-war demobilization. However, the desire to encourage small-scale industry was hampered by a general reluctance to disrupt the existing social organization of local craft industries, or to threaten the export interests of British firms (NAE, AbaDist 14/1/936; OnDist 20/1/1136 1950; OpoDist 1/1/59 1941). Thus, amidst interest in promoting small-scale industry, colonial officials in Bende Division and Aba in the 1940s prevented private firms from selling good hides to local shoemakers in order to ensure that the best hides were sold to the UAC for export. As one official put it, ‘The position therefore is that the UAC buys more of the good quality hides while inferior grades go to local shoemakers’ (NAE, AbaDist 14/1/252). Within this context, support for small-scale manufacturing remained lackadaisical, oriented more towards an indulgent laissez-faire approach combined with an enforced lack of access to high quality inputs, rather than engaging in any significant development efforts. Overall, the impact of colonialism involved a considerable reshaping of indigenous social and economic organization among the Igbo. While some institutions and practices persisted from the pre-colonial era, there was also a significant restructuring of local identities, diasporic networks,

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popular associations, and patterns of occupational specialization. Unfortunately, efforts among the Igbo to adapt their social organization to new conditions ran up against persistent efforts on the part of colonial authorities to limit the institutional capacities of local organizations in order to prevent them from competing with the objectives and prerogatives of British firms and the colonial administration. In the process, indigenous forms of organization neither faded away, nor were they incorporated into the formal system. Rather, they persisted and adapted to new circumstances within a framework of continuing social and economic marginalization.

4. Igbo Small-scale Enterprise after Independence At the dawn of Nigerian Independence in 1960, Igbo small-scale producers had endured decades of political neglect and economic marginalization. The Kilby Report on small-scale industry in Eastern Nigeria, based on fieldwork conducted in 1961, identified an active small-scale manufacturing sector that had essentially been left to ‘shift for itself’ (Kilby 1963:6). Kilby noted that small-scale industries employed three times as many people as large-scale manufacturing, but had received little attention from the government. Average firm sizes were 2.7 people, including the owner; 38% were one-person businesses; and two-thirds of the enumerated firms were located in Onitsha, Aba, and Port Harcourt. The most promising industries were identified as soap, singlets, wrought iron products, leather shoes, bread, soft drinks, furniture and mattresses (ibid.:19). The apprenticeship system was found to be the sole institution for skill development in the small-firm sector, although apprentices usually had several years of primary education. More highly trained artisans were snapped up by government or expatriate firms at higher wages than small firms were able to pay. The result was that the small-firm sector had become a low-education, low-income activity oriented towards the production of cheap, low quality goods. While describing the achievements of the apprenticeship system as ‘impressive’ in the circumstances, Kilby argued that an ‘extra push’ was needed to break the existing low quality equilibrium (ibid.:5-8). During the course of the first few decades of Nigerian Independence, Igbo small-scale enterprise appears to have met with less rather than more state support, as the Nigerian government turned its attention to the promotion of larger-scale formal sector industry. The benign neglect of the colonial period turned to growing harassment in the face of new regulations and larger-scale priorities of state based industrialization programmes. The development of small-scale manufacturing continued to rely heavily on informal, ethnically based systems of organization. During the mid-1960s, Nafzinger (1968) observed a pronounced ethnic

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fragmentation in the organization of production and trade in the Nigerian footwear industry, 95% of which involved firms with fewer than 10 workers. Ethnic fragmentation was attributed to barriers of language and credit systems – a primordialist explanation that ignored both the prior existence of credit arrangements across ethnic boundaries, and the peculiarly ethnicized environment that marked the run-up to the Nigerian Civil War in 1967. Nafzinger also noted that the Igbo had a larger distributive system than other ethnic groups, extending across southeastern as well as northern Nigeria. Their comparative success was credited to the greater willingness of Igbos to extend credit to fellow Igbos living in other parts of Nigeria, owing to the existence of strong hometown based sanctions against default (ibid.:537). The Nigerian Civil War (1967-70) constituted a decisive event in the development of Igbo small-scale enterprise. Triggered by Igbo efforts to secede from Nigeria, the Civil War isolated the Igbo, creating new pressures that intensified their tendencies towards self reliance. Brautigam (1997:1006) and Forrest (1994:195-6) suggest that the Civil War encouraged a trend towards accelerated local industrialization in the context of the three-year siege of the Igbo State of ‘Biafra’, and the subsequent marginalization of the Igbo after their defeat. The widespread physical insecurity and loss of property faced by Igbo migrants in the runup to the Civil War precipitated a flight of Igbos back to their home areas, and a significant relocation of Igbo business activities and capital to core Igbo areas after the War, a process documented by Douglas Anthony (2002) in his moving account of Igbo migrants in northern Nigeria. As Forrest (ibid.:195) observed with regard to the impact of the Civil War on Igbo enterprise: Perhaps the most remarkable outcome was the shift from reinvestment in the diaspora before the Civil War, to the repatriation of capital and the build-up of enterprises and properties closer to home. This has brought a measure of economic recovery and a new pattern of industrial location.

Owing to the depredations of war and the economic blockade, many businesses had to start up afresh after the War, but were forced to do so on a smaller scale because of heavy Igbo financial losses. While the peace settlement was not overtly punitive, the Igbo have experienced marginalization from state and formal economic power since the 1970s, limiting their opportunities for state patronage and influence in the formal economy. Forrest maintains that the re-establishment of Igbo businesses drew heavily on the financial assistance of the Igbo diaspora outside Nigeria, particularly Igbo businesses that had shifted to Cotonou and Lome during the Civil War (Forrest 1994:178-9). The Igbo diaspora outside Nigeria not only provided a source of economic assistance, but formed the base of unofficial trading networks that spread across West Africa from the 1970s. This growth involved both the penetration of Igbo traders into other West and Central African countries, and the deliberate

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development of new linkages with much older Hausa distribution networks, extending across the Sahelian countries (Hashim & Meagher 1999). In addition to the expansion of Igbo trading networks within Africa, the development of Igbo trading ties with Taiwan during the 1970s were instrumental to the growth of local manufacturing. Brautigam (1999; 2003) and Forrest (1994:162-3) emphasize the importance of these Asian linkages in providing entrepreneurs in the Igbo town of Nnewi with access to technology, skills and inputs for the development of auto parts manufacturing outside the framework of official state support. Based on the Nnewi experience, Brautigam (1999:11-13; 1997) argues that trade rather than artisanal backgrounds played a key role in the Igbo transition to manufacturing, since it was through trade that Nnewi entrepreneurs developed the necessary capital, distribution networks and global contacts to shift into local industrial production. While conceding some of the impetus behind the rise of Igbo industry to the intensification of indigenous ingenuity and relations of solidarity, Deborah Brautigam argues that external links with Asian business groups were the key factor in the shift to manufacturing. She argues that ‘This resourceful spirit may have lingered after the end of the war, but it was contacts between Nnewi traders and their Taiwanese counterparts that proved the major catalyst to industrialization’ (Brautigam 2003:463). In effect, Igbo ‘strong’ ties were capable of developing effective trading networks, but manufacturing networks required ‘weak’ ties to outside business groups. By contrast, Forrest (1994:193) suggests that trade is only one route to indigenous manufacturing, and points out that while trade has played a central role in the transition to manufacturing among wealthy Nnewi and Abiriba entrepreneurs, artisanal backgrounds have been far more central to the development of local shoe and garment manufacturing in Aba. While artisanal backgrounds provide less in the way of capital and global networks, they provide important institutions of skill formation and specialization: In the shoe and garment industry, enterprises have emerged from apprenticeship and small-scale artisanal activity… A major reservoir of skills has been built up over many years and the quality of products upgraded. This growth of small-scale enterprise (the so-called informal sector) is not in any direct sense functionally subordinate to larger capitalist enterprises, nor can it be linked to economic decline and strategies of survival. Like the shift to industry from trade, it is not the direct result of government policies. … [However,] a trading background tends to give rise to greater diversification. In some instances, diversification has been unfocused leading to dispersion of efforts. (Forrest 1994:193-4)

Ethnic and hometown linkages between small-scale producers, traders and the increasingly internationalized Igbo diaspora have created a framework of global linkages for Igbo producers from artisanal backgrounds.

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From the 1970s, growing Igbo immigration to the United States has provided a global source of economic assistance to small producers with family members and townsmen abroad (Reynolds 2002). Altogether, the intensification of Igbo efforts at self reliance, combined with the return of Igbo capital after the Civil War and the increasing globalization of Igbo production and distribution networks contributed to the consolidation of Igbo small-scale manufacturing networks during the course of the 1970s. Not only did this process take place largely outside the framework of state assistance; it was also gathering pace just as economic crisis and structural adjustment were about to descend on the Nigerian economy during the course of the 1980s (Forrest 1994; Martin 1988).

5. The History of Informal Shoe and Garment Production in Aba The history of Aba’s informal shoe and garment clusters takes place within this wider framework of historical legacies and institutional change in Igbo small-firm development. In line with the institutions of hometown based occupational specialization, each of these activities was pioneered by a particular Igbo sub-group. Neither shoe nor garment production represented ‘traditional’ occupational specializations of these groups, but involved the adaptation of indigenous institutions to new opportunities and activities. Moreover, neither of the Igbo sub-groups responsible for pioneering these activities in Aba represented primordial hometown identities, but were identity groups created by colonial administrative changes. Thus, as Silverstein (1983: 399) points out, contemporary Igbo manufacturing activities are not so much a product of embeddedness in ‘traditional’ artisanal communities; they have developed from the use of indigenous institutions as ‘blueprints’ for the development of non-traditional activities by particular Igbo communities, which have themselves often been reconstituted during the colonial period. Perhaps more important than their communal embeddedness, the developmental trajectory of these small-scale activities is critically affected by the way in which each community is embedded in the changing political and economic context of Nigeria. The town of Aba in what is now Abia State is a site created by the encounter between indigenous and colonial economic interests. Aba is a colonial rather than a ‘traditional’ Igbo town that developed in the early 1900s as an administrative centre and an entrepôt in the palm oil trade (Forrest 1994; Martin 1988). Over time, the town developed into a regional commercial centre, attracting migrants from a wide variety of Igbo communities. Since the colonial period, serious land shortage, the collapse of palm oil exports and the Igbo defeat in the Nigerian Civil War have precipitated a rapid growth of small-scale enterprise in an environment of capital shortage and state neglect.

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5.1 The Informal Garment Cluster Informal garment production was developed in Aba during the colonial period by migrants from Bende Division, in what is now north-eastern Abia State.3 Created in the colonial period, Bende Division comprised the Igbo groups who were close neighbours and often ‘junior partners’ of the Aro during the pre-colonial period, including the Bende, Abiriba, Ohafia and Item communities. Even after colonial district boundaries were restructured, the area came to be known as ‘Old Bende’ which still represents a major centre of wealth and power in Igbo society. Figure 3 shows the location of the communities of Old Bende. Advantageously located in pre-colonial times with regard to trading networks, markets and institutional influences, the Igbo groups that came to comprise Bende District were generally prosperous. Colonial accounts describe them as successful farmers, traders and craftsmen (Forde and Jones 1950:39). During colonial times, some of these groups, particularly from Abiriba and Item, began to specialize in the cotton and cloth trade (Forrest 1994:175-8). Migrants from Item are said to have pioneered tailoring in Aba in the 1930s, where they operated as itinerant tailors specializing in the alteration and repair of clothing.4 Over time, they were joined by other migrants from Bende District, who settled in Aba in a neighbourhood just south of the town’s main cloth market. This residential area now constitutes the core of the garment cluster. By the late 1950s, garment producers in this area had begun to differentiate into two categories. The first consisted of local tailors, who remained essentially artisanal in orientation, and continued to rely on apprenticeship as the key source of labour. The second consisted of small garment firms involved in the more mechanized mass production of underpants and singlets, which required more costly industrial garment machinery and a more skilled labour force. Like tailoring, indigenous pant and singlet firms were first established in Aba by Item entrepreneurs who had trained in the formal garment firms of Western Nigeria, and began setting up their own garment firms in Aba in the late 1950s and early 1960s (Forrest 1994). Kilby (1963) observed that small-scale singlet production had higher capital and skill requirements than most small-scale activities. Enterprise heads tended to have post-primary education, employed larger labour forces, and showed a preference for employees rather than apprentices. By the beginning of the 1960s, there were 733 small-scale tailoring firms in Aba, only five of which employed more than ten people, and 11 small-scale singlet firms, which employed an average of 10 people per firm. Kilby (1963:22) identified singlet production as a well organized and ‘profitable industry with considerable expansion potential’, while tailors were seen as too 3

Forrest 1994:175-6; Interview with the President of Aba Garment Manufacturers Cooperative, 7 April 2000. 4 Interview with President of Aba Garment Cooperative, 7 April 2000.

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Figure 3 Location of Bende and Mbaise Areas of Igboland

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numerous, disorganized and heterogeneous, ranging from the itinerant mending tailor to the London trained suit maker. Small pant and singlet firms proliferated in Aba after the Civil War as trainees and former employees of formal sector garment firms established their own businesses. Often trained in formal sector settings, these small garment producers saw themselves as industrialists rather than artisans, though they were often unable to comply fully with the regulatory requirements of formal sector operation.5 In the past two decades, small industrial garment firms have diversified from pants and singlets into the mass production of a range of garments, including lingerie and sportswear. In 1984, they created the Aba Garment Manufacturers Cooperative to assist members with registration, and to provide a forum for occupational development and state assistance. This organization, which survived into the present, represents only small-scale mass producers rather than tailors, who have never managed to form any lasting organization. In contrast with small-scale mass producers, tailors continue to display an essentially artisanal orientation based on craft skills and fashion sense rather than industrial technology. By the 1970s, Aba tailors had developed a range of distinct specializations, including men’s shirts and trousers, men’s suits, women’s skirts and blouses, men’s and women’s traditional wear, and wedding dresses (which was often combined with the production of wedding cakes). These various lines involved distinct apprenticeships, and achieved a level of skill that earned Aba a reputation for fine tailoring across Nigeria. As in most parts of Nigeria, tailoring tends to be segregated by gender, with men sewing men’s clothes and women sewing for women. Small-scale mass producers, by contrast, remain overwhelmingly male dominated, whether engaged in the production of singlets or brassières. The mechanized character of small-scale garment production, both among tailors and informal mass producers, made barriers to entry comparatively high in the early decades of the activity, when relatively few Igbos owned a sewing machine. These capital-based barriers to entry tended to preserve Bende6 dominance within informal garment production. It also allowed the development of a quality advantage among Bende producers, since entrants of Bende origins had the most advantageous access to training through the apprenticeship system. Even today, Bende origins confer an automatic reputation for quality sewing in Aba, and represent a definite asset to any tailor, though poor individual performance can quickly undermine this advantage. The greater wealth and long trading history of the people of the Bende area also resulted in a much higher level of Bende participation at the supply and distribution ends of the garment product chain.7 Traders from 5

Interview with President of Aba Garment Cooperative, 7 April 2000. The term ‘Bende’ will henceforward be used to refer to the communities of Old Bende. 7 Interview with Chairman, Elastic Traders’ Union, Garment Cluster, Aba, 18 August 2000; interview with Suppliers of Garment Materials, Garment Cluster, 25 August 2000. 6

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various Bende communities, along with those from particular communities in what is now Anambra State, became major players in the supply of elastic and other tailoring materials. Bende traders are also heavily represented in the distribution networks for finished garments. This gives garment producers of Bende origins clear advantages in terms of their embeddedness in key supply and distribution networks. 5.2 The Informal Shoe Cluster While the history of informal garment production revolves around the development of dynamic communal networks of production, supply and distribution, informal shoe production was largely a product of poverty and marginalization. Discussions with veteran and retired shoemakers in Aba indicate that informal shoe production was pioneered in Aba during the 1950s by people from the Mbaise community of central Igboland, though colonial documents indicate that local shoe production existed in Aba as early as the 1940s.8 Even within the land scarce environment of Igboland, Mbaise is an area of particularly severe poverty and land shortage, with densities of over 1000 people per square mile (Ardner 1953b; Chubb 1947:66). From pre-colonial times, land in the Mbaise area was scarce and infertile, and inhabitants were forced to work as migrant labour for neighbouring clans, or to eke out a living in crafts requiring little capital, such as mat or rope making and petty trade (Isichei 1976:27). During the colonial era, the main sources of income in Mbaise were palm produce trade and paid employment outside Mbaise, often as migrant labour and domestic servants (Ardner 1953b; Ardner 1953a; Chubb 1947:96). In Aba, Mbaise indigenes turned to informal shoe production because of its low capital requirements and ease of entry, rather than because of any local advantages in skills or trading contacts. Mbaise people have no history of specialization in leather working; in fact, informal shoemaking did not initially involve the use of leather. It was characterized by the use of automobile tyres for the production of crude rubber sandals. As the raw materials were cheap, involving largely scrap, and production required only a few basic hand tools, informal shoe production was an ideal activity for poor migrants. The activity was originally household based, but had become well established in Eke-oha market in the central commercial district of Aba before the outbreak of the Nigerian Civil War in 1967.9 As in the case of garments, a sharp differentiation occurred among shoe producers from the early 1960s. Weaker producers, largely Mbaise 8 Interview with Patron and some executive members of Mbaise Shoe Makers Association, 8 December 1999; Interview with the founder and managing director of Jonwas J. Industrial Co. Nig. Ltd. (a formal sector medium-scale shoe company in Aba) 8 August 2000; Interview with retired Mbaise shoemaker, 22 August 2000. 9 Interview with the founder of Jonwas J. Industrial Co. Nig. Ltd., 8 August 2000; Interview with retired Mbaise shoemaker, 22 August 2000.

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migrants, continued to concentrate on the production of rubber sandals, while more skilled producers moved into the production of leather shoes and sandals, particularly among Igbo artisanal groups from Afikpo in what is now Ebonyi State, and Okigwe in what is now Imo State (Forrest 1994:174). By 1961, there were 92 shoe firms in Aba: the majority involved the production of rubber sandals, were unmechanized, and had an average of fewer than three workers per firm, while just over one-third produced leather shoes, including three firms that employed more than ten people and had acquired a degree of mechanization (Forrest 1994:174; Kilby 1963). However, Forrest notes that these firms were all wiped out by the Civil War, and the re-establishment of the activity in the 1970s was dominated by very small firms. Despite the levelling effect of the Civil War, the small-scale shoe producers that re-emerged in Aba in the 1970s remained divided into two groups. One group, dominated by Mbaise indigenes, continued to operate within Eke-oha market, although the production of leather sandals and shoes had replaced that of tyre sandals. A second group, dominated by better capitalized and more highly skilled small-scale shoe producers of mixed origins operated from shops in the main streets around the market, which afforded more space for machines and workers, and tended towards formal rather than informal forms of economic organization.10 Following a fire in Eke-oha market in 1976, in conjunction with extensive lobbying from the shoemakers’ association that had emerged among the higher quality producers, informal shoe producers were shifted to a new site in 1977. The new shoe production site was located in Ariaria market, a huge open market just being developed at the edge of town.11 Shoe producers were relocated to an area known as AME inside Ariaria market. While many of the operators from Eke-oha market remained in AME, more successful producers, especially those who had operated from commercial shops outside Eke-oha, found the cramped facilities and the 5.30 pm closing hour inside Ariaria market unconducive to production. The latter group gradually occupied residential districts beside the market, which provided more spacious workshops as well as greater proximity to the main input suppliers. Over time, the expansion of informal shoe production resulted in the formation of six different sub-clusters in and around Ariaria market, each with its own producers’ association. The distinction between the low quality end of the shoe market, dominated by Mbaise migrants, and the quality-oriented side of the activity, involving a wider range of Igbo communities, affected linkages 10

Interview with founder of Jonwas shoe company, 8 August 2000; interview with Chairman of AME, 14 August 2000; case studies of older shoe producers in Powerline, and AME, 15 and 16 August 2000. 11 Interview with Chairman of AME, 14 August 2000; interview with Chairman of Powerline, 24 November 1999, 23 August 2000.

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Figure 4 Map of the Shoe and Garment Clusters in Aba, Nigeria

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with supply and distribution networks.12 Although they were the pioneers of local shoe production, Mbaise indigenes are not major players in the supply and distribution sides of the shoe business. While some major Mbaise distributors of shoe parts and finished shoes have emerged, Mbaise traders tend to predominate in the retail end of supply and distribution networks. The wholesale end is dominated by traders from Anambra State, as well as by Okigwe and Afikpo operators, resulting in more effective community based ties between production and distribution networks at the higher quality end of local shoe production. In the case of informal shoe production, the effects of communal embeddedness have been less beneficial than in garment production. While Bende origins confer a reputation for quality in tailoring, Mbaise origins tend to be associated with cheap, low quality shoes, rather than with craftsmanship. Although a preoccupation with quality emerged among better capitalized producers specializing in leather shoes, this segment of the activity was not associated with any particular Igbo subgroup, and has generally been outnumbered by low quality Mbaise producers. On the whole, Mbaise dominance reinforces the perception of shoemaking as a ‘poor man’s business’ despite a marked increase in its profitability during the 1990s. Thus, in contrast to the case of informal garment production, communal specialization among informal shoe firms has generated a reputation for low income, low quality production, while entrants from other identity groups have led the drive for entrepreneurial development.

6. Conclusion On the eve of crisis in the Nigerian formal economy, Igbo informal manufacturing enterprises seemed well placed for a dynamic response. Despite nearly a century of state neglect, punctuated with active repression, the Igbo informal economy had developed a framework of communal entrepreneurship embedded in global supply and distribution networks. Even this brief examination of Igbo economic history shows that, contrary to prevailing perspectives on African social capital, Igbo economic networks are endowed with a remarkable range of commercial and artisanal institutions, including credit networks, occupational specialization, apprenticeship, and a tendency to form associations for popular economic advancement. Far from undermining the development of ‘rational’ economic institutions, the ‘occult’ practices and secret societies of the pre-colonial era contributed to the emergence of efficient economic institutions in a stateless society. While some of these indigenous institutions were weakened by colonialism, the dualistic environment of 12

Interview with Shoe Parts Traders, Umuehilegbu Shoe Production Zone, Aba, 15 August 2000, and with Shoe Parts Traders, Zone 9 Ariaria Market, Aba, 22 August 2000.

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indirect rule facilitated the persistence of many of them in ways that allowed for their adaptation to changing political and economic conditions. New Igbo sub-groups developed in response to changing administrative and political arrangements, new activities were pioneered by various Igbo sub-groups, and new associations and diasporic networks developed to gain access to changing patterns of opportunity for social and economic advancement. Despite the temptation to accentuate the positive, a balanced assessment of the historical evidence also reveals some worrying tendencies. The informalization and marginalization of Igbo economic networks during most of the colonial and independence periods has contributed to a significant weakening of their regulatory capacity. While Igbo sociocultural networks have served as mechanisms of mutual assistance and solidarity, it is not clear whether their sanctioning capacities remain strong enough to provide a framework for small-firm development in the context of rapid expansion and intensifying competition. In addition, evidence from the history of the Aba shoe and garment clusters suggests that poverty and social inequalities among Igbo communities have resulted in unevenness in their ability to foster development. The question to be addressed in the rest of this book is how these embedded organizational networks have been affected by the process of economic restructuring. Has the liberalization of the economic environment since the mid-1980s unleashed the dynamic tendencies embedded in Igbo economic networks or has it accentuated the fragility and fragmentation of these networks in the face of intensifying economic pressure and state neglect?

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Informal Manufacturing & Economic Restructuring

Economic restructuring unleashed a whirlwind of economic change in Nigeria that dramatically reshaped the informal as well as the formal economy. Igbo commercial networks, which had proved an impressive source of entrepreneurial development in the face of repeated historical obstacles, found themselves confronted with the formidable new challenges of liberalization and globalization. The question to be raised here is whether neo-liberal economic reforms unleashed or undermined the developmental capacity of Igbo informal manufacturing networks. Addressing this issue calls for empirical attention to the actual impact of economic reforms on informal enterprise, rather than simply assuming that positive or negative economic outcomes are the best indicators of whether informal economic networks constitute social capital or social liabilities. This chapter will trace the effect of Nigeria’s structural adjustment policies on the Aba shoe and garment clusters, focusing on changes in the organization of production, supply and marketing networks. Have these enterprise networks been able to promote productive development in an environment of liberalization and formal sector crisis? To what extent have Igbo cultural institutions acted as assets to or as constraints on the ability of the two clusters to meet the challenges of economic restructuring? Have neo-liberal economic reforms unleashed a process of ‘development from below’ or have they served to intensify processes of informalization and marginalization that have plagued Igbo informal enterprise since colonial times?

1. The Challenge of Economic Restructuring The onset of Nigeria’s Structural Adjustment Programme in 1986 confronted Aba’s informal enterprise clusters with an economic environment that seemed more daunting than enabling. Structural adjustment involved 56

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Table 4.1 Indices of Devaluation and Consumer Price Inflation in Nigeria, 1991-1999 (1985 = 100) 1991 1992

1993

1994

1995

1996

1997

1998

1999

Index of N – to $ Exchange Rate

7.6

4.8

3.7

4.9

2.5

2.4

2.6

2.7

1.3

Urban Consumer Price Index

346

515

830

1317

2135

2771

3054

3230

3489

Source: Central Bank of Nigeria, Annual Report and Statement of Accounts, 1999; IMF, International Financial Statistics, 2000.

a range of macro-economic policies including currency devaluation, trade liberalization, downsizing of the public sector and fiscal as well as governance reforms. Between 1985 and 1999, the Nigerian currency lost 99% of its value, and urban dwellers faced an average annual inflation rate of more than 200% (Table 4.1). Massive public and private sector retrenchment generated catastrophic levels of unemployment, conservatively estimated at 27% in 1997, as well as high rates of entry into all manner of small-scale and informal activities (Meagher & Yunusa 1996; US State Department 1999). Even after the doubling of the minimum wage in 2000, real minimum wage levels still stood at one-third of their 1985 value, owing to the pressures of inflation and high unemployment.1 Operators of small firms were all but overwhelmed by the ensuing economic turbulence. Collapsing real wages and unprecedented unemployment confronted small firms with rising costs, intensified competition and collapsing consumer purchasing power. Worse still, import liberalization and rampant smuggling have flooded local markets with cheap Asian imports and second hand goods, further intensifying the competitive pressures confronting small business operators. As Haan (1999:162) observes, informal operators across Africa have ‘become more and more squeezed between low (and in some countries even declining) purchasing power of their clients and increased competition from industrial goods, especially from liberalized imports.’ Moreover, Nigeria’s widespread deregulation of markets has been accompanied by an increase in the regulations faced by small enterprise. Owing to the realities of Nigerian industrial policy and strong labour unions, factory, labour and zoning regulations, as well as registration requirements, all 1 Nigeria’s monthly minimum wage was raised to – N 60 per month in 1985, – N 125 in 1986, – N 250 in 1991, and – N 3500 for federal workers in 1999. In 2000, the monthly minimum wage was N 6500 for workers employed by state governments, and raised to – N 7500 for federal workers, – – N 5,500 for the private sector (see Meagher, K. & M.-B. Yunusa (1996a), Passing the Buck: Structural adjustment and the Nigerian urban informal sector, Geneva: United Nations Research Institute for Social Development; World Socialist Web Site (2002) Nigeria: Employment and Labour; World Socialist Web Site (2000), Nigerian unions concluding separate agreements over minimum wage, www.wsws.org.

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remain in force. In fact, Nigeria’s long standing exemption of firms with fewer than ten employees from official requirements2 was revoked in 1987 when industrial regulations were extended to all enterprises, no matter how small.3 Rather than eliminating the boundary between the formal and informal sectors as intended, the incorporation of all production units into the formal regulatory framework has had the paradoxical effect of intensifying the division between the formal and informal sectors. Additional regulations affecting small producers have been generated by international conventions and an adjustment-induced commitment to increased revenue generation. Since 1989, a number of new taxes, including VAT and Environmental Sanitation Tax, have been imposed at varying levels of government, to which even the smallest firms are now officially subject. These are in addition to the various operating licences and signboard taxes conventionally paid by small and micro-businesses to the local government, which have also been massively and repeatedly raised since the early 1990s. To complicate matters further, a new battery of regulatory controls has been introduced to control counterfeiting and adulteration of locally made goods. In response to US pressure and international conventions on intellectual property rights, counterfeiting of patented goods and trademarks was criminalized under Nigeria’s Copyright Decree of 1988. The creation of the Nigerian Agency of Food and Drug Administration and Control (NAFDAC) in the mid-1990s has further intensified regulatory controls on counterfeiting and adulteration of food, drugs and cosmetics. Amid increased taxation, constant changes in tax and regulatory regimes, and a growing reliance on adulteration and counterfeiting to cope with rising costs, these regulatory changes have pushed a growing number of small producers into the informal economy. Commenting on the impact of structural adjustment on African business development, Poul Ove Pedersen and Dorothy McCormick (1999: 130) point out that ‘The continuous changes in rules and regulations and their inconsistent enforcement create an instability in the economic system which is not supportive of long-term investment.’ Far from integrating the formal and informal economies, the unstable economic climate of structural adjustment has increased the vulnerability of informal operators to official sanctions, as well as driving a growing number of small firms underground in response to poverty and a dizzying succession of regulatory reforms. Contrary to theoretical arguments about the disappearance of informal economic boundaries, the picture that emerges is one of an expanding and clearly identifiable informal economy. Structural adjustment does 2

Federal Government of Nigeria, 1974. Nigeria Labour Act. Nigeria Factory Act (Decree No. 16 of 1987); Interview with official of the Factory Inspectorate, Federal Ministry of Employment, Labour and Productivity, 31 January 2000.

3

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not appear to have made the formal/ informal distinction obsolete in Nigeria. Despite informal economic expansion, some commentators remain sceptical about whether the Nigerian informal economy has been dynamized by restructuring policies. According to a Nigerian government survey conducted in 1998: The perceived contribution of the informal sector as the driving force of the economy, especially since the introduction of SAP, as been confirmed only in the area of employment generation; … the contribution of the informal manufacturing sector to the GDP was only 0.3 per cent in 1998… This is small when compared to the large number of enterprises involved and the number of people employed. (CBN/ NISER/ FOS 2000:iv)

Yet proponents of small firm clusters argue that it is precisely under conditions of severe economic instability that informal enterprise networks come into their own. While isolated small firms may fare badly under structural adjustment, collaborative enterprise networks can create a competitive edge. Recent research has documented the dynamic performance of small enterprise clusters in developing as well as industrialized economies, even under conditions of rapid economic restructuring. Studies of small enterprise clusters in a range of Asian and Latin American countries detail how producers survived the twin challenges of liberalization and globalization by increasing cooperation, cutting costs, entering new markets and exerting pressure on government for strategic support (Knorringa 1996; Rabellotti 1997; Schmitz & Nadvi 1999). In a situation particularly reminiscent of Nigerian conditions, Knorringa documents the travails of an active shoe cluster in Agra, India involving over 5,000 largely informal firms, which has coped with the pressures of liberalization by accessing new export markets and successfully lobbying the state to upgrade infrastructural facilities. Such success stories suggest the dynamic possibilities of small firm clusters in developing countries, even under the daunting conditions of liberalization and globalization. While the record of African enterprise clusters has been poor, as numerous studies have shown (McCormick 1999; Nadvi & Schmitz 1994; Rasmussen et al. 1992), the main problem is diagnosed as the underdevelopment of enterprise networks. Nadvi and Schmitz (1994:42) contend that African enterprise networks are ‘relatively young with specialization and cooperation yet to develop’. By contrast, Igbo enterprise networks show a much higher level of development, involving subcontracting networks and an interfirm division of labour, training and labour networks, and distribution networks linking the cluster with external markets. Given their history of dynamism in the face of economic upheaval and marginalization, are the informal enterprise networks of the Aba clusters sufficiently developed to meet the challenge of economic restructuring?

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2. Claiming the New Millennium There can be no doubt that the liberalization of the Nigerian economy triggered a dramatic expansion of Igbo enterprise clusters, particularly in the towns of Aba and Nnewi. This contrasted with the fate of the formal manufacturing sector, where capacity utilization fell from 70% in 1980 to 41% in 2002, and manufacturing growth declined by over 2% per year from 1991-1999 (Adebiyi & Babatope-Obasa 2004:2). During the same period, the expansion of non-state manufacturing activities in the Igbo south-east of the country attracted increasing national and even international attention, leading the Nigerian press to dub the area ‘the Taiwan of Africa’ amid rising levels of production, employment and incomes (Brautigam 1997). By the turn of the millennium, the Aba shoe and garment clusters had emerged as two of the largest and most dynamic small-enterprise clusters on the continent. In a town of about 750,000 inhabitants, these two enterprise clusters generated an impressive level of employment and economic turnover despite their persistent informality. With an average firm size of only three workers, the two clusters hosted a total of 14,000 firms, employing 36,600 enterprise heads, employees and apprentices, and over 21,000 temporary workers during seasonal periods of high demand (Table 4.2). More remarkable still, their annual turnover in the 1999-2000 season amounted to US$ 160 million, in the case of shoes, and US$ 12 million for garments. These figures dwarf small enterprise clusters in the rest of the continent, and compare favourably with those of successful manufacturing clusters in Brazil, India and Pakistan (Schmitz & Nadvi 1999). Table 4.2 Size of Aba’s Informal Shoe and Garment Clusters in 1999-2000 Season Cluster

No. of Firms

Long-term Employment

Temporary Employment

Annual Turnover (US$ mil.)

11,497 2,423 13,920

26,443 10,177 36,620

19,610 1,938 21,548

12.5 162.4 174.9

Shoes Garments Total

Specialization of Enterprise Head in One Activity (% of Firms) 85.5 72.9 79.3

Source: Fieldwork

Moreover, producers in both clusters showed a continued tendency to occupational specialization, rather than sliding into the pluri-activity strategies commonly associated with African informal enterprise, particularly in times of economic instability (Berry 1994; Collier & Gunning

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1999). While informal economic performance in the rest of Africa has given cause for concern, Igbo popular entrepreneurship seemed poised to claim the 21st century. The remarkable dynamism of the Aba enterprise clusters has developed in a context of continued and pervasive informality; that is, they operate largely outside the regulatory framework of the state (Castells & Portes 1989). As of the year 2000, 99% of shoe firms, and 80% of the garment firms were unregistered, and all firms were in contravention of basic factory, labour and/or zoning regulations. Even with regard to taxes, the vast majority of firms were on the wrong side of the law. While most informal shoe and garment firms paid a battery of local government taxes, as well taxes for higher levels of government delegated to the local government for collection, they evaded most federal and statelevel taxes. This observation is confirmed by a report of the Central Bank of Nigeria (2000) which found that 80% of Nigerian informal manufacturing firms paid taxes to the local government, while largely evading taxes to higher levels of government. Despite high levels of informality, the Aba shoe and garment clusters have developed a complex array of supply, production and marketing networks which have underpinned their ability to expand in the face of rapid economic reform. Drawing on culturally embedded forms of organization, these Igbo enterprise networks have helped producers to weather the economic instability of economic restructuring while responding actively to new opportunities. However, the pressures of rapid economic change and mounting competition are beginning to take a toll.

3. Entry and Training Networks In both the shoe and garment clusters, networks regulating entry and training have continued to play an important role as vital sources of skills and start-up capital. At the same time, rising levels of entry have generated new pressures on the regulatory and resource capacities of culturally embedded networks, generating shifts in the communal as well as the generational composition of both clusters, though there has been surprisingly little effect on patterns of gender participation. While differing social histories have meant that these pressures have played themselves out in distinctive ways, they have, in both cases, given rise to new communal and generational tensions. 3.1 Founding Communities and Rapid Entry As noted earlier, Aba’s shoe and garment clusters were pioneered by different artisanal communities – migrants from Old Bende communities in the case of garments, and Mbaise indigenes in the case of shoes. The dominance of communal networks has been severely challenged by economic restructuring, which has triggered unprecedented levels of

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entry into both activities by producers from a wider range of Igbo and even non-Igbo communities. Nearly 80% of garment producers, and 90% of shoe producers have entered the business since the imposition of structural adjustment, overwhelming the regulatory control of the original artisanal networks. As of 2000, only 43% of surveyed garment producers and 56% of shoe producers had been trained by a relative or townsman. The incorporation of outside communities was not in itself a problem. During periods of expansion since the 1970s, neighbouring Igbo subgroups linked through trade and intermarriage were gradually integrated into both clusters through the apprenticeship system. Informal occupational cohesion was maintained through socio-cultural and family connections between neighbouring groups, and socialization into occupational norms through apprenticeship, which often involved absorption into the master’s household.4 Under the pressures of structural adjustment, however, the rising tide of new entrants overwhelmed these more gradual processes of communal integration. While the pressures of rising entry were similar in both clusters, their impact on the dominance of the founding communities varied significantly. In the Aba garment cluster, the founding Bende communities maintained their prominence in the activity, along with a reputation for superior skills. Higher capital and skill requirements in garment production helped to insulate the garment cluster from the flood of new entrants. A sewing machine is considerably more expensive than the basic tools of a shoe producer. By 2000 a tailor could not set up even the most basic business for less than N – 10-15,000 (US$ 100-150), which amounted to three to four times the monthly minimum wage. Small-scale mass producers faced far higher costs, owing to more costly industrial machinery, the necessity of procuring at least two to three different types of machines. Setting up at even a basic level required – N 150-200,000 (US$ 1500–2000) in 2000. In the shoe cluster, by contrast, the founding ‘artisanal’ group, known for their poor skills and low levels of capital, has been overwhelmed by entrants from other communities, including a substantial proportion of Aba indigenes and ethnic minorities from neighbouring non-Igbo states. The capital requirements for informal shoe production are extremely low, owing to the lack of mechanization and use of simple tools. Some respondents started their businesses in the late 1990s with as little as N 1,600 (US$ 16), making shoe production much more accessible to the – poor and unemployed. The differential timing of import liberalization for textiles and shoe also influenced the intensity of entry pressures in the two clusters. Textile imports, previously limited by high tariffs, were liberalized in 1997, with 4

Normally, apprenticeship marks a person’s exit from his or her natal household; upon completion of the apprenticeship, the trainee would not return home, but start up an independent household.

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a powerful impact on the profitability of informal garment production. The pressures of liberalization were exacerbated by the dramatic devaluation of several East Asian currencies in the same year, as a result of the Asian economic crisis, flooding the Nigerian market with cheaper and higher quality Asian garments.5 These events have devastated markets throughout the garment cluster, particularly among informal mass producers. The shoe cluster has fared better in this regard. While competition from smuggled second hand shoes posed an ongoing threat to markets, the liberalization of shoe imports did not take place until 2000, delaying the pressures of Asian competition. As a result, informal shoe production benefited from a few more years of protection, sustaining its attractiveness to new entrants. The interaction of communal advantages and wider economic conditions has resulted in distinctive patterns of communal restructuring in the two clusters. By the year 2000, Bende producers made up only 44% of enterprise heads in the garment cluster, while Mbaise shoe producers had dwindled to only 14% of enterprise heads. While Bende producers maintained a reputational advantage and a limited measure of influence, the majority of producers in the two clusters did not perceive community origins as conferring any particular advantage or disadvantage on producers. This situation contrasts with the comparative stability of embedded networks among small shoe producers in Dakar, Senegal. Despite similar conditions of liberalization and high unemployment, Senegalese shoe producers have been less affected by an influx of competition because participation is governed by caste structures which make entry demeaning to non-caste actors.6 The rapid influx of new producers has also exerted a profound effect on the generational composition of the two clusters. Intense competition not only brought in a flood of younger entrants; it forced out an increasing number of older, more experienced producers. Although there were producers of over sixty years of age in tailoring, and producers in their fifties in shoes, 51% of garment producers and 59% of shoe producers were youths aged thirty or less. These trends were not the product of a penchant for early retirement, but of a dramatic increase in competition that put older operators with more expenses and family responsibilities out of business. A struggling shoe producer from Mbaise, who had been in the business for twenty years, claimed that before 1985 it was common to find older men in the business, but they had since been ‘swept away by austerity’.7 Yet hopes that such developments would bring new skills into the informal economy have been largely disappointed owing to the effects of rapid entry on the apprenticeship system. 5

Interview with five small-scale Garment Producers, Core Garment Cluster, 2 November and 5 November 1999; interview with President and Secretary of Aba Garment Manufacturers’ Cooperative, Ndoki Road, Aba, 5 November 1999. 6 Interviews with small shoe producers, Dakar, Senegal, August 2002. 7 Interview with a poor shoemaker in AME, 15 August 2000.

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Interestingly, the pressures of rapid entry have had remarkably little effect on the gender composition of the two clusters. Although studies have shown that more women are entering the informal economy, increased female participation has had comparatively little effect on the informal gender division of labour. In the garment cluster, prevailing social and occupational norms support a situation in which women make up about half of garment producers, with a particular concentration in tailoring rather than mass production. Even after the onset of structural adjustment, women were found to make up 44% of producers in the garment cluster. By contrast, in the shoe cluster, physical and social constraints continue to bar women from operating informal shoe firms. 3.2 Apprenticeship Networks The institution of apprenticeship, much celebrated in the literature on African informal enterprise, continues to serve as the main gateway to entry. In the Aba clusters, 99% of shoe producers, and over 90% of garment producers had trained as apprentices before entering the business. Indeed, the Igbo apprenticeship system offers considerable benefits to entrants, including training in production skills, induction into supply, credit and marketing networks, and socialization into relevant occupational values relating to quality and work ethics. In many activities, Igbo masters also provide start-up capital in cash or equipment, and secure a workshop for the apprentice to start up on his or her own (Forrest 1994; Chukwuezi & van den Bresselaar forthcoming; Silverstein 1983). While the practice of settling apprentices is not as common in informal manufacturing activities as it is in trade, it remains conventional practice in activities which require expensive machinery, such as garment mass production, and was also found to exist more sporadically in tailoring and shoes. While apprenticeship continues to play a central role in both clusters, it has come under considerable strain in face of rapid entry and mounting economic stress. Contrary to expectations, problems have not arisen in the areas of child labour and the increased exploitation through delayed ‘graduation’ of apprentices; rather, they have been reflected in an erosion of the institutionalized benefits of apprenticeship for both masters and apprentices. The average starting age of apprentices in both clusters was found to be between fifteen and sixteen years. This conforms to the legal working age in the Nigerian Labour Code, as well as reflecting a contemporary need for trainees with at least primary education to ensure adequate levels of numeracy and literacy. This reliance on primary education suggests that the effectiveness of apprenticeship training is likely to be negatively affected by the ongoing collapse of the Nigerian public educational system, rather than providing a ready-made alternative – a problem noted in other studies of Nigerian apprenticeship in various parts of the country (Adam 1999; Meagher & Yunusa 1996).

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By the early 2000s, training periods averaged just over three years in the shoe cluster, while in the garment cluster they were slightly over twoand-a-half years, though they could often be twice as long among informal mass producers owing to higher skill and capital requirements. Far from showing a tendency to increase, the evidence shows an erosion in both the quality and duration of apprenticeship training. Owing to increased economic hardship among customers as well as masters, production is becoming biased towards cheaper and more easily produced items. As a result, apprentices are being trained in lower quality standards and a narrower and more obsolete range of technical skills. Despite poor training conditions, masters have experienced pressures from both apprentices and their families to reduce training periods so that apprentices may begin bringing in an income as soon as possible. There is evidence of a slight reduction in the duration of training between producers trained before adjustment, and those trained afterwards. Equally problematic is the marked decline in the practice of ‘settling’ apprentices. Settling is normally restricted to relatives and townspeople, and is therefore rarely an option for those apprenticed to masters of different communal origins. Even among relatives and townsmen, the fact that settling requires a much longer period of service has made apprentices and their families less inclined to opt for such an arrangement. Worse still, when apprentices serve the longer period required for settlement, it is increasingly common for masters to default on the arrangement owing to financial difficulties, or to resort to the opportunistic dismissal of apprentices just before they completed their training. Indeed, a number of operators interviewed had ended up in the small-scale shoe or garment sectors because masters in more costly trading or craft activities had failed to settle them at the end of their training. In one case, a young garment mass producer from Item was forced to serve two apprenticeships totalling twelve years because his first master had been unable to settle him properly owing to financial difficulties. Less than 10% of shoe and garment producers operating in 2000 had been settled by their masters. The erosion of supportive apprenticeship practices has been accompanied by increased opportunism in relations between masters and apprentices. On the one hand, masters attempt to maximize the use of cheap apprentice labour while increasingly reneging on financial and training obligations. On the other, apprentices and their families attempt to minimize the time spent under the control of the master, in an effort to capture the benefits of their own income generating potential. Masters interviewed also complained of a decline in the trustworthiness of apprentices, in the form of increased stealing and unreliability. These problems have encouraged a growing shift towards more ‘formalized’ arrangements involving fees and written contracts. While relatives and townsmen are not normally charged fees for apprenticeship, it has become increasingly common to charge fees to

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other categories of trainees, although church members are sometimes also exempted. Given the increased rates of entry from outside kinship and community networks, the payment of fees is fast becoming the norm in the shoe and garment clusters. Nearly two-thirds of garment producers and more than three-quarters of shoe producers had paid for their training.8 While the use of contracts and fees predated structural adjustment, they have become increasingly common owing to greater entry of outsiders and growing conflicts of interest even within kinship and community networks. In written contracts, the duration of training, working conditions and any fees or settlement are negotiated between the master and the apprentice or his/her senior relatives. Written contracts were used by 18% of producers in the garment cluster, and by 11% of producers in the shoe cluster. Although contracts are often used even if the apprentice is from the same community background, they were three times as common among firms in which apprentices were sourced predominantly outside kinship and community networks. While this looks like a trend towards formalization, most of these apprenticeship contracts are not legally enforceable. Both the terms of apprenticeship and the contracts themselves contravene the provisions of the Nigerian Labour Code, which now covers even the smallest firms. Among other things, regulations governing apprenticeship and young workers stipulate that apprentices cannot work more than eight hours at a stretch, and cannot be made to work at night, both of which are violated by prevailing norms of service in Aba’s small shoe and garment firms (Federal Government of Nigeria 1974: Sect. 49-53, 59-60). The Labour Code also states that no apprenticeship is valid unless it involves a written contract signed by a labour officer, a formality that is rarely, if ever, observed (ibid.: Sect.50). Thus, enforcement of apprenticeship contracts continues to rest on informal conventions rather than on formal legal sanctions. It has also led to an increased fragmentation of apprenticeship arrangements, in which terms and expectations vary from case to case, increasing openings for opportunism. The end result is that apprentices tend to enter the business more poorly trained and poorly capitalized than was previously the case, and masters face a more unstable, unskilled and unruly labour force.

4. Production Networks Contrary to assertions about the underdevelopment of African enterprise networks, these Igbo clusters reveal a sophisticated system of production networks. Both clusters have developed a distinctive division of labour 8 In 2000, fees charged for training averaged – N 2182 in the case of garments, and – N 5236 in the case of shoes, equivalent to two to four weeks’ pay at the official minimum wage. Charges vary according to the length of service, with higher fees for apprentices who have served shorter periods, since longer periods of service are of greater economic benefit to masters.

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underpinned by complex labour and subcontracting networks, reflecting their differing histories and labour needs. A highly institutionalized division of labour between firms has emerged in the shoe cluster, while the garment cluster involves a more sophisticated division of labour within firms. The declining importance of communal ties has been supplemented by an increased commercialization of both labour and inter-firm networks as the clusters expanded. Even though firms remain very small – averaging only 2.4 workers in the shoe cluster, including the enterprise head, and 4.6 worker in the garment cluster (Table 4.3) – production networks have facilitated engagement in increasingly complex and costly production processes by breaking them down into ‘small riskable steps’ (Schmitz and Nadvi 1999). Although these production networks reveal a remarkable capacity for economic coordination in the face of daunting economic challenges, they are beginning to show signs of strain amid mounting competition and severe pressure on livelihoods. Table 4.3 Patterns of Labour Use within Firms Cluster

Garments Shoes Average

Percent Avg. No. Avg. No. of Firms of of with No Apprentices Employees Workers

20.3 16.1 18.2

1.4 1.1 1.2

1.9 0.2 1.0

Avg. No. Avg. No. Avg. of of Permanent Temporary Unpaid Labour Workers Family Force (incl. Workers Firm Head) 0.9 1.7 1.3

0.3 0.1 0.2

4.6 2.4 3.3

Source: Fieldwork

4.1 Production Networks in the Shoe Cluster In the shoe cluster, labour and subcontracting networks have been shaped by the conditions of severe poverty historically associated with the activity. A rudimentary internal division of labour reflects a dependence on cheap but unpredictable forms of labour. Most of the labour used in the cluster is made up of apprentices and temporary workers, constituting a low cost but erratic workforce. In the face of increasingly unstable markets, apprentices are cheap, but they can be a liability when markets are slow and they breed increased competition over time. Temporary workers, normally drawn from a large pool of unemployed journeymen and idle shoemakers within the cluster, offer greater flexibility, since they can be employed for short periods on daily wage or piece rate contracts, but they can create as many problems as they solve. The main drawback of temporary labour is that the intense demand for such labour during the high production season makes access problematic and often leaves poorer shoemakers unable to meet their pressing labour

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needs. In the low production season, lack of work and the decline of the wage rate below that of motor-cycle taxis and casual labour tends to draw some of the labour pool off into other activities, making labour scarce despite the slowness of the market. More prosperous shoe producers began to opt for more permanent employees from the 1970s in order to ensure stable access to skilled labour, but owing to lack of resources and unstable markets, the use of steady employees remains rare in the shoe cluster. As a result, shoe producers are increasingly plagued by labour shortages not only during the high production season, but during the low season as well. While the division of labour within the firm is weak, problems of capital and labour shortage have fostered a strong division of labour among clustered firms. As the shoe cluster began to produce more sophisticated shoes in the 1970s, a range of specializations emerged. Shoemakers specialized according to the types of shoes they produced, normally men’s, ladies’, and children’s. For all types of shoes, the production process evolved into three distinct activities centred around the types of equipment needed. ‘Shoemakers’ had only simple hand tools, while ‘shoe tailors’, who carried out sewing tasks for shoemakers, were equipped with sewing machines, and ‘smoothers’ owned grinding machines and generators.9 Each of these activities involves a separate apprenticeship. As shoe production has developed, additional specializations have emerged, including ‘pressers’, who emboss designs on soles and uppers; printers, who stencil designs and labels; and sprayers, who dye shoes. The fact that the division of labour centres around machinery reflects the weak access to capital of most informal shoe producers, who are unable to afford the full range of machinery needed for shoe production. While some shoe producers have acquired additional machinery, the vast majority are dependent on subcontracting to other firms in the cluster. Less than 20% of shoemakers have any specialized equipment outside the conventional hammer, scissors, pincers, lasts and kerosene stove (Table 4.4). By contrast, processes not centred on mechanized equipment have not given rise to any structured inter-firm division of labour. Firms specializing in cutting out shoe uppers, which are routine in Italian footwear clusters, do not exist in Aba (Rabellotti 1997: 35). Given problems of poverty, more informal inter-firm networks have also developed around the borrowing of basic equipment. In addition to their lack of mechanized equipment, many shoemakers lack even the basic hand tools required for their trade, and depend on networks of informal borrowing in order to carry out their day to day activities. This tendency is exacerbated by the proliferation of increasingly small and undercapitalized firms owing to rapid entry into the informal economy and the weakening of the apprenticeship system. Amid very small firms, 9

Interview with retired shoemaker, 22 August 2000; interview with aged shoe maker, Powerline, 16 August 2000.

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Table 4.4 Levels of Inter-firm Subcontracting (% of Firms) Cluster

Garments Shoes Average

Own Specialized Machinery

Take in Subcontracts from Other Firms in Cluster

Subcontract Operations to Other Firms in Cluster

Subcontract Large Orders to Other Firms in Cluster

57.6 16.1 36.4

40.7 9.7 24.8

83.6 88.7 86.4

36.1 42.2 39.4

Source: Fieldwork

the subcontracting of large orders is also relatively common, involving over 40% of shoe producers. In the face of intensifying competition and communal diversity, shoemakers reported that subcontracting ties depend less on community origins than on an earned reputation for skills and reliability. As one shoe producer put it, ‘If you give something to your friend or townsman and he spoils it, it is bad for your business. People do jobs together and get to know each others’ work.’ As a result, subcontracting relations have become highly commercialized, and are shaped by economic factors of proximity, price, quality and speed as much as by communal identity or social affinity. 4.2 Production Networks in the Garment Cluster Higher levels of capital and skills in the garment cluster have given rise to distinctive patterns of labour use and subcontracting relations. Patterns of employment show a preference for skills and stability over cheap labour, reflected in a bias towards steady employees rather than temporary labour (Table 4.3). Particularly at the upper end of the cluster, employees predominate over other forms of labour, and a strong internal division of labour prevails. As of the early 2000s, some informal mass producers had as many as twenty employees, involving specialized workers trained on particular machines rather than multi-purpose apprentices or temporary workers. In the case of tailors, who make up the bulk of the garment cluster, firms are smaller, apprentices predominate over employees, and the division of labour is more rudimentary. However, mounting pressures of Asian competition have triggered a growing recourse to temporary workers among mass producers as well as tailors. Mass producers have taken to laying off employees when business is too slow, and hiring them back when things pick up, blurring the line between employees and temporary workers. Tailors are turning to temporary workers to avoid being burdened with apprentices during the slow season. This has generated a pool of trained workers in the garment cluster, but, like apprentices, employees often start up their own businesses as soon as they can acquire enough capital. Employment contracts

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and ‘shortees’ are often used to guard against early departure of employees as well as apprentices, but low wages and tough working conditions continue to encourage the fissioning of firms. Problems of labour scarcity have been exacerbated by increases in the official minimum wage in mid2000, and by the liberalization of the mobile phone networks in 2003. Garment producers noted that many former workers turned to running mobile phone card kiosks, where work is easier and returns higher. The paradoxical result is that, despite intense import competition and increased laying-off of employees, the garment cluster is also plagued by a constant shortage of skilled labour. While labour relations within firms are more defined, the division of labour between firms in the garment cluster is less sharply institutionalized than in the shoe cluster. Although inter-firm subcontracting is widespread among garment firms, it is not based on specialization in particular aspects of the production process, but on conjunctural variations in machinery owned by a given firm. While all firms have basic sewing machines, a significant proportion do not own the more costly buttonholing, weaving and embroidery machines. However, there are no separate apprenticeships for buttonholing, weaving or embroidery – all of these are learned by tailors trained in well equipped workshops. Those unable to afford specialized equipment in their own business subcontract these processes to better endowed fellow producers. Overall, over 80% of garment producers were found to subcontract operations to other firms in the cluster (Table 4.4). By contrast, borrowing of basic equipment among firms is much less common in the garment than in the shoe cluster. Most garment producers own a full complement of basic equipment, and more than half of them have at least one additional machine for a specialized operation. A majority of these use their specialized equipment to perform services for other garment producers, giving rise to dense but less structurally defined subcontracting networks. The most successful firms in the cluster are less likely to engage in subcontracting networks because their machines are fully employed with their own work. While less institutionalized, interfirm subcontracting provides access to costly new machinery in a context in which most garment producers are no longer able to afford it themselves. 4.3 Pressures on Labour and Subcontracting Networks The evolution of production networks appears well adapted to the particular constraints and social histories of each cluster, but new economic pressures have triggered processes of regression and disruption of these networks. The paradox of labour shortages among pools of skilled labour, and subcontracting networks that create bottlenecks in access to equipment suggest that production networks are under stress. On the one hand, poor wages and working conditions are weakening the cohesion of labour networks. Despite the best efforts of producers,

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average monthly wages for employees and temporary workers have been unable to keep pace even with other informal activities, and involve average working weeks in excess of 55 hours in the low season, and reaching over 100 hours in the high season – especially in the shoe cluster where workers and enterprise heads often work through the night. The result is a constant fissioning of firms or a bleeding of skilled labour into other activities as workers and apprentices search for more viable options. Within this context, it was noted that the continued relevance of social ties in labour relations is often less about cooperative loyalties than an effort to tie labour and maintain discipline in the face of poor wages and working conditions. In inter-firm networks, mounting pressures on subcontracting relations are also contributing to problems of unreliability rather than enhancing efficiency. Serious bottlenecks are created in high production seasons, when producers who normally provide specialized services for others are busy with their own work. At such times, those dependent on contracting out certain operations face delays and disappointed customers. Despite increasingly commercialized subcontracting relations, communal or other personal ties remain important as a means of seeking some small economic advantage or preferential treatment While inter-firm ties are often viewed in the literature in terms of work sharing and economic solidarity (Nadvi and Schmitz 1994), these arrangements have become increasingly exploitative in the context of economic restructuring. Indeed, some producers in both clusters have converted subcontractors into a new form of labour. In one case, a tailor specializing in men’s clothes had no one working in his shop, because he found it was far cheaper to give jobs out to trained tailors who had no customers, than to use apprentices or employees. He had three regular tailors to whom he subcontracted all of his sewing, after doing the cutting himself. In the shoe cluster, subcontractors are often brought into the contracting producer’s shop to work, in order to prevent the leakage of designs and materials. Bringing subcontractors into the producer’s shop is a physical manifestation of the extent to which subcontracting has been converted into a labour relation rather than a form of horizontal collaboration between firms. As Schmitz (1999: 1641) recognized in his own work on the Brazilian shoe cluster, under the pressure of liberalization and global competition, inter-firm subcontracting relations often cross the fine line between collaboration and subordination.

5. Supply and Marketing Networks In contrast to production networks, Igbo supply and marketing networks have historically operated across community boundaries. Since precolonial times, relations between producers and traders have often involved institutionalized economic relations between different com-

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munities and ethnic groups. Supply and marketing not only involve institutionalized linkages across communal boundaries, but they provide a framework for the embedding of credit relations and other services which are critical to enterprise growth among capital-strapped informal producers. While liberalization has served to widen the reach of these networks, greatly expanding informal producers’ access to markets, it has put growing pressures on collaboration and trust in relations between producers and traders. 5.1 Supply Networks In both the shoe and garment clusters, supply networks have become increasingly globalized since the 1970s. In the shoe cluster, all of the main inputs are imported owing to continued lack of access to locally produced leather. Igbo communities originating predominantly from Anambra State in the western part of the Igbo area, bring in inputs from Italy, Germany, and the Far East (Taiwan, Hong Kong, Korea), and sell them through wholesalers located in and around the shoe cluster. Informal garment production faces a similar situation, with textiles, tailoring materials, needles and machines made up largely of imports. Major importers are Igbos of Anambra State and old Bende origins. Goods are brought in largely from the United States, Europe and Asia. In addition to bringing inputs into the clusters, suppliers provide a number of additional services, including product information, special orders, and most vitally, credit. At the wholesale level and occasionally at the retail level, regular suppliers give information on new products (including free samples to try out) and fill orders from individual customers for specialized inputs. At the retail level, a further important service is bulk breaking, which is increasingly important among cash strapped small producers who are unable to afford an entire drum of adhesive or roll of elastic. Credit is by far the most important service rendered by suppliers. Among mass producers in the garment cluster, the dependence on suppliers’ credit is a structural feature of the production system. Most of their capital is tied up in machines, encouraging an arrangement in which inputs are procured on credit and paid off when the finished goods are sold. Suppliers’ credit is less deeply institutionalized among tailors and small shoe producers, who depend more on advances from buyers to fill the gaps in their own capital. Even among these producers, however, suppliers’ credit has become more significant since the late 1980s in the context of rising input costs and unstable markets. While communal and inter-communal ties played a role in the early development of supply networks, these have been transmuted over time into performance based business relations. Length and frequency of custom and reliability of payment are the key factors underpinning the development of collaborative producer-supplier relations. An elastic dealer in the garment cluster characterized contemporary producer-

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supplier relations with a quotation: ‘In politics, there are no permanent friends, only permanent interests.’ Supplier networks are not determined by who one’s friends or townsmen are, but by where one can get the best deal.10 Producers of any background can build up collaborative supplier relations, including considerable credit, through regular purchases and reliable payment. In the garment cluster, cases were encountered of Bende producers who receive no credit from their Bende suppliers because of a poor repayment record, and of non-Bende producers who have built up N – 80-100,000 credit in less than two years with suppliers of different community backgrounds from their own. However, these arrangements differ importantly from the pure ‘repeated interaction’ networks extolled by new institutionalists (Fafchamps & Minten 2000; Humphrey & Schmitz 1996). In particular, the embeddedness of relations between producers and suppliers in well institutionalized practices and cluster-based enforcement mechanisms shortens the time necessary to develop significant business trust from several years, (as Fafchamps (1996:444) observed among formal sector Ghanaian firms), to a period of months.11 In both clusters, supplier networks not only support improvements in information, quality and variety; but fill the critical financing gap endemic to African small enterprise. Unfortunately, mounting market pressures are beginning to undermine collaborative relations between producers and suppliers. Quality-oriented garment and shoe producers repeatedly complained that importers have taken to bringing in only low grade inputs because most producers could not afford anything better. One highly reputed small-scale producer of men’s suits showed me a pair of heavily worn imported tailoring shears which he had been using since 1979. He had been ‘managing’ them, because one could not buy such shears in Aba anymore, despite the fact the Aba is one of the largest centres of small-scale garment production in West Africa.12 For their part, suppliers complained that when they import good quality inputs and equipment, it moves too slowly, tying up capital. They still occasionally bring samples of new goods for customers to try out, but on the whole stick to cheaper staples. Access to high quality inputs is increasingly restricted to larger firms who can obtain inputs from purchasing agents of foreign companies or import goods for themselves.13 The demand for imported inputs generated by the two clusters is having a mixed effect on the development of backward linkages. The growth of the shoe cluster has stimulated the informal production of shoe 10

Interview with Chairman of the Elastic Traders’ Union, New Market, Aba, 16 August 2000. Interview with Chairman of Umuehilegbu Shoe Parts Traders’ Association, Umuehilegbu shoe production zone, Aba, 15 August 2000; interview with shoe parts distributors, Zone 9, Ariaria Market, Aba, 22 August 2000; interview with Chairman of Elastic Traders’ Association, Ibere St., Aba, 18 August 2000. 12 Interview with owner of Kennedy Tailors, Asa Rd, Aba, 18 November 1999. 13 Interviews with management of Niger Garment, Offiasco Garment, and Sparks Tailors, Aba, 17–18 November 1999. 11

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parts in and around the cluster. Although they are inferior to the imported alternative, shoemakers buy them anyway because they are cheap. Industrial production of local inputs emerged in the early 1990s when the two largest Aba-based shoe companies shifted to the production of plastic soles in response to low cost competition from the expanding shoe cluster, abandoning shoe production altogether. Backward linkages to sources of leather have been more problematic. Although northern Nigeria produces and exports leather, the good quality leather is either reserved for export – perpetuating the colonial marginalization of local shoe production – or pre-purchased by large- and medium-scale shoe companies, leaving only inferior quality leather for small producers.14 The rising cost and poor quality of available leather has precipitated a shift to imported leatherette among the vast majority of Aba’s small-scale shoe producers, further compromising quality. A similar trend in backward linkages was observed in the garment cluster. Some large Aba garment factories have abandoned the production of finished garments because of intense competition from small firms, shifting to the production of the knit cloth used in garment production. However, demand for locally produced cloth is also faltering. Owing to mounting economic pressures, garment producers are shifting to cheaper imported seconds and misprinted fabric from the US.15 By early 2000, distributors from textile industries in northern Nigeria were threatening to stop supplying Aba if markets for their product did not improve. Access to machinery faces a similar problem of declining resources and quality. Machinery, both new and used, is obtained from three main sources: imports, factory sell-offs, and local fabrication. Simple domestic sewing machines from China are the only new machinery locally available, because few producers are able to afford anything more sophisticated. More advanced types of sewing, finishing and embroidery machines can only be obtained through specialized contacts with importers located outside Aba. As a result, those requiring more complex machinery are restricted to used and obsolete machines. Quality conscious producers in both clusters complained of the poor quality finishing and constant maintenance required by used machinery, but few were able to afford better. Contrary to the assertion of Pedersen and McCormick (1999: 118-9) that there are no markets for used machinery to service the needs of African small firms, an active market for used garment machinery existed in Aba by the early 1980s. Initially, these machines were obtained from factories in Western Nigeria who were going out of business or, upgrading. Aba-based dealers in used garment machinery later turned to importing used machinery, largely from the United Kingdom.16 Dealers of used shoe 14

Interview with the Human Resources Manager, FAMAD shoes, Lagos, 19 January 2000. Interview with cloth distributor for Aba-based garment firms, 25 August 2000. 16 Interviews with President of Aba Garment Cooperative, and with larger garment producers, 5 November 1999; Interview with used industrial sewing machine distributor, Aba, 25 August 2000. 15

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machinery also operate in Aba, and provide a range of services, including payment in instalments, and training on unfamiliar machinery. In the garment sector, however, the general decline in the industry is driving used machinery dealers out of business. Of the four used machine importers operating in Aba, three had gone out of business by 2000, and the fourth was not sanguine about his prospects. By 2005, there were no used machinery dealers left. As for local production, local machine fabricators can only make serviceable substitutes for some of the more basic shoe machines and tools, but are unable to handle the fine engineering required by sewing machines, with the exception of a few basic sewing machine parts.17 The result is a trajectory of technical regression as new machines become increasingly unaffordable, while used machinery and spare parts become unavailable. Market liberalization and economic instability have also taken a serious toll on the system of suppliers’ credit. Rising input costs and intensifying competition have encouraged a shift towards ‘cash and carry’ relations between suppliers and producers.18 Among shoe producers and tailors, who are less structurally dependent on suppliers’ credit, there is a greater reluctance to take credit owing to the instability of markets. The duration of suppliers’ credit for both of these groups is relatively short – only one to two weeks for all but the most successful producers. In a situation in which their buyers may pay late or fail to turn up, many cashstrapped producers prefer to avoid suppliers’ credit and buy only what their limited cash resources will allow in order to avoid embarrassment from suppliers coming to their workshop to demand payment. From the perspective of suppliers as well, slow repayment and increased instances of default have made credit too risky. The Chairman of the elastic traders’ union in the garment cluster claimed that hard economic times had destroyed relationships of trust with producers, even where they come from the same community. Whether the producer is a townsman or not, he explained, ‘by the time he can’t repay me, that trust is no more there…. Formerly, on trust, you could release 100 dozen [units of elastic], but now if you give that out on credit, you could stay for one month without repayment.’ The problem is not seen as one of personal characteristics, but of broader economic forces. As the elastic Chairman observed, ‘It is not you as a person that makes you disappoint [the supplier], but the economy of the country that makes you disappoint.’ In the face of negative economic conditions, community based ties with producers are often regarded by suppliers as more of a liability than an asset. Suppliers in the shoe cluster explained that townsmen often use moral pressure to get credit, and have a higher risk of default because they expect a fellow townsman to understand their problems. 17

Interview with Managing Director of Sparks Tailors, Aba ; Interview with owner of Kennedy Tailors, Aba, 18 November 1999. 18 Interview with Chairman of the Elastic Traders’ Union, New Market, 18 August 2000; interview with shoe parts traders, Ariaria Market, 22 August 2000.

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Overall, supply networks in the informal shoe and garment sectors bear little resemblance to the collaborative relationships of the more celebratory industrial district literature. During the 1970s, expanding markets and more diverse patterns of entry allowed the development of trust based on business relationships rather than communal identities, but these relationships have been rapidly undermined by intense competition and market instability. While some local input production has emerged, collaboration between small-scale producers and suppliers is minimal, and relations are increasingly locked into a logic of declining quality of inputs and machinery, both local and imported. 5.2 Informal Marketing Networks Marketing networks, like supply networks, have become increasingly globalized. Already by the late 1970s, marketing networks involving linkages with a range of Igbo trading communities had expanded across Nigeria and into other African countries. However, economic restructuring has triggered a dramatic expansion of informal markets for Aba’s smallscale manufacturers. Clandestine cross-border trading networks of Igbo and other African traders have responded energetically to expanding demand across Africa for cheap Aba-made goods at duty-free prices. By the year 2000, virtually all shoe producers, and more than a third of garment producers supplied markets outside Aba, as indicated in Table 4.5. Perhaps more surprising, 82% of shoe producers and 28% of garment producers manufactured for markets outside Nigeria. While Cameroun, Gabon, Benin Republic, Togo, and Niger were the main destinations of Aba’s informal exports, customers also traded Aba-produced goods to Ghana, Côte d’Ivoire, the Democratic Republic of the Congo (former Zaire), Zambia and South Africa.19 From the early 1990s, Forrest (1994) estimated that as much as 30% of Aba’s informal shoe production was exported through these informal channels. Much of the remainder was Table 4.5 Participation in Informal Distribution Networks, and Destinations of Products (% of Firms) Cluster

Some Main Distribution West Market Outside African Outside Aba Nigeria Countries

Shoes Garment Average

98 39 71

82 28 56

65 18 42

Central African Countries 68 19 44

Subcontracts Southern to Formal African Sector Countries Firms 8 6 4

26 50 37

Source: Fieldwork 19

Using personal networks, a few garment producers even distribute their goods to customers in Europe, and one Mbaise shoe producer in the sample markets some of his shoes in China through a townsman living there.

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traded to every corner of Nigeria, including Lagos, Abuja, Kano, and even Maiduguri. Initially, the export of Aba-made shoes and garments to distant countries was carried out by members of the Igbo commercial diaspora, distributed across Nigeria and in neighbouring West and Central African countries since the Civil War. Traders from other parts of Nigeria, especially Hausa and Yoruba operators, began frequenting the Aba clusters in the 1970s, but Igbo traders continued to dominate the export of shoe and garments to other countries throughout the 1970s and early 1980s. In the context of economic restructuring, two changes took place in the structure of informal export networks. The first was that Igbo networks penetrated increasingly far afield, reaching into southern Africa by the early 1990s, as economic pressures at home and increased political and economic liberalization abroad widened the horizon of opportunities. The second change was that foreign African traders began to come directly to Aba to buy for export to their home countries, bypassing their former Nigerian suppliers. Camerounians were reckoned to have started coming to the shoe cluster in the late 1980s, and by the 1990s Africans from a range of West and Central African countries had become regular buyers. Traders from Francophone countries, known locally as ‘ça va’, are highly prized by informal shoe producers, since they often purchase large quantities, up to one thousand pairs at a time, owing to long distances and less frequent visits. A command of French has become a business asset in parts of the shoe cluster. The rapid development of export networks in the shoe cluster is in part a product of power relations between shoe producers and shoe traders. Among shoe producers, a prohibition against selling their goods outside the cluster is strictly enforced by Nigerian shoe traders’ associations, who will seize the goods of any shoe producer caught flogging his wares outside the cluster. Shoe traders are backed by the shoe producers’ associations in Aba, who impose fines and other sanctions on behaviour that might discourage traders from coming to buy inside the cluster. In the garment cluster, mass producers also depend on traders who come into the cluster. Among tailors, however, marketing networks are still dominated by direct ties with individual consumers, though highly skilled tailors now attract customers from other parts of Nigeria and from neighbouring Cameroun. In the face of weakening consumer markets and the high price of imported clothing, a growing number of tailors also produce for traders who supply finished clothing to markets, boutiques, schools and other institutions in various parts of Nigeria. In contrast to the shoe cluster, enterprising tailors can and increasingly do cultivate wider distribution networks by taking samples of their goods to boutiques, companies, or offices in major towns across Nigeria – a practice found among half of the tailors interviewed. The penetration of international marketing networks into the Aba clusters has severely limited the value of identity based ties in securing markets. Shoe producers repeatedly stressed that long distance traders

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were primarily interested in saleable goods, not communal loyalties. Workmanship, rather than community origins, is the key to attracting buyers. As one shoe producer put it: ‘Your handwork tells where you are from.’ Community origins still make a limited difference in the garment cluster, not because of blind communal loyalties, but because of a lingering collective reputation for quality, which still attaches to producers of Bende origins. In addition to sales, informal marketing networks are also important sources of market information and credit. Traders’ preferences transmit information about shifts in fashion, but some traders even bring samples of popular products in their area for Aba producers to replicate. Because of the breadth of the informal distribution networks, small-scale shoe producers receive up-to-date market information from across West and Central Africa, and many have access through personal networks to design catalogues from Europe, North America and Asia. The responsiveness of the shoe cluster to fashion changes in women’s shoes is so rapid that a large multinational shoe factory in northern Nigeria abandoned the production of women’s shoes because it could not keep pace with the Aba producers. Marketing networks are also critical sources of access to working capital, particularly among tailors and small-scale shoe producers. Advances of one-third to one-half of the final price of the goods are conventional throughout Nigeria, owing to the inability of many small producers to mobilize sufficient working capital to start a job. Conversely, buyers often depend on credit from producers to fill gaps in their trading capital or consumer purchasing power. In both the shoe and garment clusters, a combination of advances and producers’ credit has oiled the circuits of small-scale production and distribution systems for decades, mitigating the severe economic constraints of producers, traders and consumers operating at the margins of the economy. Recent economic pressures have begun to threaten the viability of credit relations between producers and buyers. The rapid influx of new producers and traders of all origins has created a greater degree of anonymity within enterprise clusters, weakening reputation mechanisms, and making it easier for traders and producers to run away with each other’s credit. Market instability also increased the frequency with which traders or producers went out of business or ‘changed line’, undermining the effectiveness of reputation based enforcement mechanisms (see Fafchamps 1996: 442). An experienced shoe producer from Anambra State said he had scaled back his credit relationships to only two buyers because of growing problems of default even with long term customers.20 At the same time, oversupply and intense competition among producers has limited the need for buyers to offer advances. Producers tend to compete down advances in order to attract or retain a customer. There 20

Interview with a shoemaker from Imo Avenue, 14 August 2000.

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was a general consensus in both clusters that advances had become less available. A well established shoemaker lamented that in order to keep a customer who offered advances, one had to be willing to accept almost any price, or risk the transfer of valuable custom to another producer willing to accept the terms. He observed that, ‘competition wipes out long-term business relationships.’21 While buyers are less prone to giving advances, producers continue to offer credit if they can in order to hang on to customers. Increasingly, producers extend credit to buyers, not because of the strength of the business relationship between them, but because it is the only way of retaining customers. Over 60% of producers continue to rely on the reputation mechanism to prevent default, despite growing problems of enforcement. Barely 10% of producers require some sort of guarantee, such as the buyer’s address, a guarantor, or some form of collateral. While this is in part a product of continued faith in the reputation system, it also reflects the lack of options open to producers. In the face of extreme pressure on markets and livelihoods, the line between trust and desperation has become increasingly blurred. When asked how he ensured that credit would be repaid, one poor aging shoemaker said, ‘I just leave it to God.’22 While liberalization has triggered a remarkable expansion and internationalization of marketing networks, it has also precipitated a weakening of their reliability and their financial benefits to both producers and traders. Intense competition and market instability has eroded trust, precipitating a growing recourse to a ‘cash and carry’ system. This has deprived small producers in the shoe cluster of a key source of working capital, as well as increasing their exposure to the ravages of market forces. 5.3 Subcontracting Networks with the Formal Sector While informal marketing networks represent the main outlet for goods from the Aba clusters, subcontracting relations with the formal sector have also emerged. One-quarter of shoe producers, and half of garment firms in the sample had supplied goods to formal sector firms and organizations at some point in their careers. In the garment cluster, school uniforms account for the largest share of formal sector subcontracts, followed by uniforms for private companies, and orders from fashion boutiques in hotels and major cities. In the shoe cluster, formal sector subcontracts involve the supply of work boots to industries and oil companies, as well as subcontracts from formal sector shoe companies in order to increase product variety. The multinational shoe firm Bata (sold in the mid-1990s to the consortium FAMAD) was a well-known source of subcontracts to the Aba shoe cluster in the late 1980s and early 1990s.23 Some informal 21

Interview with a well-established shoe producer, Powerline, Aba, 9 September 2000. Interview with a poor producer of men’s sandals, AME Shoe Production Zone, Aba, 15 August 2000. 23 Interview with Human Resources Manager, FAMAD, Lagos, 19 January 2000. 22

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shoe producers in the sample had also produced footwear or belts for government agencies, including the electricity parastatal (NEPA), the police, and the army, as well producing shoes and sandals for schools. These comparatively high levels of subcontracting to the formal sector stand in direct contrast to the low levels of formal sector subcontracting normally observed among African small firm clusters (Rogerson 1999:89; Meagher & Yunusa 1996; Masinde 1996:33). However, the vast majority of these subcontracting linkages involve ancillary services, largely uniforms, rather than a subcontracting of central production processes. In the few cases where formal firms had subcontracted key products to the Aba clusters, most had abandoned it because of poor performance.24 This included the former Bata Shoe Company, which had experimented with subcontracting in the 1990s, and had even set up an agent in Aba to manage relations with subcontractors. Officials explained that the problem of subcontracting to the Aba clusters was not so much a lack of skills, as unreliable quality and delivery in the face of market instability and poor infrastructure.25 As formal sector firms have lost confidence in Aba producers, subcontracting relations with the formal sector have become dominated by opportunistic relationships rather than trust based forms of economic collaboration. They frequently come through personal connection with third party contractors, and are often one-off arrangements. Typically, a producer will get a contract to produce uniforms or work boots through ‘a brother’ or an old school friend who has obtained a supply contract from a school or a formal sector firm. Exploitation and collusion, rather than productive collaboration, is the order of the day. Locally based multinational firms, such as PZ and United Equitable offer subcontracts for uniform production only in the rainy season when local tailors are desperate for business, but pay less than half the rate offered by traders for the same goods, despite much more exacting quality standards.26 Third party contractors often buy goods that fail to meet safety specifications for industrial boots or uniforms but supply them to the end firm at inflated costs, sometimes involving kickback arrangements with procurement agents. On the whole, formal sector clients show no interest in using subcontracting ties to upgrade technical capacity within small firm clusters. Asked whether they had ever offered technical assistance to producers within the shoe cluster, a FAMAD sales manager replied, ‘No, 24

Interview with management of Presidential Tailors, Aba, 17 November 1999. Interview with managing director of Jonwas shoe company, Aba, 8 August 2000; Interview with Human Resources Manager, FAMAD (formerly BATA Shoes Nigeria), Lagos, 19 January 2000; Interview with the acting Sales and Marketing Controller, FAMAD, Lagos, 4 July 2000. Officials of both companies explained that small firms in the shoe cluster cut corners on safety soles, steel toes and coatings for protection from dangerous chemicals. FAMAD has been lobbying the government to enforce safety standards in order to prevent competition from inferior goods. 26 Interview with small-scale subcontractors, Azikiwe Rd. and Ehi Rd., Aba, August 2000. 25

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that is the government’s job. They [small producers] are our competitors.’27 Instead of constituting a channel for strategic upgrading, subcontracts to small firms generally serve as a strategy on the part of formal sector firms to cut costs and evade labour regulations. 28 As a result, subcontracting links with the formal sector are characterized more by collusion and exploitation, than by productivity- or quality-enhancing forms of collaboration.

6. Conclusion At first glance, Aba’s shoe and garment clusters seem to have responded dynamically to the challenge of economic restructuring. Informal supply, production and marketing networks provide a low cost institutional infrastructure, able to respond to new supply and demand conditions despite severe economic upheavals and the contraction of the formal economy. A closer look, however, suggests that the intense liberalization and formal institutional neglect have tended to undermine rather than promote the developmental capacity of enterprise networks in the two clusters. Far from encouraging network development, the economic pressures of liberalization and globalization have served to erode institutionalized practices and relations of trust within enterprise networks. Production, supply and marketing networks have become increasingly unstable and exploitative as collaborative relations are undermined by extreme competition. Even hints of more formalized and rationalized economic practices within clusters are being reversed through a shift towards more temporary, flexible labour and marketing relations. Where successful small-firm clusters in Brazil, India and Pakistan have drawn on a measure of formal sector support to respond effectively to the pressures of economic reform, Aba’s enterprise networks have experienced a situation of persistent state neglect and a deterioration of meaningful integration with the formal economy, leading to an environment of cutthroat competition, economic uncertainty, and opportunism. But, as Hubert Schmitz (1995:538) reminds us, ‘crisis itself is not a sign of failure. The key question is whether there is a capacity to respond to crisis in such a way that growth of the local economy is restored.’ Faced with the erosion of community based production networks, and a lack of formal institutional support, Aba’s informal producers have turned to new types of ties to solve problems of economic coordination and assistance under increasingly squeezed and unstable conditions. In particular, firms have turned to a wider range of personal ties, as well as to the creation of new ties through participation in local associations. These responses have 27

Interview with the acting Sales and Marketing Controller, FAMAD, Lagos, 4 July 2000. Interview with the Factory Inspector, Abia State Ministry of Employment, Labour and Productivity, Umuahia, 17 February 2000. 28

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led to a significant restructuring of informal entrepreneurial networks, involving a shift towards weaker ties and more individuated networks, with increasingly uneven effects on social cohesion and productive relations within the clusters.

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5

Restructuring Informal Enterprise Networks

1. Introduction The upheavals of macro-economic reform triggered a major restructuring of informal economic networks in Aba’s shoe and garment clusters. Faced with the erosion of institutionalized economic arrangements such as hometown occupational networks, apprenticeship systems, and credit networks, small-scale producers have turned increasingly to the deployment of a range of personal ties to gain access to the skills, resources and markets needed to operate a business. This has led to the use of a much wider range of social relations in economic organization, as firms draw not just on kinship and hometown networks, but on ties of friendship, neighbourhood, school or church membership to organize production and distribution activities. How have these changes affected the organization and economic performance of informal small-firm networks? Does the use of a wider range of social ties lead to the development of more dynamic and globally competitive enterprise networks, or does it weaken and fragment network organization? Reflections on the role of social networks in contemporary economic change tend to focus on variations in the use of strong and weak ties. While strong identity based ties have been celebrated as an important source of popular entrepreneurship, their ability to promote economic growth in rapidly changing conditions has been questioned. Proponents of the ‘weak tie’ thesis (Granovetter 1983) maintain that strong ties are hampered by parochialism, while ‘weak ties’ facilitate the mobilization of new resources and information in response to changing circumstances. Recent research on small enterprise clusters portrays a shift from strong to weak ties as an evolutionary development with positive implications for economic performance in a globalizing economic environment. In dynamic enterprise clusters, John Humphrey and Hubert Schmitz (1996: 30) note that: 83

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The Scramble for Weak Ties …the influence of socio-cultural bonds lessened over time, it was eroded by growth… Trust has not therefore ceased to be important for collective efficiency … but its foundation is changing from trustworthiness being ascribed to being earned. It seems that operating in the world market has both eroded and created trust. It has undermined the socio-cultural ties and now demands new ties…’

In the context of African entrepreneurship, MacGaffey and Bazenguissa-Ganga (2000:12-16) also associate a greater use of weak ties with the globalization of informal trading networks. In contrast to the ‘structured’ religious or ethnic networks of West Africa, the authors argue that ‘personal’ networks based on the deployment of a wider range of social ties allow ethnically diverse groups of Congolese transnational traders the flexibility to seize new economic opportunities within a global trading arena. While weak ties facilitate access to new, more global contacts, they may also foster an individuation of organizational strategies, undermining informal systems of trust and cooperation. Instead of acting as informal forms of group coordination, Richard Rose (2000:4) notes that networks come to resemble ‘portfolios’ of personal ties in which economic action is based on ‘combinations of networks that individuals draw on, changing tactics as the situation changes… Yet portfolios of individuals differ…’ While the use of more varied personal networks may enhance entrepreneurial flexibility and access to resources, it can also increase instability and inequality within networks. The question to be considered here is how recourse to a wider range of personal networks has affected enterprise development in the Aba shoe and garment clusters. How do individual firms organize access to skills, resources and markets in the face of collapsing socio-cultural networks? Have informal producers tended to rely on a more diverse mosaic of communal solidarity, or is there a greater dependence on ties that crosscut community boundaries such as friendship, church, or even pure business relationships? Are informal restructuring strategies leading to a fragmentation of enterprise networks, or have they encouraged the evolution of more inclusive and flexible forms of network organization more suited to a globalizing economic environment? This chapter will begin with an examination of whether the restructuring of enterprise networks in the shoe and garment clusters relies on a more diverse range of strong ties, or has precipitated a significant shift toward the use of weak ties. The implications of new networking strategies will then be explored in the context of wider structural changes in the social composition of informal enterprise amid the entry of a range of new social groups. Attention will focus on how more diversified portfolios of identity, class and gender relations have shaped the networking strategies of informal producers. A series of case studies will be used to explore how recourse to more diversified personal networks has affected patterns of advantage and disadvantage within the clusters.

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2. From Strong to Weak Ties: Beyond the Economy of Affection The erosion of collective socio-cultural networks – referred to by MacGaffey and Bazenguissa-Ganga (2000:12-16) as ‘structured’ networks – has significantly altered the terms of successful participation in the Aba enterprise clusters. But has it manifested itself in a shift from ethnic to economic loyalties in small firm networks? As Brautigam (2003:449) noted in her analysis of the development of global business networks in Africa, three categories of ties are involved in the shift from strong to weak ties. In addition to communal ties, based on ascriptive relations of kinship and communal identity, there are associative ties, based on affective relations across communal boundaries, and business ties, built up through repeated market interaction with no prior social bond. While associative ties can widen networks of non-economic obligation, business ties are more dependent on economic performance, making them more difficult to build and maintain. Poverty and economic instability can undermine access to all of these categories of networks, leaving some producers to operate through pure market relationships. The wealth of home communities, the range of alternative contacts and individual firm performance shape how small producers navigate the shift to new types of business networks. 2.1 Start-Up Networks: The Weakening of Strong Ties Despite the overall weakening of communal forms of enterprise organization in the Aba clusters, family and hometown networks remain the single most important source of training and start-up capital. Just under 50% of garment producers and a majority of shoe producers received training as well as start-up capital through communal ties, although rapid entry into the informal economy expanded the range of communities involved. Shoe producers revealed a particularly heavy dependence on communal relationships, reflecting their origins in poorer communities with limited abilities to form linkages to additional sources of financial support. While communal ties remained central to enterprise start-up in both clusters, a significant share of producers were unable to enter informal manufacturing through community networks. Amid rising rates of entry and on-going economic hardship, demand for training and capital had begun to exceed the capacity of communal networks. In the case of training, growing gaps in communal networks were largely filled through recourse to friendship or church contacts, making associative ties the second most important source of training in both clusters. Among shoe producers, associative ties were the only real alternative to communal ties, involving a shift to weaker forms of affective relationships, rather

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than to the ‘earned trust’ of business ties. More than 40% of shoe firms got their training through friends, neighbours and church members, while only one shoe firm obtained training through business contacts with customers or traders. Among garment producers, however, business ties were considerably more prominent as an alternative source of training. While one-third of garment producers received their training through associative ties, nearly one quarter acquired training through business ties – that is, from instructors with whom neither they, nor their family members, had any prior social link. This normally involved apprenticeship to a master chosen ‘off the street’ on the basis of workmanship or convenience, though the absence of affective links generally translated into choosier masters and higher training fees, making this option difficult for generally poorer and less educated shoe producers. In the case of start-up capital, however, faltering communal networks have left a gap that weaker forms of ties are largely unable to fill. While families have found it increasingly difficult to meet their cultural obligation to provide capital to junior relatives just starting up in business, weak ties are rarely strong enough to provide access to such valuable resources in developing country contexts, as Bian (1999) points out in the case of China. The default of communal networks in providing start-up capital was particularly pronounced in the garment cluster, owing to the higher cost of basic machinery, but is also significant in the shoe cluster where socio-economic disadvantage makes it difficult for families to come up even with the limited resources needed for shoe production. Yet associative ties filled the gap in only a handful of cases, involving the unusual practice of being ‘settled’ by a master who was not a townsperson, but a close friend or church member of a senior relative. The majority of entrants disappointed by communal sources of capital were forced to earn the money they needed through the market. Approximately one-third of enterprises in the shoe and garment clusters had to work for their start-up capital rather than receiving it through any form of affective or business network. A further 10-20% of producers had to supplement scanty family resources by earning for additional capital through the market. While some saved money earned during apprenticeship, the majority earned start-up capital by working as journeymen or by engaging in casual labour or trading activities after completing their apprenticeship. The large proportion of firms in both clusters resorting to the market for training and start-up capital is a powerful indication that, at least in informal manufacturing, family resources and settlement of apprentices no longer provide a reliable means of starting up a business, even in Igbo societies where these institutions are particularly resilient. 2.2 Labour, Supply and Marketing Networks: The Strength of Weak Ties While strong ties remain central to secure access to training and capital for starting up a business, access to labour, supply and marketing networks

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have become more dependent on weaker types of ties.1 In the case of labour, associative and business networks were the main sources of workers, challenging conventional assumptions about the importance of family labour in African informal enterprise. Non-communal channels were used by half of garment firms, and three-quarters of shoe firms. In addition to friends, neighbours and church members, producers obtained unrelated workers and apprentices though ‘help wanted’ signs, or recommendations from customers. While widening the pool of labour on which firms can draw, however, the predominance of weak ties in access to labour has tended to weaken the influence of informal social control in the protection as well as the discipline of labour, with increasingly problematic consequences. This is especially marked in the shoe cluster, where under 15% of firms obtained labour though communal networks, and where the poverty of many producers strained collaborative tendencies within the weaker ties used, increasing the vulnerability and indiscipline of labour. In supply and marketing networks, the shift to weak ties is even more pronounced, and more strongly associated with growth rather than economic stress. Liberalization and cluster expansion have brought clustered producers into contact with traders from an increasing variety of ethnic and national communities. As a result, the majority of producers in both clusters depended on suppliers and buyers with whom they had no prior social connection. In the shoe cluster, as many as 93% of producers relied on sales networks built up through pure business relations. Garment firms also depended predominantly on business ties for access to markets outside Aba, although communal and associative ties also remained important owing to structural differences in informal garment markets. Trust in supply and marketing networks depended heavily on business considerations, such as quality, reliability, and price, rather than on communal solidarity or personal loyalties, despite the fact that credit relations embedded in these networks were the key sources of finance within both clusters. Communal sources of business finance, usually involving loans from relatives or women prevailing on their husbands for assistance, served principally as a default option, and was generally the sign of a shaky business. In granting as well as receiving credit, shoe and garment producers depended largely on business rather than stronger social ties. Some producers even declared a preference for granting credit outside communal boundaries. As a shoe producer explained, his Hausa customers were more likely to repay credit, while fellow Igbo customers tended to expect understanding for the many reasons why they were unable to repay. Interestingly, national origins had more of an influence than communal or ethnic relations on credit decisions. While the 1

The figures for access to labour refer to the dominant form of access to labour in each firm, taking account of apprentices, employees, temporary labour, family workers and capacity subcontracting.

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majority of producers were happy to grant credit to customers outside their own ethnic group, a significant proportion in both clusters were less willing to grant credit to non-Nigerians, who visited the cluster less frequently, and were too difficult to trace in the event of default. The only dimension of supply and marketing networks in which business ties did not predominate was in subcontracting links with the formal sector. Of the 30% of firms who had carried out formal sector subcontracts, associative ties slightly exceeded business ties as the main form of access. While most shoe and garment producers lacked strong ties to key formal sector decision makers, they also lacked the skills and resources to build up reliable business ties with formal sector firms. The prominence of associative ties reflects both the weak social access of informal producers and the role of third-party brokers in subcontracting relations between formal and informal firms, where relations are built as much on collusive kickback arrangements and circumventing formal production standards as on quality and reliability. Unsurprisingly, garment producers, with their higher levels of capital and education, proved more successful than shoe producers in building associative as well as business ties with the formal sector. 2.3 When Weakness is Strength While strong ties continue to play a role, weaker ties have become central to the organization of production and marketing relations in the shoe and garment clusters. Humphrey and Schmitz (1996) argue that this does not represent a disintegration of informal manufacturing networks so much as a shift of the basis of inter-firm trust from non-economic to economic loyalties. There is some evidence for this interpretation in the shoe and garment clusters. As a shoe producer commented when explaining the declining importance of community origins in enterprise success, ‘This is business. Business is based on trust. It makes a person like your relative.’2 Among poor informal producers, however, weak ties are not always sources of strength. While they may widen access to resources, they involve more exacting conditions for the development of trust and economic collaboration, devoid of the leverage of affective loyalties. Those unable to meet these requirements are either thrown back on narrow and under resourced networks of strong ties, or abandoned to more unstable business contacts based more on opportunism and desperation than trust. In an environment of poverty and market instability, more than a quarter of firms in both clusters were unable to build stable business ties with suppliers or buyers, nor could they rely on the narrow markets afforded by strong ties. One in three producers explained that they had no regular suppliers, because they had no townspeople in the required lines of trade, and were often forced by poverty to buy from whoever was cheapest at the time, precluding the development of stable business or credit networks with 2

Producer of women’s shoes, Umuehilegbu shoe production zone, Aba, March 2000.

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suppliers. Similarly, a significant proportion of firms were unable to build up stable business relations with buyers owing to unreliable quality, unpredictable output, and cutthroat competition from other producers. As strong ties diminished in importance, a growing number of firms experienced the shift to weak ties as a transition to less supportive and secure networks rather than as a widening of network advantages. However, the focus on strong and weak ties alone tends to mask deeper structural factors that influence the economic effectiveness of strong as well as weak ties. Bende garment producers often benefited from privileged communal access to training and resources, and from well developed communal supply and distribution networks, giving them the resources to build more advantageous weak ties to widen production and marketing networks. By contrast, Mbaise producers often found strong ties a liability, and weak ties fragile and unreliable. These differences in the ability of producers to develop effective enterprise networks suggests that economic performance is shaped not only by the strength or weakness of ties but by the wider patterns of advantage and disadvantage in which these ties are embedded. While a shift to weak ties is certainly taking place in the Aba clusters, understanding the implications of this process for cluster development requires a closer look at the underlying structural factors shaping the institutional content of ties, rather than just their strength or weakness.

3. Restructuring Enterprise Networks: Identity, Class and Gender Changes in enterprise networks have taken place within dramatic shifts in the social landscape of the informal economy. While it used to be the domain of economically marginalized groups, declining opportunities in the formal economy have precipitated the entry of people from a more diverse range of class as well as community backgrounds. Patterns of gender participation have also changed, involving a rapid influx of women into certain informal activities, including some kinds of informal manufacturing (Sethuraman 1998). The question is whether these structural changes, combined with the increased use of weak ties, have created more inclusive informal enterprise networks, or have created new patterns of social and economic marginalization. In addition to the complex social restructuring of the informal economy, severe economic hardship has tended to erode the reliability of social ties, making them a more uncertain link to economic resources. Studies from Guinea Bissau and Burkina Faso have noted an increased tendency of kin to default on obligations amid the pressures of liberalization and informalization (Freidberg 2001; Lourenço-Lindell 2002). How have these complex changes altered patterns of advantage and disadvantage within Aba’s shoe and garment clusters? Focusing on ties of

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communal identity, class and gender, new patterns of advantage and disadvantage are illustrated through a series of case studies that explore differences in the personal network ‘portfolios’ of various categories of producers, as well as variation in the kinds of access they provide. 3.1 Restructuring Communal Networks As previously noted, dramatic increases in entry have diluted the importance of the original artisanal communities in both the shoe and garment clusters. In the process, other communities with different types of structural advantages and disadvantages have gained in prominence. This has tended to alter rather than eliminate community based patterns of advantage within the Aba clusters. Among the new communities entering the business, three new bases of occupational advantage have emerged. The first advantaged category involves communities with strong cultural and historical links to the original artisanal groups, often involving geographical proximity and similarities in the dialect of Igbo spoken. In the garment cluster, historically and culturally related groups include the Afikpo community of Ebonyi State, which has strong historical connections with the Aro, and is seen as ‘almost the same as’ the peoples of Old Bende (Northrup 1978:120-21; Ottenberg 1958). In the shoe cluster, the Mbano and Owerri sub-groups, both of Imo State, are linked by historical and cultural similarities with Mbaise indigenes.3 In many cases, members of these closely related groups began entering into garment or shoe production through community based mechanisms of intermarriage and trading relations during earlier phases of expansion, well before the contemporary era of economic restructuring. A second advantaged category involves distinct communities prominent in formal small-scale manufacturing, which have gradually been informalized by hard economic times, such as the Okigwe and Afikpo communities in the shoe cluster. A third category of advantaged communities involves those trading communities prominent in supply and distribution networks, who have been using these connections to enter related small-scale manufacturing activities. This principally involves a range of communities from Anambra State in both the shoe and garment clusters, as well as the Afikpo community in the shoe cluster. Outside the occupationally well connected communities mentioned above are a range of new groups with no historical or communal connections to these activities. Once again, three categories of occupationally less advantaged communities can be distinguished. The first involves the Ngwa-Igbo, who are the indigenes of Aba and surrounding areas, but have no significant history in informal manufacturing or related trading activities. The second disadvantaged group involves other Igbo subgroups who have entered these activities recently without any prior social 3 I am grateful to the historian and poet Obi Nwakanma for invaluable guidance in tracing cultural linkages among Igbo communities.

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Table 5.1 Occupationally Advantaged and Disadvantaged Communities (% of Firms)

Cluster

Occupationally Advantaged Communities Original Artisanal Related Trading Community Comm’s Comm’s Total

Garment Shoes Average

44.3 14.1 28.0

16.4 8.5 12.1

16.4 15.5 15.9

77.1 38.1 56.0

Disadvantaged Communities Aba Indigenes Other (Ngwa) Igbo 8.2 23.9 16.7

14.8 32.4 24.2

NonIgbo

Total

0.0 5.6 3.0

22.9 61.9 44.0

Source: Fieldwork

or historical connection. Finally, there are non-Igbos, who were directly encountered only in the shoe cluster, although a very small number have also entered the garment cluster. These non-Igbo producers involve southern minorities from the neighbouring states of the Niger Delta, largely Akwa Ibom and Rivers. One shoe producer also claimed to have trained a Yoruba apprentice, although no examples of Yoruba producers were picked up in the study. Rapid entry from a wider range of communities has restructured communal networks within the shoe and garment clusters. Table 5.1 shows that in the garment cluster, nearly 80% of firms come from occupationally advantaged communities, including over 40% from the original artisanal community. By contrast, advantaged communities make up a total of only 38% of shoe firms, and only 14% from the original artisanal group, reflecting the weak competitive advantage of shoe producing communities and the limited attraction of the activity to other advantaged groups. New patterns of community based advantage have produced differences in the way producers from various communities network. Members of advantaged communities enjoy a range of occupational benefits through kinship and community ties. Despite the weakening of structured smallfirm networks, the presence of advantaged communities in production as well as trade means that small producers from these groups often have privileged communal connections to training, capital, and commercial networks, as the following example shows: Chuks, a young tailor specializing in shirt and trouser production, was just starting up a business in Aba. An indigene of Ohafia in the old Bende area, he had benefited from the networks of his townspeople to acquire additional capital and experience. Although his father was a civil servant, Chuks was unable to pursue a middle class trajectory because financial problems prevented him from continuing with his education past the secondary school level. Following an apprenticeship with a relative, Chuks started up a tailoring business in his home village with money he had saved while he was with his master, but found he lacked sufficient capital to establish properly. He then spent some years trading textiles in neighbouring French West and Central African states of Benin, Togo and

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The Scramble for Weak Ties Gabon, operating through the trading networks of his townspeople. While abroad, Chuks was exposed to the high standard of tailoring workmanship in the Francophone countries, which he used to upgrade his own skills. With the capital he saved from trading, Chuks went to Aba in 1998 to set up shop as a tailor in the outer periphery of the garment district. By early 2000, he already had two sewing machines and a weaving machine, and had one apprentice from his home town. He had managed to build up significant credit in the market, and was building up a clientele of consumers and traders through contacts made through hometown and friends, which helped to compensate for the relatively remote location of his shop.

Identity based advantages are also available to entrants who lack ties to the original artisanal communities, but belong to communities that are strongly represented in related trading activities. Such contacts can help to compensate for the adverse personal or economic circumstances that might force someone from a trading background into informal artisanal activities in the first place. Mr. Okolie is a moderately successful shoemaker from Ukpo in Anambra State. He specializes in ladies leather shoes and sandals. After completing secondary school, he served an apprenticeship in motorcycle spare parts in Aba, but his master failed to settle him so he was unable to take up the business. Although his father is a carpenter, his townspeople are in the leather trading business, so he decided to try shoemaking since it is cheap to enter and he would be able to get low prices on key inputs. He paid a friend of his brother to teach him, without a proper apprenticeship. He started up his business without tools, and managed to work by borrowing tools from neighbours and selling below the going rate in order to get customers. He stuck to the suppliers he had under his master in order to get credit right away, and has always bought his leather from his townsmen because they give him better prices. His first big order was a ‘ça va’ from Abidjan, who became a regular customer, although his orders have become smaller of late. He has lost many of his other regular customers because hard times have forced them to change line, or have made them unreliable. He has only two regular large-scale customers left now, both Igbo traders based in Lagos, although he gets a lot of ‘cash and carry’ business from customers of a range of ethnic groups from all over Africa, including Morocco, Zimbabwe and Zambia. Two years ago, he managed to get a contract for 100 pairs of shoes from the former Bata shoe company. They gave no advance, but paid promptly on delivery, although he has not succeeded in getting another contract since. Unlike most informal shoe producers, he says traders’ credit is his most important source of financial assistance, although he says one can also get assistance from their hometown association once one is well established.

Membership in relevant trading communities can also provide privileged access to resources from outside Nigeria, such as specialized imported inputs, owing to the wide international trading networks of specialized trading groups. Particularly among the Anambra and Bende

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trading groups, contacts with European and East Asian countries are well established, and those from the more successful trading towns often have relatives or townsmen who travel abroad. Such contacts are often used to get higher quality inputs, catalogues of new styles, or unavailable machine parts that are not being imported through regular supply channels. One successful shoe producer said he had a contact in Hong Kong who shipped him specialized inputs on request. But an advantageous communal identity is not a ticket to success, even in the garment cluster where it carries significant economic benefits. A poor family background, low levels of education, and adverse personal circumstances lead to narrower and more poorly resourced networks even if one belongs to an advantaged community. In addition, structural factors operating within community based networks tend to exclude the poor from access to significant economic benefits. Even in comparatively wealthy communities with a concentration of economically relevant contacts, wealth and status are important determinants of access to loans, business information, and useful contacts. As a result, members of advantaged communities in low status positions, such as youth, women and the poor, tend to be excluded from the most advantageous community networks. In other words, the social capital enjoyed by an individual is a function of one’s structural location within a community, rather than an automatic benefit of community membership. These limitations are illustrated by the case of Papa Chukwu: Papa Chukwu is an aging tailor of Item origins in the Bende area, although he was born in Aba. His father was a farmer, who died before Papa Chukwu was four, leaving him, as the first and only son, with no help, and heavy financial responsibilities from very early in life. Papa Chukwu never went to school, and had to do various forms of manual labour, such as cart pushing, in order to get capital to start up an activity. He initially trained as a mechanic, and ended up trying several other activities before finally taking up tailoring, which he saw as a business that could help a poor person to get by. He first learned informally from a friend, who was also a townsman, and then took up sewing jobs with other tailors. After some years, he did a one-year apprenticeship with one of his employers, also a townsman, and then continued to work for him as a journeyman. After a year, he bought a machine and set up shop in his house, just before the onset of structural adjustment in the mid-1980s. He specialized in traditional Igbo men’s shirts, and a friend from Imo State used to bring him cloth to sew shirts for trading in the local market – a low quality, low paying activity. He saved up some money to sew samples which he hung in his friend’s stall in the market to attract customers. He had no supplier networks, since he could not afford to continue buying from any of those he had used under his master. He just went to whoever was cheapest. However, through hard work and determination, scouting for sewing jobs in the local market when he had no customers, Papa Chukwu managed to build his business up to four machines and eight workers – a mixture of

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The Scramble for Weak Ties employees and apprentices – by the beginning of the 1990s. Unfortunately, most of his customers belonged to the poorer class of local traders, and many ran into financial difficulties in the early 1990s and changed line. He still sews mostly for traders, who pay less than one-fifth of the going rate paid by private consumers. However, the poorer class of private customer available to Papa Chukwu now take up to a month before they come to collect their goods and pay. The influx of Asian readymade shirts since 2000 have diverted much of his business, and he has been selling off his machines since last year to keep going. Although he participates in his village association, he says it is of little help to his business, since it brings him no customers or contacts, owing to the comparatively low quality of his work.

While the poor from advantaged communities have more contacts with occupational networks, they lack the resources to exploit them effectively. By contrast, producers from disadvantaged communities are obliged to build up economically useful networks through the strategic deployment of communal, business and class ties, as indicated in the following case: Monday is a non-Igbo shoemaker from Akwa Ibom, a non-Igbo state in the nearby Niger Delta. He specializes in cheap children’s running shoes, a line dominated by Akwa Ibom producers. His father is a teacher and farmer, and his senior brother is an employee in the federally-owned Ajaokuta Steel Company in Kogi State, indicating a slightly advantaged class position. However, hard times and economic instability in his home community prevented him from going far in school. He started out in petty provisions trade in his home village because he was unable to find training for anything better, but often heard stories of the opportunities available in Aba. He quipped that kidnapping oil workers was about the only profitable activity available in his home area, and even that was highly seasonal. One of his fellow townsmen was a shoemaker in Aba, and on one of his visits home, Monday arranged an apprenticeship with him. He served for four years along with a number of other apprentices, some of them Igbo. Then he worked as a journeyman for another few years in order to get some capital, since his family had no money to give him. With his savings, and a loan from some of his friends (also townsmen) he started his own business in 1992. He joined forces with four or five of his townsmen to get a shop. His master used to give him contract work when he was just starting out. Monday acquired a supply network through his master as well, enabling him to get credit right away, although all of the suppliers are Igbo (his people are not in the shoe parts trade). He used suppliers’ credit in his first few years, but now avoids it, because after repaying credit, one has little money left for other things. Monday has managed to get two subcontracts from the formal sector: one from a school in Akwa Ibom, and the other from his Local Government through a townsman who worked there. He shared one of the jobs with a fellow shoemaker from his village. Currently, he has two apprentices from his village, although he complains that they are very young and do not

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always do as they are told. He also uses a temporary employee who has no connection to him. His customers come to him in the market from all over West and Central Africa, and sometimes he uses a complimentary card to attract business. He participates in his village association, as well as in a social club of Akwa Ibom youth. He feels on the whole that he benefits from contacts with his townsmen, since Akwa Ibom people buy from him and give him useful business contacts, and he can sometimes get loans from his social club. But he also maintains he faces no discrimination in this business for not being Igbo, since he has been able to build up fruitful supply and distribution contacts largely with Igbos without any sense of disadvantage.

3.2 Restructuring Class Networks In addition to changes in communal participation, economic restructuring has provoked radical changes in the class composition of the informal economy. This has been noted in other parts of Africa as well as in Nigeria (Birks & Sinclair 1991; Gibbon 1995; Meagher & Yunusa 1996). The traditional occupants of informal activities were those excluded from the benefits of ‘modernization’, predominantly those of rural farming or fishing backgrounds, and the offspring of artisans and petty traders. Since the onset of structural adjustment, however, the informal economy has attracted a growing number of entrants from more advantaged classes, involving both formal sector employees (both from the public and private sectors) and the middle-level business classes (large-scale traders, formal small-scale manufacturers, contractors and transporters). For those from more advantaged class origins, recourse to the informal economy may represent a decline in family fortunes, or it may represent the identification of a commercial opportunity. Whatever their motive for entry, entrants from advantaged classes bring with them higher education and a wider range of contacts with more privileged social groups. Table 5.2 shows the relative importance of differing class backgrounds in the shoe and garment clusters. As might be expected, informal garment producers show a higher participation of advantaged classes (26%) than do informal shoe producers (18%). Across both clusters, the vast majority of entrants from advantaged class backgrounds entered the business after the beginning of Nigeria’s structural adjustment programme. Table 5.2 Class Backgrounds of Informal Shoe and Garment Producers (% of Firms) Disadvantaged Classes

Cluster

Rural

Urban Informal

Total

Garment Shoes Average

31.1 40.0 35.9

42.6 41.4 42.0

73.7 81.4 77.9

Source: Fieldwork

Advantaged Classes Formal Middle-Level Sector SelfEmployee Employed Total 14.8 11.4 13.0

11.5 7.1 9.2

26.3 18.5 22.2

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Those entering from the advantaged classes are endowed with different types of network advantages from members of advantaged communities. The key class advantages are centred on higher levels of education and business skills, as well as access to a higher market niche through personal contacts and a common social background with purchasing officers, contracting agents, and a higher class of consumer. Entrants from established middle class employment or business backgrounds retain these advantages even when they do business within the informal economy, as revealed by following two examples from the shoe and garment clusters: Mr. Nwagbara, a man in his 40s, is a successful shoe and bag producer of Ngwa origins, the indigenes of Aba. He is an office holder in a number of small-business associations. A graduate of a polytechnic in Lagos, he started his working life as a salesman in a bag, shoe and chemical company in Western Nigeria. In the early 1980s, he left his job to set up his own small formal shoe firm in the commercial district of Aba. He is proud to reveal that he entered shoe and bag production as an employer, not as an apprentice. Unfortunately, the market for his goods was poor in the early 1980s. Duties were high on imported goods, and inputs were scarce and costly. This led him to set up shop inside the Ariaria shoe production cluster, in order to benefit from the cheap labour and proximity to inputs. He does not depend on the traders for markets, but pursues contracts from the formal sector. His first contract was to produce conference bags for a Nigerian university, which he got through an old school friend who introduced him to the person giving the contract. He maintains that for getting large contracts with the formal sector, personal background and image are important, as well as a reputation for delivering on previous jobs. He also emphasizes the importance of obtaining references from someone known to the contractor. Mr. Nwagbara puts a lot of store in dressing well, and has gained significantly from the wide business contacts obtained through his post-secondary education, his employment in a formal sector firm, and his current involvement in enterprise associations, which help to forge links with the state officials. Mr. Nwagbara also attends weekend classes at one of the university satellite campuses in Aba, where he forges additional business contacts. Blessing is a young man from a non-advantaged community in Abia State, the son of a building contractor and textile wholesaler. He produces men’s suits in a small workshop at the outer periphery of the informal garment district. When he finished secondary school, his decision to become a tailor was not approved of by his parents, who thought the business too lowly. Blessing served an apprenticeship with a friend (not a townsman), and then earned his start-up capital trading textiles. He opened his own business in 1992, and now has an apprentice, who is a friend, and four employees whom he hired through the market. He had no trouble building up credit relations with suppliers, especially given his connections in the textile business. He expands his distribution network by taking samples of his work to boutiques and offices in Port Harcourt, Enugu and Lagos,

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where he has contacts through friends and customers. He also gets subcontracts to produce uniforms for private companies, as well as traders who take his products as far as Zaire, Côte d’Ivoire and South Africa. He says participation in his village association is useful for attracting customers, but does not give access to any financial assistance or useful business contacts. He also belongs to a social club in which the members are linked by friendship rather than communal identity.

Class based networks also facilitate privileged access to inputs. Producers from advantaged class backgrounds were more likely to have friends or relatives who were importers, or who worked abroad. One small Enugu shoe producer from a middle class background obtained inputs at wholesale prices through a friend’s elder brother, who was a licensed distributor. As exemplified in both of the above case studies, however, class-based networks function as more than just bridges to more advantaged sectors of the economy. They operate as a framework for trust. In informal businesses, which are dominated by marginalized groups and unreliable economic performance, a shared educational background and middle class economic values can provide a basis of confidence, often reinforced through membership in social clubs that use membership fees and dress codes to exclude ‘riff-raff’. Even within the informal economy, class is not only a ‘bridging’ tie but a framework for ‘bonding’. In many cases, however, entrants from advantaged class backgrounds represent interrupted processes of class formation, rather than a move to seize new opportunities. Arduous working conditions and the low status of informal manufacturing mean that entry from the advantaged classes tends to be concentrated among small producers who have slipped below the level of formal operation, or young people whose education or entry into business was disrupted by economic adversity. Many young shoe producers with secondary or junior secondary education fall into this category. In such cases, interrupted educational careers go hand in hand with a lack of economic and social resources to establish a viable enterprise or to maintain ties with friends in higher places, constituting a trajectory of disadvantage rather than advantage. As such, an advantaged class or educational background can be an indication of the failure of personal networks rather than of their superiority. In such cases, the inability to display appropriate indicators of status (mode of dress, lavish contributions at social events, fluent command of English) can become a barrier to trust and inclusion within class based networks. Samson, who is from a non-advantaged community in Enugu State, found himself entering informal shoe production in 1993 despite his secondary school education and higher aspirations. His father was a trader and farmer, although he was trained by his elder brother who worked for the State Ministry of Agriculture. The untimely death of his brother left him without assistance to enter an activity worthy of his education. He turned

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The Scramble for Weak Ties to shoemaking because it was cheap. A friend took pity on him and gave him training on the side for a year and a half, well under the duration of a proper apprenticeship. He feels this has left him weak in designing, and he has difficulty coming up with styles that sell. He also lacks much of the basic equipment, and has to borrow or hire tools from his neighbours, which slows down production. He avoids buying materials on credit, although this restricts his level of production, because he finds it embarrassing to be harassed for repayment by suppliers if his goods do not sell quickly enough. For markets, he is dependent on traders who frequent the shoe cluster, but is in a weak position to compete with better trained and resourced producers. He manages to get some customers from his home area, who patronize him on the basis of community-based ties, but they are largely petty traders and consumers buying for personal use, which does not generate much business.

3.3 Restructuring Gender Networks Gender represents the structural factor for which liberalization has brought about the most subtle changes in informal economic participation. As noted earlier, patterns of women’s entry into informal shoe and garment production have changed little. Women continue to make up about half of garment producers, and remain conspicuously absent from the ranks of informal shoe producers. Within this picture of continuity, however, changes have occurred at the margins. Despite the high proportion of firms headed by women in the garment cluster, women tend to be increasingly concentrated at the lower end of the activity owing to structural disadvantages in access to capital and business contacts. In the shoe cluster, the absence of women as enterprise heads has been accompanied by an incipient tendency to incorporate them as cheap labour. In neither case has the presence of women entering the activity been associated with a significant expansion of economic opportunity. In the garment cluster, women accounted for 44% of producers by the turn of the millennium. However, the cultural norms that grant women access to garment production also restrict their advancement within it. While Igbo social conventions favour women having an income generating activity, they are marginalized within communal frameworks of access to capital and business contacts. Among the Igbo, women normally marry outside their home community, and acquire their husband’s hometown identity on marriage. Although they participate in their marital hometown unions, meetings are segregated by gender, making the women’s wing a body composed largely of women who are not ‘daughters of the soil’. Given their limited influence in hometown unions, women’s activities are often centred around church rather than hometown networks (Isichei 1976:221). As a result of these disadvantages, women tend to be concentrated at the bottom end of garment production, although they are only slightly under-represented among the advantaged identity group, and drama-

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Table 5.3 Female Participation in Informal Shoe and Garment Production (% of Firms) Cluster

Garments Shoes Average

Female Producers

44.3 0.0 20.5

% of Female % of Female % of Firms Producers from Producers from Using Female Advantaged Advantaged Class Employees and Communities Backgrounds Apprentices 70.4 n.a. 70.4

37.0 n.a. 37.0

57.9 3.9 28.8

% of Firms Using Female Temporary Labour 28.8 6.2 15.4

Source: Fieldwork

tically over-represented among those from advantaged class backgrounds. The garment cluster survey showed that 70% of women come from occupationally advantaged communities, compared to just over 80% of men, and 37% of women come from advantaged class backgrounds, compared to less than 20% of men. Women informal garment producers also tend to be considerably more educated than their male counterparts. Three quarters of female garment producers have secondary education or better, while less than two-thirds of their male colleagues have similar levels of education. However, none of the women in the sample were found in the highest segment of informal garment production – that of mass producers – and it was generally acknowledged that women are extremely rare at that level. Average turnover among female garment producers was found to be barely a fifth that of their male counterparts. Although women face a number of embedded disadvantages in informal manufacturing, they can sometimes draw on advantaged community or class connections to achieve a significant degree of economic success, as exemplified in the following case: Mrs. Kalu, from a non-advantaged identity group in Abia State, is the daughter of a textile importer. She is married to a man from Abiriba in the old Bende area – a community particularly renowned for its success in textile trading. Mrs. Kalu runs a successful women’s tailoring business, equipped with several sewing machines, weaving machines, a modern buttonholing machine and an embroidery machine. She completed secondary school and had hoped to go to university, but failed to obtain a high enough score on the entrance exam. Instead, she underwent training at an institute for fashion design (a privately run tailoring school) and opened her own business in the central commercial district of Aba in 1995. Her parents bought her first sewing machine, and the well located shop she occupies belongs to her father. She gets most of her business from private customers rather than traders, and does particularly well through her church group, which generates customers especially in times of burial ceremonies. She is not much involved with her hometown association (Abiriba), and claims they cannot give her any financial help because their money is always tied up in textile trading.

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It is worth noting that despite marrying into an advantaged community in the tailoring business, Mrs. Kalu derives her most useful business connections through her church rather than through her hometown association. Women without identity based advantages can also make innovative use of class based networks to build up successful businesses. Mrs. Erondu, from a non-tailoring community in Abia State, is a tailor in her late 30s, who has just given birth to her fourth child. She has two shops, equipped with four sewing machines and a weaving machine, and employs two workers (not apprentices), and two subcontractors, who are trained tailors without workshops of their own. Mrs. Erondu learned tailoring in Enugu, where she was apprenticed to a relation after she completed secondary school. She went on to do a clerical job in a multinational courier firm in Aba. However, she found it increasingly difficult to combine the clerical job with domestic duties once she started having children. After the birth of her second child, she resigned and set up a tailoring business in 1996 with money borrowed from a relation (which she later repaid). When she saw that customers were scarce, Mrs. Erondu began applying to formal sector firms to sew uniforms for them. In this endeavour, her previous job was of help to her, since she was acquainted with the staff of several companies who had used the services of the courier she had worked for. These connections helped her to get past the gate, and gave her some contacts in the offices to find out whom to approach to get contracts for uniforms. Her formal sector contacts served her well, and she began sewing uniforms for a large multinational cosmetics company in the year she started up her business. Since then she has obtained regular contracts for sewing uniforms from four other formal sector firms, although she has since lost two – one because she contracted out part of the work and it was done badly, and the other because the company decided to give the business to a townsperson. In part because of her inside contacts, she never has to pay any ‘appreciation money’ to get contracts. She only has to fill out an application form and sew a sample uniform.

Few women, however, are as successful as the women profiled above. Most suffer from domestic disruptions and inadequate access to capital, which disorganizes business networks even among women from advantaged class and identity backgrounds, and leaves them struggling at the helm of precarious enterprises. Mrs. Okeh is from the old Bende area, the daughter of a tailor. Her husband is a used clothing trader from another Bende community. When she completed secondary school, Mrs. Okeh was trained at a ‘sewing institute’ she chose off the street – an informal tailoring establishment that specializes in training apprentices to sew paper clothes, but rarely has any real sewing jobs to give them. She married immediately after her training and was given a sewing machine by her parents, along with a little start-up capital from her husband. She started up her business in 1993, and took on some apprentices, although they failed to complete their training. At the

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time of interview, Mrs. Okeh had just returned to her business after having a baby. She had no workers, and her shop was a zinc shack tacked onto the wall of another building. She had no regular supplier network, and did not take credit. She received some business from local traders, who were introduced to her through a neighbour. She also received a contract to sew school uniforms through the owner of the school, who was a member of her church. She claimed her Bende identity attracted some customers from her town, but they did not pay promptly. She felt she received more assistance from her church, from which she attracted some customers as well as prayers. The only association she participated in was her evangelical church group.

While gendered structures of disadvantage limit women’s opportunities for success as small-scale producers, gender barriers appear to be breaking down at the level of informal labour. In both clusters, however, tendencies toward a feminization of the informal labour force are based more on a logic of cheap labour than increased economic opportunities for women. In garment production, women were found to make up nearly 60% of the steady work force (employees and apprentices), concentrated mostly in mass production. Owing to the lower cost of female labour, women provide an increasingly important share of skilled labour among male mass producers, contravening the conventional gender division of labour in garment production. A similar trend toward an increasing use of female labour is discernible in shoe production, although at a much lower level. Women were found to constitute 4% of steady workers and 6% of temporary workers in the shoe cluster.4 There is also a marginal presence of women as shoe tailors, which demands less capital and physical strength, but is also much less profitable. 3.4 Making the Most of Personal Ties Economic restructuring has brought with it some significant shifts in the patterns of advantage and disadvantage within the shoe and garment clusters. Some new Igbo communities have moved into positions of informal structural advantage, and class advantages have become more prominent in the networking strategies of successful firms. However, economic restructuring has not only altered the structure of informal small-firm networks; it has also increased their fluidity and unpredictability. In some cases, social ties are less reliable in delivering on their institutionalized obligations; in others, new forms of access are being created by making use of personal ties to cross cut institutionalized channels in the formal as well as the informal economies. While this situation is seen by some as a source of institutional creativity and 4

Trends towards the use of cheap female labour were far more evident in Aba’s formal shoe firms, where women constitute the overwhelming majority of the labour force. The primary motive, as a formal sector shoe producer admitted, was to cut costs (Interview with the managing director of Jonwas Shoes, Aba, 8 August 2000).

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innovation (Chalfin 2000; Chalfin 2001; Cleaver 2001; Guyer & Hansen 2001), its may also pose new problems. A final case study outlines the situation of a dynamic young producer whose prospects had been undermined by the hard economic times, but who managed to build up a relatively successful business through determination, industry and innovative use of his portfolio of personal ties. What appears at the individual level to represent the successful use of personal networks, involves worrisome consequences at the institutional level: Dike is a young tailor of Ngwa origins and advantaged class background, who started his own business in 1992. He had not originally intended to enter tailoring, but in the sixth year of an apprenticeship in electronics trading, his master ran out of money and was unable to settle him. Dike was forced to take a job as a conductor on local transport vehicles, where he worked for three years before apprenticing himself to a neighbour (not a townsman) who was a tailor specializing in trousers. He signed on for two years, but obtained his freedom in less, because he learned quickly, and his master knew he was struggling financially. His apprenticeship arrangement did not involve meals, forcing him to continue with his conductor’s job on weekends in order to earn a little money for food. When Dike started his own business, he only knew how to sew trousers, and had to subcontract orders for shirts to other tailors. He had to teach himself how to sew shirts by watching others and experimenting. He remembers shouting for joy when he completed his first good shirt. In 1995, three years after starting up his business, Dike began doing subcontracting for formal sector firms. His first contracts involved sewing uniforms for Aba Textile Mill and the Coca Cola company in Owerri, the capital of the neighbouring state. He got the contracts through a brother who was working in the textile mill, and a church member who worked in Coca Cola. These companies paid reasonably well, and gave out large orders of 100 uniforms or more. He later got himself put on the list of tailors for PZ, a multinational cosmetics firm, with the help of an acquaintance working in the company. Dike recognized that PZ paid very poorly and that tailors only took their contracts if there was no other business available. Given the hard economic times, even these low paying contracts were worth hanging onto to help fill in the low season, and Dike intended to continue doing them ‘just for the business’. Dike explained that the key to getting regular business as a subcontractor was never to disappoint the customer with regard to workmanship or delivery times. He managed to keep to delivery schedules by maintaining his own subcontracting network of five tailors, although he did all of the cutting himself. He had been subcontracting work out to fellow tailors since he started getting outside contracts in 1995, but would not take on anyone unless he knew their reputation very well, so that he could be sure of their workmanship and honesty. Three of the five were church members and former apprentices, one was a tailor who used to work nearby, and one he got through a neighbour whom he trusted. He

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required all of the subcontractors to sew samples before giving them any jobs. As a further strategy to ensure against disappointments, Dike always paid advances to his tailors, even though he rarely received any advances from the contracting companies. Whenever he received a contract, he would borrow money at around 20% interest from a trader he knew, or from his landlady, and even once from his pastor, who lent him money from a fundraising project, on the strict understanding of repayment within a month (which he met). None of these people was a relative or townsman. Good workmanship and reliability alone were not always enough to hang onto subcontracting jobs from the formal sector, especially those that paid well. Getting on ‘good terms’ with the management was also important, and that meant regular gifts to the management. The previous Christmas, he had given the manager of Aba Textile N 10,000 (US$ 100) as a gift.

The remarkably innovative use of a range of personal ties of community, class and religion, as indicated above, has facilitated personal goals of economic advancement despite adversity, but contributes to the erosion of institutionalized economic relationships in the formal and informal economies. The use of subcontracting networks to acquire labour keeps underemployed tailors going, but represents a cheap labour strategy which further undermines wage rates and destabilizes the labour supply in the informal garment sector. Similarly, the use of bribes and personal contacts to obtain formal sector subcontracts encourages the development of ties between formal and informal manufacturers based as much on collusion as on performance. Rather than constituting informal institutional innovation and ‘network governance’, the individuated use of personal networks tends to encourage opportunism rather than collective action.

4. Conclusion The dramatic restructuring of enterprise networks in response to economic reforms does not appear to have generated more transparent or inclusive forms of organization in Aba’s shoe and garment clusters. A greater use of ‘weak ties’ to widen markets and fill gaps in crumbling identity based networks has tended to expand rather than reduce the importance of non-economic loyalties in the struggle to maximize access to resources. As Suzanne Freidberg (1997:127-28) astutely observes in a study of entrepreneurship in Burkina Faso: …the entrepreneurial dynamism so far unleashed by liberalization reflects not so much a broad based acceptance of the rules of the market economy as a scramble to readapt earlier strategies to new conditions. Best positioned to adapt are those individuals who have already accumulated during their working lives not just capital (though that, clearly, is not unimportant), but also the skills, knowledge, social relations, and status needed to win acceptance and ‘do business’ in all kinds of social contexts...

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Owing to uneven access to effective strong, as well as weak, ties, recourse to diversified personal networks has promoted differentiation rather than integration within the shoe and garment clusters. Narrower networks and structural inequalities embedded in relations of identity, class and gender have contributed to increasing marginalization among women, youth and the poor. From this perspective, the scramble for weak ties precipitated by collapsing communal arrangements appears more disruptive than evolutionary, generating an organizational free-for-all that has served to exacerbate structures of disadvantage and undermine the emergence of stable productive arrangements. What is lacking is a means of harnessing these diverse individual strategies to a more cohesive framework of collective economic institutions.

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Popular Associations & Networking Strategies

1. Introduction In addition to endowments of personal ties, informal producers have also drawn on popular associations to fill gaps in business networks. Scholars of enterprise clusters have long maintained that local clubs and associations play an important role in strengthening collaborative relations among clustered firms (Nadvi & Schmitz 1994; Pyke & Sengenberger 1992; Nadvi 1998). In unequal and ethnically divided societies, however, it has been suggested that associations may fragment and marginalize rather than strengthen popular economic organization (Beall 2001; Englund 2001; McCormick 1999:1544; Gorter 1997; Wheeldon 1969). Far from consolidating small-firm dynamism, Tostensen et al. (2001:23) point out that popular associations in Africa tend to be weak and suffer from limited resources, restricting their capacity to foster collaboration, especially in times of intense economic stress. In Aba’s informal shoe and garment clusters, the developmental potential of popular association appears more encouraging. Igbo society is noted for its high levels of associational participation, and informal manufacturers are no exception. Voluntary associations operating across communal lines are commonplace in both clusters. However, the capacity of local associations to foster trust and economic efficiency is often limited by the social and economic marginality of informal producers. Social powerlessness and limitations of time and resources influence the types of associations that informal actors are able to join, and their access to benefits within them. This chapter will explore whether participation in popular associations has given rise to a more pluralist and productive framework for informal activity, or has tended to compound problems of socio-economic marginalization and organizational fragmentation. It will begin with an analysis of associational participation within the two clusters, and 105

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consider how patterns of associational membership influence access to resources. This will be followed by a consideration of the varied ways in which informal producers have used associational participation to develop and strengthen business networks, reinforcing relations of communal embeddedness in some cases, while pursuing strategies of disembedding and network diversification in others.

2. The Web of Local Associational Life Despite their comparative marginalization within Igbo society, Aba’s informal shoe and garment manufacturers are involved in a range of local associations, including hometown unions, religious societies, producers’ associations, savings clubs, and a range of social clubs, friendship societies and private sector associations. This dense web of associational ties offers a means of building and strengthening business linkages, mobilizing resources, and exchanging information, as well as creating ties that cut across communal lines. As previously discussed, the propensity to form associations, such as occupational groups and title or secret societies, is deeply embedded in Igbo society, and constitutes a ready made institutional framework for the emergence of new associations to solve popular organizational problems. While many of the forms of local associations in contemporary Igbo society are of comparatively recent origins, the deeper institutional legacies that underpin them give Igbo popular associations considerable regulatory power. Moreover, few of the associations common among Aba’s informal manufacturers were formed as a result of recent state initiatives to promote ‘civil society’, suggesting a measure of local autonomy. The institutional character of these popular associations is quite varied. Some, such as hometown unions, have come to be regarded as mandatory within the moral framework of Igbo society, despite colonial efforts to make them voluntary (Gugler 1991; Ofondu 1997). Others, such as religious societies and producers’ associations, are more subject to individual choice. Some of these associations combine informal producers with more advantaged members of society, while others, such as social clubs, are limited to people of the same socio-economic level. Many of the associations involved are formally registered, at least at the local government level, while others remain purely informal. In short, the ‘voluntary associations’ of the informal economy are not necessarily voluntary, and not necessarily informal. Nonetheless, these associations can be said to constitute forms of ‘informal’ economic organization to the extent that they provide a popular, non-state framework for regulation and resource mobilization within the informal economy. And they can be said to constitute ‘networks’ to the extent that they form the basis of social connections among individuals which can be mobilized for economic ends (Boswell 1969).

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2.1 Patterns of Associational Participation Overall, Aba’s informal manufacturers belong to an average of 3.6 associations across a range of communal and cross-community organizations (Table 6.1). The rates of associational participation are similar to those found by Silverstein (1983) among Igbo entrepreneurs in the town of Nnewi, also particularly noted for involvement in local manufacturing. The two most important types of associations are hometown unions and religious societies, each of which attract the loyalty of the majority of informal producers across the shoe and garment clusters. While the popularity of these associations appears to indicate a prevailing commitment to particularistic loyalties, they have come to represent more progressive forms of civic engagement. In the face of state withdrawal, hometown and religious associations increasingly mobilize members around issues of economic and infrastructural development rather than around more parochial concerns (Barkan et al. 1991; Honey & Okafor 1998; McNulty & Lawrence 1996). Hometown unions in particular have become increasingly important agencies of infrastructural and social welfare provision in the face of declining state involvement. They can also be important sites for business contacts and access to loans within advantaged communities. These functions are not so much independent of the state as complementary to it. Igbo hometown unions are officially registered and have strong connections with the state through incorporation into official community development strategies and through links with their elite sons in government. Thus, hometown unions serve as a conduit for state resources and a gateway to wider political connections (Smock 1969). Participation in the village union of one’s home community, requiring an annual return visit to the village, is considered mandatory for all adults (which usually means after marriage). Involvement in the wider hierarchy of hometown unions, involving town unions and branch unions for migrants, is less strictly enforced, but is also more likely to yield economically useful contacts. Successful informal manufacturers were found to participate in as many as three types of hometown unions (village union, town union and branch union in their place of residence), while young, unmarried producers often do not participate in any. However, involvement at even the lowest level has become increasingly problematic for those with limited resources. The increased social welfare and infrastructural responsibilities of hometown unions have led to higher and more frequent levies on members. At the same time, networks of personal assistance between the better-off and more needy townsmen have become increasingly strained, which has tended to harden lines of class differentiation within local communities. Despite the strong moral sanctions against withdrawal, participation in hometown unions has been weakened by hard economic times and the contradictory demands of evangelical Christianity.

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Table 6.1 Rates of Participation in Various Types of Popular Associations (% of Firms)

Cluster

Hometown Unions

Garments Shoes Average

63.9 81.7 73.5

Religious Producers’ Savings Societies Associations Clubs 85.2 77.5 81.1

6.6 83.1 47.7

39.3 49.3 44.7

Local Social Clubs 9.8 18.0 14.0

Formal Private Sector Avg. No Associations of and Business Associations Clubs per Person 6.6 5.6 6.1

3.0 4.2 3.6

Source: Fieldwork

By contrast, participation in religious societies has been rising in the face of economic pressures and the proliferation of evangelical or ‘prosperity’ churches. This is particularly marked in Abia State, where evangelical churches far outweigh the established churches. The sheer profusion of evangelical religious sects in the area has led people to refer to Abia State as ‘God’s Own State’, which is in fact the slogan on Abia State licence plates. The sheer profusion of religious sects in the area is remarkable. In a survey of 132 informal producers, 26 different denominations were represented, 20 of them Pentecostal sects. Since the 1980s, these sects have spread rapidly in Nigeria, and have proven particularly attractive to members of the middle and aspiring middle classes who have lost out in the process of economic restructuring. In Aba, prominent sects include Deeper Life Bible Church, Assemblies of God, Christian Partnership Mission, and the non-Christian sect of Eckankar, all of which are global organizations, with well established branches in the US and Europe. The attraction of these churches appears to be both moral and strategic. Evangelical churches promote an ethic of moral rectitude, frugality, and economic advancement, as well as creating new social boundaries based on religious purity rather than communal identity. They also link members into global religious networks which facilitate access to overseas contacts, scholarships, travel to international church conventions, and other resources outside the framework of state connections and influence (Hunt & Lightly 2001; Marshall 1991; Marshall 1993; Mary 2002; Smith 2001). Where hometown unions reinforce communal embeddedness, religious associations encourage disembedding from community based ties, and re-embedding in new, more global and professionally-oriented organizational networks. From this perspective, the bias of garment producers toward religious rather than hometown associations appears strange, given their greater communal homogeneity and advantaged community origins. By contrast, shoe producers participate more strongly in hometown than in religious associations, which could be expected to reinforce their communal fragmentation and socio-economic disadvantage. The reasons for this unexpected twist will be explored below.

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Producers’ associations and savings groups represent the second most prominent types of association. Both of these represent organizations with more specifically economic goals that unite members across both religious and community lines. While participation levels are highly uneven, they average just under one half of producers across the two clusters. Participation in producers’ associations is particularly uneven, reflecting the narrow base of the mass-producers’ association in the garment cluster, and the lack of any association to represent tailors, leading to overall participation rates of under 10%. By contrast, more than 80% of shoe producers are members of local producers’ associations, despite, or perhaps because of, their diverse community origins. Savings groups show more uniform participation rates across the two clusters. Savings groups refer to arrangements in which an independent operator collects regular contributions from a clientele who are otherwise unconnected with each other and do not meet together. These institutions only facilitate savings, and do not grant loans. Although these savings groups date from colonial times, they have become particularly popular in the past decade owing to the high level of bank failures triggered by numerous reforms of the banking sector from the early 1990s. Southeastern Nigeria appears to have suffered disproportionately from the spate of bank failures (Nwajiuba 2001), which has severely shaken local confidence in formal savings institutions, and encouraged a greater recourse to informal financial alternatives. A number of informal producers indicated that they had previously used bank accounts, but had reverted to informal savings groups because the banks were too unreliable. Unfortunately, participation in savings groups has also been weakened by declining earnings and greater dishonesty of savings group operators. Many producers indicated that they preferred to participate in contribution clubs embedded in their hometown unions, church groups, or social clubs, which were seen as more reliable. Finally, social clubs and formal private-sector associations show the lowest levels of participation, averaging less than 20% of informal producers overall. Local social clubs refer to groups organized around socializing with peers, also known as friendship societies or ‘committee of friends’. These groups may unite peers from the same home area or occupation, or they may crosscut community and occupational boundaries, depending on the objectives and social opportunities of the participants. They can be an important means of mobilizing resources or information for business needs, but tend to be highly segregated along socio-economic and educational lines. It is striking that the participation of shoe producers is nearly twice as high as that of garment producers, despite the former’s less advantaged socio-economic and educational status. Formal private sector associations and business clubs reflect much more pronounced class divisions (Silverstein 1983:292). They involve a range of social organizations with national as well as international links to formal sector business interests. These include national private sector

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organizations, such as the Manufacturers’ Association of Nigeria (MAN), the Aba Chamber of Commerce (ACCIMA), the Nigerian Association of Small and Medium-Scale Industrialists (NASSI), as well as national and international associations of businessmen and professionals, such as the Full Gospel Businessmen’s Fellowship and the Rotary or Lions’ Clubs. All of these associations have branches in Aba. Derisory levels of participation among informal shoe and garment producers, averaging only 6%, reflect the persistence of strong class divisions between formal and informal sector operators, despite the limited penetration of more advantaged classes into informal manufacturing. The majority of formal private sector associations preserve class boundaries through legal requirements and relatively high membership fees. Some, such as MAN and ACCIMA, have explicit requirements that the businesses of members must be formally registered. The economic barriers to participation in private sector associations are reinforced by social barriers, which discourage participation by any who feel their educational level, command of English (the language of education in Nigeria), mode of dress, or financial capacity to bear entertainment costs might lead to embarrassment. In discussions with producers, questions regarding why they decided against participation in these associations were generally met with awkward and vague answers. The handful of informal producers in the sample who participated in private sector associations only did so at the lowest level. One was a member of NASSI and the remaining few were members of the Full Gospel Businessmen’s Fellowship, which is popular among traders and tends to be less educationally exclusive. 2.2 The Economic Role of Local Associations Comparatively high levels of participation in local associations are accompanied by fairly limited advantages in promoting business success. Over 40% of garment producers, and nearly 70% of shoe producers, maintained that local associations offer no business advantages. At best, they provide limited social wefare assistance in response to family emergencies or burials. Among the minority who felt that associations contribute to the development of their businesses, the main benefit centres on the role of associations in attracting customers. Small producers often find associations a useful way of advertising their businesses, and tailors and shoe producers often wear their own best designs to church or to important meetings in order to interest potential clients. Among the better skilled and connected, membership in associations can bring larger contracts to provide ceremonial wear for burials, weddings or associational functions, as reflected in the case of Mrs Kalu in the last chapter. The downside of these forms of assistance is that concessional prices are expected for any business obtained through associational ties. Moreover, associational membership is only useful for attracting business if there are not too many others in the same activity within

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the association. This makes membership in an association dominated by artisanal communities, or attending a church frequented by such a group, a mixed blessing. In some cases, associations can provide a useful source of business contacts. References from local notables or well connected businessmen within one’s association is an important means of guaranteeing credit or obtaining contracts with companies or parastatals. However, interviews with producers suggested that loans, references and even useful business contacts are rarely available to small informal producers. They tend to be reserved for more influential or successful members. Business loans are sometimes mobilized through social clubs, though interest rates are not necessarily concessional. Contribution clubs are normally used only as means of savings, and most producers maintained that the funds generated are insufficient for business purposes. In addition to being intermittent and limited, the forms of business assistance available though associations are largely side-effects of membership, rather than associational objectives. Popular associations are unable to offer more structured forms of assistance to local businesses because their own projects consume the bulk of their resources. Providing infrastructure for their local communities, building churches, raising funds for local or religious ceremonies, and responding to pressing social welfare demands leaves little in the way of funds or organizational slack for providing assistance to a profusion of small businesses. In fact, the growing responsibilities of popular associations for social provisioning transform them into an increasing financial drain on members rather than a source of economic assistance. As one garment producer put it, ‘Associations don’t help you with money, they demand it!’ While membership dues remained fairly modest, the increasing financial demands of local associations manifest themselves in a growing array of levies and emergency contributions. Members’ standing in a given association is strongly influenced by the ability to contribute lavishly on such occasions. Including dues and special levies, average annual contributions amounted to N – 7,513 ($US 75) for garment producers, and – N 9,233 ($US 92) for shoe producers, roughly two months wages for a skilled worker in both clusters. The cost of participation varies significantly according to social status. Successful garment producers reported levies and extra contributions of nearly twice as much as their poorer colleagues, while better-off shoe producers contribute more than ten times as much as their less successful counterparts. The time demands of associational membership are also a significant constraint on participation. Time commitments for participation in associations average 19 hours per month in the case of garments, and 16 hours per month for shoes. This excludes burials and ceremonies, which often take participants out of town. The majority of producers in both clusters feared heavy participation in associations might run down their business. Those with more resources and social authority can defray the pressures

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of associational time commitments by sending someone to represent them at less important meetings or ceremonies, or by leaving trusted workers in charge of the business in their absence. Poorer producers, who lack such control over labour, face fines and social censure for non-attendance at meetings. This forces them to restrict associational participation in order to minimize the drain on time and resources.

3. Associations and Popular Agency: Embedding, Disembedding and Diversification Among Aba’s informal shoe and garment producers, voluntary associations appear to offer a very uneven source of ‘social capital’. In fact, flows of information and resources generated by associational participation appear to reinforce rather than counteract structures of advantage emanating from the formal economy. Communal, gender and class divisions embedded in associational structures, combined with the economic pressures of associational participation, clearly limit the extent to which popular associations are able to compensate for structural disadvantages in the wider society. This becomes glaringly obvious when the focus is shifted from particular types of associations, to the social factors governing overall participation rates in voluntary associations. Regression analysis of the influence of identity, class, gender, age, and religion on associational participation in the two clusters revealed that structurally advantaged producers tend to join a greater number of voluntary associations than their less advantaged counterparts (Appendix 1, Table 1). Producers aged thirty or more from advantaged class backgrounds tend to participate in more associations than younger, lower class producers. By contrast, women, and members of evangelical churches participate in fewer associations than men and members of mainstream churches. In short, senior male producers from established churches and advantaged class backgrounds – in other words, the local establishment – were the most active participants in voluntary associations. Once these social factors were taken into consideration, differences in associational participation between the shoe and garment clusters became statistically insignificant. While popular associations tended to reinforce structural disadvantage among informal producers, they also created space for popular agency. Patterns of associational participation were not only a product of economic constraints on membership; they were found to reflect strategic choices about the types of networks that various categories of producers wished to build or reinforce. An examination of the patterns of associational participation on the basis of gender, age, communal identity, class and education revealed three distinct networking strategies, which can be described as embedding, disembedding and diversification.

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3.1 Hometown Associations and Embedding Strategies Associational strategies based on strengthening embeddedness in ascriptive communities centred on participation in hometown unions. The appeal of this strategy was shaped, not by membership in advantaged or disadvantaged communities, but by a particular configuration of class, gender and communal characteristics. In fact, regression analysis showed that producers from artisanally advantaged communities were considerably less likely to participate in their hometown unions, which would explain the comparatively low rates of participation of garment producers in hometown unions (Appendix 1, Table 2). Unsurprisingly, women were also found to be less likely to join hometown unions than men. Those with junior secondary education or more, and those below the age of thirty, were also associated with a lower probability of membership. By contrast, producers from advantaged class backgrounds showed a very strong propensity to join hometown unions – indeed they were found to be over four times as likely to join as producers from disadvantaged class backgrounds. On the whole, these findings corroborate earlier indications that older male members from the advantaged classes tend to monopolize benefits within hometown associations, to the disadvantage of women, youth and producers from artisanal backgrounds (who tend to come from disadvantaged classes). In short, participation in hometown unions reflects a strategy of collaboration with patriarchal elite interests in the hope of access or assistance. The following case from the shoe cluster illustrates the interplay between identity and class in networking strategies involving participation in hometown unions: Mr. Chukwuma, an indigene of Mbaise, is a well established producer of women’s shoes. He is from a trading background, and his father is also a village chief. After completing primary school in the early 1970s, he was apprenticed to a townsman, but was not settled. In 1978, he started up his own business with substantial capital given to him by his family. Now the head of a thriving business with three apprentices and three temporary workers, Mr. Chukwuma has built up his business through active participation in a range of associations. These include both his village and his town unions, a Catholic Church association, his local shoemakers’ union, and a savings club. He says his town union has been a useful source of business contacts and customers, while his church group sometimes helps with loans. Strengthening his embeddedness in the communal and religious establishment has provided the resources and contacts to diversify his business networks. None of Mr. Chukwuma’s workers are relatives or townsmen – he prefers to use friendship ties and business contacts as a means of selecting workers. Ties with suppliers and customers are also largely through pure business relations, though embeddedness in Mbaise commercial networks can be an added asset as regards economic benefits and access to information. However, Mr. Chukwuma’s business networks

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involve many traders who are non-Mbaise, and even non-Igbo. In addition to selling to traders who distribute across West, Central and North Africa, Mr. Chukwuma also gets significant business from formal sector firms and boutiques. He finds operating in the shoe cluster is a useful way of gaining access to customers, but complains that the concentration of Mbaise producers is a disadvantage, since it exposes him to too many demands for assistance from struggling townsmen.

In the above case, the producer’s advantaged class background afforded him better access to capital and contacts within his hometown union than most of his fellow producers – something he has used to advance himself occupationally by diversifying his business networks, and distancing himself from his less advantaged townsmen. 3.2 Evangelical Religious Associations and Communal Disembedding Marginalized within the framework of hometown unions, producers from skilled, but less advantaged backgrounds have to seek alternative networking strategies in their quest to ‘get ahead’. Evangelical religious associations play a central role in the creation of alternative networks of social advancement through exit from communal relations. This is not to suggest an absence of spiritual motivation in conversion to evangelical sects, but to indicate that spiritual impulses to convert tend to arise within a particular socio-economic framework. Through exhortations of religious purity, evangelical religious groups discourage members from participating in any other types of associations, especially hometown unions, owing to their involvement in the consumption of alcohol and connections with ancestral shrines and ‘idol worship’. Steeped in a Weberian ethic of piety, industry and frugality, Nigeria’s more ascetic evangelical churches not only address the spiritual anxiety induced by the punishing economic circumstances of economic reform; they also provide a normative framework for the conservation and concentration of resources, rather than their dissipation through levies and ceremonies of a range of hometown, occupational and friendship associations. In Aba, 33% of producers in the garment cluster, and 10% of producers in the shoe cluster were found to have adopted a disembedding strategy based on exclusive participation in their religious associations. Participation in evangelical exit strategies is shaped by two key factors: gender and class (Appendix 1, Table 3). As of the early 2000s, women and producers from disadvantaged class backgrounds were over five times more likely to join exclusive evangelical religious societies than men or producers from advantaged class backgrounds. These factors are the opposite of those found to promote participation in hometown unions, suggesting that religious exit strategies are a response to the exclusion experienced by skilled but structurally disadvantaged small producers. This explains why garment producers, who have a high proportion of women and members form disadvantaged classes, are

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especially prone to participation in religious strategies of communal disembedding. An examination of producers’ social histories reveals that evangelical exit strategies are also accompanied by a strong commitment to artisanal values of skill and quality. Where not associated with membership in artisanally advantaged communities or higher levels of education, a skillbased orientation is often indicated by other factors in a producer’s history, especially the tendency to enrol in additional apprenticeships in the same activity in order to obtain more specialized production skills, as the following example illustrates: Mr. Esiobu is a middle-aged, highly skilled producer of men’s shirts from Okigwe, a non-advantaged identity group in the garment cluster, but a skilled artisanal group in the shoe cluster. Hailing from a rural farming background, Mr. Esiobu never had an opportunity to go to school. He came to Aba in 1972 to train as a tailor. He first trained in sewing general men’s wear, then in order to improve his skills, did a second apprenticeship with a tailor who specialized in shirts. After completing his second apprenticeship, Mr. Esiobu worked for his master as a journeyman to earn some startup capital, and also worked as a bricklayer. He started his own business in 1976, and worked very hard to get established. He worked extremely long hours – sometimes as many as three to four days on end without sleep. This regime affected his health, and he was forced to leave the business after two years. He turned to trading shoes, which he continued to do until his trading business collapsed in 1987. At this point, Mr. Esiobu felt called back to tailoring, which he believed was where his real talents lay. After working as a journeyman for six months to get some money together, Mr. Esiobu relaunched his business in 1988. Some time during his absence from tailoring, Mr. Esiobu became a member of Deeper Life Bible Church. He now belongs only to his religious society, and to no other association, freeing him from the constant economic demands of his village union. He claimed the hometown union did not help businesses, but just imposed levies to build things for the village. Participation in Deeper Life has reduced his economic liabilities, contributing to the growth of his business. Through skill and hard work, Mr. Esiobu has developed good contacts with traders and boutiques, and builds up his distribution networks on the basis of reliability, quality, and the use of a complementary card. He once had an order of over one thousand shirts through an indirect contract from the Nigerian Shipping Council. He recruits most of his workers through customers on the basis of his reputation, selecting them for their skills and paying higher than the going rate in order to keep them loyal. However, Mr. Esiobu’s lack of education has limited his ability to gain access to Deeper Life occupational networks in the garment sector. In contrast to more educated converts, Mr. Esiobu felt that Deeper Life connections were not a useful source of workers, since those offered to him lacked adequate education (most parents in the church would not send an educated child to train with an uneducated tailor). His lack of education also limits his ability to gain

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direct access to contracts, forcing him to charge 25% below the going price for high quality shirts in order to get contracts via better connected intermediaries.

While this case study supports the contention that withdrawal into religious societies is favoured by ambitious producers with a strong artisanal orientation, it also indicates that education is critical to the ability to reap the full benefits of evangelical religious networks. While the producer profiled above was able to reduce his social liabilities by joining an exclusive religious group, he was unable to tap into a significant level of new social capital. By contrast, a moderately successful shoe producer with secondary school education interviewed at about the same time was far more successful in tapping into evangelical networks to further his business. He obtained much more skilled labour through Deeper Life contacts, and his longest standing customer was a Deeper Life member from Lagos, who brought him considerable business and granted credit when needed. While levels of education influence the ability to benefit from evangelical networks, for a producer even to contemplate withdrawal into such networks, his or her skills and occupational values must be strong enough to warrant the risky strategy of cutting oneself off from the social welfare assistance of hometown associations. 3.3 Diversification Strategies: Religious Conversion and Social Clubs A final set of strategies involves efforts to use associational participation to diversify social networks rather than to concentrate them. In contrast to disembedding strategies, diversification represents a risk-averse strategy oriented toward increasing connections to various groups in order to maximize options for access and assistance. Diversification strategies involve two main practices: conversion to evangelical churches without withdrawal from hometown unions, or participation in social clubs. Diversification strategies based on evangelical conversion involve producers whose skills and education are above average, but who, for a variety of reasons, are unwilling to cut themselves off from community networks altogether. This strategy was encountered among about one quarter of shoe and garment producers. In general, religious diversification strategies are used to compensate for critical weaknesses in ones social networks, without cutting off any options. In some cases, religious conversion acts as a mechanism for bonding with the main artisanal groups in a cluster. In both the shoe and the garment clusters, membership in evangelical churches is prominent among comparatively skilled and successful producers who are not from the original artisanal community. In such cases, conversion often occurred well before structural adjustment, during earlier waves of Christian revivalism that took place in Nigeria in the 1950s and 1970s. Many of the producers involved are from important trading communities for cloth and garments, making it undesirable to sever hometown connections,

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since strong trading links are useful to the individual enterprise as well as to the cluster as a whole. A more prevalent strategy involves religious diversification to maximize limited advantages in the face of current economic insecurity. In such cases, evangelical conversion is a fairly recent response to contemporary social and economic upheavals, and constitutes a purely personal rather than a collective networking strategy. Recent evangelical converts are characterized by higher than average levels of skills and/or education, but tend to suffer from serious capital constraints and weaknesses in their social networks. These weaknesses, often accompanied by heavy family responsibilities, make it too risky for them to sever ties with their home communities which are a critical social welfare fallback in times of trouble. The story of Mrs. Ubah, a widow of advantaged class background, exemplifies the pressures and strategies involved. Mrs. Ubah is a women’s tailor of advantaged class but disadvantaged community background in Abia State. Her parents were employed in the formal sector, and put their daughter through secondary school. Mrs. Ubah finished secondary school in the late 1970s, after which she married, and came to Aba in 1985. By 1987, one year after the onset of structural adjustment, Mrs. Ubah decided to take up tailoring to help make ends meet. She served a two-year apprenticeship with a tailor to whom she was directed by friends, and started up her own business in 1989 with capital from her family. Somewhere along the line, her husband died, leaving Mrs. Ubah to support the family with her tailoring business. She is now the head of a household of eight, and has been struggling to keep things together. Part of this struggle has involved her conversion to Pentecostal Covenant Mission, although she still maintains membership in her husband’s village and hometown associations as well. Mrs. Ubah has built up her labour, supply and distribution networks largely through a combination of business and personal relationships. She currently has one employee and one apprentice, obtained through customers and a former apprentice rather than through kinship or hometown ties. She sews largely for individual customers from various parts of Nigeria, who linked up with her through relatives and previous customers. Mrs. Ubah finds that her Church meeting is a particularly useful source of customers and business contacts, though not of loans or contracts from companies.

Although educated and reasonably skilled, the producer described above lacks both the strong artisanal socialization and the occupational networks that characterize the Deeper Life members profiled in the previous case studies. Mrs. Ubah’s economic orientation is driven by livelihood rather than occupational concerns. While widening networks of assistance, evangelical diversification also increases the demands on a producer’s time and resources. Converts face economic demands of regular church collections and levies in addition to the financial demands of their hometown unions. For evangelical diversification to facilitate economic advancement, converts would have to be in a position to invest

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significantly in evangelical as well as hometown networks, both systems in which status is heavily influenced by the generosity of contributions. In diversifying their networks, more economically insecure converts broaden their contacts, but most spread their resources too thin to reap any significant business gains. A completely different diversification strategy concerns participation in social clubs and friendship societies. This strategy involves an attempt to diversify ties through investment in friendship networks, which create links across community lines, or across various lines of business. Unlike religious diversification strategies, which encourage an ethic of modesty and frugality, participation in social clubs revolves around an ethic of lavish hospitality. Among Aba’s small manufacturers, social clubs build relations of trust, mutual assistance and exchange of information among peers through social activities such as hosting each other with food and drink, and spending as lavishly as possible at each other’s ceremonies (marriages, baptisms, burials, etc.). Social clubs are often a means of strengthening links among townsmen in other businesses, or of maintaining ties formed in secondary (or junior secondary) school. Some social clubs also host seasonal festivities, such as Christmas parties, in which displays of wealth and generosity are aimed as much at creating important social and business contacts with guests from outside the group as they are at maintaining ties within the group. For some producers, social clubs are an important means of pooling resources for loans, particularly among those whose community and class based connections provide little alternative access to such resource pools. At the same time, the ability to participate in such clubs requires enough in the way of surplus resources to meet entertainment obligations without obvious strain. As a result, social clubs are favoured by producers who are successful enough to engage in economic displays among their peers, but lack the class contacts, skill levels and social disposition to advance themselves through hometown or religious associations. Unsurprisingly given these motivations, participation in social clubs is heavily concentrated among older, more prosperous producers from disadvantaged communities, and is almost twice as high in the shoe cluster as in the garment cluster. Established producers from non-advantaged communities tend to have more capital than connections or skills, making social clubs a more effective method of strengthening occupational networks. This situation is particularly pronounced in the shoe cluster, where non-advantaged communities predominate, occupational professionalism is more weakly developed, and profits can be high for those with capital and passable skills. The strategy of network diversification through investment in friendship ties is illustrated by the case of Mr. Wilfred, an enterprising non-Igbo shoe producer from Delta State:

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Mr. Wilfred, a producer of ladies and children’s shoes, has been in the business for sixteen years. His father was a farmer, and was unable to fund Mr. Wilfred’s education beyond the primary school level. Originally, Mr. Wilfred had come to Aba to train as an electrician, but his master ran into economic problems and returned him to his village. Not wanting to hang around, Mr. Wilfred returned to Aba to train as a shoemaker under one of his friends. His family gave him a little capital to start up with, but he had to work as a labourer to build up his capital to a viable level. Difficult economic times forced him to move shop several times during his first years in business, but through hard work and reliable performance, he managed to build up strong credit and customer networks. In 1994, he was among the shoemakers forced by police to move to the newly constructed shoe production zone known as Bakassi, at the edge of Ariaria market. The facilities were very poor, with no electricity, no paths between the stalls, and no security for people’s goods. Mr. Wilfred now does comparatively well at the lower end of the market but is against the kinds of sharp practices and use of inferior materials common among younger producers. He supports a household of nine, and belongs to six associations, including an Anglican religious association and three social clubs. One of these involves friends from his home area, another involves shoemaker friends, and another involves friends in other lines of business. Involvement in these associations is largely for social purposes, but they can also be helpful for business. One of his social clubs gives loans large enough for business purposes, based on internal contributions. Some of the members of another club have brothers who are shoe traders, and these traders have become his customers. However, participation in so many associations requires a significant commitment of time and resources. Mr. Wilfred must attend meetings as well as ceremonies, especially for the fellow members of his social clubs. Membership fees, levies and contributions consumes – N 30,000 (US$ 300) a year. Mr. Wilfred intends to stay in shoe production for another five years, and then to move into another activity more suitable for older men, such as trade.

4. Conclusion The high levels of associational participation characteristic of Igbo society have done little to promote the development of a more collaborative informal institutional environment for small-scale enterprise. Indeed, the thick web of associational life in which informal actors are embedded appears to reinforce rather than moderate tendencies toward social fragmentation and intense competition over access to resources. Rather than creating a basis of trust and collective action, associational strategies appear to be geared largely to the pursuit of personal or sectional advantage. The embedding and disembedding strategies associated with hometown unions and exclusive evangelical societies reflect tactics of group

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closure which seek to maximize class or skill based advantages in ways that marginalize weaker fellow producers. Groups with more limited advantages in human and social capital turn to diversification strategies in an effort to widen their portfolio of ties with better off members of society, though in ways that tend to dissipate rather than focus resources. The poorest producers, unable to afford the risks of closure or the costs of diversification, remain marginalized within these associational networks by the same lack of skills and resources that marginalize them in the formal economy. They join very few associations, and rely largely on ascriptive membership in hometown and conventional religious associations when they do. Ultimately, associational participation appears to have more to do with strategies for linking up with more powerful and successful groups than with strengthening collaborative relations or popular agency within the clusters. Not only do these strategies tend to dissipate resources in the service of diverse associational goals, as Sara Berry (1993) argues in other African contexts, but they also make small producers vulnerable to the powerful interests with which they strive to forge ties. Despite the appearance of agency afforded by associational strategies, informal producers seem more like flies than spiders in the web of associational life.

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7

Networks of Accumulation & Networks of Survival

1. Introduction Faced with the pressures of economic restructuring, Aba’s informal producers have drawn on personal ties and associational strategies to restructure their enterprise networks, with uneven success. From the perspective of economic development, however, the critical issue is not whether individual producers have fared well or badly, but the collective impact of these various networking strategies at the level of the cluster as a whole. The complex interplay of informal organizational strategies in the Aba clusters raises questions about how relations of accumulation and survival, structure and agency, play themselves out at the cluster level. Does the proliferation of social and entrepreneurial networks promote economic growth or is it fostering the fragmentation of collective production systems in the face of extreme competition and economic hardship? Focusing on the complex array of networks unleashed by economic restructuring, this chapter will explore the link between individual economic strategies and wider structural, or ‘institutional’ consequences. In Aba’s shoe and garment clusters, it is not clear that enterprise networks are leading in the direction of collective efficiency. Patterns of personal networking and associational participation appear to be contributing to fragmentation and differentiation within clusters, creating informal organizational frameworks of structural inequality and social exclusion rather than cluster-wide solidarity. At the same time, there does appear to be some room for excluded firms to gain access to more advantageous networks through the strategic manipulation of social ties. How does this complex interplay of networks of communal identity, class, gender, religion and friendship play itself out at the structural level? Do these patterns of networking lead to a permanent structural fluidity, or do they coalesce into increasingly stable patterns of advantage and dis121

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advantage? More importantly, what are the implications of these structural tendencies for the development of production within these two clusters? Can Aba’s enterprise networks still foster a tendency towards collective efficiency, or are they perpetuating the unproductive solidarities of the ‘economy of affection’? These questions will be addressed through an exploration of how relations of solidarity and exclusion, collaboration and differentiation, have shaped structural outcomes in Aba’s shoe and garment clusters. Beginning with a consideration of networking strategies among successful producers, it will be shown that networks of accumulation have given rise to contrasting social dynamics and occupational objectives between the shoe and garment clusters. This will be followed by an exploration of the more diverse networking strategies among the mass of struggling producers, where mounting economic pressures and social disadvantage tend to privilege individual livelihood concerns over collective occupational needs, with problematic consequences. A final section will consider how emerging structures of accumulation and survival affect the economic prospects of the two clusters.

2. Networks of Accumulation Previous chapters have noted that social networks operate in very different ways in the shoe and garment clusters as a result of their distinct social histories and occupational character. Founding communities, for example, have remained central to processes of skill formation and occupational organization in the garment cluster, but have retained comparatively little influence in the shoe cluster. As new groups enter, with varying skills, economic objectives, and class and educational backgrounds, entrepreneurial networks have been reshaped in distinctive ways. Of concern here is whether the introduction of new bases of entrepreneurial advantage tends to moderate or reinforce economic inequalities among informal producers. 2.1 Social Structures of Accumulation Clustering and dense small-firm networks have not prevented the emergence of significant economic inequalities among informal shoe and garment firms. Socio-economic inequalities and divergent networking strategies have produced a wide divergence in skills, incomes and productive capacity among firms. By the year 2000, the top 25% of garment producers enjoyed an average monthly turnover nearly 14 times that of the bottom 50% of firms and employed more than five times as many workers, despite serious contraction in the cluster as a whole. In the shoe cluster, divergences are less extreme, but remained considerable. The top quarter of shoe producers had an average monthly turnover more than five times that of the bottom half, and employed twice as many workers.

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These wide variations in performance do not appear to be associated with the life cycle of the firms. The most successful stratum of garment producers was on average only marginally older than less successful producers, while successful shoe producers had the same average age as their poorer counterparts. An exploration of the relationship between social characteristics of producers and annual turnover suggests that economic inequalities are a product of ‘social structures of accumulation’ operating in distinctive ways in the two clusters. Despite the dizzying flux of networking strategies among successful as well as unsuccessful producers, the interweaving of identity, class, gender, age and education reveals the emergence of clear social patterns underpinning success. Regression analysis confirmed that age had no significant effect on performance, and, predictably, women producers were negatively associated with economic success (Appendix 1, Table 4). However, education, community and class background were found to have opposite effects on performance in the two clusters. Secondary education contributed positively to economic success in the garment cluster, but had an insignificant, even negative, effect on performance in the shoe cluster. This bolsters the observation that high levels of education in the shoe cluster often indicate a lack of capital and connections for entry into a more prestigious activity, handicapping performance. Similarly, advantaged community origins were found to be critical to success in the garment cluster, while demonstrating a slightly negative effect on performance in the shoe cluster. This confirms earlier remarks about the predominance of under-skilled and under-capitalized producers in the advantaged communities of the shoe cluster. By contrast, an advantaged class background was not found to be an asset to performance in the garment cluster, but had a positive effect on performance in the shoe cluster. In short, community rather than class is central to enterprise growth in the garment cluster, and class rather than community is the secret of success in the shoe cluster. A closer look at the most successful stratum of producers reveals the different ways in which structures of accumulation have been shaped by systematic differences in the interweaving of networks of communal identity, class, and gender. In the garment cluster, entrepreneurial success is associated with what Gorter (1997:1600) refers to as ‘artisanal backgrounds’, which involve embedded values of craftsmanship combined with disadvantaged class backgrounds, giving rise to an ethic of advancement through skills, quality and education – precisely the social profile celebrated in the early literature on small enterprise clusters (Nadvi and Schmitz 1994). Significantly, the original artisanal communities of Old Bende remain a prominent force in the garment cluster generally, but are particularly concentrated in the top quartile, where they constitute nearly three-quarters of producers (Table 7.1). Occupationally advantaged communities more generally – that is Bende

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Table 7.1: Social Differentiation among Shoe and Garment Producers (% of Producers) Income Group

From Original From From Artisanal Advantaged Advantaged Community Communities Class Background

Secondary Education

Gender (Male)

GARMENT Top Quartile

71.4

92.9

14.3

78.6

92.9

Entire Cluster

44.3

77.0

26.2

64.3

55.4

SHOE Top Quartile

22.2

44.4

33.3

11.1

100.0

Entire Cluster

14.1

38.0

18.6

12.7

100.0

Source: Fieldwork

producers as well as producers from culturally, historically and dialectically related Igbo communities – are also heavily concentrated among the most successful garment firms, where they make up over 90% of producers, compared to just over 75% in the cluster as a whole. Although the vast majority of successful garment producers are from occupationally advantaged communities, they are predominantly from disadvantaged class backgrounds. Most garment producers come from families who earned their living from petty trading or farming, rather than from large-scale business activities or formal sector employment. Less than 15% of the most successful garment producers come from advantaged class backgrounds, compared to over 25% in the garment cluster as a whole. Despite their less privileged class origins, however, levels of secondary education are generally high in the garment cluster, and especially so among the most successful stratum of producers, where the vast majority have secondary education or more. Comparatively high levels of education have created a particularly effective basis for technical progress and social advancement, despite disadvantaged class origins. While facilitating the progress of skilled producers with disadvantaged class backgrounds, the social basis of success among informal garment firms shows a heavy bias against women. Despite high female participation in the garment cluster as a whole, and the over-representation of women with advantaged community origins and secondary education, the top stratum of small garment producers was over 90% male, highlighting the barriers to women’s advancement in the informal economy. Overall, the top stratum of garment producers shows a striking level of social homogeneity, given the diverse patterns of entry triggered by the last fifteen years of economic hardship. In spite of high rates of entry by other communities, middle-class actors and women during the past

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twenty years, nearly 80% of the producers in the top quartile were men from advantaged communities and disadvantaged class backgrounds. This contrasts sharply with the social composition of successful producers in the shoe cluster. As previously indicated, the social composition of success in the shoe cluster is a mirror image of that found in the garment cluster. Membership in the original artisanal community, and in communities with longstanding cultural or trading links in the activity, is considerably less important to advancement in the shoe cluster. By the early 2000s, barely 20% of producers in the top quartile of the shoe cluster had Mbaise origins, and less than half came from communities with advantaged occupational links to the business. Interestingly, however, advantaged communities were slightly more concentrated in the top stratum than in the cluster as a whole. While community origins seem to be of little importance to accumulation in the shoe cluster, class backgrounds play a more central role – the reverse of the situation in the garment cluster. Relative to the garment cluster, more than twice as many producers in the top stratum of the shoe cluster boast advantaged class backgrounds, despite higher levels of advantaged class entry in the garment cluster overall. Yet the prominence of advantaged class origins among successful shoe producers is accompanied by very low levels of education. Only 11% of top shoe producers had secondary education, less than in the shoe cluster as a whole. The combination of advantaged class origins and low levels of education indicates a predominance of indigenous business, or trading, backgrounds, as opposed to producers entering from formal sector employment, which is relatively rare in the shoe cluster. As previously indicated, the gender bias among shoe producers is total. All heads of shoe firms in the cluster were male. The distinctive pattern of communal, class, and educational characteristics masks important social divisions within the top stratum of shoe producers. In contrast to the social homogeneity at the top of the garment cluster, successful shoe producers are divided into two very different groups. On the one hand, there is a distinct concentration of shoe producers from advantaged class and advantaged community backgrounds, but with no secondary education. These producers are largely of Mbaise and Anambra origins and come from trading families. Although smaller, this group is significantly wealthier than the others in the top stratum. Their economic strength lies not so much in their advantaged community origins – given that the pioneering communities in informal shoe production had no reputation for artisanal skills – as in their comparatively successful trading backgrounds. The result is a distinctive social profile among the most successful fraction of shoe producers that emphasizes class connections and access to capital rather than artisanal skills and education. Values of profit and economic access generally triumph over an orientation towards quality and technical advance. On the other hand, the second group of successful shoe producers

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come from occupationally disadvantaged communities and disadvantaged class backgrounds, and show a slightly greater educational orientation. This second fraction of prosperous shoe producers more closely mimics the artisanal accumulation strategies of successful garment producers. Despite disadvantaged class and community backgrounds, this group was found to have higher levels of education and skills than their more successful and ‘advantaged’ colleagues in the shoe cluster. While few had secondary school certificates, over half of them had completed junior secondary school, compared to only one in seven among the trader oriented shoe producers. Moreover, the majority of this artisanally oriented fraction involve indigenes of Old Bende, where the communal embeddedness of artisanal skills and values is stronger than in most of the historically advantaged communities in shoe production. In short, the top stratum of producers in the shoe cluster is split between producers from advantaged communities embedded in a trading ethic (advantaged class backgrounds with little emphasis on education), and producers from disadvantaged communities embedded in an artisanal/small-scale manufacturing ethic (disadvantaged class backgrounds with a greater emphasis on education, although interrupted by circumstance). Although the more artisanal group constitutes a much larger share of successful shoe firms, their capacity for accumulation is crippled by limited access to capital and interrupted educational careers which weaken their ability to form links with formal sector and advantaged class groups outside the cluster. What is strikingly obvious here is that networks of accumulation depend on a great deal more than socio-cultural solidarity. While communal identity is an important component of success in the Aba garment cluster, solidary images of community tend to mask the underlying role of class and gender in excluding certain groups from networks of accumulation. In the shoe cluster, the centrality of class rather than communal solidarity reveals alternative bases of cohesion and social closure in an activity characterized by the poverty and weak artisanal skills of participating communities. Understanding the processes at work demands a closer examination of how networking strategies shape the internal cohesion of high performing producers, their relations with less successful firms in the cluster, and their linkages with the wider society – what might be called the ‘bridging and bonding strategies’ of enterprise success. 2.2 Bridging and Bonding for Success As might be expected, successful shoe and garment producers deploy very different bridging and bonding strategies. Among successful garment producers, broad communal homogeneity is undercut by largely disadvantaged class backgrounds, resulting in weak linkages to influential groups in the wider society. Conversely, accumulating shoe producers benefit from more economically advantaged backgrounds, but access to formal sector resources is weakened by communal diversity and low

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levels of education. This raises questions about how the social history of successful informal producers affects their options for gaining access to resources in the wider society. In addition to focusing on the basis of internal relations of cooperation and solidarity, the dynamics of networks of accumulation depend on linkages to resources and influence in the wider society. At first glance, communal solidarity appears to offer high performing garment producers an ideal framework for occupational solidarity and networks of access to external resources. With over 70% of the top stratum of garment producers originating from Old Bende communities, for the first seven years of the new millennium they enjoyed an ideal communal link with the governor of Abia State, Orji Uzor Kalu, who happened to come from the same area. Some of the older garment producers even knew Governor Kalu as a boy, and had close connections with some of his senior relatives. Unfortunately, the humble class origins, limited resources and informal status of the majority of top garment producers left them ill placed to reap the advantages of hometown links with the State Governor. This reality is reflected in the fact that participation in hometown unions is lower in the top quartile than in the rest of the garment cluster, despite their advantageous communal ties (Table 7.2). Table 7.2 Associational Strategies and Accumulation in the Shoe and Garment Clusters (% of Firms) Income Hometown Unions GARMENTS Top Quartile Bottom 3 Quartiles Cluster Average

Religious Society Only

Membership in Evangelical Sects

Local Social Clubs

57.1 66.7 64.3

35.7 33.3 33.9

64.3 40.5 46.3

28.6 2.4 8.9

SHOES Top Quartile 100.0 Bottom 3 Quartiles 75.5 Cluster Average 81.7

0.0 13.2 9.9

38.9 35.8 36.6

27.8 15.1 18.3

Source: Fieldwork

Excluded from the benefits of local political networks by their low social status and limited resources, established garment producers turned to religion as a means of networking for success. Nearly two-thirds of the top quartile of garment producers participated in evangelical religious societies, higher than their rate of participation in any other type of organization. The President of the informal garment association was a

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church pastor, and many of the members of the executive were church elders. Most high-performing garment producers participated in nonexclusive evangelical religious societies, facilitating occupational bonding. A successful suit producer from a disadvantaged community claimed that his lack of community-based ties with Bende garment producers was not a disadvantage, since ‘there are so many of them in my church’ (Jehovah’s Witness). In true Weberian fashion, evangelical religious ties have served to reinforce occupational networks among successful producers from different communities, acting as mechanisms for the development of trust, common commercial values, and social closure. In addition to reinforcing processes of occupational soliarity and closure, evangelical religious networks have provided alternative channels of social advancement and access to resources at the local, national and even the global levels. At the time of the research, about one-third of garment producers participated in exclusive religious societies, although participation was not significantly affected by economic performance. Paradoxically, it was producers of Old Bende origins who were most prone to strategies of religious exclusiveness, indicating a tendency to withdraw from hometown networks among the group with the strongest communal ties to cluster dominance and political influence. Owing to their disadvantaged social status, prosperous Bende producers stand to gain the least from hometown networks. They face the burden of heavy redistributive demands from weaker Bende firms, as well as mounting pressures to invest in hometown projects and political networks oriented to serving more powerful political interests. Within this context, established Bende producers have found religious strategies of disembedding more conducive to small-enterprise development than strategies based on communal solidarity. Religious and communal affinities among successful producers are further reinforced by membership in local social clubs. By the turn of the millennium, nearly one-third of successful producers participated in social clubs, compared to less than 10% in the garment cluster as a whole. Common among older producers, participation in social clubs represents an additional means of bonding across community lines, both within the cluster and with secondary school friends who had moved on to a range of activities in business and formal employment. As with evangelical religious networks, social clubs reflect a strategy of forging links with performance-oriented groups on the basis of economic and social values rather than communal identity. Such linkages also facilitated links to a more middle-class customer base, as well as access to subcontracts from schools and other formal sector establishments for uniforms. By contrast with the garment cluster, networks of accumulation in the shoe cluster were more fragmented. Tensions between trader oriented and artisanally oriented shoe producers were expressed in similar ‘bridging’ strategies, but very different ‘bonding’ strategies. All of the producers in

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the top quartile, regardless of class or community origins, were found to participate in their hometown associations, in marked contrast to the practice among successful garment producers. Far from seeing links with elite interests as a threat to their occupational aspirations, successful shoe producers of both trader and artisanal orientations cultivate such contacts as a part of their accumulation strategy. Indeed, access to a bank loan, which requires the cultivation of elite contacts, is an important concern among successful shoe producers. The two large-scale shoe firms located in the cluster, Anzzy Shoe and Virgi Shoe, both originated from the ranks of local shoe producers, but had received bank loans in the pre-SAP era, allowing them to expand into highly mechanized industrial concerns. Because of the emphasis on hometown connections with local elites, none of the top shoe producers was found to participate in exclusive religious associations. The 10% of the shoe cluster who did withdraw into exclusive religious associations involved producers from outside the top stratum, characterized by disadvantaged class backgrounds and higher than average levels of education and skills. However, more inclusive forms of evangelical religious participation also play a role. More than one-third of shoe producers in the top stratum were found to be members of evangelical churches, slightly higher than the proportion in the shoe cluster as a whole, and many were recent converts. Membership in evangelical religious groups is particularly common among artisanally oriented producers, who come from communities in eastern Abia State where evangelical conversion has overtaken the established churches. Among trader oriented producers of Mbaise and Anambra origins, however, evangelical conversion remains rare. Communities in these areas still tend to adhere to the mainstream churches, and conversion would tend to disrupt linkages with the hometown political establishment. Social clubs play a more significant role in networking strategies in the shoe cluster in general, but their significance among the top stratum of shoe producers is roughly equal to that of the top stratum of garment producers. Interestingly, membership in social clubs is markedly different between trader oriented and artisanally oriented shoe producers. No shoe producers from advantaged communities were found to participate in social clubs. Their lower levels of education make such clubs less useful than hometown associations for valuable social contacts in the wider economy. Among the artisanally oriented producers, where levels of education are higher, social clubs serve to strengthen links with townsmen and school peers employed in business and formal sector activities. Once again, the role of social clubs is less about bonding within the cluster than linking up with more influential groups in the wider economy for access to resources and markets. As a result of these various strategies, the top stratum of shoe producers reveals a fractious rather than a solidary character. Division among various groups of shoe producers is evident in the organization of

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the shoe cluster as a whole, which involves six production zones with distinctly different community, class, educational and religious profiles. The two most influential zones are Umuehilegbu and Powerline – the former dominated by trader based networks, and the latter by ‘artisanal’ networks. These divisions have been reproduced in the organization of producers’ associations, with significant political and economic implications for the development of the cluster as a whole, as will be discussed in the next chapter. Despite their internal divisions, however, successful shoe producers display a common ethic of economic and social advancement based on reinforcing linkages with more powerful social forces through community, religious and friendship networks. In other words, successful shoe producers emphasize the cultivation of social linkages based on class and wealth, which tends to reinforce rather than transcend communal loyalties and inter-communal divisions. In both the shoe and garment clusters, then, the distinctive interweaving of personal networks and associational strategies among successful producers has created networks of accumulation with distinct social identities and governance practices. In the garment cluster, the dominance of advantaged community and disadvantaged class backgrounds, reinforced by education and membership in evangelical religious sects, has given rise to an occupational identity based on social advancement through frugality, skills, and technological improvement. The pursuit of these small-scale manufacturing values has involved a process of withdrawal from the patrimonial structures of Nigerian society, and increasing integration into more professionally oriented social and evangelical religious networks. In the shoe cluster, by contrast, greater social disadvantage has fostered an occupational ethic dominated by mercantile values of profit and elite contacts. Despite underlying tensions between trader dominated and artisanal networks within the shoe cluster, the dominant economic strategy among successful shoe producers emphasizes patrimonial ties, rather than pursuit of alternative systems of social advancement. These distinctive forms of social regulation have influenced economic processes within the two clusters.

3. Networks of Survival While social networks and associational strategies have woven together to form distinctive networks of accumulation for some producers, the majority of producers in the cluster lie outside these networks. What of producers caught on the wrong side of community, class, gender and religious networks? Are they simply forced out of business? If so, do they go quietly, or do they set off countervailing dynamics in their efforts to network for economic survival? In the realm of informal enterprise, where advantages are fragile and markets plagued by uncertainty and instability, networks are used as much for keeping options open as for

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closing them off. As a result, the boundaries of community, class and religious networks that foster group closure and accumulation are constantly being breached by networks of assistance and economic survival. How does the balance between solidarity and closure play itself out in the broader context of Aba’s small-firm clusters? Are less successful producers moving towards incorporation into networks of accumulation through ties of community, class, friendship and religion, or do they form different types of networks, with different economic effects? In order to answer these questions, it is necessary to explore how networking strategies shape economic action among the struggling majority of informal producers. More importantly, we need to consider the impact of their networking strategies on the economic performance of the cluster as a whole. While successful networks within enterprise clusters have monopolized research interest, there is a need for greater attention to the ways in which the networks of more severely disadvantaged producers can affect cluster performance from below. Rare insights are offered by counter-narratives of less successful clusters in India (Knorringa 1996), Peru (Visser 1999), and a range of African countries (McCormick 1999), where social divisions, intense competition and state neglect have tended to undermine productive cooperation. Significantly, these accounts suggest that weaker producers do not suffer from a lack of networks, but from a tendency to form less productive networks as a result of social marginalization, lack of skills, and economic desperation. Does a proliferation of networks from below promote or undermine the development of ‘collective efficiency’? 3.1 Cooperation in Adversity While networks of accumulation in Aba are characterized by selective patterns of networking, relations among less successful firms reveal an indiscriminate profusion of networks. Earlier chapters have shown that active inter-firm networking is central to the organization of the shoe and garment clusters at all levels. Sharing work spaces and tools, subcontracting processes and excess work, and helping fellow producers get started or get back on their feet are engrained in the structure of these informal production clusters. This is especially true in the shoe cluster, where process-based subcontracting is more deeply institutionalized, and nearly half of all producers lack basic equipment for the processes they carry out in their own firms, making them dependent on borrowing and renting from fellow producers. In the garment cluster, sharing of minor equipment or inputs, such as scissors or thread, is also common. Indeed, the organization of both clusters makes it difficult to avoid these forms of cooperation. The close proximity of firms, particularly in the shoe sector which averaged three to four producers in each small workshop, creates a situation in which a producer’s equipment, inputs, designs, and extra work are there for all to see, making it almost

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impossible to avoid sharing with a needy colleague. A result of this situation is that patterns of inter-firm networking among the struggling majority of producers are based on dense webs of diverse social ties, including hometown, friendship, church, and proximity (in neighbouring shops or work tables), as producers draw on any relationship available to secure access to needed resources. While most producers are aware of the productive importance of more selective bases of cooperation, this does not eliminate the strong social and economic pressures for cooperation on the basis of all manner of ties in order to cut costs or assist colleagues in need. The intensity of cooperative networking within the two clusters is impressive. Well over three-quarters of producers in both clusters share common resources with fellow producers, including inputs, equipment and information, and the majority also share more strategic resources such as small loans, designs and large orders. However, many producers cooperate with their colleagues, not because they feel it improves their efficiency, but because of moral compulsion and economic insecurity. On average, less than two-thirds of producers felt that sharing resources with colleagues actually helped their business. Many engaged in collaborative relations, not because they improved productivity, because they depended on the good will of their fellow producers when times were hard. A fledgling producer of men’s trousers claimed that sharing resources sometimes undermined his business, but if he failed to cooperate with others, he would not get subcontracts from them when his own business was slow. Others saw cooperation as a temporary measure. An established women’s tailor commented that cooperation helped the young, but once one became successful, it was necessary to withdraw. Knorringa (1999:1601) noted a similar pattern in India, where he found that ‘relationships with other producers…were only weakly correlated with performance.’ This in itself is not problematic, if cooperation helped weaker firms get off the ground, after which they moved on to more structured and occupationally productive networking strategies. However, as indicated by the high levels of inter-firm cooperation, and the limited share of firms who regard such cooperation as beneficial, many firms continue to engage in forms of cooperative relations they regard as detrimental to growth. Even where producers’ economic interests are not served by this ‘economy of affection’, they are constrained by the moral compulsion of affective ties in a context of economic hardship and the threat of future misfortune. In addition, many producers, as well as input and output traders, engage in uneconomic cooperative relations with townspeople in order to avoid ‘getting a bad name’ in their home communities for refusing to help a ‘brother’ (or sister). While providing a limited safety net, the dense web of social networks in which most producers are enmeshed adds up to a constant drain on resources. This is particularly problematic for producers who are just beginning to accumulate. In both clusters, producers complained that

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regular borrowing of equipment slowed down their work, and equipment often went missing in the process. Poor producers dependent on borrowed equipment commented that this strategy increased their vulnerability in the high season, when lenders are busy with their own equipment most of the time. Particularly as regards the sensitive resources of information and designs, many slightly more successful producers make efforts to limit cooperation only to close networks of friends. Even this is difficult. As a young Mbaise shoe producer explained, he avoided sharing good designs because it brought down the price of his goods and made his business ‘go backward’. But he would inevitably be pressured into sharing profitable designs by friends and townsmen who would demand ‘Do you want us to die of hunger?’ What is most striking about these networks of survival is their antistructural character. In contrast to the structured interweaving of social ties observed in networks of accumulation, survival networks constitute a dense tangle of crosscutting linkages and redistributive claims. As previously observed, associational strategies among less successful producers tend to emphasize a maximal diversification of ties, rather than the more limited development of strategic social links. The result is an unstructured web of ties, as each producer deploys any available linkages in the service of personal livelihood needs. In the process, livelihood and social welfare concerns tend to overrule occupational interests through a constant breaching of occupational boundaries and standards. This gives rise to the distinctive economic logic of networks of survival, characterized by affective obligations and redistributive claims. This logic of survival contrasts sharply with the logics of artisanal skills or elite connections found in networks of accumulation. 3.2 Social Networks and Collective Inefficiencies The emergence of distinctive networks of accumulation and networks of survival raises questions about how changing network dynamics affect economic performance at the level of the cluster as a whole. If networks of accumulation and networks of survival operate according to different economic logics, how does their interaction affect a cluster’s growth potential? Are networks of survival gradually transformed through social and occupational linkages with networks of accumulation, or do they ultimately undermine productive conditions throughout the cluster? While conventional wisdom emphasizes the potential of dense webs of inter-firm ties to generate a process of ‘collective efficiency’ (Schmitz 1992), Dorothy McCormick (1999:1547) argues that clustering and interfirm networks can become a source of diseconomies in the dysfunctional institutional environment of poverty, liberalization and state neglect. She maintains that, ‘The small size of markets, over-supply of labour, and weak institutional character of many African countries mean that external economies and joint action do not always work in the ways predicted by the collective efficiency model.’ Instead of providing a

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framework for the pooling of skilled labour, the attraction of suppliers and traders, incremental technical advance and mutual learning, clustering in a dysfunction institutional environment can generate ‘collective inefficiencies’. Aba’s shoe and garment clusters clearly exemplify this tendency towards collective inefficiencies. Instead of attracting ‘pools’ of skilled labour, clustering in an environment of easy entry and low wages tends to draw skilled labour out of the labour reserve, to be set up as underequipped producers. In both the shoe and garment clusters, not only apprentices, but employees regularly leave to set up their own businesses. Lack of work and low pay encourages employees to feel they have a better chance if they set up firms of their own. Conversely, garment producers claimed that they had no problem hanging onto their employees as long as they paid them regularly and had plenty of work for them to do. However, the prevailing context of unstable markets, over-competition and squeezed margins make such stable relationships increasingly difficult for most small producers to maintain. To make matters worse, the constant fissioning of firms intensifies competition and exacerbates existing problems of squeezed margins and shortage of customers. Input supply networks in the shoe and garment clusters have also suffered from collective inefficiencies owing to the negative effect of low income consumer demand on the quality of inputs supplied. As previously discussed, high levels of inflation and a demand for cheap goods have undermined the market for good quality inputs. As a result, the expansion of informal production in both clusters has resulted in a decline rather than an upgrading in the quality of available inputs over the past fifteen years. Inferior substitutes such as third or fourth grade suiting materials, misprinted fabrics, elastic off-cuts, plastic rather than metal shoe decorations, and lower grade adhesives have become the mainstay of the clusters’ input markets. Suppliers have also adapted to current conditions through an increase in adulterated and ‘fake’ inputs – the passing off of inferior substitutes as quality inputs. Practices such as diluting adhesives with cheaper substances, and passing off poor quality elastic or zippers as quality goods are rampant. In order to avoid these disadvantages, better-off producers tend to make their own arrangements through personal ties to distributors or contacts abroad, further undermining the local market for high quality inputs. These trends do not represent a slow trajectory of improvement among very poor producers, but an active downgrading of the quality of materials previously available in the cluster. The supposedly positive dynamic of mutual learning and technical advance have also proved problematic in the context of extreme overcrowding, poor infrastructure and intense competition. Clustered producers have developed quality-compromising innovations to cope with difficult circumstances, leading to ‘negative spillover effects’ (McCormick 1999). Subtle methods of cutting costs, generally through the substitution

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of inferior materials, are shared among producers, and passed on from master to apprentice. Recycled industrial packaging has become the new low-cost substitute for fibre board insoles. Shoe producers are routinely observed tracing insoles onto sheets of misprinted corn flakes boxes – a major input in the shoe-parts section of the market. There is also a growing recourse to brand name counterfeiting in order to give the illusion of quality. Counterfeiting is rampant in both clusters, promoted as much by distributors who wanted to pass off Aba manufactures as imported goods, as by producers anxious to attract customers. Aba garment firms produce Ralph Lauren, Fruit of the Loom and St. Michael’s underwear, Lee’s jeans, and Yves St. Laurent shirts, adorned with convincing labels which are widely available in local markets. Aba shoes often bear stamps indicating they were made in Italy, Brazil, France or the UK, sometimes complete with price labels in pounds or dollars. The few committed nationalists who use ‘Made in Nigeria’ labels or personal brand names in order to build their own product reputation lament that traders avoid such goods because they attract lower prices from consumers. Moreover, local brand names are frequently copied by other producers in the cluster once they begin to establish a good reputation, forcing many to abandon the attempt to create their own brands. The technical effects of clustering are also more negative than positive under these conditions. The prevailing trajectory is one of technical regression rather than incremental advance, owing to the rising costs of machinery, irregular or non-existent supplies of electricity in production areas, and inadequate space in workshops. Equipment suppliers concentrate on very basic, often obsolete, used machinery, because that is all the majority of producers can afford. Better trained garment producers longingly described the kinds of finishing and embroidery machinery they would need to compete with Indonesian imports, and even had catalogues in which they had identified the types of machines they wanted. But they were unable to procure such machinery through local sources, or in most cases, to afford it. Worse still, production conditions have made it difficult to use even the little machinery available. One garment producer had moved to a smaller shop because of problems with rent, and had been forced to rent out his edging machine because he no longer had any room for it. An older shoe producer operating in an extremely overcrowded zone of the shoe cluster had been forced to take his production machinery back to the village for storage because his current workshop had neither electricity nor adequate space to operate machines. While these are not isolated incidents, the majority of producers have no specialized production machinery at all, and the apprentices they train have no familiarity with such machinery. The prevalence of hand tools and used machinery in these small-firm clusters is not a product of ‘appropriate technology’ or ‘small riskable steps’ of technical advancement (Schmitz and Nadvi 1999), nor a product of limited technical

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knowledge and parochial information networks (Visser 1999). In Aba, they represent a clear trend of technical regression. Older producers routinely display levels of technical competence that exceed the machinery they have access to, while newer recruits have less training and exposure to technical advances than their masters. Indeed, mutual learning has degenerated into the passing on of negative practices of copying designs and cutting quality. As Barr (1999) and McCormick (1996) have noted among small, informal firms in Ghana and Kenya, social pressures and overcrowded production areas have made it difficult for producers to exclude others or reap the profits of business secrets. In Aba’s shoe and garment clusters, producers constantly complained about the lack of secrecy, which rapidly eroded the gains of a good design through copying and undercutting. Indeed, nearly one half of producers in the garment cluster, and one-third of producers in the shoe cluster, cited copying and undercutting as the most serious downsides of clustering. More prosperous producers tend to insulate themselves from these risks by getting a shop to themselves and centralizing production operations under their own roof. However, even centralization does not protect producers from increasingly desperate strategies for ‘snatching customers’, including physical interception of customers outside someone else’s shop and a willingness to accept less advantageous terms. While better-off producers decried these tactics as opportunistic and injurious to growth and quality standards, weaker producers simply declared, ‘that is the market’. Despite widespread concerns about rampant copying, the informality of these firms leaves them in a weak position to protect their intellectual property rights. Only those few firms who are economically secure enough to register can, and do, threaten copiers with police or court action, which is often enough to deter overt poaching of designs. But it is well known that an unregistered firm has no legal standing, giving it no claim to legal protection, as well as making it vulnerable to harassment if authorities are called in.1 The occupational association in the garment cluster, and some of the more local line associations within the shoe production zones, attempt to provide informal protection against copying, but have no jurisdiction over producers who decline to join cluster associations, or who operate outside their reach. All of these various pressures and negative practices have had a detrimental effect on the developmental capacity of the cluster. While clustering widens markets by attracting international trading networks, it also encourages a proliferation of undercapitalized producers and promotes an environment of cutthroat competition. The impact is not to 1

A managing director in a medium-scale cosmetics firm in Aba related a case in which the firm had taken an informal cosmetics producer to court for copying one of its products. While the case of copying was clear cut, the offending firm was unregistered and could therefore not be held liable. The owner of the larger firm resorted to registering the offending firm herself, in order to proceed with the case, in effect against herself.

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raise prices and quality, but to depress both, as traders gravitate towards the lowest priced goods to hasten turnover, while producers continuously reduce quality in order to undercut their competitors. Even producers with a strong quality orientation are forced to join in the low price, low quality spiral, unless their personal ties give them access to higher value markets outside the cluster, largely through contacts with political elites or formal sector buying agents. While new patterns of entry by traders and more educated producers have facilitated the development of such contacts, these tend to be monopolized within networks of accumulation. The less privileged majority are simply left to the ravages of the market. An established Mbaise shoemaker of humble background, who has been in the shoe business for 25 years, lamented the impact of extreme competition on quality. He explained that customers now switched from one producer to another just because of the price, so that even quality-oriented producers had to cut corners or lose their customers. ‘Quality doesn’t pay in this market,’ he said. ‘People just want a low price.’ He experienced this as a shift from the more collaborative practices of the 1970s and 1980s when skilled producers were fewer and traders fostered loyalties with producers to ensure future supplies. Ultimately, clustering in the disabling institutional environment of rapid liberalization has created a downward spiral of copying, undercutting, counterfeiting, declining quality and technical regression – a parody of the prevailing image of successful small firm clusters. While a great deal of ink has been spilled on the advantages of clustering, too little attention has been paid to its disadvantages in unfavourable institutional contexts. In addition to weak formal institutional provision and the erosion of popular regulatory structures, poor producers find themselves enmeshed in personal networks dominated by livelihood concerns rather than by occupational goals. As Dorothy McCormick (1999: 1546) observes, an institutional environment that ‘provides little or no safety net for the economically vulnerable’ will give rise to non-developmental network dynamics that ‘protect producers and their households from calamity but do not necessarily improve performance’. Within this unstable milieu, social networks have not generated ‘trustbased forms of governance’, but a prevailing dynamic of opportunism, mistrust and cutthroat competition. The greatest casualty of this process has been the reputation of the cluster as a whole. Instead of attracting buyers from more lucrative market niches, clustering in Aba has tended to discourage foreign buyers and local quality-sensitive firms. In Aba, agents of Brazilian and Italian firms who were seen in the shoe cluster during the late 1980s and early 1990s have disappeared, and locally based formal firms such as the former Bata and the shoe retailer, Lennard’s, have largely withdrawn from their earlier attempts to develop subcontracting linkages. The problem is not a blindness of clustered firms to the need for more effective inter-firm networks, but the absence of the wider institu-

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tional and economic conditions to develop more productive forms of collaboration.

4. Conclusion The dramatic restructuring of personal and associational networks in response to new economic challenges does not appear to be promoting economic dynamism in Aba’s shoe and garment clusters. In contrast to ‘collective efficiency’ arguments, the dominant structural tendencies emerging from the welter of crosscutting networks of shoe and garment producers are differentiation, exclusion and network fragmentation. While there have been winners as well as losers in the process, the proliferation of enterprise networks has largely failed to create a basis for cluster development, from above or from below. What is equally clear is that the problem lies neither in a dearth of networks, nor in cultural failings, but in the disabling institutional environment of economic liberalization and state neglect. The differentiation of firms into networks of accumulation and networks of survival highlights the divisive implications of informal economic restructuring in a context of economic hardship and social disadvantage. The entry of producers from a wider range of communal and class backgrounds has introduced new skills and resources into the clusters, but it has also introduced new inequalities and conflicts of interest which are intensified rather than resolved by the experience of serious economic stress. Far from opening up spaces for new forms of productive collaboration, differentiation is leading to the emergence of divergent network dynamics involving conflicting social identities and governance practices within the clusters. As Knorringa (1999: 1593) argues in the context of the vast Indian shoe cluster in Agra, differentiation into networks with distinctive social and class identities limits the tendency for gains to percolate down to weaker producers, and for weaker producers to ‘graduate’ to more successful production networks. The result is that clusters do not coalesce into a single logic of network governance, but fragment into contradictory logics of accumulation and survival. A closer look at networking strategies arising in response to inequalities within the Aba clusters confirms the sense of conflicting rather than convergent organizational processes. Indeed, evidence of closure and economic exclusion challenges the notion that network restructuring is about increased collaboration and benign evolutionary shifts from strong to weak ties. As Knorringa and Meyer-Stamer (2008:32) note, the shift to weak ties serves less to strengthen the social fabric of the cluster than to tear it apart: ‘entrepreneurs... often feel more ‘attached’ to their vertical value chain linkages, with outside actors, than to their horizontal local cluster linkages.’ Despite important differences in their bridging and

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bonding strategies, successful shoe and garment producers are remarkably similar in their reorientation towards vertical linkages with important buyers and suppliers, while distancing themselves from the claims of weaker producers within the cluster. By contrast, networks of survival depend on frustrating strategies of social closure through redistributive pressures of affective solidarity. The overall image is one in which poorer producers grasp at personal ties to capture their more successful colleagues in an unstructured web of social welfare claims, while successful producers attempt to consolidate ties with external political and religious forces to hoist themselves out of social reach. The end result is neither growth nor stagnation, but a frenetic proliferation and fragmentation of inter-firm networks in which developmental prospects are rapidly being overwhelmed by a survivalist logic of ‘cutthroat cooperation’. Once again, collective efficiency theorists suggest that differentiation and disunity are only an evolutionary phase, which can be overcome if firms recognize the need for greater cooperation in response to intensifying global competition (Schmitz 1995; Nadvi 1999; Schmitz 1999; Rabellotti 1999). Producers’ associations are said to play a crucial role in ‘shifting gears’ towards the more intensive forms of inter-firm collaboration needed to meet the challenges of contemporary economic change (Schmitz & Nadvi 1999). However, there is growing evidence that the objectives of informal producers associations are not always oriented towards productive development. Social backgrounds and political objectives also shape the character of producers’ associations, as well as the nature of their linkages with the formal economy and the state. Whether a cluster is dominated by trader-entrepreneurs, or educated micro-industrialists influences more than internal dynamics of accumulation; it shapes the development of cluster associations and their interface with the state and formal economy.

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Producers’ Associations & the State

1. Introduction Emphasis on the developmental role of informal enterprise associations sits awkwardly with the realities of many African clusters. Far from galvanizing inter-firm cooperation and organizing the provision of ‘real services’ for enterprise development, African enterprise associations are noted more for their lack of organizational capacity and their vulnerability to political capture and agendas of personal advancement. A survey of African SME associations found that those that existed were largely ‘assistance-driven’; they appeared more interested in ‘lobbying with government agencies for their attention and support…and far less in the organization and delivery of packages of business development services to the members’ (Haan 1999:167). Organizational weaknesses and lack of autonomy among African small enterprise associations mean that ‘their activities sometimes get derailed by internal power struggles or external forces’ (McCormick 1999:1540). Indeed, there is a growing awareness that collective organization under such conditions may not promote popular empowerment so much as vulnerability to ‘capture’ by more powerful forces in the service of political rather than productive agendas (Beall 2001; Thulare 2004). The realities of the Aba clusters challenge some, but not all, of these views. Active producers’ associations have existed in the Aba shoe and garment clusters for decades, and initially emerged on the basis of popular rather than state initiatives. Despite their longevity and grassroots credentials, however, the capacity of these associations is constrained by the weak and chaotic formal institutional environment within which they are embedded, and by the internal divisions and socioeconomic marginalization of their members. While Aba’s informal cluster associations have fostered some institutions of productive cooperation, they have also given rise to the violent Bakassi Boys vigilante group, 140

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which has been described as ‘arguably the most notorious of all the vigilante groups in Nigeria’ (Smith 2006:168). A closer look at the role of producers’ associations in the Aba clusters highlights the prospects, as well as the risks, of informal economic dynamism within the volatile and ethnically charged political environment of contemporary Nigeria. Beginning with a consideration of the formal institutional disarray brought on by governance reforms and political manoeuvring, this chapter will explore the ability of informal producers’ associations to galvanize productive cooperation and effective institutional linkages, focusing on their history, organizational activities and internal divisions. Attention will then turn to how these producers associations shape relations between informal enterprise clusters and the state. The central question to be addressed here is whether, in an environment of social powerlessness, political opportunism and weak formal institutions, building linkages between the informal economy and the state strengthens popular economic interests, or promotes social disorder and political capture.

2. Governance Reforms and Institutional Enabling Since the early 1990s, the operating environment of the two Aba clusters has been buffeted by an array of governance reforms. In particular, economic liberalization has been accompanied by significant decentralization of government structures, both identified as key ingredients for the promotion of dynamic small firm clusters (Pyke & Sengenberger 1992). Particularly at the local level, the Nigerian government has implemented a concerted decentralization of service provision and fiscal control, including the right of local governments to raise taxes and levy fees for services (Wunsch & Olowu 1997). Devolution has been accompanied by an enormous increase in revenue allocation from the federal government, which has risen from 2% to 15% of federal revenues, and by the late 1990s accounted for over 90% of local government finances. In response to calls for greater local self determination, new, smaller states and local government areas have been created, in 1991, and again in 1996. Abia State was carved out of the original Imo State in 1991, and, between 1991 and 1996, the two local governments of Aba municipality became five. Unfortunately, the process of decentralization has been rapidly implemented and weakly institutionalized, often leaving new local structures less rather than more able to support local economic initiatives. Among Aba’s small-scale shoe and garment producers, the decentralization of government control has been a source of increased conflict and confusion rather than institutional assistance. In the face of political decentralization and increased emphasis on revenue generation, new taxes and rate increases have intensified the economic pressures faced by small producers. Confusion among different levels of government over the collection of various taxes has been even more problematic, with

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several shifts during the 1990s regarding who was to collect what.1 In Aba, local government and state officials have sometimes collected the same tax twice, and bogus tax collectors have profited from the confusion to collect ‘fake’ taxes from unfortunate producers. The situation became so serious that the Manufacturers’ Association of Nigeria had to hold seminars for their formal sector members to clarify what they should and should not pay and to whom they should pay it.2 Informal entrepreneurs were left to work out arrangements for themselves. Worse still, public services suffered from the rapid pace of reform. The extensive reorganization of states and local governments destabilized local political institutions, generating power struggles as well as genuine confusion over who had authority over what. The result has been a massive deterioration in public services and an increasing unresponsiveness to popular economic needs. Despite decentralization, sanitation in Aba was appalling, roads were quagmires for much of the year and the electricity supply was a local joke. The roads linking the various shoe production zones in Ariaria market had not been repaired since the market was built in 1976. After a rain, the roads in both the shoe and garment clusters were rivers of mud, and movement between shops became a slow and dirty business. Struggles by two of the shoe zones for access to electrical power had generated several rounds of levies over a period of years, but not a single volt of electricity, while those areas that had operative connections regularly experienced power outages lasting for up to three months. Security was also a perpetual problem, amid a collapsing and corrupt police force. Far from addressing these pressing infrastructural problems, the increasingly decentralized system of local governments spent their time squabbling over the spoils to be extracted from the hapless producers operating in this inhospitable business environment. The embeddedness of Aba’s manufacturing clusters in migrant communities and a petroleum economy has stimulated relations with local authorities characterized more by antagonism and disinterest than by support. With over 90% of local government revenue coming from the federal purse, and local government offices dominated by the Ngwa-Igbo – the commercially less active indigenes of Aba – local officials have little incentive to promote the development of small-firm clusters. Worse still, the pervasive informality of small firms put the vast majority of them on the wrong side of the law in their relations with devolved government structures. The increased authority of local and regional governments has not served to support Aba’s small firm clusters so much as to increase their vulnerability to taxation demands, arbitrary enforcement of the dizzying regulatory shifts of the reform process, and harassment for their general inability to comply. 1

Interview with the Head of Advertising Revenue, Revenue Section, Aba South LGA, 17 July 2000. 2 Interview with Chief Jacob, Vice President of the Abia State branch of MAN, Aba, 16 February 2000.

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In fact, despite increased autonomy and resource control, none of the local governments in Aba developed any programmes for small-business support, although they presided over one of the most dynamic small business environments in Africa. At the regional level, the prospects for small firm promotion were no better. Owing to the overwhelming financial importance of Federal allocations in Nigeria’s oil based economy, decentralization had the perverse effect of intensifying power struggles with the centre, reducing the focus on regional development. Since the formation of Abia State in 1991, the State government had also been involved in two international development programmes for informal manufacturing initiated by the UNDP and UNIDO. However, state officials have used their knowledge of the local institutional environment more to divert resources into official pockets than to channel them effectively to the intended beneficiaries. Worse still, institutional chaos and gross underfunding have virtually emasculated relevant State ministries. The Factory Inspector for Abia State, who is charged with inspection and enforcement of labour standards, had no vehicle and no budget for field visits.3 He said he had never paid an inspection visit to Aba, and knew nothing of conditions in the informal garment and shoe clusters. Despite extensive devolution of economic powers, government schemes for small-firm development were invariably federal programmes, and invariably inaccessible to the poorly connected majority of informal manufacturers. Various national small and micro-enterprise (SME) programmes have passed across the scene since the early 1990s, including the People’s Bank, the National Directorate of Employment, SME Incubation Centres, and the Poverty Alleviation Programme. Yet only four producers out of 253 firms interviewed on the issue had ever had contact with any government assistance programmes – one with the National Directorate of Employment’s Apprenticeship Programme, and the other three with the UNDP programme – but none of them had ever managed to obtain any of the promised benefits. Within this inhospitable formal institutional framework, the producers’ associations of the shoe and garment clusters faced a daunting developmental challenge.

3. Producers’ Associations in the Garment Cluster 3.1 History Although Aba’s garment cluster developed in the 1930s, an enduring enterprise association did not emerge until the eve of structural adjustment in the mid-1980s. The Aba Garment Manufacturers’ Cooperative, known affectionately as ‘Aba Garment’, was formed in 1984 among the most established, highly capitalized (and male-dominated) segment of the 3

Interview with Factory Inspector, Abia State Ministry of Labour and Productivity, Umuahia, 17 February 2000.

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garment cluster, the informal mass producers – although by 2001, attempts were being made to widen its mandate to cover tailors. Despite their extensive formal sector contacts, and wide national and international markets, Aba tailors have never succeeded in forming an enduring occupational association of their own, though there were accounts of several different tailors’ associations that had been tried, and failed. As of the year 2000, Aba Garment was the only association in the garment cluster. Unfortunately, the non-participation of tailors and of less successful mass producers led to very low rates of associational participation within the cluster. Despite extremely high level of communal homogeneity, only 7% of informal garment producers were members of the association. The concentration of cooperative efforts among informal mass producers is not surprising. Their higher skill and capital-based barriers to entry, and a much greater degree of communal uniformity, has made collective organization much easier among this sub-group. However, it was not communal solidarity that triggered the formation of Aba Garment, but mounting levels of official harassment in the context of economic crisis and Nigeria’s return to military rule. On the pretext that their machines were stolen or imported without proper documentation, police and other state officials had taken to extracting huge bribes from garment producers. The Aba Garment Co-operative emerged to combat this threat by forming a collective front to deal with government. The need for protection, combined with the particularly strong communal base of informal mass producers, contributed to the cohesion of the organization. Aba Garment was registered as a Co-operative Society under State law in 1989. Formal registration strengthened the ability of informal garment producers to combat official harassment, even allowing the association to take the government to court on at least one occasion.4 3.2 Organization By the early 2000s, Aba Garment had developed into a relatively streamlined and well organized association. It operated from a secretariat based in a small office in the garment cluster and had an elected executive of 12 members, all of whom were small garment producers operating in the cluster. Meetings of all members were held monthly, and were well attended. However, high levels of internal democracy had not yet succeeded in attracting the allegiance of the majority of the cluster. The collective appeal of the association was limited by its almost total domination by the most successful stratum of garment producers, who are in turn dominated by a single Igbo community. All of those indicating membership in Aba Garment were found to belong to the advantagedcommunity/ disadvantaged-class group dominating the networks of accumulation. Three quarters of them were from the town of Item. Within 4

Interview with President and Secretary of Aba Garment Manufacturers’ Cooperative, Aba, 5 November 1999 and 7 April 2000.

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the executive, 10 out of the 12 members were also from Item, the other two being from another part of Bende and from Ngwa.5 While the executive of Aba Garment was anxious to attract membership from a larger share of the cluster, the spectre of Item domination seriously thwarted attempts to encourage other garment producers to join up. While the membership included some producers form non-Bende communities, especially Ngwa, these remained in the minority. Despite this communal bias, evangelical Christianity appeared more central than communal identity in defining prestige and belonging within the association. As mentioned earlier, the President of Aba Garment in the early 2000s was a pastor, most of the executive were church elders, and communal origins were not generally regarded to be as important an indicator of trustworthiness as religious affiliation. 3.3 Functions The activities of Aba Garment included protecting members from unwarranted harassment, dealing collectively with the Local Government over tax matters, assisting members with formal registration, and providing assistance with burials. There were attempts to create a rotating loan scheme, but these collapsed due to insufficient resources. With annual fees and levies amounting to barely – N 500 (US$ 5.00) per member, there was little the association could do from its own resources, and in current hard times, no prospect of raising fees without reducing its already narrow membership. As a result, Aba Garment offered no collective services such as input procurement, marketing, or quality control. There was some attempt to regulate prices and limit copying, but this was easily evaded by producers who simply refused to join the organization, and, where necessary, located their workshops on the outer periphery of the cluster, beyond the watchful eye of association officials. Within its limited means, however, Aba Garment was attempting to tackle two major threats to the survival of the cluster. The first was the increased entry of small operators who survived by undercutting better established producers. Officials were torn between trying to force them into joining the association, and trying to attract them into joining. The executive of Aba Garment preferred a strategy of attracting new members, but was thwarted by the lack of resources to make membership appealing to recalcitrant producers. The second and increasingly critical threat faced by Aba Garment was that of Asian competition, which was destroying their market even faster than local undercutting. In the face of this better mechanized, low-cost competition, Aba producers of traditional products such as underwear were facing ruin. Even tailors were being negatively affected by Asian competition, and Aba Garment hoped this could provide a common point of interest to attract them into the association. 5

Interview with President of Aba Garment Manufacturers’ Cooperative, Aba, 24 August 2000.

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4. Producers’ Associations in the Shoe Cluster 4.1 History The history of the informal shoe producers’ associations is a much more complex story, owing to the existence of several distinct production zones, each with its own separate association. The original artisanal shoe producers’ union, known as Omenka Shoe Manufacturers Union, dates from the 1970s, when small-scale shoe producers were located in the centre of Aba. The union was formed initially to provide collective assistance to help shoemakers re-establish after the Civil War. As this challenge was met, the union turned to lobbying for a proper industrial site for shoe producers.6 The social base of the union appears to have been strongest among the more professionally oriented small producers who came largely from outside the original Mbaise community. The relocation of informal shoe producers to Ariaria market in the late 1970s led to a progressive fragmentation of the shoe cluster, and its association, into six separate zones. The first zone was formed when artisanal shoe producers were moved to Ariaria market in 1977. Along with shoe traders, they were allocated an area of the market known as AME, and, under the jurisdiction of the market officials, formed an association known as Ariaria Shoe Manufacturers/Sellers Association. However, more quality oriented producers rejected these facilities as inadequate, and in the late 1970s, began to colonize residential districts adjacent to Ariaria market. These new sub-clusters, known as Powerline and Imo Avenue, were located at the southern edge of the market. Powerline became the new home of the original Omenka union. Imo Avenue formed a separate association in the 1980s, called United Shoe Manufacturers Association of Nigeria. In 1986, the local government built a slightly more commodious shoe production area adjacent to AME, which became known as Shoe Plaza. When shoe producers from Imo Avenue showed a reluctance to move to the new Shoe Plaza site because of its inadequate facilities, including lack of electricity, they were chased in by police. However, many shoe producers subsequently returned to Imo Avenue. As a zone of Ariaria market, Shoe Plaza had to form its own association, known as Aba North Shoe Plaza Industrial Union.7 In the early 1990s, a similar attempt was made to relocate the residen6

Interview with President, Performing Shoe Manufacturers’ Association of Nigeria, Powerline Shoe Production Zone, Aba, 24 November 1999, 23 August 2000; interview with Chairman, Ariaria Shoe Manufacturers/Sellers Association, AME Shoe Production Zone, Ariaria Market, Aba, 19 November 1999, 14 August 2000. 7 Interview with Chairman, United Shoe Manufacturers Association of Nigeria, Imo Avenue Shoe Production Zone, Aba, 26 November 1999; Interview with Chairman – Zone 3, Aba North Shoe Plaza Industrial Union, Shoe Plaza Shoe Production Zone, 22 November 1999.

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tially based Powerline production zone.8 A vast ‘industrial shoe market’ was built at the northern edge of Ariaria market in 1993, in an area called Umuehilegbu. The original shoe producers union based in Powerline was transferred to the new site, and renamed Umuehilegbu Industrial Shoe Makers Union. However, the facilities in the Umuehilegbu site were little different from the cramped market stalls previously provided in AME and Shoe Plaza. Moreover, there was no electricity in the area to run machines and provide light for night-time work, and no decent roads for traders to gain access to the area. As occurred in Imo Avenue, many of the shoe producers from Powerline refused to move to the new site, with the result that in 1994 the government sent in military police to chase them in. Because this armed intervention took place at the time of Nigeria’s armed conflict with Cameroun over the Bakassi peninsula, the Umuehilegbu shoe production zone became popularly known as ‘Bakassi’. While many shoe makers remained in the Umuehilegbu site, more established shoe producers with more to lose in the way of facilities and customer networks responded by closing down for a few weeks, and then reoccupying the residential Powerline site. Shoe producers in Powerline took things a step further by approaching the State government for help, and the area was declared a temporary industrial site in 1996. This was accomplished with the backing of the area’s landlords, relatively wealthy Aba residents who enjoyed the considerably higher rents generated by the industrial use of their properties.9 However, the temporary nature of the solution left Powerline shoe producers in an extremely insecure position in which the government periodically raised the issue of moving them again, and the landlords exerted pressure to prevent any mobilization on the part of shoe producers for a better solution. Moreover, the transfer of the original shoemakers’ union to Umuehilegbu in 1994 left the Powerline sub-cluster without any association until 1999, partly as a result of the pressures of the landlords against ‘troublemakers’ who might organize for transfer to a better site. Vestiges of former union structures remained in the form of local groupings of workshops into ‘buildings’, each with its own chairman, but there was no central organization at the level of the Powerline sub-cluster. In 1999, a number of events which raised the profile of informal shoe producers provoked the formation of a new union in Powerline, which is called Performing Shoe Manufacturers Union of Nigeria. The sixth sub-cluster, Ogu Avenue, a mixed trading and production area, has its own union known as Omenma Traders/Workers Welfare 8 Interview with Chairman, Umuehilegbu Industrial Shoe Makers Union, Umuehilegbu Shoe Production Zone (aka Bakassi), 22 November 1999, 14 August 2000; Interview with President and Union Officials, Performing Shoe Manufacturers’ Association of Nigeria, Powerline Shoe Production Zone, Aba, 30 November 1999. 9 Interview with President and Union Officials, Performing Shoe Manufacturers’ Association of Nigeria, Powerline Shoe Production Zone, Aba, 30 November 1999, 23 August 2000.

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Table 8.1 Shoe Production Sub-clusters and their Associations Production Date Zone Status of Area Established Production Zone Around EkeOha Market, Aba City Centre

Early 1970s

AME

1977

Powerline

Late 1970s

Imo Avenue Late 1970s

Moved to Ariaria Market in 1977

Name of Association

Date Official Status Association of Association Established

Omenka Shoe Manufacturers Union (moved to Powerline in late 1970s)

1970s

Moved to Powerline

Official, but Ariaria Shoe under Market Manufacturers/Sellers Authority Association

1977

Registered but not autonomous

1. Omenka Shoe Manufacturers Union (moved to Umuehilegbu in 1994)

1. 1970s

Moved to Umuehilegbu

2. Performing Shoe Manufacturers Union of Nigeria

2. 1999

State Registration pending

Unofficial United Shoe (residential Manufacturers area) Association of Nigeria

1980s

Local Government Registration

Unofficial (residential area)

Shoe Plaza

1986

Official, but Aba North Shoe Plaza under Market Industrial Union Authority

1986

No independent registration

Umuehilegbu (aka Bakassi)

1993

Official and Umuehilegbu Independent Industrial Shoe Makers Union (the former Omenka Union, moved from Powerline in 1994)

1993 (1970s)

State Registration since 1993

Ogu Avenue

n.a.

n.a.

n.a.

Source: Fieldwork

n.a.

Omenma Traders/ Workers Welfare Association

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Association. The domination of this zone by shoe traders and belt and bag makers led to its omission from the study. This complex history leaves Aba shoe producers with an extremely fragmented associational structure. Despite their proximity and common occupational concerns, the various shoe production zones did not form any joint organization until 1998. The lack of prior cooperation among the zones was a product of class divisions, zoning divisions, local government boundaries, and struggles over seniority that have plagued the history of collective organization among shoe producers. To begin with, the varying conditions under which the different production zones were founded have created different social profiles and occupational identities among the various sub-clusters. Table 8.2 shows the distinct social characteristics of the five main sub-clusters. As might be expected, the inadequate facilities of AME were only able to attract and retain relatively uneducated and poorly capitalized producers from disadvantaged class backgrounds, none of whom are particularly successful. Powerline and Imo Avenue, by contrast, have been the unofficial refuge of more professionally oriented producers from artisanal backgrounds, with Powerline showing the highest level of education of all the shoe zones. By contrast, Shoe Plaza and Umuehilegbu, which represent official production locations with improved but still inferior facilities, have attracted the highest share of producers from advantaged class backgrounds, involving mostly traders. Powerline and Umuehilegbu, as the first and the current repositories of the original Omenka shoe producers’ union, represent the two most influential production zones. They also represent the two distinct networks of accumulation in the shoe cluster. While Umuehilegbu is dominated by trader-entrepreneurs, Powerline hosts the most skilled and evangelically oriented artisans. Table 8.2 Social Characteristics of the Major Shoe Production Zones (% of Firms in Production Zone) Production Zone

AME Powerline Imo Avenue Shoe Plaza Umuehilegbu (aka Bakassi) Average Source: Fieldwork

Advantaged Advantaged Trading Secondary Identity Classes Background Education Groups or More

Member of % of Zone Evangelical in Top Church Quartile

33.3 26.7 66.7 27.8

9.1 13.3 0.0 22.2

0.0 0.0 0.0 11.1

0.0 20.0 0.0 11.1

36.4 42.9 0.0 46.7

0.0 50.0 0.0 33.3

52.2 38.0

26.1 18.6

17.1 8.6

17.4 12.7

56.3 44.1

37.5 25.0

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These social divisions among the production zones are complicated by administrative issues. The two sub-clusters inside Ariaria market – AME and Shoe Plaza – are under the Ariaria market association, AMATA, and their unions must operate through this wider structure, which is concerned with commercial rather than industrial interests. The two residentially located sub-clusters, Powerline and Imo Avenue, more clearly represent productive interests related to quality control and improved industrial facilities, but their ability to pursue these interests is constrained by their tenuous official status. Umuehilegbu (aka Bakassi), is the only sub-cluster that is both officially recognized and independent of Ariaria market, giving the Umuehilegbu association greater autonomy and legitimacy than the others. However, this tends to reinforce the hand of trader-oriented interests within the cluster, which are economically and politically dominant in Umuehilegbu. The upshot is a strategy that privileges elite collaboration and quick profits over broader productive concerns of quality and improved facilities. This complex social and occupational history has resulted in intense disagreement among the unions as to who should lead. Umuehilegbu has always claimed leadership on the basis of its official status as the industrial shoe market of Aba, as well as being the host of the original Omenka shoemakers’ union. However, the transplanting of that union from Powerline has effectively cut it off from its social base. Powerline claims seniority as the social base of the original union, as well as the site of the most skilled and experienced producers. And finally, AME claims leadership on the basis of being the oldest shoe producing site in Ariaria market, despite its weak occupational base. Struggles over leadership have tended to overshadow common interests. Following a disappointing experience with an international donor in 1997, awareness of the importance of a united front led to the formation in 1998 of a collective organization called the Shoe Makers/ Traders Welfare Committee. This group had representatives from all of the shoe union executives, and a mandate to look into the collective problems of shoe producers. The main concerns of the committee were price and quality regulation, with a view to addressing the negative dynamic of declining quality and falling prices. However, ongoing leadership struggles have effectively emasculated the Committee.10 Despite the problems of communal, class and associational fragmentation, membership in the shoe unions is high. 83% of shoe producers were found to be members of the shoe producers’ association in the zone where they operated.11 Non-membership was the result of various factors. Some 10

Interview with Chairman, Ariaria Shoe Manufacturers/Sellers Association, AME Shoe Production Zone, Ariaria Market, Aba, 14 August 2000; Interview with President, Performing Shoe Manufacturers’ Association of Nigeria, Powerline Shoe Production Zone, Aba, 23 August 2000, May 2001. 11 Membership of the various shoe producers unions comprises shoe producers and related production activities such as shoe tailors, smoothers, embossers, shoe lace producers, sprayers, sole stitchers and shank producers.

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of the largest producers did not join the union, since they had the resources and connections to meet their own needs. Some of the weakest producers also avoided membership, in part to avoid the cost of levies and in part because they felt that the union had little to offer. Others stayed out because of religious injunctions not to join forces with nonbelievers. An attempt by the leadership of AME to make all resident producers join the union was met with a threat of court action by those abstaining for religious reasons. The AME executive was served with a letter from the solicitor of the religious abstainers alleging the violation of their human rights and religious freedom, forcing the union to back down. There are also a large number of inactive members on the books, who have left shoe production temporarily, and in some cases permanently owing to lack of capital.12 4.2 Organization The organizational structure of the shoe unions is considerably more complex than that of Aba Garment, owing to their large membership, varied social composition and diverse institutional histories. At the time of the research, none of the unions except Umuehilegbu had an independent secretariat. Meetings were often held in the workshop of the union chairman, or in empty market stalls available for the occasion. Each union had an executive of 12 to 20 officers, depending on the size of the zone. Most of the executive was elected, though there were also appointed members and patrons from outside the shoe sector. Below the executive was a cadre of ‘line chairmen’ or ‘building chairmen’, who represented blocks of workshops within each of the shoe zones. The line or building representatives were also elected, though the smaller constituencies at this level meant they often stood unopposed for long periods of time. Union executives met with the line chairmen on a monthly basis, and decisions were communicated to the membership by their line chairmen. In the case of Umuehilegbu, the largest of the shoe unions, there were 52 line chairmen, in addition to the 20-man executive council. Members of the different unions oversaw each others’ elections, along with officials from the relevant local government and from the Aba Chamber of Commerce. Elections made efforts to appear free and fair, Nigerian style, which means they were not immune to a measure of money politics or other forms of electoral racketeering. There was no evidence of inordinate communal domination in the union executives, although Mbaise indigenes were the Chairmen of three out of the five associations. Overall, however, the community breakdown of the executives was roughly proportionate to the composition of the membership. Union membership was also broadly based. More than threequarters of Mbaise producers were members of their shoe associations, 12

Interview with Chairman, Ariaria Shoe Manufacturers/Sellers Association, AME Shoe Production Zone, Ariaria Market, Aba, 14 August 2000.

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compared to a slightly higher proportion of producers from other communities. The key division within the membership was economic rather than communal. As in the case of the garment association, it was the most successful group of shoe producers who felt they had most to gain from union membership. All shoe producers of advantaged community/ advantaged class background were members of their shoe associations. Their dominance within the executives was also evident, and executive members of more humble backgrounds, especially in the artisanally oriented Powerline and Imo Avenue associations, were ridiculed by officers of other unions as unfit to lead. 4.3 Functions The main functions of the shoe unions relate to the maintenance of law and order within the shoe areas, interfacing with police and local government, and social welfare assistance. All of the unions settled disputes among members or with customers, enforced rules of orderly behaviour and cleanliness, and saw to the provision of security within their area, usually by hiring night guards. They handled relations with the police, and attempted to settle lesser problems without arrest. As one union leader put it, ‘Police don’t come into this market except to buy shoes.’13 The unions also liaised with market and Local Government officials regarding taxes, levies and the provision of services, especially roads and electricity. This sometimes involved negotiations to reduce or delay payments, but also involved collusion with officials to impose levies in excess of actual expenditure. As in the garment sector, social welfare assistance was largely restricted to contributions for burials. While short-term capital shortage and workshop fires regularly put firms out of business, the union lacked the resources to assist members in distress, prompting an aggrieved producer to complain, ‘They only help you with money when you’re dead!’ A few of the unions have also attempted some measure of regulation of productive and commercial activities. Such regulation relates mostly to quality control and copying.14 Imo Avenue prohibits the use of substandard materials, and any attempts to use them will result in their confiscation. Umuehilegbu was at the point of bringing in a similar regulation as of my last visit. Powerline and AME have patchy regulations against copying designs, but these are operative only among particular sets of workshops, not across the whole sub-cluster. While price regulation has been raised as an important issue, the inability to enforce it has

13

Interview with Chairman, Umuehilegbu Industrial Shoe Makers Union, Umuehilegbu Shoe Production Zone (aka Bakassi), 22 November 1999. 14 Interview with Chairman, United Shoe Manufacturers Association of Nigeria, Imo Avenue Shoe Production Zone, Aba, 26 August 2000; Interview with Chairman, Umuehilegbu Industrial Shoe Makers Union, Umuehilegbu Shoe Production Zone (aka Bakassi), 22 November 1999, 14 August 2000.

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prevented its being adopted as a policy by any of the unions. Some of the unions imposed sanctions, including heavy fines, on members marketing their own shoes in other towns, in order to limit opportunities for undercutting. As in the case of the informal garment association, what has remained conspicuously absent from the activities of the shoe producers’ unions is a collective provision of actual business services, such as credit, training, collective procurement and marketing services. The unions lack the resources to engage in credit provision or collective input purchases on a scale that would even begin to satisfy the needs of a membership of over 9,000 producers. No efforts at collective marketing or training exist, either at the sub-cluster level or at the level of smaller groups of individual firms. Two attempts were made to set up collective access to specialized machinery donated by an outside agency. In both cases, however, the executives were unable to set up viable arrangements, and the machinery has remained locked up in a workshop, unused. In the first instance the problem related to internal disputes, and in the second instance, collusion at a higher level resulted in the delivery of unusable machinery. While members remain desperate for services, they have limited faith in the ability of the leadership to respond to their interests. In addition to the basic economic division between the interests of better-off and poorer producers, there are significant misgivings about the ability of the leadership to dispense resources fairly. One member described the executives as ‘hungry lions’. In addition, members expressed a concern over their inability to control or sanction leadership. They expressed greater confidence in their local line or building chairmen largely because they were more privy to the activities of the latter, and therefore more able to exert some form of democratic control. As noted in the case of Aba Garment, the shoe producers unions are interested in official registration with the state as a means of increasing their authority and effectiveness. The Umuehilegbu association was registered in 1993 when the new shoe market was built, which has given this association a great advantage over the others in terms of formal recognition by the state and other outside agencies. AME formally registered its association in 2000 in order to increase its access to assistance from the State and Federal governments. However, the association remained under the jurisdiction of AMATA, which complicated any direct access to benefits from higher levels of government. Shoe Plaza, also under the jurisdiction of AMATA, has been struggling to register its association independently. Powerline and Imo Avenue were also handicapped because of their informal zoning status. However, Imo Avenue was registered with the Local Government, and claimed to have since registered with the state. The new Powerline union was in the process of obtaining formal registration.

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5. Institutional Networks Three important similarities are evident in the experience of producers’ associations in the shoe and garment clusters. The first is the inability of associations in both clusters to generate adequate resources for the provision of even the most basic business services to foster enterprise development. This has tended to confine producers’ associations to a focus on basic social welfare assistance and the maintenance of order within the cluster. The second similarity is the central concern with official registration. Although the firms involved are overwhelmingly informal, and the formal institutional environment remains notoriously disruptive, all of the occupational associations have sought, not to evade the state, but to strengthen their links with it. Finally, economic power rather than communal identity constitutes the central determinant of participation in enterprise associations. In both clusters, firms sharing the social profile of networks of accumulation show the highest propensity to join enterprise associations, while women or poorer members sharing a similar communal identity are less likely to join. However, the economic and political marginalization of informal producers has severely limited their ability to promote small firm development through internal collective efforts. Instead, economic advancement has depended on the ability of producers’ associations to form linkages with the formal economy and the state through what have been referred to as ‘institutional networks’ (Benton (1992) or ‘local policy networks’ (Schmitz 2004) bridging the private/public sector divide. Once again, the differing social characteristics of the shoe and garment clusters have led these associations to embed themselves in very different ways within the wider institutional structure of the Nigerian economy, with radically different results. 5.1 The Garment Cluster and Institutional Incorporation Despite strong communal ties with the State Governor until 2007, even comparatively successful informal garment producers faced class and wealth-based marginalization within their home communities, and within Igbo social and political hierarchies more widely. As a result, the garment association has focused on forging new institutional linkages with Federal economic structures in order to bypass their disadvantaged position in local or regional patrimonial networks. Given the professional orientation and Evangelical exit strategy prevalent among this group, there is a strong tendency toward relations at arms length with local elites and officials, backed by a propensity for legal confrontation in cases of harassment. The garment producers’ association have sought to circumvent their subordinate position within local patrimonial networks by cultivating formal institutional linkages with the organized private sector and the state.

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Comparatively high levels of education and professional values in the garment cluster give the informal garment association the social resources to pursue formal channels of political voice. In their efforts to represent their members, Aba Garment has focused on the development of formal, transparent linkages with industrial associations rather than on cliental relations with local officials. The President of Aba Garment explained that informal linkages through influential townsmen had not proven particularly helpful for solving their real problems, and access to such people was unreliable.15 Instead, Aba Garment joined the formal sector small business association, NASSI, through whom they gained assistance with organizing official registration for members, as well as information about trade fairs and financial help in setting up a credit scheme (though resources were insufficient to keep it running). The president of Aba Garment expressed the desire to join the Manufacturers’ Association of Nigeria (MAN) in future, in order to obtain links with larger companies for contracts. Aba Garment also showed an interest in addressing policy issues, rather than simply lobbying for favours. With the aim of addressing the threat of Asian competition, Aba Garment attempted to register as a trade union in order to lobby the Federal Government against the 1998 liberalization of textile imports, since the local and state governments lacked jurisdiction over trade policy. The association was renamed the Association of Garment Manufacturers of Nigeria (AGMN), with the aim of embracing tailors as well as informal mass producers, and to encourage the formation of branches in other parts of Nigeria. The President also expressed an interest in pursuing links with the national textile workers union (NUTGTWN) and Nigeria Labour Congress (NLC) regarding their common opposition to Asian textile imports.16 Marginalized within local and regional structures of power and influence, the informal garment association has concentrated on building ties with national institutions with a mandate for industrial development. While this strategy has allowed Aba Garment to circumvent negligent and corrupt local political networks, it has also thrown a comparatively small and weak group of informal producers into the open waters of formal industrial organization, where their inability to compete effectively for resources and influence leaves them severely handicapped. By 2005, few of these aspirations had been realized. Efforts at Federal registration failed owing to the lack of nationwide membership, and links with the Manufacturers’ Association and the textile workers’ union had not materialized. Indeed, little came of Aba Garment’s various efforts at increased institutional access until they were included in a UNIDO informal sector development programme in 2003. The UNIDO programme delivered little in the way of useful resources – routine managerial and 15 16

President, Aba Garment Manufacturers’ Cooperative, Aba, 24 August 2000. Meeting between President of Aba Garment and official of NUTGTWN, 10 May 2001.

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technical training workshops, and an unrealized promise of credit – but the association executives found that working with UNIDO allowed them to gain the ‘ear of the state’ through easier access to relevant officials in the State ministries. Unfortunately, the promise of NGO resources also attracted the attention of other opportunistic forces, prompting the rise of a new association in the garment cluster, called the ‘Association of Tailors and Fashion Designers’. Founded by two failed tailors of middle-class origins, the new association is focused on capturing resources within the garment cluster now that it appears to have greater state and NGO attention. The leadership has little knowledge of the collective interests and concerns of the garment cluster, and seems to devote most of its organizational energies to lobbying the local and state governments for contracts and unspecified ‘assistance’. The new association has attempted to procure a government contract to collect the sanitation tax from tailors across the state. Although the contract has not been confirmed, the association has already set about collecting the tax by offering a lower tax rate to those who can be persuaded or coerced into paying a membership fee, and strong arming ‘non-members’. 5.2 The Shoe Sector and Cliental Incorporation In contrast to Aba Garment, the leadership of the Aba shoe associations has tended toward a strategy of collusion with local patrimonial networks. Lowly occupational status and limited education even among the leadership has deprived informal shoe producers of the social resources to form effective linkages with formal institutions. Leaders of the shoe associations have generally shied away from links with formal private sector associations or participation in formal business events such as trade fairs, as much out of embarrassment about their lack of social refinement as out of concerns about the costs of participation. Instead, associational linkages generally reflect a strategy of collusion and cliental ties with local officials and politicians. Motivated more by economic and class survival than by industrial excellence, executives of the shoe associations tend to make use of these links as much to serve their own personal and political agendas as to address the occupational concerns of informal shoe production. The association leadership has been implicated in collusion with local government officials over tax collection, electricity supply and access to workshops in the shoe production zones, all of which were characterized by kickbacks and dubious arrangements between association executives and local government as well as state officials. At the regional level, the associations have been used to mobilize votes through promises of improved electricity supply. While promises have rarely been kept, relations between the shoe union executives and government officials are generally more collusive than adversarial. Attempts to form links with international NGOs have also been impeded by social marginality as well as by ongoing organizational frag-

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mentation and leadership struggles among the shoe associations. In the 1990s, the shoe associations joined an ‘umbrella’ union called the Nigerian Association of Small and Medium Scale Leather Producers and Allied Products Industrialists (NASMSLAPI), popularly known in the shoe zones as ‘Leather and Allied’. Led by an influential businessman, Chief Ibiam, Leather and Allied turned into something of a one man show that absorbed resources from government and NGOs on behalf of the Aba shoe producers without passing them on to the intended beneficiaries.17 Although Chief Ibiam was a member of a national committee seeking export opportunities through the American Growth and Opportunity Act (AGOA), and obtained contracts to supply shoes to the US market, the benefits never trickled down to the Aba cluster (Dawson 2003). Informal sector development programmes led by the UNDP in 1996 and by UNIDO in 2003, which also operated in the garment cluster, attempted to deal with the organizational fragmentation of the shoe cluster by requiring the formation of a single new association. Billed as a dedicated channel of development benefits, including credit, training, and the creation of a joint machine workshop, the unified associational structures became channels for executives and wealthy operators within the shoe clusters to monopolize benefits by keeping the wider membership largely uninformed about the new and generally hasty associational arrangements. Not only did this disrupt existing patterns of collective organization in the shoe cluster, creating new bodies detached from their popular base, but it attracted the predatory attention of state officials and better connected notables who claim to represent shoe producers at a higher level. Indeed, the UNDP’s policy of collaboration with the State government resulted in most of the project resources being absorbed by government officials, while the shoe executives ended up with a few seminars, some per diems, and a collective machine workshop stocked with obsolete, inoperable machinery located in an area without sufficient electricity to run it. The UNIDO programme proved equally disappointing, pulling out for lack of resources after a few training workshops, and leaving behind only enticing promises of credit and a collective mechanical workshop that had still not materialized by 2007 owing to disputes over where to locate it. The failure of these various initiatives left the ‘joint’ associations they spawned effectively dormant, and the shoe unions starved of resources, but increasingly anxious to forge a connection with wider networks of resources and power. These attempts to bridge the formal/informal divide in the shoe cluster reinforced a tendency to form institutional linkages lacking in transparency and accountability. While serving the personal interests of some shoe executives, such arrangements operate against the collective interests of informal shoe producers, reinforcing an environ17 Interview with President of Performing Shoe Manufacturers Union, Powerline, Aba, May 2001.

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ment of infrastructural neglect, organizational fragmentation and the absence of real business services. Moreover, shoe producers are increasingly embedded in relations that place them and their associations at the mercy of more powerful political interests, which are more interested in political spoils than in local economic development. The dangers of this scenario are tragically illustrated in the case of the Bakassi Boys Vigilante Group. 5.3 The Story of the Bakassi Boys Vigilante Group The Bakassi Boys vigilante group represents the civil initiative which has most significantly raised the profile of Aba’s informal shoe producers (Meagher 2007). The enormous popularity and rapid expansion of the Bakassi Boys not only made the shoe associations beneficiaries of previously unimagined levels of influence and resources, but also drew them directly into the front line of Nigerian identity politics. Great controversy surrounds the question of whether the Bakassi Boys represented a civil security initiative, or a manifestation of the inherently uncivil character of Nigerian society (Ikelegbe 2001; Smith 2004; Ukiwo 2003; Reno 2002; Meagher 2007). What is clear is that, far from providing the shoe associations with the means to address their own development problems, the rise of the Bakassi Boys drew them into networks that undermined their economic interests, and intensified the marginalization of informal shoe producers. A range of accounts concur that the Bakassi Boys arose from Aba’s informal shoe cluster in late 1998 as a spontaneous popular response to the rampant armed robbery and physical insecurity that had gripped Aba since the early 1990s (Human Rights Watch/CLEEN 2002; Ukiwo 2002; Meagher 2007). For years, gangs of organized criminals carried out theft, extortion rackets, and physical assault against civilians, with a devastating effect on local business, and little response from formal sector security services. Human Rights Watch (2002:9) reports that an estimated 200 people were killed in Aba by armed robbers between 1997 and 1999, not to mention the daily toll of fear, injury and loss of property. An underfunded and corrupt police force failed to enforce order, and was even known for active collusion with criminals. Shoe producers, whose livelihoods depended heavily on out-of-town buyers, found their market drying up in the face of deteriorating local security. Reports are mixed as to the event that actually triggered the vigilante response, but they are unanimous as to the result. On 6 November1998, the shoe producers of Ariaria market took up their matchets18 and declared war on criminality in Aba (Newswatch 29.3.1999:18; Human Rights Watch 2002:9; Ukiwo 2002:41). Known armed robbers were hunted down and killed, and anyone found guilty of theft, no matter how small, met a similar fate. Over a period of weeks, the initiative developed 18

West African variant of ‘machete’, recognized by the Oxford English Dictionary.

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into an organized vigilante group, composed of shoe producers from all six of the shoe production zones, and governed by the leaders of the six shoe associations. The office for the vigilante group was located in the Umuehilegbu shoe production zone, known popularly as Bakassi, from which the vigilante group took its name. 19 Within a matter of months, the Bakassi Boys had restored security to Aba. In the face of police corruption, inefficiency, and state indifference, this vigilante action represented what new institutionalists call a ‘secondbest solution’ to the problem of law and order (Paciotti & Mulder 2004; North 1990). Aba residents from all walks of life celebrated the restoration of security in the town. Men claimed they could now ‘sleep with two eyes shut’, replacing their earlier routine of dozing in the parlour with a matchet by their side in case of nocturnal intruders. Although their methods of control were brutal, usually involving death by matchet and the public burning of bodies, the Bakassi Boys acquired a reputation for fairness and resistance to corruption that gained them overwhelming popular support in Aba. The execution of the notorious armed robber known as ‘Jango’ on Christmas Day 1998 was widely regarded as indicative of Bakassi’s strict adherence to a mandate of public accountability. The vigilantes rejected a bribe of – N 2 million (US$ 20,000) to set Jango free, and after executing him, burnt his property rather than sharing it out (Newswatch 1999:18). While local people recognized that the brutality and extra-judicial process of the group were undesirable, in the context of rampant armed robbery and police corruption, it was better than the alternatives. As one Aba resident explained, ‘Killing human beings is not good. The Bakassi Boys will go to Hell, but we thank God they’re here’ (Aba small businessman 2000 interview). For more than two years, shops and businesses across the town willingly paid a security levy of – N 100 per month to fund the operations of the vigilante group. As late as the summer of 2000, no complaints were heard of unjustified killings in the town. The growing fame, and later notoriety, of the Bakassi Boys has spawned a number of human rights reports and academic analyses. Some have characterized the rise of the vigilante group as a reversion to violent indigenous institutions of law and order based on occult practices (Harnischfeger 2003; Smith 2004) while others claim they represent predatory collusion between rebellious youth and rapacious officials intent on profiting from social disorder (Human Rights Watch 2002; Reno 2002; 2006). A closer look reveals that neither view is accurate. Far from demonstrating an indigenous propensity to superstition and mayhem, the Bakassi Boys emerged as a popular organizational initiative with a clear moral code based on social justice and accountability. What some saw as 19

Interview with Chairman, Ariaria Shoe Manufacturers/Sellers Association, AME Shoe Production Zone, Ariaria Market, Aba, 14 August 2000; Interview with President, Performing Shoe Manufacturers’ Association of Nigeria, Powerline Shoe Production Zone, Aba, 23 August 2000 and May 2001.

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a band of renegade youth was actually governed by a committee initially made up of the senior leaders of the six shoe unions. In fact, the Bakassi Boys was the first effective joint initiative of the Aba shoemakers’ associations. The organizing committee enforced procedural regulations, background checks on recruits to ensure ‘good character’, and a strict code of conduct which required that each case be investigated, and suspects found innocent be released unharmed. In cases of guilt, the execution of criminals was accompanied by the destruction of their illgotten property, in order to avoid any squabbles over loot – a practice that continued until state officials seized control of the group (Meagher 2007). While the leadership and operation of the group later came to involve all of the market unions in Aba, the shoe producers unions continued to supply key officials and vigilante operatives, as well as hosting the offices of the vigilante activities. From early 2000, the Bakassi Boys began to attract increasing attention from the federal and state governments. At first, this had a galvanizing effect on the informal shoe unions. Increased access to resources and contacts with the State government encouraged the formation of two new joint organizations in 2000 to foster more effective linkages with the state. The first was the Joint Aba Shoe Manufacturers Association of Nigeria, which was formed with a view to addressing welfare and quality control issues among shoemakers, though its main preoccupation was with the running of the vigilante group. The second joint organization was Abia State Shoe and Bag, which was formed to foster relations with outside agencies, ‘because UNDP and Leather & Allied failed us’.20 In 2001, efforts to formally register both organizations were underway. Unfortunately, growing state attention served to undermine rather than to promote productive development within the informal shoe cluster, as well as to derail the security functions of the vigilante group. Rather than focusing policy attention on security and the economic needs of local production, the Bakassi Boys were converted into a new weapon in power struggles between the state and federal governments. The rise of the vigilante group was embedded in wider national struggles over the creation of a state-level police force in addition to the constitutionally allowed federal police, and tensions over the introduction of Shari’a law in the north of the country. The governors of the Igbo states saw in the Bakassi phenomenon an opportunity to capture quasi-legal control over a statelevel security force. The enormous popularity of the Bakassi Boys only increased their attractiveness as a source of cheap political legitimacy outside the framework of constitutional and legal controls. In the process, the Bakassi Boys were transformed from a popular cry for order and accountability into a force for disorder and unaccountable political control. The political capture of the Bakassi Boys involved a drawn out process that culminated in the State government assuming unconstitutional 20

President, Performing Shoe Manufacturers Union, Powerline, Aba, May 2001.

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control over the group in May 2000 (Meagher 2007). The involvement of the Bakassi Boys in ethnic riots in on 28 and 29 February 2000 marked an initial stage in this process. In reprisal against the slaughter of Igbo migrants in the northern city of Kaduna in the previous week, the Bakassi Boys led an attack on the northern Hausa-Fulani community in Aba, precipitating the brutal killing of over 300 northern Nigerian migrants and sojourners in the town.21 Behind the riots was the active encouragement and political mobilization of the Abia State governor, Orji Uzor Kalu, who saw in the Bakassi Boys a means of furthering his own political aims, rather than ethnic solidarity and fostering local productive capacity. Violating the central mandate of the Bakassi Boys to make Aba safe for traders from other parts of Nigeria, the riots undermined local security and disrupted trade in the town for months afterwards. Informal shoe producers, who constituted much of the rank and file as well as the leadership of the vigilantes, were among the worst hit by the economic consequences of the mayhem. The Aba riots took place a few weeks before one of the major Muslim festivals, an important period of northern demand for Aba shoes. For months after the event, shoe producers complained bitterly that their northern customers no longer came to the market, especially in the Umuehilegbu production zone which housed the Bakassi Boys’ headquarters. In the garment cluster, tailors bemoaned the disappearance, not only of customers, but of Hausa embroiderers, whose skills had provided the best quality finishing for one of the most fashionable styles of African dress at the time – ironically, a style that came from the Muslim north, which Igbo residents had to hastily take off during the time of the riots to avoid being mistaken for Hausa and killed. Since the Aba riots, the negative impact of the Bakassi Boys on local and regional security has worsened. Their quasi-legal incorporation into the security arrangements of Abia and a growing number of neighbouring Igbo states have transformed the vigilante group from a popular bid for law and order into an unaccountable security force under the control of powerful political patrons. Instigating, and then exploiting internal leadership struggles within the Bakassi Boys, the Abia State government seized control of the vigilante group in May 2000, and had it officially registered as the Abia State Vigilance Service despite its involvement in unlawful detention and extra-judicial killings, and its illegal and unconstitutional status of a state-level security force in Nigeria. The vigilantes were also invited to set up operations in neighbouring Anambra and later Imo and Bayelsa States under the auspices of the state governments. In Anambra State, the vigilante group was also officially registered and received heavy state funding.22 Under the control of the Igbo state governors, the Bakassi Boys were gradually transformed into a 21

Weekly Trust 10-16.3.2000:5; Vanguard 4.3.2000:1. Interview with President, Performing Shoe Manufacturers’ Association of Nigeria, Powerline Shoe Production Zone, Aba, May 2001, Human Rights Watch/CLEEN 2002: 10. 22

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force for unaccountable state-level security and the repression of political opposition in the run-up to the 2003 elections (Human Rights Watch/ CLEEN 2002; Ukiwo 2002). While political interest in the Bakassi Boys attracted increased resource flows into the shoe cluster, these were not used for the benefit of local producers. Instead, they were channelled largely into vigilante activities and private incomes for executive of the shoe associations, rather than into infrastructural improvements and increased pressures for productive institutional support. If anything, the vigilante experience did more to absorb organizational energy and resources from the shoe unions than to reinforce their developmental capacities. For example, the Chairman of Imo Avenue, a skilled shoe producer and committed leader, resigned his post in mid-2000 to head the Nnewi branch of the Bakassi Boys in Anambra State. Within weeks, he was driving a Mercedes Benz and controlling a significant operating budget provided by the Anambra State Governor. As a fellow member of the Imo Avenue executive commented, ‘What he couldn’t get from shoemaking, he is now getting from Bakassi.’ Ultimately, this extensive collaboration between the shoe producers’ associations and the state governments of south-eastern Nigeria has failed to produce the kind of developmental collaboration celebrated by cluster scholars. What began as a ‘second best’ local initiative to defend property rights and restore security, ended up fuelling the growth of economic instability, ethnic fragmentation, and communal violence. Not only did the Bakassi Boys undermine production and markets in the shoe and garment clusters, but, in the end, the governors found it necessary to remove shoe producers themselves from the vigilante group. The ongoing commitment of the Aba operatives to the original mandate of impartial crime control made them effective as vigilantes, but more difficult to bend to political objectives. The Human Rights Watch/CLEEN report (2002:10) noted that among the different factions of Bakassi, ‘those from Aba seemed more committed to their original crime-fighting function.’ The Anambra State Governor, Chinwoke Mbadinuju, began to squeeze out the more carefully selected Aba operatives sent in from the shoe zones in favour of recruits made up of disaffected and criminal elements. According to a prominent Anambra politician, the rank and file as well as the leadership of the Anambra branches of the Bakassi Boys were gradually replaced by more compliant local recruits. He explained that ‘As for now, there is no single original Bakassi Boys in Anambra State. Those boys in Anambra State were nothing but thugs trained by Mbadinuju and his agents to be used against his perceived opponents’ (Newswatch 4.11.2002:18; cf. also Human Rights Watch 2002:10). A similar process took place in Abia State, leading to clashes between ‘original’ and ‘fake’ Bakassi from 2001 (Meagher 2007). Amid increasing brutality and declining popularity, the Bakassi Boys continued to operate for nearly two years after popular control of the organization had been lost, and was

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responsible for an estimated 2,000 extra-judicial killings (Amnesty International 2000). Increasing involvement in mayhem and political thuggery in the run-up to the 2003 elections ultimately led to the disbanding of the Bakassi Boys by the Federal government in August and September 2002, when Bakassi vigilantes were arrested and their bases closed down in police raids in Abia and Anambra State.

6. Conclusion Despite grassroots origins and attempts to engage with formal institutions, Aba’s cluster associations have failed to forge productive linkages with local and state governments. The efforts of these associations are crippled by lack of resources, economic differentiation among producers, and embeddedness in a weak and disruptive formal institutional environment. The decentralization of authority to local and state government in the context of national governance reforms has failed to improve matters. Rather than increasing institutional sensitivity to local capacities and needs, decentralization has only exacerbated the decline in popular services amid intensifying power struggles and a petro-dollar feeding frenzy at all levels of government. As a result, the producers’ associations of the shoe and garment clusters are bereft of access to the kinds of formal institutional support necessary to mobilize producers around collective economic goals in order to nurture the productive potential of these small-firm clusters. Attempts by the informal garment association to circumvent the fractious environment of local and regional politics by forming official links with formal private sector organizations have allowed the organization to maintain a focus on occupational issues, but the informality and disadvantaged class backgrounds of the bulk of members leave the association poorly equipped to command any significant attention within the arena of the organized private sector. The informal shoe unions, settling for cliental forms of incorporation into local and regional government structures, have been unable to resist political mobilization against their own productive interests. In both cases, the associational efforts of informal producers have tended to accentuate rather than reduce their economic and social marginalization.

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9

Social Networks & Economic Development in Africa

1. Introduction In the Aba shoe and garment clusters, things have never quite been the same since the time of the Bakassi Boys. The problem is not just the disorder triggered by vigilante violence, but the mounting costs of intense Asian competition and ongoing institutional neglect, undermining any possibility of a competitive response. The disruptive turn of the Bakassi Boys coincided with the liberalization of shoe imports in Nigeria. Cheap ‘Dubai’ shoes (made in China and imported via the freeport of Dubai) flooded the Nigerian market from mid-2000, making the 2000/2001 production season the worst in years. Succeeding years have seen an ongoing collapse in demand for Aba shoes, ensuring a ready supply of frustrated young men for recruitment into vigilante activities. Cheap Asian garments have also continued to threaten the survival of the garment cluster. In 2000, considering the possibility of lobbying the government against trade liberalization, the President of Aba Garment inquired into the kinds of state assistance that Indonesian and Chinese small enterprises received. Upon hearing of the infrastructure, technical and financial support, and export assistance provided for Asian small producers, he replied in exasperation ‘And we who receive nothing from our government, how are we to compete?’ The imposition of a ban on imported textiles in 2002 (though only really put into effect in 2004) eased the pressure on garment producers a little, but it has also created new problems of access to fabric inputs needed for garment production. In addition, smuggling networks – so important to the marketing of Aba-made goods – continue to provide a steady flow of crippling Asian competition despite the official ban on imported textiles. By 2005, producers and workers from the shoe and garment clusters were haemorrhaging out of the business. Nearly half of those I returned to interview had moved into other activities or left town. The President of 164

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Aba Garment had left to become a full-time pastor in Port Harcourt, while a number of the chairmen of the shoe associations had garnered some resources from their involvement with the Bakassi Boys and gone into trade. New executives and larger producers are now struggling to forge ties with the state and NGOs, and there is more talk of the need to improve quality, but little capacity or assistance for doing it. Poorer skilled producers who are still hanging on in the business, many of them evangelical converts, have been withdrawing from their producers’ associations in frustration with the lack of assistance and the monopolization of benefits at the top. Weaker producers are diversifying into other activities to fill in the slow periods, or just leaving the activity altogether. Women from the garment cluster have shown a preference for selling mobile phone cards, while casual labour and motorcycle taxis (okada) absorb increasing numbers of failing shoe producers. The recent ban on motorcycle taxis imposed in Aba to control the upsurge in armed robbery and kidnapping only adds to the pressure and frustration. The roads into the clusters are still deplorable, and the electricity supply has become even more erratic. Despite dense entrepreneurial networks that have fostered the emergence of two of the most dynamic enterprise clusters in West Africa, liberalization and state neglect are condemning Aba’s informal producers to a future of disconnection, economic failure and political volatility. Meanwhile, after being disbanded in 2002, the Bakassi Boys started up again secretly in late 2004, with funding and surreptitious logistic support from the Abia State government (Meagher, 2007). A bill officially establishing the group was signed into law in January 2006 by the Abia State governor, partly to up the stakes in his aborted bid for the Presidency in the 2007 elections. Clearly, state support for informal activities takes place in Nigeria – the problem is that it rarely facilitates developmental goals.

2. African Social Networks: Dynamism or Disorder? This account of Nigerian enterprise networks raises crucial issues about informal economic governance and political disorder in contemporary Africa. Earlier hopes that the proliferation of informal economic networks would help African societies transcend the limitations of corrupt and inefficient states have been dashed as areas most renowned for informal dynamism have slipped into economic chaos and violence. The smuggling of diamonds and other precious minerals in the former Zaire, celebrated in the 1980s as an activity that fostered the rise of an ‘autonomous bourgeoisie’ (MacGaffey, 1991) has, since the late 1990s, become associated with shadowy networks, brutal insurgencies and state failure (Reno, 1998, Jackson, 2002, Vlassenroot and Raeymaekers, 2004, Turner, 2007). Ongoing violence and chaos has also been the legacy of the

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clan-based networks of Somalia, despite their impressive capacity to provide innovative solutions to the problems of economic organization in a collapsed state (Menkhaus, 2007, Lindley, 2009, Bradbury et al., 2001). Although such networks generated significant ‘social capital’ for coordinating complex economic activities outside the framework of the state, they have failed to provide the anticipated ‘missing link’ in economic development (Grootaert, 1998). The prevailing tendency to represent this as a problem of culture fails to grapple with the complex processes underlying the developmental failures of African economic networks. The focus on cultural dysfunction tends to gloss over the role of liberalization and state neglect in disrupting informal governance systems. This book offers a more sober assessment of the successes as well as the failures of African enterprise networks. It highlights the complex interaction of culture, economic restructuring and the state in shaping network performance, with the aim of casting new light on the increasingly murky terrain of informal economic governance in contemporary Africa. This concluding chapter will reflect on the wider implications of African network governance in the era of liberalization. The volatility of Igbo enterprise networks resonates with similar cases of informal dynamism and disorder across Africa, and raises new questions about the relationship between cultural embeddedness, state withdrawal and institutional change. With a view to bringing out wider intellectual as well as practical implications, these issues will be drawn together along three themes. The first focuses on the institutional strengths of African social networks, and considers how they have been obscured by contemporary perspectives on the ‘retraditionalization’ of African societies. The second reflects on the limitations of African social networks, with particular attention to the role of the state in shaping the development, as well as the violent disintegration, of informal economic organization. A final section will revisit the relationship between power and network failure, and consider the openings for fostering the strengths of informal economic governance in contemporary Africa.

3. The Power of Identity: Dispelling the Cultural Shadows Despite an explosion of research on African social networks since the turn of the millennium, our understanding of their regulatory role remains ‘trapped in the shadows’. The challenges of deciphering indigenous forms of economic organization, combined with high levels of poverty and disorder in many African countries, have fuelled increasingly murky images of the cultural legacies and governance logics of African societies. In a trenchant commentary, James Ferguson (2006) notes that the ‘abundance of shadows’ in contemporary representations of Africa contribute to ‘reinventing Africa as the 21st century dark continent’. References to informal organizational

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networks as ‘shadow states’ (Reno, 2000), ‘shadow governances’ (Gore and Pratten, 2003) or just ‘the shadows’ (Nordstrom, 2004) foster images of Africa as a realm of dark and inaccessible cultural practices. Negative representations of African social networks are tied to the failure of indigenous institutions to facilitate integration into a liberalizing global economy. Expectations that state withdrawal would turn social networks into a source of ‘order without law’ (Ellickson, 1991) or a ‘seedbed of entrepreneurship’ (World Bank, 1989) have been forced to confront the realities of growing social disorder and economic and political collapse across Africa in the concluding decade of the 20th century. These developmental failures are increasingly framed in terms of debates about ‘retraditionalization’ or ‘criminalization’, which portray the resurgence of culturally embedded institutions as a backward slide into primeval logics of communal loyalties, clientism and occult belief. In a recent article, Stephen Ellis (2009:195) contends that: West Africa’s ‘shadow states’ are thus relatively new, but they draw heavily on older traditions. These include not only the existence since pre-colonial times of initiation societies that are sites of power, but also the colonial practice of indirect rule, which sometimes resulted in local authorities operating unofficial networks of governance rooted in local social realities, hidden from the view of European officials whose attention was focused on the official apparatus of government.

However, more detailed research suggests that the shadows associated with African informal organization do not arise from the primitive or amoral character of indigenous cultural institutions, but from the theoretical and methodological limitations of contemporary scholarship on African informal governance. The notion of retraditionalization or ‘retribalization’ dates from earlier literature on African informal governance, particularly Abner Cohen’s (1969) work on Hausa networks in the Yoruba town of Ibadan. However, current uses of the concept involve more rarefied notions of indigenous institutions devoid of the detailed empirical and historical perspectives characteristic of earlier research on African economic networks. A flourishing of essentialist studies represents African informal institutions as a collection of primordial and cliental impulses which turn informal governance into a realm of the opaque and the bizarre (Bayart, 2005, Chabal and Daloz, 2006). Far from clarifying the relation of African informal arrangements to contemporary global processes, the growing recourse to culturalist hermeneutics, rational choice models and selective and sensationalist readings of history has created serious lacunae in our understanding of how cultural institutions shape social and economic action in contemporary Africa. Such approaches have neither illuminated the institutional terrain of African informal governance, nor have they provided adequate analytical tools for further exploration of these issues.

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The result has been a ‘damned if you do, damned if you don’t’ interpretation of African informal governance. If popular forces turn to embedded social arrangements to fill the widening gaps in formal institutional provision, they are denounced for corrupting rational development processes; yet if they fail to mobilize indigenous institutions, they are accused of lacking ‘social capital’. In the wry words of the eminent economist Thandika Mkandawire (2001:298): In these accounts, ‘market failure’ central to development economics and ‘government failure’ central to neoclassical economists are replaced by something more debilitating and more recalcitrant ‘societal failure’, signalled not only by lack of ‘social capital’, but also by the disease-like spread of this societal malaise into both market and state structures.

In a trenchant critique of the ‘retraditionalization’ approach, Godwin Murunga (2006:29) argues that blaming Africa’s problems on a resurgence of primordial values and institutions ‘trivializes culture and invites us to ignore broader elements of political economy...[which] have inspired decades of illuminating scholarship on the continent...’. This study joins in the call to dispel the shadows surrounding African social networks through a recovery of the ‘invisible histories’ and cultural strategies through which Africans have engaged with economic change and globalization (Feierman, 1999). As Feierman notes in the context of East Africa, contemporary interpretations of the fragmented organizational residues we refer to as ‘informal’ tend to focus on their incompatibility with Western economic and political institutions, airbrushing out their original institutional logics and the ways they have been reshaped by more than a century of political suppression and economic marginalization. Understanding informality requires an appreciation of the underlying historical logics and contemporary limitations that shape non-state order, as well as an awareness of the tension between popular forms of order and their vulnerability to repression and political manipulation. 3.1 Invisible Histories and Cultural Resources The story of Igbo informal enterprise challenges the simplistic representations of African social networks put forward by prophets of primordialism and path dependence. Far from reinforcing primitive practices and parochial loyalties, indigenous Igbo institutions reveal a capacity for fostering rational commercial organization and cooperation across kinship and ethnic cleavages, even in precolonial times. As has been shown here, decentralized communal networks fostered rather than undermined the development of entrepreneurship in a stateless society through institutions of apprenticeship and hometown based occupational specialization. At the regional level, apparently exotic institutions such as secret societies, blood pacts and oracular religions served to institutionalize trust and systems of contract enforcement across communal lines for the

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development of economically efficient markets, trade and credit networks. Contrary to the proponents of the retraditionalization thesis, Aro religious networks were not simply primitive systems of slaving and human sacrifice, but exercised critical juridical and commercial functions that facilitated the expansion of trade in a stateless society. Similarly, secret and title societies were more than dark havens of parochialism and primitive practices; they constituted vital elements of precolonial trading networks and contract enforcement. In the words of the historian Axel Harneit-Sievers (2006: 282), secret societies ‘formed nodes within wider networks that served to express status and prestige and to promote commerce’, and gave rise to ‘“translocal” networks [that] integrated local communities…over sizable areas of precolonial Igboland’. In addition to promoting economic efficiency and market development, Igbo popular institutions have demonstrated a capacity for adaptation and change in response to the new challenges of colonialism, independence and contemporary economic restructuring. The institutions most closely associated with contemporary Igbo culture – hometown associations, Christianity and Igbo ethnicity itself – were innovations of the colonial period. Contemporary Igbo commercial networks reveal a genius for combining precolonial legacies with new institutional forms in response to the changing political and economic context. Far from being a product of primordial allegiances or colonial ‘invented tradition’, the Igbo informal institutions that emerged during the colonial period were a product of a long indigenous history of economic cooperation and institutional innovation, oriented to responding to changing opportunities rather than just aping Western ways. Even in contemporary times, Igbo commercial networks have been as much about economic cooperation across ethnic lines as about ethnic conflict and violence. The informal shoe and garment clusters of Aba depend for their survival on ethnically diverse trading networks involving Igbo entrepreneurs in trust and credit relations with ethnic Yoruba, Hausa, southern minority groups and even non-Nigerian traders. Hausa embroiderers constitute a key category of skilled workers in the Aba garment cluster, while in the shoe cluster southern minorities provide an important source of labour during periods of rapid expansion. Business contacts and Pentecostal religious networks have also played a central role in creating bonds of trust linking Igbo producers with traders or apprentices from other ethnic backgrounds. Trading relations between Igbo producers and Hausa buyers, while unable to prevent the brutal Aba riots of February 2000, later played an important role in resolving the conflict and reintegrating Hausa traders and embroiderers into the Aba clusters.1 As 1

As I have explained in more detail elsewhere, in the aftermath of the Aba riots, the Aba shoe and garment unions were obliged to give guarantees of safety to northern Nigerian shoe traders and embroiderers in order to draw them back to Aba (K. Meagher, ‘The Informalization of Belonging: Igbo Informal Enterprise and National Cohesion from Below’, Africa Development 34(1), 2009).

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Douglas Anthony (2002:33) explains in his moving account of Igbo-Hausa relations in northern Nigeria, ‘any generalized depiction of the gulf between groups fails to take into account the ability of individuals to build bridges. …friendships, marriage, commercial and political cooperation, and simple civility played key roles in connecting individuals and, sometimes, communities.’ The history of Igbo economic networks shows that informal economies and indigenous institutions have played as important a role as individuals in bridging divides between ethnic groups. Some scholars have suggested that the dynamic economic and civil organization of the Igbo represents a case for ‘Igbo exceptionalism’ (Brautigam, 2003, Harniet-Sievers, 2006:294) in a region where most groups are constrained by ethnic divisions. Yet studies of ethnic networks in other parts of Africa reveal a similar capacity for economic rationality and institutional innovation. As economic historians have shown, precolonial trading networks of the Hausa, Mande, Juula, and other West African groups have used relations of kinship, ethnicity, religion, patronclientage and even secret societies in the development of efficient, marketoriented values and institutions (Curtin, 1975, Austen, 1987, Hopkins, 1973). Paul Lovejoy’s (1980:31-2) superb history of precolonial Hausa trading networks reveals that ethnicity and religion were neither primordial nor divisive, but served as ‘bridging and bonding’ mechanisms that promoted solidarity within dispersed trading diasporas, as well as incorporating new members across clan and ethnic boundaries: commercial diasporas acted as a kind of ‘bridge’ across the labyrinth of West Africa. …People who were incorporated into the scattered Hausa settlements included [non-Hausa] individuals who initially came from Nupe, Borno, Agadez, Adar and even more distant places… They had settled in the trade towns to take advantage of expanding commercial opportunities and had subsequently developed a sense of community which was based on Islam, the use of the Hausa language, intermarriage within the community and with other diaspora settlements, and common residence. The resulting group identification, based first and foremost on similar commercial undertakings, was fundamental to the operation of Asante-Central Sudan trade.

In other contexts, scholars have highlighted the use of African religious networks as mechanisms of economic efficiency, in which new commercial groups ‘disembedded’ themselves from redistributive obligations to their ethnic community in order to solve the ‘traders’ dilemma’ of accumulation and communal obligations (Evers, 1992, Platteau, 2000). Norman Long (1968) traces the conversion to Jehovah’s Witness among a rising stratum of rural Zambian shopkeepers anxious to build new commercial networks, while David Parkin (1972) details a similar conversion to Islam among commercial palm farmers in Kenya. In modern times, highly successful global trading networks of the Mouride brotherhood of Senegal have responded dynamically to the collapse of the

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groundnut economy by mobilizing unemployed youth around an ‘Islamic ethic’ of piety, obedience and hard work (Ebin, 1993, Malcolmson, 1996, Babou, 2002). Across the continent, the role of religious and spiritual factors in African informal governance involves processes that often appear more Weberian than primordial (Maxwell, 1998, Meagher, 2009). While indigenous institutions have not resolved the problems of African development, they reveal a valuable reservoir of institutional strengths. Amid contemporary pressures of market and state failure, many economically dynamic ethnic and religious networks across Africa demonstrate an institutional capacity for social and ethnic integration, and economic logics of market rationality and productive development. As Anna Lindley (2009: 526) points out in the case of Somali remittance networks, ...money transmitters are effectively using xeer (customary law) to underwrite their contracts and arbitrate any disputes arising... It is important to emphasize that resorting to xeer does not necessarily imply that the economy turned inwards on clan communities – rather, in order to expand, it was necessary for the companies to work across clan lines...

This is not to suggest that all African networks are socially integrative and developmental; quite the contrary, the continent’s economic networks have shown very uneven capacities for promoting economic growth. Recent accounts of Igbo drug trading networks, Nigerian 419 systems, and human trafficking networks or actual war economies reveal that the continent has given rise to undesirable as well as dynamic economic networks, centred around war lords and criminals rather than commercial groups (Smith, 2006, Ellis, 2009, Kynoch, 2005, Little 2004). But this does not demonstrate that all African networks operating at the margins of the law are therefore criminally inclined. In fact, close attention to historical legacies tends to reveal the reverse – that the problem of network failure lies less in the primordial dysfunction of African social institutions than in the disadvantageous way in which these social arrangements have been embedded in formal political and economic structures.

4. Network Failure, Informality and the Role of the State Explaining the problem of network failure in Africa demands a clear assessment of the organizational limitations as well as the organizational strengths of indigenous economic networks. If Africa is endowed with dense and culturally dynamic social networks, what has prevented them from fostering economic growth in the context of liberalization? In the heady atmosphere of the ‘cultural turn’, a fascination with the regulatory capacity of social ties has tended to overstate the power of popular networks, eclipsing in the process the role of the state in network

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development. Efforts to understand informal governance processes must move beyond the preoccupation with culture to an examination of how other factors, such as relations with the state and global economy, shape the development of social networks in a given context. Even in successful examples of informal governance in East Asia, scholars have increasingly recognized that: …the simple existence of ethnic ties does not necessarily translate into …‘cooperative exchanges’. …whether ethnic groups are able to become, in Clifford Geertz’s terms, ‘cosmopolitan’ and thus to resolve the tension between solidarity and scale may in turn depend on facilitative political institutions and coalitions. (Deyo et al., 2001:222)

In short, the missing link in economic development may have less to do with indigenous institutional tendencies than with the wider regulatory framework in which that they are embedded. While social ties can provide a regulatory fall-back in times of formal institutional crisis, they are ill-equipped to overcome the obstacles created by prolonged state dysfunction. In the context of economic hardship and intense competition, even the most dynamic social networks are vulnerable to social fragmentation, differentiation and political manipulation. Part of the problem stems from the fact that specialized lines of informal economic activity tend to be dominated by particular ethnic or religious groups, owing to the embeddedness of training, credit, and other specialized economic functions within identity based networks. In Nigeria, the Yoruba dominance of informal automobile repair, Hausa-Fulani dominance in livestock trade and informal currency markets, and Igbo dominance in the trade and production of automotive spare parts are cases in point (Cohen, 1969, Onokerhoraye, 1977, Silverstein, 1983). Although identity based organization promotes informal economic efficiency in situations of weak formal institutions, it also increases the vulnerability of economic networks to being hijacked by elite interests in the ethnically charged political environments of contemporary Africa. While African social networks have demonstrated a capacity for cooperation across communal boundaries, extreme economic pressure and elite mobilization can undermine integrative tendencies and spark inter-communal hostility, as was so painfully evident in the Aba clusters. As this study has shown, the shift of enterprise networks away from reliance on ‘strong’ communal ties to an incorporation of weaker kinds of linkages does not solve the problem. While the ‘weakness of strong ties’ lies in their vulnerability to ethnic and religious mobilization, the weakness of weak ties is their propensity to foster differentiation and opportunism. At first blush, the intermeshing of strong and weak ties through personal portfolios of linkages based on identity, religion, friendship, school and business relations appears to address concerns about the parochial tendencies of communal networks, but it does so at

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the cost of an increasing fragmentation of network strategies. A propensity to privilege individual agency over structural consequences has tended to mask the potentially disruptive effects of individualized networking strategies in a context of weak formal institutions. The disruptive effects of global buyers’ networks on collective efficiency and productive solidarity in the Brazilian footwear cluster of the Sinos Valley noted by Schmitz (1999), and Knorringa and Meyer-Stamer (2008) have highlighted the wider tendency in enterprise clusters for ‘weak ties’ to disrupt, rather than complement, ‘strong ties’. In the Aba clusters, an unstructured proliferation of personal networks embedded neither in communal norms nor in a coordinating framework of formal institutions has not spawned ‘emergent structures’ of popular economic empowerment (Long 2001), but increased opportunism, differentiation, and social fragmentation within as well as beyond enterprise clusters. The problem is institutional rather than cultural; as David Pratten (2007) observed in the context of south-eastern Nigerian vigilante groups, informal actors are thrown back on an unstructured profusion of ‘micro-political strategies’ that ‘undermine the social cohesion necessary to establish meaningful institutions’. Despite evidence of Weberian mechanisms of incipient class formation and accumulation within Igbo enterprise networks, the emergent institutions of cluster development have been thwarted by social marginalization and state neglect, forcing a recourse to increasingly personalized and disruptive channels of access to economic and political support. Aba’s informal producers’ associations have proved to be equally unsuccessful in galvanizing cooperation within the clusters or in obtaining institutional support from the state. For those who represent the informal economy as a product of exit rather than exclusion, it is worth noting that all of the informal associations in the Aba clusters devoted their energies to linking up with the state rather than evading it. Yet, the social and legal marginality of these associations prevented them from lobbying effectively for assistance even at the local government level, despite strong indigenous associational practices and decades of comparatively autonomous operation. Even where they were linked to powerful officials by strong communal ties, as in the Aba garment association, informal enterprise associations were unable to gain the attention of the state unless they became endowed with a strategic resource, such as a popular vigilante group or the attentions of an international NGO. As studies of informal associations have shown, collective organization does not necessarily overcome the problems of powerlessness and informality, owing to their vulnerability to capture by opportunistic leadership and the political agendas of more powerful social groups (Thulare, 2004:17, Shefner, 2006, Mitlin, 2001, Meagher, forthcoming, Beall, 2001). These realities challenge optimistic assessments that informal associations can ‘assist the growing informal sector and give it a political voice, especially at the local level’ (Tripp, 2001:10).

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This brings us back to the role of the state. In a globalizing economy, a viable small enterprise sector requires a wide range of services that cannot be provided through social networks and even the most cooperative local governments. These include political stability, facilitative trade policy, decent roads, an effective police force, stable electricity supplies, technical up-grading, and assistance in meeting the administrative and quality requirements of access to global markets. Even sustaining the social cohesion that underpins collaborative enterprise networks is as much a product of state policy as of cultural affinities. As Whitford (2001:59) explains, dynamic enterprise networks require more than a ‘conducive’ culture; ‘their continued viability is dependent on sustaining formal institutions that can ensure coordination, overcome scale difficulties, and, importantly, guarantee the reproduction of the norms and values underlying the system.’ Studies of Third World clusters that have coped more successfully with the challenges of economic restructuring invariably show evidence of active state involvement at the regional and national as well as the local levels, though its importance is often downplayed. Research by Nadvi (1999, Nadvi and Halder, 2002) and others on a Pakistani surgical instruments cluster, and studies of successful Indian (Knorringa, 1999), Brazilian (Schmitz, 1995, 1999) and Mexican footwear clusters (Rabellotti, 1999), reveal that successful cluster responses to the challenges of economic restructuring had a great deal to do with the active role of the state in providing infrastructure, technical services, and conducive trade policy, which require the involvement of central as well as local government. In short, dynamic enterprise networks are as much a product of, as a substitute for, effective state intervention. While strong states can foster more efficient and cohesive networks, weak states and prolonged economic stress can leave even the most culturally dynamic networks vulnerable to marginalization and fragmentation. In many African countries, the problems of weak states and rapid decentralization have been compounded by crippling processes of ‘communal empowerment’ in which governments have further burdened the organizational capacities of informal networks by off-loading economic and social welfare responsibilities onto popular organizational systems – what Grey-Johnson (1992) calls ‘passing the buck to the informal sector’. This is precisely the opposite of the ‘synergistic’ forms of state engagement advocated by scholars of dynamic clusters and popular enterprise development (Evans, 1996, Tendler, 1997, 2002). As they struggle to cope with an increasing burden of economic responsibilities, popular networks have been strained to the limit, generating processes of fragmentation and polarization that are threatening to unravel the very fabric of society. Jean-Loup Amselle (2002:227-8) warns that: [by] calling on the ‘private sector’ to take care of itself, the State – or what is left of it – encourages the burgeoning of a whole series of associations, non-

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governmental organizations and other structures charged with doing the job in its place, and these structures are often based on communal forms… [T]he ‘new tribes of the marginalized sectors’…are the product of a history in which the disengagement of the state has played a decisive role.

Far from reinforcing the cohesion of popular networks, African governments – in league with neo-liberal reforms – have subjected them to unbearable economic and social stress, intensifying their vulnerability to ethnic fragmentation and political capture. Nigeria’s parade of small enterprise support programmes, as well as the occasional international informal sector development programme, have done little to alter this dynamic. Capture by better connected and capitalized actors, such as spouses of civil servants, unemployed graduates and formal sector startups, or diversion of resources by state officials brought in to administer the programmes, ensures that informal micro-entrepreneurs are rarely beneficiaries of these initiatives, as was clear from the fact that not a single Aba producer was found who actually gained productive assistance from any these programmes. As the case of the Bakassi Boys has shown, there is more at stake than economic performance. Poverty, rapid liberalization and weak states not only undermine the developmental potential of existing networks; they can contribute to new dynamics of conflict and disorder. In addition to hosting active informal manufacturing clusters, south-eastern Nigeria is a strategic site of global oil production which faces rising insecurity at the hands of local militias and disenfranchised youth from the Niger Delta. Located at the edge of the Delta, Igbo enterprise clusters have been an important source of employment, not only for Igbo youth, but for members of Delta ethnic groups. The contraction of the shoe cluster after 2000 has coincided with increasing unemployment, youth disaffection, and mounting violence across both the Igbo and Delta areas of southern Nigeria. Far from addressing the problem, decentralized local and regional governments have exacerbated it by leaving local enterprise clusters to fend for themselves, while contributing lavishly to the activities of the Bakassi Boys and other local militias (Meagher, 2007). While the majority of informal producers reject vigilantism as an economic option, anger and frustration are spreading. In 2005, a struggling shoe producer who was a devout Pentecostal Christian declared that shoe producers still keep their matchets in their shops, since the state has abandoned them and the shoe associations are dishonest and self-serving. ‘We are suffering, and if someone contributes to our suffering, we must rise up against them.’2 Similarly, in the garment cluster, lack of state support and divisive intervention by an international NGO contributed to the collapse of the Aba Garment Association in early 2007.3 This has ceded the field to a more coercive and 2 3

Shoe producer, Umuelhilegbu production zone, April 2005. Interview, President of Aba Garment, August 2007.

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predatory tailors’ association focused on taxing informal producers rather than on supporting their productive development. What we are witnessing in Aba is not just the disintegration of productive enterprise networks, but a shift toward increasingly dysfunctional informal organizations owing to the negligent and opportunistic character of state engagement with the informal economy. While the predatory propensities of African rulers are part of the story, the deliberate erosion of infrastructure and social provision by economic restructuring policies, and the instrumentalization of informal networks in the service of ‘decentralization’ and ‘good governance’ also play an important role. These disruptive processes leave their mark on informal regulatory processes. Just as commercial institutions and collaborative relations can become embedded in popular economic and social networks, conflict and social strife can also become socially embedded. A political and economic environment that fails to nurture economically dynamic social networks will ultimately warp and destroy them.

4. Looking for a Way Forward: Synergy and Political Voice Unable to serve as a ‘missing link’ in economic development strategies, Nigeria’s Igbo enterprise networks are in danger of being turned into a missed opportunity for popular economic growth. In a sense, informal enterprise development in Nigeria, and in Africa more widely, seems to be confronted by a ‘Catch 22’. They are neither able to ‘substitute for the state’, nor to mobilize the state in support of their productive needs. In order to find a way forward, recognizing the powerlessness of African informal economies is as important as recognizing their institutional strengths. Prevailing policy prescriptions of liberalization and decentralization as the path to dynamic cluster development sit uneasily with the realities of informality in a globalizing environment. In a recent collection on the politics of inclusion, Peter Houtzager (2003:6) points out that notions of pro-poor development through decentralization of power to communal forms of order contrasts starkly with the dramatic concentration of economic and political power at the global level: If a basic tenet of political economy holds true – that the concentration of economic power enables, and sometimes necessitates the concentration of political power... then suggestions such as those made by UNDP (2000:12) that ‘the foundation of poverty reduction is self-organization of the poor at the community level’ seems at best hopelessly naive.

If the travails of Igbo informal producers have revealed anything, it is that even the most dynamic and well established informal enterprise networks lack the ability to assert their productive interests against the disruptive agendas of local officials, let alone to defy national or global economic and political interests.

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These observations suggest two broad areas for more productive policy engagement with African informal enterprise, one from above and one from below. The first involves shifting the emphasis of international and national policy makers toward the development of more ‘synergistic’ relations between informal enterprise and the state, rather than continuing to pretend that social networks and cultural values should be able fill the widening gaps in state provision. Instead of putting their weight behind liberalization and decentralization, the international community needs to focus on strengthening the ability of the state to find ways of supporting the productive tendencies in informal business networks through the provision of infrastructure, basic business services and a degree of social protection. These measures offer the possibility of moving beyond what Judith Tendler (2002) calls ‘the devil’s deal’, in which small firms support governments that ignore their productive needs, but exempt them from taxes and formal regulations. In the process, informal enterprise is turned into a low productivity ‘social safety net’, undermining its potential for economic growth. A second area of policy focuses on strengthening the capacity of informal operators and their associations to represent informal economic interests from below. Significant research and advocacy work carried out by the ILO’s Decent Work Programme, and the international labour advocacy network, Women in the Informal Economy Globalizing and Organizing (WIEGO), among others, emphasizes the importance of developing ‘political voice’ within the informal economy (Carr and Chen, 2004, Chen et al., 2006, Horn, 2003, ILO, 2002, Lund and Skinner, 2004). Even the World Bank is advocating the importance of ‘voice’ as a solution to ‘exit’ from the formal economy (World Bank, 2007). Given the vulnerability of informal actors, however, ‘political voice’ involves not only supporting informal associations, but developing strategic alliances with supportive formal institutions, such as trade unions, NGOs and local governments. As Marilyn Carr and Martha Chen explain, ‘[u]nless informal workers and producers are effectively organized and gain representation and voice in mainstream institutions, they will continue to be excluded by global economic integration and/or included on unfavourable terms.’ Building alliances with formal sector organizations that share common interests increases the ability of informal actors to make claims on the state through the aggregation rather than the decentralization of power and responsibility. Such integration of informal and formal organizational strategies weaves informal economic networks into society to strengthen rather than unravel the social fabric. Given the failings of Aba’s informal cluster associations, it is important to remember that the development of informal voice is not an uncontested process. In an inspired article, Pat Horn (2003) reminds us that political voice is a product of decades-long struggle for internal consensus and political recognition, not an automatic result of collective organization. These struggles are as much about learning the skills of

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collective mobilization, building constructive alliances and avoiding the tactics of elite capture once associations have been formed, as they are about forging channels of interaction with the state and donor community. International NGOs have sometimes been less aware of the emerging associational terrain of informal enterprise clusters than they should be, often undermining existing associations, and their deeper links to members, in an effort to create something more conducive to project delivery. Shifting the focus to issues of policy rather than culture offers new possibilities for bringing African informal economies out of the shadows. In the development community, the emerging consensus around institutional inclusion and political voice provides an opportunity to move beyond the disabling economic environment of liberalization, state neglect and network failure towards a more dynamic trajectory of informal enterprise growth. This opens the way for turning identity economics from part of the problem into part of the solution.

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EPILOGUE

In 2010, as Nigeria marks 50 years of independence, hopes that informal enterprise networks can contribute to broad-based economic development are fading. Particularly in the south-east of the country, there is a growing sense that the situation has reached a tipping point. In place of the expanding dynamic of employment and pro-poor growth that had begun to incorporate disaffected youth in surrounding south-eastern states during the 1980s and early 1990s, Aba’s enterprise clusters are increasingly drawn into patterns of violence and disorder spilling over from the Niger Delta. Initiatives from the state and international community pay lip service to the promotion of informal entrepreneurship, but misplaced economic ideologies and political struggles over oil resources continue to undermine even the most basic support for small enterprise development. Communitized security strategies funded by oil companies, underhanded patronage by local politicians, and demobilization and amnesty strategies have pumped billions of dollars into militias and vigilantes in the Delta and south-eastern states, while informal entrepreneurs are left to fend for themselves. Recently, an encouraging surge of development attention has been focused on the Aba enterprise clusters by the Abia State government, and by the Small and Medium-Scale Enterprise Development Agency of Nigeria (SMEDAN), established in 2004. Within the framework of a wider national policy for micro, small and medium-scale enterprise (MSME) development in Nigeria, SMEDAN is promoting ‘made in Aba’ goods as part of Nigeria’s rebranding exercise.1 In 2006, SMEDAN mounted a capacity-building course for Aba shoe and bag producers in collaboration with a private management consultancy. Unfortunately, the course’s focus on business management skills, export information and e-business fails to address the real problems of credit, technical upgrading and market access facing informal producers. In a similar vein, the Abia State government embarked on the construction of the Aba International Industrial Market (ABIIM) in 2009, through a public-private partnership 1 This Day, ‘SMEDAN Course to Promote Leather Clusters’, 1 June 2006.

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arrangement with a private construction firm.2 The new market is slated to provide 40,000 multi-purpose shops and commercial services to boost the international competitiveness of made-in-Aba goods. But aims of revenue generation and the construction of a world-class shopping mall ‘like those seen in Europe’ have displaced consideration of the needs of small-scale producers, who are yet again provided with infrastructure designed for traders, in units for which the rent (already a key constraint) will be completely unaffordable for the bulk of informal operators. At the popular level, informal firms and enterprise associations are losing ground, while the Bakassi Boys persist with surreptitious support from the Abia State government, despite having been banned repeatedly by the Federal Government since 2002. Now a force for criminality rather than security, Bakassi activities have merged with a rising crime wave engulfing Abia State since 2007, involving an unprecedented surge in murder, armed robbery and kidnapping spilling over from the 2007 elections and spreading up from the Niger Delta.3 The Abia State government oscillates between denying that the Bakassi Boys still exist, and threatening to give them legal backing if the security situation in Abia continues to deteriorate. Calling for Federal intervention in the situation, a prominent citizen lamented that ‘Development cannot thrive in insecurity. Investors are scared of visiting Abia. Even Aba, the industrial hub of indigenous manufacturing is under siege.’4 Unfortunately, Federal responses have revealed a similar privileging of political opportunism over popular livelihoods and public security. Since 2008, the deployment of army and military police to Aba have done more to exacerbate economic pressures than reduce crime, as roadblocks and extortion proliferate by day, and crime reclaims the roads at night.5 In an effort to contain criminality, the banning of motorcycle taxis in Abia and some other southeastern states in 2009 has created further hardship by eliminating a key economic fallback for failing informal producers. Despite claims to promote informal enterprise, the devil’s deal of state neglect and clientalism continues to triumph over any genuine commitment to productive support and political voice within the informal economy. This reckless policy neglect is rapidly squandering the valuable informal institutional resources that could offer a path out of the unemployment, disaffection and criminality engulfing the Nigerian south-east. 2

This Day, ‘Aba Industrial Market Runs into Legal Hitch' 8 August 2009; MILLAT Group Limited, http://millatgrpltd.com/Abiim.htm. 3 Sun News On-line, ‘Fear of Bakassi Boys, kidnappers’, 11 July 2009; This Day, ‘Nigeria: NBA Tasks Govt on Bakassi Boys’ 26 October 2008; Daily Champion, ‘Nigeria: Bakassi Boys Raid Abia CD’s Office’, 22 October 2008; Vanguard, ‘Nigeria: Abia Assembly Set to Empower Bakassi Boys’, 26 May 2008. 4 Guardian, ‘Group seeks security in Abia’, 9 July 2009. 5 Guardian, ‘Aba now in the hands of gangs’ Guardian 18 October 2009.

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APPENDICES

Table 1 The Relationship Between Structural Disadvantage and Levels of Participation in Local Associations (linear regression)

Factors

Unstandardized Beta Coefficient

(Constant) Shoe Sector (ref. Garment) Age 30+ (ref. Below 30) Women Advantaged Community Advantaged Class Evangelical Membership

3.52 (.41) .64 (.38) .75 (.29) -1.19 (.44) -.49 (.31) .67 (.34) -.60 (.29)

R2 N

Significance .000 .090 .011 .002 .115 .053 .038

.245 129

Dependent variable is the number of associations to which a small producer belongs. Source: Fieldwork

Table 2 Logistic Regression of Propensity to Join Hometown Associations Variable

Odds Multiplier

Shoe Sector (ref. Garment Sector) Women Youth (ref. 30 years and over) Advantaged Class Advantaged Community JSS Education+ (ref. primary or less) Constant Model Improvement

.94 .20 .44 4.58 .37 .40 16.39 28.52 (6 df)

Total N

129

Source: Fieldwork

181

Significance .926 .020 .087 .021 .054 .080 .000 .000

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Appendices

Table 3 Logistic Regression of Propensity for Exclusive Membership in Religious Associations Variable Garment Sector Women Disadvantaged Class Constant Model Improvement Total N

Odds Multiplier 2.80 5.31 5.27 .021 23.89 (3 df)

Significance .091 .008 .026 .000 .000

131

Source: Fieldwork

Table 4 Regression of Social and Economic Variables on Firm Turnover

Variable (Constant) Shoe Sector (ref. Garments) Women Age Secondary Education - Garment Secondary Education - Shoe Advantaged Community - Garment Advantaged Community - Shoe Advantaged Class - Garment Advantaged Class - Shoe

Unstandardized Beta Co-efficient

Sig.

3.96 (.29) .56 (.28) -.40 (.13) -.00 (.01) .28 (.13) -.29 (.20) .41 (.14) -.47 (.18) -.16 (.14) .39 (.19)

.000 .043 .003 .978 .035 .153 .005 .011 .244 .046

R2

.45

N

124

Dependent variable is the Log10 of firms’ Average Monthly Turnover. Source: Fieldwork

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Aba 1, 5, 6, 8-9, 43, 46-54, 56, 59-62 passim, 68, 73-8, passim, 90, 92, 94, 96, 108, 110, 118, 121-53, 158-63 passim, 168, 173, 176, 177, 179-80 see also garment industry; shoe industry; - Chamber of Commerce (ACCIMA) 8, 110, 151; - Garment Manufacturers Cooperative (AGMN) 50, 127, 143-5, 155-6, 1645, 173, 175; - International Industrial Market (ABIIM) 179-80; North Shoe Plaza Industrial Union 146 Abam 34 Abia State 33, 108, 127, 129, 141, 143, 160-5 passim, 179, 180; Shoe and Bag 160; Vigilante Group 161 Abiriba 32, 43, 46, 48 accumulation, networks of 121-31, 137, 138, 149, 154 Adam, S. 64 Adebiyi, M.A. 60 adjustment, structural 3, 47, 56-9, 62, 95 affection, economy of 122, 132 Afigbo, A.E. 29, 30, 32, 34-9 passim Afikpo 90 Africa 1-4, 6-7, 11-14, 18-26, 28-30 passim, 59, 61, 64, 73, 76, 77, 87, 131, 140, 165-76 passim; Francophone 77 age factors 123 agency 4, 9, 17, 23, 120, 121, 173 agriculture 29 Akpa 33 Akwete 32, 43 Amin, A. 18, 24 Amnesty International 163 Amselle, J.-L. 174-5 Anambra State 33, 51, 54, 72, 78, 90, 92, 125, 129, 161-3 passim

Anthony, D. 40, 41, 45, 170 Anzzy Shoe 129 apprenticeship 25, 27, 32, 41, 44, 48, 50, 54, 62, 64-7 passim, 83, 86, 93, 115, 143, 168; contracts 66; settling 65, 86 Ardner, E.W. 51 Ariaria market 146, 147, 150, 158-9; AMATA 150, 153; AME 146-53 passim; - Shoe Manufacturers/ Sellers Association 146 Arnaut, K. 11 Aro 32-8 passim, 41, 48, 90, 169 Asia 2, 6, 13, 14, 18, 19, 20, 25, 46, 59, 63, 69, 72, 78, 145, 155, 164; East 19, 24, 25, 172 Asiwaju, A. 24 associations 9, 38-43 passim, 54, 55, 77, 81, 97, 105-20 passim, 127, 136, 140, 173-8 passim, 180, 181; producers’ 9, 77-9, 109, 130, 139, 141, 143-58, 163, 165, 173 Austen, R.A. 34, 170 auto parts 6, 21, 43, 46, 172 Awka 32, 43 Babatope-Obasa, B. 60 Babou, C.A. 171 Bajada, C. 15 Bakassi 147, 159; Boys 1-2, 9, 140-1, 158-65, 175, 180 Barkan, J.D. 107 Barr, A. 21, 136 Bata Shoe Co. 79, 80, 92, 137 Bayart, J.-F. 3, 6-7, 22, 27, 167 Bazenguissa-Ganga, R. 12, 21, 84, 85 Beall, J. 105, 140, 173 Beccattini, G. 19 Bende 33, 37, 43, 48-51 passim, 54, 613 passim, 72, 73, 89, 90, 92-3, 123, 126-8 passim, 145

201

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Benton, L.A. 13, 18, 154 Berry, Sara 30, 60, 120 Best, M.H. 18 Beuving, J.J. 3 Biafra 45 Bian, Y. 86 Birks, J. 95 Blessing 96-7 blood pacts 34, 36, 168 Blokland, T. 25 Boswell, D.M. 106 Bradbury, M. 166 brand names 135 Brautigam, D. 5-6, 21, 27, 45, 46, 60, 85, 170 Brazil 60, 81, 137, 173, 174 bribes 103, 144 bridging and bonding 126-30, 138-9, 170 Britain 5, 38-9, 43 see also colonialism burials 145, 152 Burkina Faso 89, 103-4 Burt, R.S. 17 Callaghy, T.M. 11 Cameroun 76, 77, 147 capital 30, 52, 62, 64, 78, 79, 85, 86, 91, 117, 123, 125, 126 capitalism 2, 3, 18, 20, 32 Carr, M. 177 Castells, M. 2, 3, 13, 14, 17, 19, 21, 61 Chabal, P. 7, 22, 167 Chalfin, B. 102 Chen, M. 15, 177 China 21, 74, 86, 164 Christianity 9, 39, 41, 42, 116, 145, 169 Chubb, L.T. 39, 51 Chukwuezi, B. 64 churches 42, 84, 85, 98, 100, 101, 108, 112, 114, 116-18, 129, 145 clans 21, 27, 29, 30, 39-40, 166, 170, 171 class factors 9, 24, 25, 89, 95-9 passim, 101, 109-10, 112-14, 123-7 passim, 130, 131, 149, 173 Cleaver, F. 102 clientelism 3, 9, 25, 180 cloth industry/trade 32, 43, 48 clubs, contribution 42, 109, 111; social 25, 105, 106, 109, 111, 118, 119, 128, 129 clusters/clustering 2, 4-6 passim, 10, 18-22, 83-104, 121, 133-42, 173-7 passim; see also garment industry; shoe industry Cohen, A. 24, 167, 172 Coleman, J.S. 17 Collier, P. 3, 22, 60-1

colonialism 27-44 passim, 48, 167, 169; pre- 27-39, 168-70 passim; post- 22, 27, 28 community 4, 17-19 passim, 29, 34, 38, 85, 90-5, 123-31 passim, 168, 170, 172 competition 18, 37, 63, 67, 69, 74-81 passim, 89, 119, 121, 134, 136-7, 139, 145, 155, 164, 172 conflicts 5, 147, 169, 176 collective efficiency 2, 18, 122, 138-9 collective inefficiency 133-8 Congo, Democratic Republic of 1, 3, 21, 76, 84 contracts 34, 37, 66, 67, 69-70, 96, 1003 passim, 111, 168, 169 see also subcontracting Cook, S. 15 Cooper, F. 12 cooperation 9, 19, 121, 131-3, 138, 139, 141, 144, 169, 170, 172, 173 copying 136, 137, 145, 152 corruption 19, 21, 39, 144, 159 costs 58, 62, 134-5 counterfeiting 58, 135, 137 crafts 29, 30, 32, 43, 51 credit 6, 8, 20, 27, 36-7, 42, 45, 72, 73, 75, 78-9, 83, 87-8, 92, 94, 96, 111, 153, 157, 169, 172, 179 crime/criminalization 2, 3, 5, 22, 27, 167, 180 culture 4, 9, 12, 13, 16-23 passim, 27, 56, 166-72 currencies 36, 38, 43, 51, 57, 63, 172 Curtin, P. 24, 35, 170 Daloz, J.-P. 7, 22, 167 Dawson, J. 157 debt collection 35; default 37, 75, 78, 88, 89 decentralization 21, 30, 141-3, 163, 168, 174, 176, 177 Deeper Life Bible Church 108, 115-17 passim demobilization 43, 179 democracy 5, 27 deregulation 11, 15, 57 De Soto, H. 14 devaluation 57, 63 development 3, 9, 10, 20, 56, 121,143, 154-7 passim, 162, 166 devolution 141, 143 Deyo, F.C. 24, 172 diamonds 3, 14, 165 diasporas 24, 39-41 passim, 45, 46, 77, 170

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Index Dicken, P. 26 differentiation 9, 121, 123-30 passim, 138, 139, 163, 172, 173 Dike, K.O. 29, 32-8 passim, 41 disembedding 24, 28, 38, 108, 114-16, 128, 170 dispute resolution 33-5 passim, 37 distribution 8, 14, 76-8 passim, 89 diversification 30, 116-20 passim, 133 Douglas, O. 5 drugs 3, 5, 22, 27, 171 dualism, institutional 11, 16, 28 Dubai 21, 164 Duffield, M. 3, 6, 15, 22 Ebin, V. 21, 171 Edda 34 education 39, 64, 96, 97, 99, 113, 116, 123-30 passim, 149, 155 Ekejiuba, F.I. 32-8 passim, 41 electricity supply 142, 146, 147, 152, 156, 157, 165, 174 elites 25, 42, 113, 129, 137, 154, 172 Ellickson, R.C. 167 Ellis, Stephen 5, 167, 171 Elyachar, J. 15, 16 embeddedness 2, 4, 6, 11, 17-19 passim, 24, 28, 38, 47, 54, 72, 73, 108, 113-14, 126, 142, 163, 166, 172 Emirbayer, M. 12 employment 11, 13-14, 51, 59, 60, 6970, 175; National Directorate of 143 empowerment 23, 173 Englund, H. 105 Enste, D.H. 15 entry 61-4, 86, 90, 98, 124-5, 137, 145 equipment/machinery 68, 70, 73-5 passim, 86, 98-100 passim, 131, 133, 135-6, 153, 157 ethnic factors 3, 4, 6, 16, 24, 25, 38, 168-72 passim Europe 2, 6, 30, 36, 37, 72, 78; Eastern 19, 20, 24, 25 Evans, Peter 25, 174 Evers, H.-D. 170 exclusion, social 9, 25, 121, 122, 138 exports 59, 76-7, 157 Fafchamps, M. 73, 78 failure, bank 109; market 2, 20; network 17, 20, 24, 166-7, 171-6, 178; state 2, 3, 15, 20,165 FAMAD 79-81 passim Feierman, S. 168 Feige, E.L. 14, 19 Ferguson, James 166

203

Fine, Ben 23-4 fines 77, 153 ‘419’ 5, 171 Forde, D. 30, 34, 48 formal economy 4, 6, 9, 13-15 passim, 18, 20, 28, 56, 60, 79-81, 89, 103, 177 Forrest, T. 5, 6, 32, 41, 43, 45-8 passim, 52, 64, 76 fragmentation 23, 27, 29, 105, 108, 119, 121, 138, 139, 146, 150, 157, 158, 162, 172-5 passim Freidberg, S.E. 89, 103-4 friendship 9, 16, 36, 83-5 passim, 131, 170; societies 106, 109, 118, 130 Fukuyama, F. 19 Full Gospel Businessmen’s Fellowship 110 Gambetta. D. 19 garment industry 1-2, 6, 8-9, 48-51, 6077 passim, 86-8, 90-5, 98-103, 108111, 113-17, 122-4, 126-8, 130-6 passim, 139, 143-5, 154-6, 163-5 passim, 169, 173, 175-6 Geertz, Clifford 172 gender factors 9, 15, 25, 61, 64, 89, 98101, 123-6 passim Gertler, Meric 25 Geschiere, P. 17 Ghana 1, 76, 136 Gibbon, P. 95 gift exchange 26, 36 Giuliani, E. 20 globalization 2, 11-13 passim, 17, 47, 56, 59, 72, 76, 81, 83, 84, 168 Gold, S.J. 25 Goodwin, J. 12 Gore, C. 167 Gorter, P. 105, 123 governance 3-6 passim, 9, 15, 17, 21, 38, 141-3, 163, 166, 167, 171-2; non-state 12, 14, 21, 23-6, 167-8, 171-2 Grabher, G. 12, 24, 25 Granovetter, M. 2, 17, 19, 28, 83 Grégoire, E. 3 Grey-Johnson, C. 174 Grootaert, C. 166 growth, economic 2, 3, 27, 81, 83, 121, 171, 176 Gugler, J. 106 Guha-Khasanobis, B. 16 Guinea-Bissau 89 Gunning, J. 60-1 Guyer, Jane 6, 102

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Index

Haan, H.C. 57, 140 Hakansson, H. 17 Halder, G. 174 Haller, W. 14, 15 Hamilton, G. G. 2 Hannertz, U. 17 Hansen, K.T. 2, 15, 20, 102 Harding, P. 14 Harneit-Sievers, A. 33-6 passim, 169, 170 Harnischfeger, J. 27, 159 Hart, G. 12, 23 Hart, K. 14-16 passim Hashim, Y. 3, 46 Hausa 2, 24, 30, 35, 36, 38, 46, 77, 87, 161, 167, 169-80; -Fulani 161, 172 Hausner, J. 24 healing, ritual 29, 32 Heintz, J. 15 Hibou, Beatrice 13 Højbjerg, C.K. 11 hometown 29, 34; networks 85, 169; unions 9, 41-2, 98, 106-8 passim, 113-14, 119, 127-9 passim, 169, 181 Honey, R. 107 Hong Kong 93 Hopkins, A.G. 170 Horn, P. 177 Houtzager, Peter 176 Human Rights Watch 158, 159, 162; /CLEEN 158, 162 Humphrey, J. 20, 73, 83-4, 88 Hunt, S. 108 Ibadan 24, 167 Ibiam, Chief 157 Ibibio 29, 33 Igala 30, 33 Igbo 4-6 passim, 8, 27-56, 59-82 passim, 87, 90-1, 98, 105-7 passim, 119, 124, 154, 160, 161, 166, 16871 passim, 173, 175, 176; Ngwa- 90, 142; reconfiguring identities 39-40 Igué, J. 2 Ihe 34 Ikelegbe, A. 158 ILO 13-15 passim, 177; Decent Work Programme 177 Imo Avenue 146-50 passim, 152, 153, 162 imports 3, 57, 62, 63, 72-4 passim, 923, 135, 155, 164; ban on 164 India 30, 59, 60, 81, 131, 132, 138, 174 indirect rule 28, 29, 39, 55, 167 Indonesia 21, 164 industrialization 44-6 passim

inequalities, economic 22-3, 138 inflation 57, 134 informal economy 1, 3-16 passim, 18, 20, 23, 26, 47-104, 141-63 passim, 173, 176-8, 180 informality/informalization 7-9 passim, 11-18, 23-6, 37-9, 55, 56, 89, 142, 166-76 passim infrastructure 35-7, 59, 142, 174, 177 inheritance 30 inputs 72-6, 134-5, 145, 153 insecurity 2, 158, 162 institutions 2-4, 10-13, 17-20, 23-55, 140-3, 154-63, 166-74 passim, 178; pan- Igbo 33-5, 40; ‘twilight’ 11 intellectual property 58, 136 internet fraud 5 investment 21 invisible economy 6-10; histories 16871 Inyi 32 Iro, M.I. 41 Isichei, E.A. 29, 30, 32, 34-43 passim, 51, 98 isusu clubs 42 Italy 20, 21, 24, 137 Item 48, 145 Jackson, S. 165 ‘Jango’ 159 Jenkins, R. 14 Johanson, J. 17 Joint Aba Shoe Manufacturers Association of Nigeria 166 Jones, G.I. 30, 34, 48 Juula 24, 35, 170 Kabeer, N. 15 Kaduna 161 Kalu, Orji Uzor 127, 161 Kano 8 Kaplan, R. 3 Keen, D. 22 Keino, I.C. 21 Kenya 21, 136, 170 kidnapping 5, 165, 180 Kilby, P. 44, 48, 50, 52 kinship 4, 16, 30, 34, 36, 38, 83, 85, 89, 91, 168, 170 Klein, A. 14 Knorringa, P. 59, 131, 132, 138, 173, 174 Kynoch, G. 171 Labazée, P. 3 labour 8, 14, 15, 51, 64-71, 87, 101,

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Index 103, 116, 122-3, 133, 134, 143; Code 64, 66; division of 64, 66-8 passim, 70, 81, 169; Nigeria – Congress 155 Lagos 8, 21 land shortage 28-30 passim, 47, 51 Landolt, P. 19 Latin America 13, 14, 59 Lawrence, M.F. 107 Leander, A. 25-6 legacies 8-9, 24, 27 Lennards 137 levies 152, 159 liberalization 2-5 passim, 10, 12, 13, 21, 24, 56, 57, 59, 60, 62-3, 72, 75, 77, 79, 81, 87, 89, 98, 103, 133, 137, 138, 141, 155, 164-6 passim, 171, 175-8 passim Lightly, N. 108 Lindley, A. 3, 166, 171 linkages 9, 17, 24-6 passim, 30, 38, 467, 73-4, 76, 130, 138-9, 141, 154-7 passim, 163, 172 Little, P. 3, 14, 20-1, 27, 171 loans 42, 87, 93, 107, 111, 118, 119, 129, 145 local government 18, 141-6 passim, 152, 155-6, 177 localities 25-6 Long, N. 17, 24, 170, 173 Lourenço-Lindell, I. 15, 20, 89 Lovejoy, P.E. 24, 35, 38, 170 Lund, Christian 7, 11 Lund, F. 177 MacGaffey, J. 2, 11, 12, 20, 21, 84, 85, 165 mafias 19-20 Maier, Karl 5 Malcolmson, S.L. 21, 171 Malmberg, A. 26 Maloney, W. 15 Mande 170 manufacturing 1, 5, 6, 9, 21, 22, 37, 4354, 56, 59-105 passim, 126, 142; MAN 8, 110, 142, 155 marginalization 3, 28, 39, 44, 45, 54, 56, 89, 105, 120, 140, 154, 158, 163, 168, 173, 174 marketing 72, 76-9, 81, 145, 153 markets 13, 17, 34, 36, 37, 57, 63, 76, 77, 88, 133, 134, 137, 168, 169, 179 marriage 30, 35-6, 170; inter- 90 Marshall, R. 108 Martin, R. 12 Martin, S.M. 47 Mary, A. 108

205

Masinde, C.K.M. 80 Mattsson, L.-G. 17 Maxwell, D. 171 Mayer, P. 24 Mbadinuju, Chinwoke 162 Mbaise 51, 52, 54, 61, 63, 89, 90, 125, 129, 137, 151 Mbano 90 McCormick, Dorothy 58, 59, 74, 105, 131, 133-4, 136, 137, 140 McNulty, M. 107 Meagher, Kate 3, 12, 32, 46, 57, 64, 80, 95, 158, 160-2 passim, 165, 171, 173, 175 Meek, C.K. 30, 41 Melson, R. 40, 41 Menkhaus, K. 166, 171 Mexico 174 Meyer, B. 17 Meyer-Stamer, J. 138, 173 migrants/migration 2, 11, 22, 29, 40-1, 47, 48, 51-2, 142, 161 militias 3, 22, 175, 179 Mingione, E. 12 minorities 4, 62, 91, 169 Minten, B. 73 missionaries 41 Mitchell, J.C. 24 Mitlin, D. 173 Mkandawire, Thandika 168 Monday 94-5 moonlighting 11 Mulder, M.B. 3, 159 Murunga, Godwin 168 Nadvi, K. 2, 18, 19, 21, 22, 59, 60, 67, 71, 105, 123, 135, 139, 174 NAFDAC 58 Nafzinger, E.W. 44-5 Narayan, D. 17 NASMSLAPI (Leather and Allied) 157, 160 NASSI 8, 110, 155 Native Authorities and Divisions 40 Nee, V. 19 network capitalism 2, 3, 18 networks 2-12, 17-23, 27-78, 83-104, 121-39, 154-63, 165-78 passim; of accumulation 121-30; class 95-8; community 85, 90-5; economic/ trading 3-5, 7, 9-12 passim, 21, 24, 25, 27-56, 59, 61- 84, 89- 106 passim, 121, 138, 165, 166, 169-77 passim; entry and training 61-6; gender 98-101; institutional 154-63; production 66-71, 81, 89; remit-

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tance 3, 12, 21, 171; social 2-4, 6, 912, 16-26, 39-44, 83-104, 165-78 passim; supply and marketing 7181, 87-9; of survival 130-8 Newswatch 158, 159, 162 Ngau, P. 21 NGOs 156, 177; international 9, 156, 173, 178 Niger 3, 76; Delta 5, 29, 91, 175, 179, 180 Nigeria 3-10 passim, 21, 27-59 passim, 116, 164, 170, 173, 175, 176 Nigeria Labour Congress 155 Nkwerre 32 Nnewi 5, 6, 21, 27, 41, 43, 46, 60, 107, 162 Nnoli, O. 29 Nohria, Nitin 12 Nordstrom, C. 22, 23, 167 North, D. G. 17, 28, 159 North America 6, 78 Northrup, D. 28-30, 32-8 passim, 90 Nri 32-4 passim,38 Nwajiuba, C. 109 Nwajiaku, K. 5 OECD 13, 14 Ofondu, N.C. 106 Ogu Avenue 147, 148 Ohafia 34 oil 4-5, 142, 175, 179 Okafor, S. 107 Okigwe 90 Okonta, I. 5 Olowu, D. 141 Omeje, K. 5 Omenka Shoe Manufacturers Union 146, 149, 150 Omenma Traders/Workers Welfare Association 147 Onokerhoraye, A.G. 172 Onwubu, C. 41 Onwuejeogwu, M.A. 29, 33, 34, 36 opportunism 4, 9, 17, 65, 81, 137, 172, 173, 180 oracles 28, 32-4 passim, 38, 168 Oriji, J.N. 33-7 passim Ott, K. 19 Ottenberg, S. 34, 90 Owerri 90 Oyelaran-Oyeyinka, B. 6, 21 Paciotti, B. 3, 159 Pakistan 60, 81, 174 palm oil 47, 51 Parkin, David 170

parochialism 3, 10, 23, 83, 169 patrimonialism 22, 130, 154, 156 patronage 36, 170, 179 Peace, A.J. 24 Peattie, L. 14 Pedersen, P.O. 19-20, 30, 58, 74 Peel, M. 5 People’s Bank 143 Performing Shoe Manufacturers Union of Nigeria 147 Perry, G. 15, 16, 177 Peru 131 Petrobelli, C. 18 Platteau, J.-P. 170 police 2, 142, 152, 158-60 passim, 174, 180 political factors 13, 25 population density 29, 51 Portes, A. 12-15 passim, 17, 19, 61 poverty/poor 3, 4, 9, 21, 51, 67, 68, 85, 87, 88, 93, 94, 104, 133, 166, 175; Alleviation Programme 143 Powell, W.W. 2, 17-18 Powerline 130, 146-53 passim Pratten, D. 167, 173 predation 4, 41-3 passim, 34 private sector 8, 163, 174-5 protection, social 177 Pyke, F. 2, 18, 105, 141 PZ 80 quality 89, 137, 150, 165; control 145, 150, 152, 160 Rabellotti, R. 18, 59, 68, 139, 174 Raeymaekers, T. 16, 21, 165 Rakodi, C. 15 Rasmussen, J. 18, 59 reform, administrative 39-40, 57; economic 8, 9, 15, 56, 57, 61, 81, 83; governance 141-3, 163 registration 57-8, 61, 106, 107, 110, 136, 144, 145, 153-5 passim regulation 4, 11, 13, 16, 34, 57-8, 152; non-state 7, 11, 16, 22 religion 9, 25, 28, 33, 34, 36, 38, 41, 42, 84, 108, 116-19, 127-31 passim, 151, 170-2 passim; conversion 9, 25, 11618, 129, 170; oracular 27, 28, 168; societies 106-8 passim, 114-18, 119, 127-30 passim, 169, 182 remittances 3, 7, 12, 21, 171 Reno, W. 3, 11, 22, 27, 158, 159, 165, 167 reputation 78, 79, 137 restructuring, economic 2, 3, 5, 6, 8, 9,

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Index 12, 13, 18, 28, 56-9, 61, 62, 71, 76, 77, 81, 83-104 passim, 121, 138, 166, 169, 174, 176; network 25, 3944, 89-104 retraditionalization 166-9 passim revenue generation 58, 141, 180 Reynolds, R.R. 47 Riccio, B. 21 rights, human 159; intellectual property 58, 136; property 2 riots 1-2, 161, 169 roads 36-8 passim, 142, 147, 152, 165, 174 robbery 2, 158, 165, 180 Roberts, B. 11, 16 Rogerson, C.M. 80 Roitman, J. 3, 13, 14, 22 Rose, Richard 19, 84 Rumbaut, R.G. 18 Russia 20 Sabel, C.F. 18 Sam, M.A. 30 sanctions 17, 20, 34-7 passim, 77, 153 Savage, M. 25 savings clubs 42, 106, 109 Schmitz, H. 2, 18, 19, 21, 22, 59, 60, 67, 71, 73, 81, 83-4, 88, 105, 123, 133, 135, 139, 154, 173, 174 Schneider, R. 4, 13, 15 Scott, A.J. 20, 25 second-hand goods 3, 43, 57, 63 secret societies 27, 34-5, 37, 41, 54, 106, 168-70 passim security 3, 5, 35, 37, 160-2 passim, 179 Senegal 21, 63, 170 Senegambia 24 Sengenberger, W. 2, 18, 105, 141 Sensenbrenner, J. 17 services, public 142, 152, 174 Sethuraman, S.V. 89 ‘shadow’ economies 3, 166-7; states 11, 22, 167 Shari’a law 5, 160 Shefner, J. 173 shoe industry 1-2, 6, 8-9, 43, 45, 46, 514, 59-80, 84-99 passim, 101, 108-11 passim, 113-14, 119, 122-31, 133-9, 146-53, 156-65 passim, 169, 175 Shoe Makers/Traders Welfare Committee 150 Shoe Plaza 146-50 passim, 153 Silverstein, S. 30, 32, 41, 47, 64, 107, 109, 172 Simone, A. 15 Sinclair, C. 95

207

Sindzingre, A. 14 Skinner, C. 177 slave trade 30, 34, 38 SME Incubation Centres 143 SMEDAN 179 Smith, D.J. 5, 27, 108, 141, 158, 159, 171 Smith-Doerr, Laurel 17-18 Smock, A.C. 40, 42, 107 smuggling 3, 57, 63, 164, 165 Soares de Oliveira, R. 5 social capital 2-4, 17-20, 23, 54, 56, 93, 112, 116, 120, 166, 168 social liabilities 3, 19-20, 23, 56, 116 social networks, see ‘networks’ social relations 16, 17, 19, 83-104 passim, 133-8 Somalia 3, 21, 27, 166, 171 Soulé, B.G. 2 specialization 29, 30, 32, 43, 46-8 passim, 50, 54, 59, 60, 68, 168, 172 Stark, D. 24, 25 state 15, 16, 39, 141, 154-8, 160, 163, 166; neglect 6, 10, 25, 133, 138, 165, 166, 173, 178, 180; role of 9, 16, 17, 25, 174-8; withdrawal 4, 27, 107, 166, 167 stateless societies 6, 27-35 passim, 38, 169 Stevenson, R.F. 38 Stiglitz, J.F. 2, 17 structural adjustment 3, 47, 56-9, 61-2, 95 subcontracting 1, 6, 9, 11, 67-71 passim, 79-81, 88, 97, 100, 102-3, 128, 131, 132, 137 Sunley, P. 12 supply 8, 71-6, 88, 134; bulk breaking 72 suppression, political 168 survival, networks of 9, 121, 130-9 Sverrison, A. 18, 19, 21, 22 tailoring 48, 50, 63, 64, 69, 71-3 passim, 75, 77, 91-4 passim, 96, 99103 passim, 109, 117, 128, 144, 145, 155, 156, 161; Association 156, 176 Taiwan 46 Tanzania 3, 4, 21 Tati, G. 20 taxation 15, 58, 61, 141-2, 145, 152, 156; VAT 58 Tendler, J. 174, 177 textiles 62-3, 72, 74, 155, 164; NUTGTWN 155 Thulare, P. 140, 173

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Index

Thrift, N. 18 ties 2, 9, 11, 17-20 passim, 24, 25, 34, 36, 83-8 passim, 103-4, 121, 133, 138, 139, 171-3 Tilly, C. 22 Times, The 5 title societies 28, 34-6 passim, 41, 106, 169 Tostensen, A. 105 trade 1, 3-7 passim, 12, 22, 23, 24, 2930, 32, 34-8 passim, 45-6, 57, 72, 76-9 passim, 84, 90, 125, 126, 155, 161, 165, 169, 170, 174 trade unions 177 training 19, 61, 62, 64-6, 85, 86, 89, 91, 153, 157, 172; fees 66, 86 Tripp, A.M. 3, 20, 21, 172 trust 11, 12, 20, 22, 36, 75, 76, 79-81 passim, 84, 86-8 passim, 97, 105, 128, 137, 168, 169 Turner, T. 165 turnover 122-3, 137, 182 Ukiwo, U. 5, 158, 162 Umuehilegbu 130, 147-53 passim, 159, 161; - Industrial Shoe Makers Union 147 undercutting 136, 137, 145, 153 underdevelopment 3. 17, 20, 22 UNDP 8, 143, 157, 160 unemployment 43, 57, 63, 175 ungovernance 1-10, 26, 27 UNIDO 8, 143, 155-7 passim uniforms 79, 80, 97, 100-2 passim, 128 unions 57; hometown 9, 41-2, 98, 106-8 passim, 113-14, 120, 127-9 passim, 169, 181; producers’ 143-53, 156-8, 160 United Equitable 80 United Kingdom 74 see also Britain United Shoe Manufacturers Association of Nigeria 146 United States 4, 47, 57, 72, 157;

Growth and Opportunity Act 157 Utoto 34 Uzzi, B. 19 Vaa, M. 2, 15, 20 van den Bresselaar, D. 64 van Dijk, M.P. 19, 20 Varese, F. 19 vigilantes 1-2, 5, 6, 9, 140-1, 158-64, 173, 175, 179 violence 2, 3, 9, 10, 13, 19, 162, 164, 165, 169, 179 Virgi Shoe 129 Visser, E.-J. 131, 136 Vlassenroot, K. 21, 165 voice, political 177-8, 180 wages 57, 70, 71, 134 war 22, 23; Civil 28, 45, 47, 52, 146; on terror 5; Second World 43 Weber, Max 22, 114, 128, 171, 173 welfare 11, 20, 160 Wheeldon, P.D. 105 witchcraft 22 Whitford, J. 174 Windsperger, G. 21 Wolpe, H. 40, 41 women 9, 42, 64, 89, 93, 98-101 passim, 104, 112-14 passim, 123, 124, 154, 165; WIEGO 177 Woolcock, M. 17 World Bank 4, 13, 15, 167, 177 Wunsch, J.S. 141 Yoruba 4, 77, 91, 169, 172 youth 5, 22, 93, 104, 164, 175 Yunusa, M.-B 57, 64, 80, 95 Zaire 165 Zambia 76, 170 Zimbabwe 4 zones, production 130, 146-50 passim

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AFRICAN ISSUES

AFRICAN ISSUES Meagher

• Globalizing networks and crumbling states have turned African informal economies into sources of dynamism as well as disorder. Through an ethnography of informal economic governance, this book reveals how ties of ethnicity, class, gender and religion restructure economic networks in response to contemporary economic challenges, leading to fragmentation and violence as well as new forms of order. Identity Economics redresses the marginalization of Africa in contemporary theories of economic informality and is essential reading for understanding the role of informality in growth and economic governance in Africa. Kate Meagher is Lecturer at the Development Studies Institute, London School of Economics & Political Science Contents: Introduction: Social Networks & Economic Ungovernance in Africa – Beyond the Cultural Turn: Rethinking African Informality – Oracles, Secret Societies & Hometown Identities: An Institutional History of Igbo Economic Networks – Unleashing Popular Entrepreneurship: Informal Manufacturing & Economic Restructuring – The Scramble for Weak Ties: Restructuring Informal Enterprise Networks – Negotiating the Web of Associational Life: Popular Associations & Networking Strategies – Collective Efficiency or Cutthroat Cooperation?: Networks of Accumulation & Networks of Survival – Informality, Cliental Networks & Vigilantes: Producers’ Associations & the State – Missing Link or Missed Opportunity?: Social Networks & Economic Development in Africa – Appendices Cover photo: Umuehilegbu Industrial Shoe Zone (aka Bakassi), Aba, Nigeria, 2009 (© Darlington Oguaka)

HEBN PUBLISHERS IBADAN www.hebnpublishers.com

An imprint of Boydell & Brewer Ltd PO Box 9, Woodbridge, Suffolk IP12 3DF www.boydell.co.uk and 668 Mt Hope Ave, Rochester, New York 14620, USA www.boydellandbrewer.com

identity economics

• In the era of liberalization African economic networks are often equated with criminality, greed and alien values. These apocalyptic perspectives gloss over the historical and institutional complexity and developmental accomplishments of popular economic networks struggling to fill the gaps left by liberalized markets and receding states.

SOCIAL NETWORKS & THE INFORMAL ECONOMY IN NIGERIA

Why have informal enterprise networks failed to promote economic development in Africa? Using Nigerian case studies, this book challenges the prevailing assumption that the problem of African development lies in bad cultural institutions and shows that informal economic governance is shaped by culture and the disruptive effects of rapid liberalization, weak states and political capture.

identity Economics SOCIAL NETWORKS & THE INFORMAL ECONOMY IN NIGERIA

Kate Meagher