Urbanization and Poverty of Abuja and Macroscopical Thinking about the Real Estate Market in Abuja

Abuja， as a city name， comes from name of a Hausa prince. In the late 18th century， Usman Dan Fodio， a Fulani noble， stirred an Islamic Crusade which swept away throughout the north central regions of Nigeria with Sokoto as its center. In 1805， the crusade army conquered Zaria， which is the southern-most and the bravest one among the “Seven Hausa City-States”. Abuja and Suleja， two princes of Zaria， were defeated and fled to the south， finally， they led their people to settle around the Abuja Mountains. This is the origin of Abuja and Suleja city names.

After the independence of Nigeria in 1960， ethnic contractions between the north and the south became increasingly acute and finally resulted in the civil war from 1967 to 1970. In the early 1970s， Nigeria who had suffered from ethnic strife and crowded chaos of Lagos， the old capital， decided to build another capital at the geometry center of its territory. The land of Nigeria is basically a parallelogram and its center lies in Abuja. The design team of Kenzo Tange， a famous Japanese architect， designed the initial blueprint of Abuja as a political center city with a population of 500，000， just like the Brasilia in Brazil， Ottawa in Canada， Washington in the U.S and Canberra in Australia， this should be a beautiful small town， a simple location for the central government. Since then， as the capital area， Abuja was individually zoned out and placed under the direct governance of the central government. In the late 1970s， the large-scale construction of the new capital was commenced， in considering of the history， the aborigines in Abuja were moved to the adjacent Suleja. Today， Suleja， which is under the administration of Niger state is more like a satellite town of Abuja， but in fact， the most authentic Abuja people are living there.

Recalling the development history of Abuja， it’s not difficult to find that Abuja is increasingly deviating from the planning as a simple political center. Each people living Abuja can felt the rapid urbanization process in recent years， as the government departments and diplomatic authorities moved to Abuja， more and more domestic and overseas companies， banks and merchants were entering Abuja. Facilities planned for the original 500，000 people can not meet the demands of the expanding population: five or six years ago， there were rarely vehicles on the airport road， yet it has to be widened due to the congestions; to ease the roads traffic pressure， Abuja has started the urban light rails project， the airport which was constructed and put into use 15 years ago is now overwhelmed and in urgent need of expansion. As of 2012， the population of Abuja had exceeded 1 million， Abuja is emerging as the economic center in the central Nigeria.

However， what accompanies the urbanization of Abuja is not the improvement of the city welfare， deepening of industrialization and progress in productivity， as what we see in China. Conversely， the most direct performance of the increasingly population in Abuja is the growing slums around the central city. Driving from the brilliant and beautiful Maitama or Asokoro， not more than a half hour， you will see Kubwa， Lugbe， Nyanya and other slums characterized by metal housing and drainage ditches. These palaces are lack of water， power supply and other basic infrastructure， yet the population density is far larger than the main city area. We can say that there are two Abuja， one is the place for political elites， dignitaries and foreigners， another is the place for farmers who left their homes， urban proletariat and practitioners in informal sectors. The urbanization process of the first Abuja has become easing seven to eight years ago， yet the urbanization of the latter is now still in the ascendant.

To explain this phenomenon， we should consider from the following 2 aspects: (1)what should be used to feed the one million population in Abuja? And (2) what’s the role played by political power and economic power in the urbanization process?

Based on the Engel’s law of economics， the Engel coefficient of nationals in a state should be equal to the proportion of population engaged in agriculture in the state. In developed countries， the expenditure spent by ordinary people on their meals only accounts for 5-15% in their total income， this proportion is almost equal to the proportion of farmers in the total population. Based on the data announced by the National Bureau of Statistics of Nigeria， the national Engel coefficient in Nigeria in 2010 was 50%， while based on the “The World Facebook” published by CIA， U.S.A， population engaged in agricultural production in Nigeria accounted for 70% in the total labors， however， the agricultural output accounted for only 30% in the GDP. Based on the figures provided by the National Bureau of Statistics of Nigeria， in the 4th quarter in 2012， Nigeria imported 60 billion nairas of wheat， 27 billion nairas of rice， 31 billion nairas of sugar and 17 billion nairas of fish. Such figures show that the urbanization of Nigeria is not based on the improve of the agricultural production efficiency， farmers accounting for 70% of the total labors can not feed city dwellers. To feed one million of people in Abuja， it is largely rely on petrodollars.

Patronage is also known as political spoils system， it means that the powers bring benefits to his followers by applying public power to exchange for support， this is one of the major features of African politics. The entire city is under a network of various shelters， such a network starts from the president and the most powerful people and is implemented by layers till the root. People sheltered by the superior layer is also shelter providers in the inferior layer. This is the unspoken rules under the constitution and the legal system， this system origin from the tribal village in Africa and donates the life in African cities， such as Abuja. National wealth is proliferated downward from the top of the network to the bottom， so that to exchange for support of the underclass for the upper class. Many African countries are relatively poor， national wealth is quite limited，on the upper layer in the network， the wealth will be divided up inside the political and military elites， it’s quite difficult to be transferred to the private sector. This is what we often say: “the circle of wealthy if quite small”. While in Nigeria and other such oil-exporting countries， the national wealth is very rich， thus the penetration of wealth through the shelter network also exceeds that in other countries. This is one of the most important reasons for the formation of the urban middle class in Abuja， they are people serving the rich， depending on the political elites. Meanwhile， the activity space in the informal economic sectors is larger， thus it can indirectly share a slice from the petrodollars.

Knowing this， we can understand， as a whole， what people in Abuja consume is not only the wealth created by themselves， but also a part of petrodollars which should belong to all the nationals. In such a case， the difference between the rich and the ordinary is just the smaller and larger proportion they occupied in the petrodollars. Therefore， Abuja may reject to depend on developed agriculture and raise more urban residence with a small part of farmers， just like the circumstance in the U.S.A; nor should it depend on the prosperity of commerce and industry， exchange for food with exporting products and services， just the circumstance in Singapore. The food problem is solved by petrodollars.

While the combination of political power and economic power is the driving force for urbanization in Abuja.

The formation process of a modern state is the gradual separation process of political power and economic power. In the feudal society， the aristocracy commonly owns the land and political power， landlord entering the court is an official， official leaving the court is a landlord， political power is integrated with economic power. After the industrial revolution， the modern industrial production enabled the economic powers to separate from nobles and landlords， entrepreneurs， capitalists， bankers and professionals begun to grasp economic power which begun to separate from political power， in other words， economic powers rose from political powers. The economic life depended more on the “invisible hand” and developed according to objective rules， while political life stepped onto a legal， democracy and rights limitation road. In developed modern countries， such as the U.S.A， U.K， France， German and Japan， economic power and political power are mutually independent， in the modernization process， all these countries are on a road where such two powers are separated. Particularly in those countries with “small capital”， such as the U.S.A， Australia， Canada， they are all countries with small government， legal society and high level of freedom. Old developed countries， such as the U.K and France， they have “large capital”， yet it was the outcome of authoritarian in the pre-industrial period. After the Industrial evolution， the U.K moved its national economic center to the north and trended for Liverpool and Manchester. It can be said， the separation of economic power from the political power is not only a feature of a modern country， but also a prerequisite for the modernization of this country.

Nigeria is currently still in the pre-modern stage where the political power is not separated with the economic power. Economic activities participated， led and controlled by the government occupy an important position in the national economy. We can find that the best way to richen Nigeria is to get approach to the government rather than the development of new technology， nor study on market preference and improve productivity. Independent economic sectors can not be sufficiently assured in system， they have to face to the insufficient infrastructure and limited water， power and transport conditions， meanwhile， they have to face to other difficulties， such as penalty， forfeiture， occupation of government departments at all levels. In such a way， many companies and industries which should be developed are pushed to informal economic sectors. Placing it in a microscopic field， we can find the following phenomenon: Many ordinary workers and vendors， no matter how they work hard， they can not change their situation. While the booming industries and enterprises can not get away from the direct intervention of the government. Success of Dangote is inseparable from the government’s protection， the brilliance of Julius Berger also origins the corruption of Babangida government.

Entangling of political power with economic power enables the economic sectors to actively get close to the government and political power. This is just like a cracked egg， wherever you put it， it will attract flies. Nigeria learned the political system from the U.S.A， yet it did not know how to separate political power from economic power， as what is in the U.S.A. Learning from the America， Nigeria established a small capital， yet the initial planning has been deformed. Enterprises in the U.S can develop well without making contact with the government， yet this can not be achieved in Nigeria.

This， from another point， interprets the origin of “Patronage”. Patronage is originally an outcome of the tribal society， while the tribal society was not modernized， the political power at that time was combined with economic power. Patronage hindered the independent development of economic power in African countries， such as Nigeria. Distribution of wealth from top to down attracts people to live around power， around the government location， thus pushed the urbanization process of Abuja.

From the above analysis， we can conclude some characteristics about the urbanization of Abuja: the urbanization is not based on the development of commerce and industry， the central city is occupied by the minority of people on the top of the patronage network， who are the owners of political and economic power at the same time， while the majority of the proletariat， people on the bottom level in the network have to live in the slums in the outskirts.

What’s the significance of understanding such characteristics for our specific work? In fact， the rich， people with power in Abuja are quite limited， even they grow， the speed is quite low. To develop real estate in Abuja， we have to focus on the elite class， while there are too many high-end properties and villa projects， it is not likely to create the expected profits. Boutique projects in small and medium size are more adaptive to the market demands. Meanwhile， large buildings in Abuja are still government agencies， hotels， state enterprises， shopping malls and so on， while more and more enterprise will come to Abuja to carry out operation around the government agencies， in such a way， the demand for office buildings and spares will also be promoted. This demand will create a new development space for the real estate industry in Abuja.

Original author:

Liu Xingquan， published on CCECC’s internal magazine

Translator:

Zhang Yunlong， staff member of China Civil Engineering Construction Corporation (CCECC)