Thread by @EuginhoCortez

We are excited about the Igbo apprenticeship scheme because a White guy touched on it at a Ted Talk. That's just it really.

But that being said, I think we are missing the most relevant part of the scheme for the Nigerian entrepreneur which is Aggregation.

Aggregation and Cluster-Formation that minimises average costs of running a business, getting market insight and acquiring customers..

I was at Alaba and ASPAMDA recently. The men I went to check didn't have generators. They just paid between 8k-12k monthly for constant electricity to a private-power supplier.

Some of us spend half of that DAILY on power. That's the economy of scale obtainable from Aggregation.

There's also the angle of marketing and customer-acquisition. Anyone who wants to sell phones can just get a shop at the Otigba cluster and tap into the MILLIONS of people who come daily.

Do you know how MUCH it would cost an individual company to get that kind of attention?

Another key angle is the protection these clusters offer. The aggregation reduces the average cost of handling the hostile Nigerian Govt, environment& security.

Being an isolated firm in the Nigerian space is risky.

You need to be part of a Herd to hunt and deal with predators

There's also the Minimisation of the cost of failure.. The Igbo trader in a cluster can fail, lose his shop and still bounce back via staying visible in the market.

He can stay beside someone's shop and sell like he owns the place. A lot of them fail and bounce back this way.

It's called "Oso-Ahia". They stay around and reroute customers to shops that give them a cut. They make money and rent a shop again.

The entrepreneur outside a cluster will die off if his business fails.
The cost of failure outside clusters is usually fatal.

Nigerian entrepreneurship copies a lot from the American and British space but we do forget that some of these large firms started out in clusters and moved out when they AND their environment had matured enough to flourish outside the physical confines of the cluster.

Madison Avenue is now an abstract cluster but it used to be a physical cluster for the advertising industry.

Fleet St was a cluster for Media.

Wall St was a cluster for Financial Institutions.

Savile Row is a cluster for bespoke British fashion and is what Aba will evolve like

Key lesson from this Igbo scheme is the angle of Aggregation and Cluster-Formation.

The average young Nigerian middle-class entrepreneur has education, relationships, lifestyle insight and some capital but they are crippled by their individualism.

They need to form clusters.

I'd love it if this led to useful results. Let's keep the convo on Clusters going on a #NaijaClusters tag.

If you believe in the Cluster principle and have contributions, questions or suggestions to help Cluster-Formation in any sector, we'd like to hear from you #NaijaClusters

AfDB says the combined apparel and footwear market in sub-Saharan Africa is worth around $31 billion.

Clusters do better with institutional support.

The Aba Clothing and Footwear cluster is fighting for a share of that market and is getting some help from the Abia State Govt..

The Aba cluster is targeting Francophone Africa. That's smart because Francophone Africa has 300 million people which is >70% of the world's French-speaking population.

DRC, Madagascar and Cameroon and Ivory Coast alone having almost 140m people. Good numbers.

Clusters do much better with institutional support. The Abia State Govt has worked out a $1.5bn agreement with Chinese giant Huajian to build a semi-automated shoe factory in Aba..

I think it will look like this when done..

Huajian already have factories in Ethiopia that were a product of interaction with the Ethiopian FG.

A key difference is that the Nigerian factory will be partly owned by the Aba cluster which is great because this is about boosting entrepreneurship..

This is what Ethiopia and China are getting done in China.

The Abia State Govt is working to replicate this here. I really hope it works. Okezie Ikpeazu has an understanding of the issues.

The sub-Saharan clothing and footwear market alone is $31bn. This factory's products will meet European and American standards so there's an even bigger market available.

Huajian produces for brands like Guess, Ivanka Trump and Gucci. I do hope this works. #NaijaClusters