• Wednesday, June 12, 2024
businessday logo


Rivers’ economy bleeds as crisis, insecurity escalate


Militancy in the Niger Delta region is not only affecting Nigeria as a country, it is also doing incalculable damage to the economy of states in the South-South geo-political zone.
Rivers State is now counting lost opportunities in investments that have gone to its competitors since 2012 when the state’s political crisis took a new turn. Its competitors- Lagos, Abuja and nearby state capitals may have grabbed the opportunities, BDSUNDAY can authoritatively report.
Top labour leaders who met in Port Harcourt at the long holidays to review the huge loss of jobs are said to have put the figure at over $20billion with job losses in thousands with stable polity and secure environments.
The bad image and business exodus began in 2005 when CEOs fled the city in the cult wars and militancy that drove away big businesses until respite came from 2008 to 2012 when the state launched a rehabilitation scheme for repentant gunmen and the federal amnesty followed. The gains were however, shattered in 2012 when the ruling party in the state split in the middle with violence as a new outcome.
The top labour leaders have pointed to the decision of the Dangote group to take their $17billion refinery/fertilizer complex to Lagos as the biggest blow, saying it would naturally have come to Port Harcourt (Niger Delta headquarters) where the raw materials for the two plants would come from.
Some entrepreneurs and investors behind the N400billion ($1.6billion) dry dock project being lobbied into Rivers State have grown weary over the impediments caused by the fierce squabbles in the state. The promoters of the project (NLNG) had planned to move it to Oshogbo before some business activists from Rivers State protested. Some big time investors began to bend towards Rivers in the dry dock project during a road-show, but insiders say some foot-dragging seemed to appear as violence and crime re-emerge.
The latest development is the enacting of new tax laws with expected clampdown on businesses as demand notices are being drafted in the womb of the government to soon begin to chase down investors already wearied by dwindling business and poor profit leading to daily sack of workers.
Some top investors are said to be making efforts to get Amaechi and Wike to reach rapprochement but no ray of hope has appeared so far as the fight seems headed to winner takes all. Analysts say it is about supremacy mixed in ego, leading to the race to a new political dynasty in the state after the Peter Odili platform had split into smithereens.

The labour think-tank also pointed at the fast growth rate of Lekki near Lagos against the slow pace of the earmarked N800billion Greater Port Harcourt City. “Already many multinational companies, including those in the Oil and Gas sector have divested their assets in Rivers State, relocated their head offices to Lagos or Abuja or scaled down their operations in Rivers State. Even many of our Rivers’ elites do not have their major investments in Rivers State”, a source in Labour disclosed after the review.
Labour leaders and business moguls in the state said they are pained at the determination of the political gladiators to fight to the end despite the steady destruction of the economy of the state which was bigger than five African countries put together when it had a state domestic product of $23billion with high per capita income over the national average at a time the state grossed an average of N30billion per month from both the federal allocation and internally generated revenue. Now, the state struggles with about N8billion from both.

The labour leaders are said to be preparing an open appeal to the political leaders in the two major camps (APC and PDP) led by Chibuike Amaechi, a former governor of the state and now minister of Transport, and Nyesom Wike, current governor of Rivers State, who seem bent on a “mutually assured destruction” (MAD) mission. A top source told BDSUNDAY, “Each time I go to Lagos and Ogun states, I weep for my state. In 2001 when I was a young banker, I know how Lekki was. Today, Lekki has blossomed. In the same period, Port Harcourt has relatively not done well.” Many say the difference is that while Lagos invested, Rivers consumed, while Lagos stabilised, Rivers disintegrated in their political camps.
The labour experts seemed to reach same conclusion, thus, “Yet, each day, the actions of our leaders, chiefs, elders, and youths continue to scare investors away. It is disheartening to note that Rivers State is no longer the preferred investors’ destination in Nigeria in the Nigeria oil and gas sector”.

The labour leaders also said they had made strenuous efforts to stop the few big corporations still in the Garden City from relocating. “The performance of Rivers State on the World Bank Ease of Doing Business report is very abysmal. All these may have been complicated by the recent imposition of new taxes on the struggling businesses and residents of the Rivers State by the state government. Agreed that some of these new taxes may already be in operation in Lagos state, we think that what Rivers State needs most is making it competitive by providing the enabling environment for businesses to thrive so that our youths will find jobs and be meaningfully engaged. Moreover a law that may be considered good in Lagos State may be counter-productive in Rivers State, giving our peculiar situation,” according to an appeal that may soon get to the state’s chief executive, though not much is expected to come out of it.
The groups warn that with huge level of unemployment in Rivers State, many of the youth for want of what to do have become hangers-on in the ‘vineyard’ of the murky waters of Rivers State politics. They say they fear that if nothing is done quickly, Port Harcourt and other major cities in Rivers State would soon become like other bad cities!
The consensus in the business community is that the leaders must find the courage to pursue peace and unity, forgive one another, create unity and development in the state because without peace, development would elude the state and without unity, Rivers would not speak with one voice as they interact with other stakeholders in the Nigerian project.
Labour is urging the political leaders to make use of the window of concluding the elections in the coming weeks to give peace a chance.
According to the leaders, “The duty of the Rivers State government is to deliver good governance to the people. And that of the opposition is to question the government of the day and hold them accountable to the public. However, when it is in the wider public interest that a problem is fixed, such as the current levels of insecurity in the state, unemployment and the loss of investor confidence we expect the state government to partner the opposition in the overall interest of the people of the state. More so, when the main opposition party in the state is the ruling party at the national level.”
The insiders also accused the youth of driving away investors, saying this alone had destroyed the famous Trans-Amadi industrial zone. They said the youth had treated manufacturing concerns with iron hand on demands and when they cannot cope, they shut down.
They said: “Because of constant harassment by the youth and demands for favours, and because these are manufacturing concerns, they easily give up. They have their Corporate Social Responsibility (CSR) quite well, but their major business is not to become a government, but just to pay taxes to government. Instead of the youth in Rivers State holding their government accountable, they swarm these companies with their demands. Then, these companies discovered that they can do business at a cheaper rate in Lagos, in Ogun, in Agbara-Ota industrial estate, etc, they can do it at cheaper rate at Aba-Owerrinta area, and so they relocated. That’s why if you look at Port-Harcourt you don’t have manufacturing concerns, and it is manufacturing that employs people.”
Governor Wike has vowed to restore the state to a business attraction zone but the investment blueprint since promised the business community is yet to be unveiled. Instead, the promise to harmonise taxes has rather witnessed new tax laws and clauses that seem to scare the business sector.
The governor has however, moved well on roads to create ease of movement in the state capital. He has also continued to donate patrol vans (130 so far) to the police and has also demolished houses believed to belong to cult kings, all to restore the confidence of the investors in the once investment destination of choice.


Ignatius Chukwu