• Tuesday, May 21, 2024
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Political unrest in Nigeria’s oil capital stokes economic fears

Political unrest in Nigeria’s oil capital stokes economic fears

Political instability in Rivers, Nigeria’s oil-rich state, is stoking fears of a further decline in the country’s already fragile oil production, according to findings by BusinessDay.

River State, the heart of the oil-rich Niger Delta, is facing a tense political standoff. The crux of the issue is the strained relationship between Governor Siminalayi Fubara and his former political godfather, Nyesom Wike, the current minister of the Federal Capital Territory.

The crisis escalated over an executive order, which relocated the state House of Assembly sitting to the Auditorium of the Administrative Block of the Government House, Port Harcourt.

The order, which Fubara released on Friday, is contained in the state’s official Gazette, tagged Executive Order of the Rivers State Government 001-2023.

While Joseph Johnson, the state commissioner for information and communications, insisted that Fubara had the power to relocate the state assembly, the pro-Wike lawmakers described the relocation as illegal.

Read also: Fubara to probe Rivers administration under Wike

“No critical evaluation is required to see the economic casualties due to the political crisis in Rivers State. Local and foreign investors will likely exercise due caution in going ahead with any new significant investments and projects at this time,” Aisha Mohammed, an energy analyst at the Centre for Development Studies, said.

The friction began in 2023 when Wike, a member of the People’s Democratic Party (PDP), switched allegiance to the ruling All Progressives Congress (APC) after falling out with the PDP leadership (although he remains in the party). This move sent shockwaves through River’s politics, as Wike still wields significant influence in the state.

The crisis deepened in October 2023 when a fire, suspected to be arson, ripped through the Rivers State House of Assembly complex. This coincided with alleged attempts to impeach Governor Fubara. Shortly after, the complex was demolished, further fueling speculation and accusations.

The situation worsened when 27 members of the House of Assembly, loyal to Wike, defected to the APC. These lawmakers accuse Governor Fubara of withholding funds, further deepening the political divide.

“The economy has become the greatest casualty. It is the economic projects in the state that have suffered most,” Mohammed said.

Read also: Rivers APC arrowhead digs up Gov Fubara’s presidential election vote

On Monday, a faction of the Rivers State House of Assembly loyal to Fubara screened and confirmed Dagogo Iboroma, as a commissioner-designate.

The screening was presided over by factional speaker, Victor Oko-Jumbo, at the Press Unit of the Government House in Port Harcourt, the state capital, on Monday.

Iboroma was given a clean bill of health by the pro-Fubara lawmakers after a brief screening, and he was confirmed as a member of the state executive council.

His screening came following the resignation of Zaccheaus Adangor, a former attorney-general and commissioner for justice.

Iboroma is designated to replace Adangor, who rejected his redeployment to the ministry of special duties (Governor’s Office) by Fubara and consequently tendered his resignation.

Fubara is expected to swear Iboroma in and officially assign his portfolio.

Read also: Wike seeks God’s forgiveness for choosing Sim Fubara, reveals 2027 plans

Implication for economy

For decades, crude oil from the delta has accounted for the larger chunk of the country’s export earnings. Rivers, one of the six states in the region, is home to pipelines that transport crude from other states to its Bonny export terminal. In 2021, the state accounted for 6.5 percent of Nigeria’s entire revenue.

Tonye Monye, a professor of political economy, emphasised the domino effect this crisis could have, explaining that the political crisis in Rivers State serves as a stark reminder of Nigeria’s economic vulnerability.

He warned that if the situation in Rivers State was not contained, it could spread to other parts of the Niger Delta, causing even more damage to the national economy.

Nigeria’s crude production averages 1.45 million barrels per day in April, according to data from the Nigerian Upstream Petroleum Regulatory Commission.