* Exodus of CEOs, relocation of investments, capital flight, delayed investment decisions, job losses, contracting economy, violence, breakdown of security, panic in financial sector, secret hold on new bank loans, special high prices and interest rates for Rivers, total blockade of FG investments, collapse of Onne oil/gas free zone, fall of Trans-Amadi
* Business community stirs, threatens to rise if the gloom lingers in seven days
By Ignatius Chukwu
The economy of Rivers State in the past six years is viewed as a war-time economy. The major feature of such an economy is uncertainty and ‘planlessness’ (absence of planning) by business owners and hesitance by investors. The consequence is usually contraction in the economy where growth is either stagnant or is rather backward. Most entrepreneurs, investors and professionals who spoke with BD Sunday in the week painted this same picture.
As a result of breakdown of law and order, many business travellers within or across Rivers State end up in the so many evil forests that have sprung up in the state; the Rumuji axis of Emuohua, the Ndele axis along East West Road, and Ahoada end on the way to Bayelsa State. A medical doctor was just rescued from the forest after three days. Ritual killers have joined kidnappers to catch travellers. Kidnappers harvest ransom, ritual killers harvest body organs. Blood is flowing freely in the forests that once flowed with milk and honey through best variety of cassava, palm oil, yams, and many others. The canoes and boats that ferried fish and aquatic treasure now ferry kidnap victims through the creeks. Any safe trip in the waters of Rivers State must be accompanied by military gunboats.
This is because the security agencies take orders from the APC-controlled federal government, the state government is controlled by the PDP. Both parties do not see eye to eye, not because they have fiercely opposed ideologies but because they have two specific leaders (Chibuike Amaechi and Nyesom Wike) fiercely sworn to perpetual enmity since 2012. Thus, when Wike was minister at the federal level, we was accused of using federal might to stifle governance in Rivers State in the bid to smoke Amaechi, then governor, out of Government House. Now that nature has created a reverse of fortunes, Amaechi, now a minister, is accused of exactly the same, or more. It has been the fate of Rivers State since 2012 that no election in the state, be it local council or ward election, let alone governorship election, would go without chaos. Often, one of the two parties would not participate. (The PDP did not participate in the LGA elections Amaechi’s APC government organized in 2015; the APC did not participate in the LGA election Wike’s PDP organized in 2017; the APC was not on the ballot in the current elections that are stalemated).
The politics of Rivers State has gradually been pushed to the definition of winner kills others. Thus, any person on either the PDP or APC is acutely aware that if he loses, he may be eliminated, crushed or pushed into exile. So, it now is better to stalemate an election than allow yourself to be defeated. During campaigns, the threats are made clearer than manifestos. The rules are clear, it’s the Russian roulette; one party must go down.
Lives have been lost. Both sides have mourned close allies. Some have been beheaded. A top PDP member called EFCC has fallen, APC;s Monwan Etete and his two brothers have fallen, a lecturer of recent doctorate degree achievement, Ferry Gberegbe, is still in the mortuary. Lesser mortals who have been killed are counted in many tens. APC had once listed 100 members said to have been killed in 2015. Many more hundreds may have gone on both sides.
The casualties are mainly the businesses. Many businesses have opened and shut down, all due to political darts shot at them from behind. Transactions closed out by one administration have been revoked by the next. The Shopping Mall started by Celestine Omehia on Aba Road has continued to waste uncompleted. Recent casualties include the sale of power projects and Olympia Hotel. The N150Bn Monorail project is lying prostrate in the state capital, sticking its horns at the governor right in from of the seat of power. The plan to build an N800Bn mega city has suffered setback; the cassava project to make Rivers a cassava variety power has vanished, the Allanblackia project with Liver Brothers has grown wild, overseas scholarship scheme has left behind ruined future of foreign scholars, and many more heartbreaks.
Many government owned businesses and economic installations such as the RSSDA, Auto Syringe company, the LR Agric Venture, the Banana Plantation Project, the Fish Farms, etc, have shut down. Some projects such as plan to relocate the Rivers State University to Omagwa has stopped, the development of a modern stadium at the mega city has stopped at the main bowl which angrily took 15 lives when the man who started it (Amaechi) came there for the presidential APC rally.
Security has suffered most in this situation. There has been endless transfer of police commissioners in the state. Gov Wike once lamented that if any CP said hello to him, he would be transferred. During Amaechi, Mbu Mbu was believed to have been specifically sent to overthrow the sitting governor. There were casualties in the judiciary where some persons who were due to be chief judge of the state were denied until a new governor came. The result was that their tenures expired few hours after mounting the throne.
On the political scene, many careers have crashed too. Some who won elections on Wike’s PDP began to lose at the courts as soon as Amaechi gained national prominence. The division between Amaechi and Magnus Abe has also claimed many careers. Abe lost both the governorship and senate tickets and so did not contest. Tonye Cole resigned from big position in Sahara Energy only to miss out on the ballot for governorship. Dumo Lulu-Briggs spent for years to pop up APC only to lose at the guber primaries and crawl to Accord Party, yet, the arrows of the political enemies shot him down. Many career public officers have also paid dearly when their masters and mentors crash out. This is the fate of the executive director of finance and administration in the NDDC who lost out when Abe’s loyalists were shuffled out recently.
There have been huge economic costs in the form of exodus of CEOs in the state, relocation of investments, capital flight, delayed investment decisions, job losses, contracting economy, breakdown of security, panic in financial sector, secret hold on new bank loans, special high prices and interest rates for things going to Rivers State, seeming total blockade of FG investments coming to the state, collapse of Onne oil/gas free zone, fall of Trans-Amadi, etc.
The real picture of the economic doom and costs would better be painted by the industry players and other technocrats. Some pleaded for anonymity.
Nabil Saleh, President, PHCCIMA
Need to tone down for sake of businesses
The President of the Port Harcourt Chamber of Commerce, Industry, Mines and Agriculture (PHCCIMA), a chief, Nabil Saleh, wishes to join other well-meaning business leaders and captains of industries to appeal to the State’s political leaders and other top politicians in the state on the very important need to tone down on political actions capable of creating higher levels of tension and panic in the state.
Tension and political wrangling have created uncertainty which is never a friend to business. At the moment, there is high tension, violence, and acrimony in Rivers State. There have been postponement of elections, inconclusive elections, shooting, killing, harsh language, etc. These have generated fear and uncertainty in the state thus affecting investment decisions. On a daily basis, business owners and investors weigh investment options, but political tension is keeping such offers on perpetual postponement.
Many business owners outside Rivers State who were waiting for the elections to come and go so they could make new decisions after assessing the political atmosphere and analyzing the government of the day have remained uncertain and confused. They have thus continued to shift their decisions. This certainly is not good for business.
The PHCCIMA wishes to therefore appeal to the political leaders to always put the interest of the economy above all other considerations because it is the economy of the state that they would fall back on to provide jobs and create wealth and fulfill their electoral mandate after capturing power. If the economy is destroyed while struggling for power, what would anybody who wins the election fall back on?
For now, new investments are not coming, new investment decisions are waiting, job creation is on hold, and business expansion is not happening. Movement of goods and materials are affected due to instability and insecurity. Business is slowing down, generally. There are many public holidays for elections but these elections end up inconclusive. The atmosphere is not business-friendly for now, and the economy is simply on hold.
There is need for the political class to consider the business community in their pursuit of power, since we are made to believe that power itself is meant to be used to help the common man in the State.
Ibifiri Bobmanuel, REIF President
The business will react if in seven days this stalemate does not abate
One of the strongest business leaders in Port Harcourt and Nigeria, Ibifri Bobmanuel, president of a fast emerging business force, the Rivers Entrepreneurs and Investments Forum (REIF), said the business community in the state may not wait for more than seven days to rise up and take some action. He said this has become necessary because the business owners had done much to create a civilized engagement platform for investors to engage with the political class, to no avail.
His words; There are huge negative impacts of the ongoing political impasse in Rivers State. Business thrives on clarity of policy and direction, but as it is right now, there is no such clarity. This is because governance has been thrown into chaos. There is no more anything that goes with ease in Rivers State, not even movement round the state capital.
Investments that ought to flow into the state are held up because of fear of the unknown, fear of where the government is heading to. It was to create clear direction of governance for businesses that REIF spent huge resources to organize the second edition of the Port Harcourt Debate series. It was to create the platform for engagement with those likely to become governors so they could see what the private sector desired most. The business owners probed into the minds of those that may become governors.
We have come to identify transition as the greatest problem Rivers State has come to face. That is why REIF picked interest in it and initiated the debate series. This needless impasse is uncalled for. This is because, when the push comes to shove, it is businesses and investments that would be the first to crash. Exodus will take place.
Why is Rivers State different? Some 26 states went for election of governors but it is only Rivers State that is suspended, hanging. Imagine, some investors were present at the governorship debate few weeks back and were ready to move in after the elections. Now, they can’t move in.
REIF position is this, in any election, it is one person that will win. When this happens, the losers greet the winners and move on. People will now work with the winner. We think the cause of the endless crisis is that there are too many persons that have nothing doing in governance that hang around those in power. They must be those who think they cannot survive without being around power. They are those causing mayhem.
See how Aba Road where INEC office is located is now shut down completely, thereby creating a high turn around time for businesses. This creates millions of naira loss per day, but who cares? Movement is hampered. Security of goods and assets as well as lives is drastically reduced. The major issues that bother the average Rivers person is about roads, safety, seaports, etc. The politicians must wake to what is important to the people of Rivers State and do what is right.
We will watch them for another seven days, after which we the business community will come together and call them to order. We will call a spade a spade because their fight is sinking Rivers State. We will put things into perspective. Everybody must be made to realize that the economy, not politics, must take the first stage.
Ekama Emilia Akpan, CEO, Showers Group, Education investor
Education is worst hit, help!
Ekama Akpan knws Rivers business sector inside out. She was tow-time chairman of Manufacturers Association of Nigeria (MAN, Rivers/Bayelsa), and national vice president for South-South/South-East. She is present a SMEDAN board member.
She said investors are leaving the state because of endless and avoidable political crisis since 2012. News investors are not coming into the state. This is bad for any economy.
Banks are wary of the situation. If you get close to bankers, you can feel their worry. It is now very difficult to get loans. To drive you away, they slam outrageous rates on you. Some would tell you to pay N2m for N5m loan. Nobody can pay that rate. Banks now demand for up to six cheques (postdated) for any loan. They must be facing high rate of failures by borrowers. There is suspicion in the financial system in the state.
Increase in VAT will worsen the situation. Youths are on the rampage doing what they like because the centre can no longer hold. This increases insecurity and threat to everyone. Business travel is in jeopardy. Most schools no longer can pay teacher salaries because many parents do not pay school fees anymore. They will plead and beg for months and from there, the child stops coming to school. The huge debt goes like that. Many parents are frustrated and threatened. You can see it. Many companies and businesses are close to shutting down. Everybody is simply limping. There is no capital inflow into the state.
Political actors must recognize this situation and redress their actions. They must know that the situation is now desperate. The situation is hitting hardest at the education system. The nation is still seeing the reflection in a child that rebelled against little levy, because her parents could not afford it and her future was threatened. She was ready to submit her body for endless flogging, if it would solve the problem and keep her in school to write the test. This is a serious signal. Governments should now look at the public schools again and do something.
The FG and state governments should also know that the private schools are holding a huge number of pupils and students that the public schools can no longer hold. There is need to look at the private schools and create a loan window for them, especially those that proved their mettle over the years. There is need for a support fund and helpful loan system. Threats and fleecing of the proprietors will not help. People may shut down and rest.
Uba Obasi, CEO, ALCON Nigeria Limited
Businesses do not like instability, we have lost the first quarter to elections
Uba Obasi is seen as a go-getter. His company, ALCON, is into manufacture of electrical components with global seal of perfection. In the last 13 years the company has handled construction of Afam Gas receiving facilities at Okoloma, Rivers State (2005), was awarded NLNG green banding in HSE, SPDC Gbarain security of supply (SOS) phase one (2015); the Soku NAG compression facility installation project, and the Woji fabrication yard rehabilitation and expansion (2016).
He said; The elections have created instability and business does not like uncertainty. The economic cost is much but if you calculate from 2012, it is monumental. For us, we have lost the first quality of 2019. We appeal to the political gladiators to consider the economy in their actions and utterances.
Lawyer, Onne oil/gas insider
The world is waiting for Rivers on this
The political crisis has led to a lot of cost, and if you take it back to 2012 when all this actually started, it becomes monumental. First, there is a climate of uncertainty and insecurity. Money hates such climate, money hates uncertainty. The damage is huge but it does not seem to matter to the political actors. Businesses are fleeing steadily. Some companies that had been wishing to move now seem to find legitimate excuse to relocate to Lagos.
There is job loss every day in the state. There is massive capital flight, too. What militancy cost the state is nothing compared to what political instability is causing in this state. The threat is bigger because it creates uncertainty and inability to plan ahead. Some companies sent their staff out of Port Harcourt during the elections. The Onne axis is badly hit. Downsizing is going on right now. Major suppliers are relocating to move to where the majors are going to.
The road to Onne which some private sector leaders wanted to rebuild to pave way for ease of doing business has been put on hold. The only way out is for the political gladiators to cease fire a bit. Only tranquility can restore business climate. Port Harcourt is a very attractive business area and this is not only to foreign business owners. The world is waiting for Rivers State to resolve this impasse.
A public affairs specialist in petrol chemical industry
International financiers are assessing the Rivers environment
Big businesses or multinational corporations are mega dollar investments. The investors always monitor the political environment to be sure their investments are safe.
Rivers State is host to many of such investments especially in oil and gas, petrochemicals, fertilizers, manufacturing, among others. Most of these investments are funded by international financial institutions such as the IFC, AfDB, etc. These are huge investments that provide thousands of jobs, raw materials, huge revenue to the state government and indeed the federal government.
The current election impasse in Rivers State, for instance, has generated huge fears, apprehension and tension among the multinationals and their investors. On daily basis, they’re seeking credible intelligence on the political situation and everything is shrouded in confusion, speculation and absurdities.
This scenario is anti-investment, anti-development and anti-progress. Businesses strive under stable political environment, stable policies and all the rest. For now, we don’t know which government is likely to come to power in Rivers State. The political tension with violence is too much. At this point, all investors are reassessing their investment positions, ready to take decisions to protect their investments
The organised private sector in Rivers State, especially the REIF and MAN, etc spent over N40m to organise a Rivers Debate for the main governorship contenders in the state, all in a bid to set the tone for investment friendly state. Unfortunately, it all now seems a big waste in the maze of political rascality and ominous seeds of violence and instability being witnessed on daily basis since the first election in March 9th..
It is important for all political gladiators to consider the negative effect of their political brigandage in the economy of Rivers State. If they drive multinationals and their big investors out of the state because of the ongoing political uncertainty and tension, then it would be such a bad omen for everyone.
INEC’s extension of the Rivers State elections resolution to the 2nd week of April makes the situation even more scary for investors, who are already weary of the political situation. There is need to end this uncertainty and the fierce political rivalry in the state by people who ought to act as brothers.
Chika Onuegbu, former TUC boss
Port Harcourt may become the next Warri, if…
When the Warri boys were terrorizing the oil industry years back, they were cautioned, just like Rivers people are being cautioned today to save Port Harcourt. They refused and were quoted to say the oil companies will never afford to leave Warri. Now, they are said to send emissaries for the oil giant to return.
Onuegbu is a thoroughbred technocrat, financial analyst, and permanent committee chairman of PENGASSAN’s PIB panel. He still works in an oil multinational.
His highly informed and insightful view, which seems in line with what the investors are saying, caps the views.
The endless political tension is not in the best interest of Rivers State whatsoever. Investors are not ready to bring in capital in the state anymore. Rather, exodus is going on.
I met a group of investors just yesterday (Thursday, March 21, 2019) who wanted to come in but pressure from their families and colleagues made them to decide to go back. They said everyone was asking them; Where, Rivers?
The instability affects the private sector more. The Rivers State public sector is like its at war with the FG, and its like one is in opposition to the centre. The FG is investing and doing projects in other states but there is ominous silence in Rivers State. There is no form of engagement with the FG. Meanwhile, this is the place where the money is coming to the centre. Its sad.
Rivers State has since dropped out of competition with Lagos. Other economic hubs within the oil region are even taking over, offering alternative locations to Rivers State and Port Harcourt. Look at the Federal budgets in at least 2016 and 2017; you find nothing for Rivers State, it is as if the state does not exist.
See Trans-Amadi industrial areas; it lies desolate. Exodus has occurred there. Its time the elders of the state stood up to be counted, putting behind every sentiment. This is the time to rise up. This situation must be resolved, else, soon, Port Harcourt would be like Warri in Delta State.
What Rivers lost between 2012 and 2015
Rivers State was cruising well and high after 2007, chasing Lagos in terms of economic competition amongst state, until the political crisis set in 2012 with the break up between then Gov Amaechi and his kinsman and political ally, now Gov Wike. The first casualty was the ambitious N250Bn bond almost in the kitty. It required FG sign-off. The signature could not come because the FG had become an enemy. That scuttled the bond and pushed the state to take high short-tenured bridging loans from commercial banks. That ruined the long-term projects and put the administration in cash squeeze.
The next loss was the World Bank AfDB N23Bn loan to transform PH water system and expand to the sub urban areas. This has remained a lost dream to this day. There was crash of federal allocation to the state from about N30Bn per month to less than N6Bn in the months before Amaechi left. There was drying up of federal projects, and this seems to continue to this day, due to reverse of fortunes.
Another casualty between 2012 and 2015 was non-refund of Rivers State spending on federal projects. This was up to N100Bn by 2015. There seemed to be relegation of Rivers State to the background at national level, contrary to the lofty heights Peter Odili administration had launched Rivers State to.
Another major setback was the grounding of Rivers jet that played a big role for the state and made Rivers a super state. There was also the stalling of the two security choppers equipped with optical vision facilities and infra red to pick out kidnappers and oil thieves from far and at night. This was followed with the collapse of the Rivers security architecture especially the works of the C4i and the Israeli partners. The result is the resurgence of abductions, robbery, insecurity and tension.
There was receding businesses; financial hardship, instability and low rating environment. Uncertainty took a position along the state’s highway to this day. Experts warned as they are still warning that other states especially Akwa Ibom, Delta, and Bayelsa were powering ahead in the race to attracting investors. There is a contest of the new headquarters of the Niger Delta. Rivers State must wake up because the contest is way ahead.
(First used in BD Sunday, March 24, 2019)