By Ifeatu Agbu
One can say without fear of contradiction that the trophy for Nigeria’s oil-wealth belongs to the Niger Delta region, which is also richly endowed in agriculture, solid minerals and water resources.
Despite these huge resources, only oil and gas contribute about 90 per cent of Nigeria’s export earnings. Thus, our national identity, as well as growth are intrinsically linked to the Niger Delta and its well-being.
Sadly, the region’s natural endowments have not been matched with commensurate physical development. To address this anomalous situation, the Niger Delta Development Commission, NDDC, was established in 2000 with a clear mandate to facilitate the sustainable development of the Niger Delta region.
The vision of the NDDC is to create an enabling environment for the sustainable development of the oil-rich region, while its mission states: “NDDC is determined to facilitate the sustainable, even and rapid development of the Niger Delta, into a region that is socially stable, politically peaceful, economically prosperous and ecologically regenerative.”
It therefore, means that NDDC can and should take an interest in the industrialization of the region, as this is within its core mandate.
It is clear to the Commission that the provision of basic infrastructure is central to setting the stage for investors to show interest in the region. There are excellent prospects for the establishment of petroleum refineries, Petro-chemical industries and capacity for Independent Power Plants (IPP) to boost power supply from present 3000MW to the projected 10,000MW in the next few years. Similarly, investments in modular refineries are beckoning.
Now, more than ever before, there is a compelling need to reposition the Niger Delta region to attract investors in several growth areas beyond oil and gas, because the peculiarities and challenges of the region make it compelling to chart a new course to jump-start sustainable industrial development.
Incidentally, the NDDC managing Director, Dr Samuel Ogbuku, has given indications that the Commission would henceforth pay more attention to industrialization. He said that NDDC should do far more than just building of classroom blocks, constructing roads, building bridges, jetties and hospitals.
The NDDC Establishment Act, gives the Commission the latitude to set up investment platforms to enable it benefit maximally from the financial resources at its disposal. Part II of the Act, which deals with functions and powers, the Commission is enjoined to “conceive, plan and implement, in accordance with set rules and regulations, projects and programmes for the sustainable development of tie Niger-Delta area in the field of transportation, including roads, jetties and waterways, health, education, employment, industrialization, agriculture and fisheries, housing and urban development, water supply, electricity and telecommunications.”
This must have informed the current moves by the NDDC management to set up an investment company. According to Ogbuku, that would hasten the process of industrializing the region. With the NDDC Investment Limited, he is confident that the Commission can use it as a springboard to deploy Special Purpose Vehicles, SPVs, to undertake specific business activities.
Ogbuku believes that the NDDC Investment Limited will be an appropriate platform to bid for high profile investments in several areas, including buying into the oil industry. Recently, there were opportunities that could have been exploited to the benefit of Niger Deltans.
Last month, Shell announced the sale of its Nigerian onshore oil assets to a consortium of local companies for over $1.3 billion. The multinational company parted with Shell Petroleum Development Company of Nigeria Limited, SPDC, with many oil-producing communities rueing their losses.
Another international energy giant that divested its on-shore assets in Nigeria is Italy’s Eni (ENI.MI), which sold its Subsidiary, NAOC Ltd, to Oando. In all these, Niger Deltans are nowhere near the bargaining table.
Yet another blue chip, the Port Harcourt Refinery, is up for grabs and again Niger Deltans are not in contention. Unfortunately, the NDDC Investment company is not ready to be considered by the Nigerian National Petroleum Company Limited as part of the firms to take over the Port Harcourt Refining Company.
Oguku believes that an NDDC Investment Limited would have approached the Federal Government to be given the first right of refusal to buy over these assets and to run it on behalf of the people of the Niger Delta. “That is where we are headed to serve the Niger Deltans and that is why we have started it,” he said.
The NDDC Investment Limited is also going into Special Purpose Vehicle, SPV, in different investments, such as owning fishing trawlers.
With strategic partnership and collaborations, the NDDC investment Limited will be in a position to build modular refineries and invest in the region and make it to be self-sufficient. What is the point in building roads and bridges in our cities without building industries.
Every nation, region or society takes different routes towards industrialisation because of their differential socio-economic, cultural and political settings; and what is now universally accepted is that some form of strategic economic planning is necessary for industrialization to take place, and that different degrees of planning are recognised and appropriate, depending on prevailing conditions.
The Niger Delta region is peculiar in many ways. It is faced with a lot of environmental and developmental challenges that include but not limited to a decline in agricultural productivity, increasing level of poverty, low level of industrial activities, low job opportunities, environmental degradation and social conflicts.
Traditionally, it is an area that was predominantly involved in farming and fishing activities; but over the years the natural environment has been negatively impacted, with many areas polluted by the proliferation of oil and gas activities.
There is no doubt that the industrialisation of the Niger Delta region will offer immeasurable gains that will affect almost every facet of life in the society. It will increase agricultural and manufacturing outputs, allowing people to take jobs in many other sectors, while increasing the amount of food, consumer goods and services available to the populace.
While increasing economic output, industrialization will also result in population migration and the associated positive and negative consequences within affected areas. It will spur technological and scientific advances that can change the economic, social and political landscape of the entire region.
In addressing the question of industrialisation of the Niger Delta region, one can rightly ask and be challenged by the speedy growth and industrialisation of the four “little dragons” – Taiwan, South Korea, Hong Kong and Singapore – which all together constitute less than four percent of the world’s population, but has become one of the pillars of the modern industrial world order. How did those “little dots on the eastern periphery” of the globe achieve such a transformational industrialization?
How can it be done for the Niger Delta region? A number of issues have been identified that will be critical to the success or failure of any strategies to be adopted. One should also acknowledge that the attainment of our industrialization objectives will depend to a large extent, on the development of critical infrastructures for industrial clusters and leveraging private sector collaboration.
This in turn, will require the development of efficient, accountable, transparent and participatory governance, the creation of strong, efficient and effective public service institutions and establishment of a competitive private sector-led business environment characterised by sustained macro-economic stability. It will also require the enhancement of regional security.
A very important impact of the growth of the industrial sector will be a reduction in poverty levels. The present singular focus on oil and gas related activities will reduce and the correlation between an improvement in living standards and benefits arising from oil and gas production activities would be seen as complimentary. This would stimulate and sustain peaceful coexistence within the Niger Delta region.
The industrial sector in the Niger Delta region comprising manufacturing, utilities and mining (excluding oil and gas operations) has been mostly comatose for many years, as attention had been focused particularly on oil and gas production and related activities.
In the face of a rapidly changing global economic landscape and increasing inequalities, sustained growth of any region must include industrialisation that makes opportunities accessible to all its peoples.
The Niger Delta region surely needs a special investment vehicle to drive the process of industrialisation.