Goldman Sachs described Nigeria as one of the next 11 biggest economies that will attract the most investment and will enjoy a promising future. However there is still a big gap between the international perception about Nigeria and the reality on the ground. What do you think is the most important for this international community to understand about Nigeria?
That is a difficult question to answer, because it depends on what they are expecting from Nigeria. Nigeria is an emerging economy where the market governs investment, so the environment should be conducive towards investment. There should be power and security. If you look, you will see that power has improved in Nigeria, with power sector reforms. There is also an initiative by both the state and central governments to improve security. One way to do that is to focus on the area of agriculture, in order to reduce the number of unemployed youths who may want to engage in crime.
Based on the reforms that are going on in the country, I think the economy will gradually improve. For any investors looking to invest in Nigeria, they should not look at speculative reports, but at the concrete measures being taken. People who decided not to come in the past are regretting it now. For instance there were some American companies who by now would have been very strong players in telecommunications, but they did not come. Now people in the telecom sector in Nigeria are making double their investment, because this is a huge market with more than 160 million people.
You are already in the second year of your administration, and one of your priorities has been to improve the legal framework, with reference to procurement and fiscal policies. This has contributed to higher ratings from the likes of Standard & Poor and Fitch. How important is a solid legal framework to the state’s economic development?
We have tried to move discretionary powers of the governor, as outlined in the Public Procurement Law, and transfer that power to an agency, so there is greater transparency and accountability. We want all processes to be subject to due diligence. For instance when we get a contractor, we want to ensure that the decision is open and clear, unlike when the governor would choose who to give a contract to. Now those candidates have to be assessed, to ensure that you have the capacity to deliver, and the requisites for execution are met. We have done that, in addition to a public-private partnership (PPP) Law to secure everybody’s investment. There are now regulations for which people can go to court, so long as you comply with the law. There is also a new Fiscal Responsibility Law which holds government officials accountable. We have different agencies that are in charge of different aspects of these reforms.
Rivers State is blessed with natural resources, but the most precious you have is your people. You have invested a lot in social development through health care, education, and job creation, to reduce inequality and improve people’s lives. In 2014 Port Harcourt will receive UNESCO World Capital status. How crucial is education for the state’s development, and how much has the health system improved under your administration?
The first thing you need to do is to see for yourself. I think it would be best if you asked the Commissioner for Information to give you a tour to see our infrastructure development in education and health. Infrastructure development in education is not just about how big a school building is; it is also about the teacher’s ability to transfer knowledge. For us the retraining of teachers and employing qualified teachers where there are gaps is key, which we have already done. We adapted the national curriculum, and engaged the British Council, who in turn engaged Cambridge University to train our teachers, awarding Cambridge certificates at the end of their training. This is a long term vocation where they train them here in Nigeria.
We have also reached the conclusion that we need to hire about 91,000 new teachers. But since we do not have the resources for that now, we have hired 13,000 new teachers to start work by September. Education falls under the responsibility of local government councils, but they lacked capacity both in terms of revenue and human capacity, so we took over and increased our budget to 9 billion Naira. If the foundation is poor, then the supporting structure will also be poor, so we decided to take over and develop that. We inherited their teachers, constructed and furnished primary schools, and are supervising their development.
We created the Quality Assurance Agency, which was supposed to be a special division of the Ministry of Education, but because we wanted to give it greater importance, we detached it and made it an independent agency that reports to the Commissioner of Education. They ensure that at the end of the day, after they finish their inspection, that report is received on the same day by the Governor, the Commissioner of Education, the school that has been inspected, and the agency that supervises that school, whether it is primary, secondary, etc. The law states that whoever is in charge of implementation must take immediate action, and send that report to these four places as well.
We have a problem with education development supervision. Impunity has taken over and some people do whatever they like. The steps we have taken to improve our education development has led to us being declared the UNESCO World Book Capital 2014, which is a great achievement and huge recognition of our contributions in the area of education.
In terms of health care, this is directly supervised by the Commissioner for Health. He believes that most of the illnesses treated in secondary health care institutions can actually be handled at the primary health care level. We must further develop our primary health care to be able to take some pressure off the secondary health care institutions. So we are building another 20 proper health centres, which will total 160, that are mostly located in the rural areas. But there are between 15 and 20 in Port Harcourt, where doctors can see an average of 80-100 patients a day. It was not always like this, but today there are doctors in all of the primary health care centres. Now there are ambulance vehicles where rural patients are taken to secondary health care institutions if the primary health care doctors cannot handle them. We have also been able to build another three hospitals in Port Harcourt, but that is still not enough. We also need to rehabilitate some of the rural hospitals, but we will focus more on that once we get resources.
The largest source of employment in Nigeria is the agricultural sector, which employs around 70% of the workforce. How does your government support agricultural development in Rivers State?
We have made huge investments in that regard. Two days ago we just signed an agreement with the Israeli LR Group, for a $140 million dollar investment.
The Government of Rivers State will put up $100 million dollars, of which we have already put up $50 million, and LR Group is contributing $40 million. This is to bring crops, such as vegetables, tomatoes, carrots, etc. as well as cocoa. But there is a primary sector and the industrial sector, in which you have agro-processing and 2,000 hectares of farming. Then there are other parts that actually belong to the people who work on the farms. There are 300 houses and infrastructure like roads, water, electricity, primary school, and health care institutions right there. Within three or four years we should be able to recover the $140 million dollar investment. They also expect to employ about 4,000 workers.
There was a company called RisonPalm, a palm oil company that belonged to the Rivers State Government, which went moribund. We have been able to revive it by transferring ownership for 35 years to a company called SIAT of Belgium. So I am surprised when they say that people are scared to come to Nigeria, because these are foreigners. But these Belgians are making an investment of about 20 billion Naira in RisonPalm.
Are you active in talking to potential investors internationally? How do you attract these international investors?
We do talk to investors internationally, but these investors all came on their own. I cannot go to the UK or Israel to try to attract investors that may not come. All of these investors came here on their own and wanted to do business with us. They came to Nigeria, asked around, and people told them that the place to do business here was in Rivers State. These agreements have been signed and the resources have started being deployed. SIAT was actually the manager of the company that developed RisonPalm, so they came back and showed interest in reviving it, and we reached an agreement for the next 35 years. There is another investor, from a fish company, that came here on his own. They are developing four fish farms in Rivers State that will produce 900,000 tonnes of fish per year, per farm. Altogether we are talking about more than 3.5 million tonnes of fish per year. They are not Nigerians, but people who heard about the opportunities available, and came here wanting to do business. We also received Mexican investors, with whom we have a 60-40 investment, with 60% for Rivers State Government. In two years they expect to pay us back for the 2,000 hectares of land. So there are huge investments in agriculture which are creating employment opportunities for our people.
Rivers State is also known for its extensive oil reserves, with a GDP of over $21 billion dollars. But beyond oil and gas, there are a lot of on-going investments, especially in infrastructure like port facilities, roads, and power. What projects and achievements would you especially like to highlight to the international community? What areas have seen more progress under your administration?
There are two areas that must be highlighted for any investor, which are in different stages of progress. We will be the first country in Africa to develop a monorail. But the more important thing for investors will be to see our security framework. There are cameras in Port Harcourt. If I took you to our Command & Control Centre, you might be shocked. An Israeli company has worked for us since 2008, and between 2008 and 2009 all kidnappers were caught, and by 2010 there ring was broken and they were on the run. That was thanks to the investments we have made in security. Security has greatly improved in Port Harcourt to the extent that when there is insecurity or kidnappings, we have been able to successfully rescue most of these victims.
Before, we used to have 15-20 kidnappings a day. Now you barely hear about 2 or 3 a month, and that is outside the city in rural areas. If you are in the city, you no longer have to worry. There are more checkpoints and security cameras, so the city is really locked down in that sense. Some of our people were taken to Israel to be trained to identify any suspicious behaviour and/or vehicles, and this has proven very successful.
Now what we are working on is improving power, which we said we would do by December. We would like to have 24-hour power supply, but we have set ourselves the target of at least 20 hours a day of power by December. We promised people a more stable power supply, and this is key for us. A stable power supply is also key for investors, rather than coming here and having to get your own generator. One firm approached me about establishing their own generation plant. But I asked them to give me until October, and if they did not have power by then, they could go ahead and build their own. They agreed, and they have stuck to it.
Aside from security and power, I can also sell the market to investors. Port Harcourt is the sixth-most populous city in Nigeria, with more than 5.6 million people and approaching 6 million. The oil economy thrives here.
The Greater Port Harcourt City Development Plan is one of the most talked about projects in Nigeria, opening up a lot of opportunities for PPPs. This needs a lot of investment, up to 250 billion. Is this project ready to be marketed for foreign investors? What have you done to create the necessary awareness to attract those investors?
This is a long term project, of which we are going to complete phase one. The cash flow and record achievement of that project will make for phase two. We have broken phase one into A and B. Phase one A, which stops at UTC, will be achieved in December 2013, and Phase one B will cover water lines. Once we achieve phase one, we can encourage investors to then put their money in to take it to the end of the road.
What impact will it have on the economic significance of Port Harcourt and Rivers State?
In terms of the movement of cargo and human beings, we expect to carry about 40,000 passengers, either in a week or in a day, which is huge.
When is the monorail project expected to finish?
That is expected to be completed in 2013, with phase one A expected in December next year. Then in July 2014 phase one B will be complete, which is where our government commitments stop. We will either continue the work being done, or we will look for investors to complete the project.
Industrialisation is key to the economic development of Rivers State whereby you recently commissioned the new PET facility of Indorama Eleme Petrochemicals, one of the largest in its kind in Africa.
We are looking to expand it and make it the largest in the world.
What message does this send to the foreign audience about making Port Harcourt and Rivers State a foreign investment destination?
People come here to do business. If the environment was not right, they would not come in. This area has gas reserves and we are open to those who want to do petrochemical and gas business. I very much encourage them to come.
There are still people who are missing the opportunity to do great business in Nigeria because of their misconceptions about the country. But the security issues in Rivers State have improved, as has the participation of indigenous companies in the local economy. How has communication between the multinationals and indigenous companies improved, and what is the government’s role between them?
Before we came in, there was a sense of impunity, which we have now eliminated. Now everybody is accountable for whatever action they take. We passed a law that protects anybody who wants to do business. Stopping anybody from doing business equals three years in prison. Secondly, the insecurity in the state has been greatly improved by focusing on three areas; poverty reduction, by providing employment, which is created by infrastructure development. As you build infrastructure, you create employment, so we look at that within our social policy. We are also looking at education, creating awareness, and sending people to school. That has also contributed to a reduction in crime.
What last message would you send to foreign investors about Nigeria and Rivers State?
That Nigeria is an open market that is ready for business. There are very hospitable people ready to welcome you to do business, and to please contact the government if you encounter any problems. There are laws to protect you which you may not know about, and we will pursue those who disturb your business on your behalf.
You have a steep political career coming from the house of assembly of Rivers State, now second term Governor and Chairman of the Governors’ Forum. What has been the proudest moment in your career life?
I was Speaker of the Parliament for eight years, and now I have been Governor for five years. I am exhausted and I need a rest, but Nigeria is a very loving country to serve. I am most proud of our development and contributions in the area of education, which is wonderful to behold. I am sure that when we grow old, our kids will be very proud, and my children will be proud to say their father initiated this.
What kind of Rivers State would you like to leave behind?
A peaceful city full of hospitable people that is open to business, and will provide equal opportunities and justice to all.
0 COMMENTS