October 13, (THEWILL) – Despite housing huge crude reserves, significant natural gas deposit and being the hub of Nigeria’s oil business, Rivers State, in South-south region, attracted zero foreign investment in two quarters (Q1 and Q2) of the year, according to data by the National Bureau of Statistics (NBS).
The NBS in its Q2 2024 Capital Importation report showed that, after recording $6 million in 2023, Rivers had no dime to its name by way of investment inflow to the state during the half year period.
Unlike in the past when Rivers was among the few states that featured as capital importation destinations in Nigeria, the report this time revealed a reverse trend.
By this, Rivers joined its neighbouring Imo, the only oil-producing state in the South-east region that attracted no foreign investment for over four years, to showcase zero capital importation during the period. (Imo’s two counterparts – Anambra and Abia states — recorded a total of $51.48 million and $210.12 million, respectively up till last year, and Imo has the largest gas deposit in West Africa.)
Although Nigeria’s capital importation for Q2 2024 showed a dwindling trend generally, especially regarding oil and gas which recorded $5 million – following agriculture’s $5.9 million – analysts and industry experts note that the lingering political crisis in Rivers State does not encourage investment inflow.
“Rivers is going to witness a downward trend in capital importation for a long time because its toxic political atmosphere is detrimental to economic growth and development. Capital is sensitive and would not go where its safety cannot be guaranteed,” said Jerome Udehi, a finance expert.
Commenting on the deteriorating political and economic environment in Rivers, an investment analyst, Abimbola Macaulay, noted that the tense situation in Rivers would end in setting the state backward for 20 years because the cracks it has created are deep and wide and the dramatis personae are not ready to give up.
“Rivers is retrogressing while others are moving forward. You can see how wealth could be a curse. When there is too much money in the hands of the leaders, they are carried away and would like to remain in power even to the detriment of the people,” Macaulay said.
Besides loss of investment inflow, Rivers has carried indices of poor economic development in recent times, suggesting that despite its acclaimed oil wealth, the state and its indigenes do not fare better than most of the ‘poor’ states in real terms;
Notwithstanding its stupendous wealth, Rivers ranks among the leading poor states of the South-South. A number of quality living indices are also against the 56-year-old oil rich state which sits atop humongous wealth that derives from its huge nature’s gift of oil and gas
In an eye-opening report late 2023, data technology company, StatiSense, unveiled distressing findings from the Multidimensional Poverty Index (2022) report of the National Bureau of Statistics (NBS) concerning some states.
The report sheds light on the staggering number of people living in multidimensional poverty in Nigeria’s oil-rich Niger Delta region, comprising states such as Akwa Ibom, Rivers, Cross River, Edo, Delta, and Bayelsa. The figures are nothing short of alarming and raise serious questions about the effective use of resources and policy implementation in these states.
The report reveals that Akwa Ibom, Rivers, and Cross River states are the hardest hit, with 5.08 million, 4.4 million, and 3.44 million people respectively living in multidimensional poverty. For Akwa Ibom state, this represents over 71 percent of its total population of 5.451 million people estimated by the National Population Commission (NPC).
Similarly, in Rivers State, the 4.4 million people living in multidimensional poverty account for 62.4 percent of the state’s estimated 7.47 million inhabitants. Cross River State also struggles significantly, with 3.44 million people living in multidimensional poverty, constituting a staggering 75.6 percent of the state’s population.
The Federal Government approved a 13 percent derivation fund for the oil-bearing communities to ameliorate the environmental challenges imposed by oil exploration and production activities. However, the 13 percent derivation funds, intended to ensure that resource-rich regions benefit from their natural resources, have been a subject of scrutiny.
Many analysts and policymakers question why these funds have failed to uplift the living standards of the people in these states. Despite receiving substantial financial support, poverty persists and worsens with the rising cost of living, magnified by increases in fuel prices and the depreciation of the naira, the national currency against major international currencies especially the US dollars.
The consequence manifests in high unemployment rate and high cost of living among the people. The latest labour force report by the NBS shows that Rivers belongs to the league of three topmost states with the highest rate of unemployment: 13.4 percent after 18.7 percent and 14.1 percent in Abia and FCT respectively.
Rivers’ total domestic debt rose by 21.2 percent to N323.5 billion in 2023 from N266.9 billion in 2019; while total external loan jumped to N80.9 million in 2023 from $78.4 million in 2019, constituting an increase of 3.1 percent.
Sam Diala is a Bloomberg Certified Financial Journalist with over a decade of experience in reporting Business and Economy. He is Business Editor at THEWILL Newspaper, and believes that work, not wishes, creates wealth.
