April 13, (THEWILL) – The prospect of oil-rich Rivers State recovering from the calamitous impact of emergency rule remains uncertain, with its debt hitting N683 billion as of December 31, 2024.
THEWILL reports that industry experts have expressed concern over the impact of the anomalous governance situation in the state, which is capable of worsening the divestment trend in the area, a development that has seen many oil and gas investors leave for other climes.
However, the recent disclosure about the huge debt profile of the state has added another dimension to the worrisome situation.
The Debt Management Office (DMO) in its latest report showed that Rivers, among the league of top indebted states, now bears a debt burden of N683 billion as of December 31, 204.
The figure comprises domestic debt of N364.39 billion and external debt of $199.58 million which translates to N317.70 billion using the CBN exchange rate of N1,591.84/US$1 on Friday, April 11, 2025.
The 2024 debt portfolio is 88.72 percent higher than the 2023 figure of N361.42 billion which constitutes a domestic debt of N232.57 billion and external debt of $80.94 million, equivalent of N128.84 billion using the CBN exchange rate of N1,591.84/US$1 as of April 11, 2025.
There are concerns that the emergency rule imposed on Rivers State by the Nigerian President, Bola Ahmed Tinubu, would have serious economic consequences.
Many stakeholders and political watchers also expressed grave concern over the “illegal” declaration of state of emergency in which the constitutionally elected governor and the state lawmakers were removed from office.
They also predict a possible socio-economic breakdown in a state that habours the major oil and gas deposit which constitute the mainstay of the nation’s economy.
Engr. Kingsley Amadi, an oil and gas company operator, expressed concern over the possible impact of the current political disturbance in Rivers on the state’s economy, especially in the aspect of foreign investment.
He noted that many international oil companies (IOCs) are divesting from the Niger Delta territory in recent years, following continued deteriorating business environment and unfavourable government policies.
“Rivers are the cradle of Nigeria’s oil and gas business. Port Harcourt was developed by Shell which helped to create many small and medium enterprises which was a major source of employment. The state is also rich in agriculture and its proximity to the ocean is a major advantage to the area. But what has happened in the state will scare investors and further deteriorate the bad economic status of Rivers which many do not see,” Amadi.
THEWILL reports that Rivers has not recorded foreign investment inflow for a long time, unlike its oil and gas producing counterparts like Akwa Ibom, Bayelsa and even Abia. Conversely, the divestment of the major oil and gas companies from the area is impacting severely on the economic advancement of the 58-year-old state.
According to the National Bureau of Statistics (NBS), Rivers recorded less than $2 million foreign investment between 2019 and 2021. The NBS quarterly Capital Importation reports showed that only $0.08 million foreign investment was recorded in 2019 followed by $1.0 million in 2021.
The foreign investment climate remained in the amber state until Q4 2023, about seven months after the change of political leadership in the state in which Gov. Fubara succeeded Mr Nyesom Wike who ruled the state for eight uninterrupted years.
The highest foreign investment in Rivers since 2019 was the $6.0 million recorded in Q4 2023, as shown in the NBS Capital Importation Report for Q4 2023.
Despite housing huge crude reserves, significant natural gas deposits and being the hub of Nigeria’s oil business, Rivers state attracted zero foreign investment in two quarters (Q1 and Q2) of 2024, according to data by 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 noted that the lingering political crisis in Rivers State does not encourage investment inflow.
“Rivers are 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,” Jerome Udehi, a finance expert, had told THEWILL.
Commenting earlier 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 are 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 in October 2024.
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 57-year-old oil rich state which sits atop humongous wealth derived 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 NBS concerning some states.
The report shed 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 revealed that Akwa Ibom, Rivers, and Cross River states were the hardest hit, with 5.08 million, 4.4 million, and 3.44 million people respectively living in multidimensional poverty. Recent data put Rivers’ population at 5.1 million people.
In a twist of fate that altered the boom era of the 80s/90s, when the Nigerian economy witnessed a rapid expansion that impacted positively on the GDP growth, employment, per capita income and general standard of living, the opposite has been the case in recent times, and the Niger Delta is among the worst hit.
The Nigerian economy is now plagued by the wave of divestment and exit of multinational companies across various sectors since the early 2000. This signals a reversal of fortune as businesses struggle to cope with uncertainties of unyielding economic headwinds.
Many international oil companies (IOCs) have sold their assets as they divest from Nigeria’s onshore and shallow water operations. These include Shell, Exxon Mobil, Chevron, Total Energy and Agip.
According to an economist and former Director of Research and Advocacy at the Lagos Chamber of Commerce and Industry in Nigeria, Dr Vincent Nwani, the exodus of multinationals from the Nigerian economy has cost the country a 94 trillion Naira loss of output in five years.
Rivers internally generated revenue (IGR) grew from N12 billion to N27 billion, according to Governor Fubara. The recent declaration of state of emergency in the state will set it backward through many avenues including tax and investments.
The rising debt burden will definitely worsen the economic challenge of the 57-year-old state.
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.
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.
