More to Niger Delta than guns and water

Nigeria’s Niger Delta, an area better known for militant bombings and kidnappings, holds good potential for investment despite the negative publicity it has attracted over recent years, says Dianna Games, executive director at Africa @ Work.

Map of Nigeria with the area considered part of the Niger Delta region in red.

Map of Nigeria with the area considered part of the Niger Delta region in red.

“I would argue that the Niger Delta . . . is poised for quite strong growth,” she told delegates at a recent conference in Cape Town.

The Niger Delta is Nigeria’s main oil production area, situated in the south of the country. It is made up of nine states with a total population of around 30 million.

Numerous incidences of kidnappings and bomb explosions have spooked many investors from doing business in the region. The violence and unrest have revolved largely around the marginalisation of the people in the region. Local residents have so far seen very little of the billions of dollars made by the federal government and international oil firms such as Shell, Exxon-Mobil, Total, Chevron and Agip.

During the middle of 2009, former Nigerian President Umara Yar’Adua, in a groundbreaking move, offered the Niger Delta militants amnesty in exchange for laying down their weapons. The government promised it would rehabilitate the militants and teach them skills as well as compensate them financially. There are also proposals on the table to give communities an equity stake in oil ventures.

Games said the amnesty programme is still holding even though it has been wobbly at times.

With the improved security situation in the region, many opportunities for investment have opened up and there is already a lot of development taking place. Areas where investors could get involved include infrastructure, construction, housing, skills training and retail.

Port Harcourt, the unofficial capital of the Niger Delta, recently announced plans to build an entire new city, alongside the old. The Greater Port Harcourt City Development Authority (GPHCDA) was last year inaugurated as a legal entity to provide the legal and regulatory framework for the development, reducing the risk of any policy reversal by future administrations. The planned new city, a multibillion dollar, 50-year initiative, will adjoin the old city, which is slowly being restructured, to form one large urban entity.

Games said that political governance in the Niger Delta is improving. Because there is so much oil money concentrated in the region, theft and corruption have traditionally been major problems. She, however, explained that the region has entered a “whole new era of governance”.

State governments in the region have introduced incentives to attract investment and many are even offering to fund projects. “For example if you want to go and set-up a car manufacturing plant, they would take-up a big stake in that investment, so they would be one of your investors,” she said. Although Games normally advises investors never to get too close to government, she said that it might have its benefits in a “difficult area” such as the Niger Delta.

The region is also poised for more investment from Nigerian companies. “A lot of the big names in Nigerian business are actually from the Niger Delta, and there is a move to invest back into [the] area now that things are starting to improve,” Games noted.

Security in the region has become considerably better but it is still a challenge. Some of the rebel activity has metamorphosed into crime and criminal gangs. Investors might also encounter problems around land tenure. “Governors tend to guarantee the land for you, but there are still issues with [local] communities,” she said.

Games concluded her presentation by saying that although she is not necessarily advising investors to rush into the Niger Delta, it is definitely an area to be considered.