BusinessDay... the voice of business: Rivers: Experimenting on less government, big economy

Rivers: Experimenting on less government, big economy
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Admin on 14 January, 2008 01:00:00
 
Economic philosophy Those close toGovernor Chibuike Rotimi Amaechi easily
understand the economic direction of the boss. The new governor came into office
waving “Rivers Money for Rivers People” slogan and this seems to have caught
on.
Insiders say the money that comes to the state would be made to build a large
economic base but with less government involvement. This is said to be primarily
a philosophy anchored on the public-private participation (PPP) concept. Nigeria
as a nation ran a system of mixed economy with the government leading in terms
of provision of infrastructure. In the past eight years however, they believe,
it has become obvious that government might not be a good manager after-all.
Conscious of this, the Amaechi administration says it believes in less
governance, the small government theory, and more of the private sector.
In this, the private sector would take the lead while the government would
provide the enabling environment in terms of basic (turnkey) infrastructure,
security, political stability, and strategic encouragements. This way, both the
private and public sectors work in synergy, they usher in a new vista of
economic boom in Rivers State.
Another concept that encapsulates the expected economic standpoint of the new
administration is diversification of the supply side of capital. This is going
to be hinged on not just saving money from leakages (apparently an end to
donations) but “using other people’s money”. The capital market may come
handy here.
New areas for the private sector
Waste management is prominent on the mind of the administration. The other is
the construction industry, the construction of new towns. Also, all those areas
where the government took the lead in the past would now be controlled by the
private sector.
The new administration has already had a discussion with the Director-General
of the Nigeria Stock Exchange (NSE), Ndi Okereke-Onyuike, and made a case for
wholesale involvement of both the people and government of the state in the
capital market. The state has made its stand known on the quest for new capital
from the capital market, just like Lagos did with a N250Bn bond. Rivers may
outstrip this. The belief in the seat of power is that there must be a radical
departure from the past when the state depended on revenue allocation from the
FG and internally generated revenue. “We must realize we are in an
ever-changing world and there are many ways of doing government business and
financing a government”, the governor’s spokesman, Ogbonna Nwuke, stated.
The tilt towards a private-sector driven economy can easily explain the
presence of the likes of Peterside Atedo (formerly of the IBTC), a guru in
investment banking who has been brought in as a special adviser to the governor.
He may lead the governor’s economic team and midwife the new dawn.
New revenue facets
Using other people’s money to develop the state is being seen as profit
already, by the mere fact that it would not require putting the people through
the mill. It means more money for social services. The Director of Press Affairs
calls it a profit of good thinking. “We intend to pluck all the loopholes
which allow public funds to be frittered away. Another major plank of the new
policy is to pluck all loopholes to save funds for capital development. This may
put paid to the era of huge donations from the Brick House. When a Church came
calling, Amaechi demonstrated his new resolve by donating N100,000 from his own
salary per year.
Now, Amaechi is setting up Due Process Commission (DPC) to handle all
government jobs and contracts. All jobs would be advertised and so, there would
be no “under-the-counter” deals. The result of the bid will be published.
From consumer state to producer state
The new administration thinks that Port Harcourt is a victim of old thinking.
They say there is over-dependence on oil, just like the case of Nigeria as a
nation. There are other areas that may generate huge income, and the
administration wants to shift attention to such areas now. The marine and
maritime sector is waiting to be exploited, they say, and then subsidiary
industry such as synthetic. These things would not just be about the government.
Onne (near PH) is seen as a virgin island which the new administration hopes to
develop into a town of its own, but in industrial and residential capacities.
Again, Amaechi will be providing the space for investors. Attention is coming to
developing new towns such as Rainbow, Onne, etc, to move the huge (trapped)
population in PH out to new areas. These would provide new economic ventures
that would create new business opportunities and open up the economy of the
state.
Nature of new deals
The administration has begun in earnest to hand out chunks of the state’s
economy to the private sector, having already signed a memorandum of
understanding (MOU) with the Silverbird group to develop the entertainment
industry in the state. The government has equally signed what it regards as a
huge deal with First Bank plc for the wholesale development of the Rainbow town
in the Trans-Amadi section of the state capital. This shows the new direction of
the state administration as the private sector moves in to create wealth, jobs,
etc, the government reaps from it. The state government has 25 per cent from
whatever Silverbird makes as profit in the deal. Another deal is on the way with
a consortium to develop the transport sector.
The state-owned University of Science and Technology (UST) is to be moved to a
new site, and many may hardly believe that oil companies like Shell and a bank
are going to build the new place. The bank will build the hostels and recover
their fund through hostel fees to students, the calculations have been done.
This way, it costs the administration nothing, the government just providing
security and the enabling environment coupled with regulations.
The thinking is that so much has been lost. Moving around the garden city has
become a nightmare, so government is thinking about building a ring-road to free
the city, so persons do not go round the city just to get to their point, but to
just move straight to where they needed to go. The reason is that except the
government opened new space, PH would become one big slum. At the moment, they
fear that the city has become one huge market. That, they insist, was not the
plan for PH. “As a government, we will resist that”, Nwuke declared.
Building institutional support for businesses
The government talks about both short term and long term plans to achieve this.
The philosophy of “Rivers money for Rivers People” will mean empowering the
Rivers people, making them more useful and more active in their own environment,
making them economically solvent and less dependent. This, according to them, is
because, “unemployment has brought us to where we are today, young men
carrying guns and making life difficult for everybody. As a people/state, we
will put much money into the hands of our own people, if not for any reason but
to show them that, yes, they can be much more productive, much more focused and
engaged”.
There will be programmes for training, financing, educating the people.
“Training is important and education is the key. The other day, the governor
virtually threw out both the vice-chancellor and the governing council and
immediately ordered that N1Bn be handed to the new VC to start work. You see a
desire to change things, showing we do not have real schools”.
The administration is impatient with the education system, asserting that what
was in existence was school system that did not produce anything, compared with
the distant past. Government said it is going to improve the human resource (HR)
base of the state including resort to foreign scholarships.
As the governor’s spokesman stated, there has to be economic autonomy in
order to complement political economy; and that both must grow side by side. The
people must be part of the economy and this is what he said the Amaechi
government is out to actualise.
No threat to non-indigenes
Non-indigenes already fretting over loss of businesses to the indigenes may not
have reason to pack up and go. “Why, why would they be in trouble? None
indigenous businesses have existed side by side in Rivers State over the years,
and nobody can challenge the record of hospitality of our people”. Nwuke
retorted.
He said the Rivers people had encouraged and protected non-indigenes even by
patronage, and this will continue. “All we are saying is that our people
should also exist and do business, as they say in Economics: people should
compete in areas where they have comparative advantage”.
Land use
Nothing raises very much tension in PH than land, the new administration
believes land must be properly used Even if one needs to sell land to survive,
they say, build to given specifications.
In order to facilitate business and development, usual delays will have to go.
“We are planning to go digital to do online management”. This may eliminate
inefficiency and corruption.
Government need a lot of cooperation, and communication is crucial in achieving
this. The administration must find a way to sell the ideas to the people and
make them buy into the new concept.
Level of infrastructural and political mobilization to support the new economic
order
The governor is sort of building an entire new economic structure for the
state. The need to build a ring-road is mainly to save the city from congestion
so that man-hours lost on the roads will be drastically reduced. New estates,
water, industrial zones such as Onne will be built to support businesses.
The new administration says it will try to create link of trust with the
masses. The new game is openness, participation, and above all, understanding.
If people understand where the administration is going, it will reduce friction,
Nwuke stated.
So, the future of the economy of Rivers State is anchored primarily on the
ability of the Amaechi administration to mobilize the people socially,
politically and economically, and prepare their mindset to the change that is to
come. This, they admit, will mean increasing the scope of liberalization,
because with it comes democratization.
He said: We in Rivers State are preparing for that future when an opposition
man or party would hope to run and win an election. The governor has
continuously asked the RSIEC and Nimi Briggs never to accept to do any favours
either to him (the governor or those who might come calling on the name of the
governor.His stand is this: if any man wins an election, even with five points,
declare him the winner, no matter his party”.
He said Amaechi enjoyed the House of Assembly in the first term when there was
opposition unlike the second term where there was none. Also from his experience
at the Supreme Court, the governor may be eager to let the deal trickle down the
ladder by causing it to be made a clause in the Rivers State electoral law that
guides the local council elections that no party would have the right to replace
the name of a candidate that won the primaries, “without cogent and verifiable
reasons”.
We are ready:
The private sector in the state may be waiting with both hands to collect what
Amaechi is dropping down from the seat of power in PH. The president of the Port
Harcourt Chamber of Commerce, Billy Gillis-Harry, told Business Day team that
the members have since been mobilised for the new dawn. He discarded fears of a
mad rush to outbid each other, saying a strategy of joint bids and sharing out
based on competences and efficiency.
He said: “The chamber is the centre of all synergies, for instance, about
seven companies in the chamber are into waste disposal and refuse management. We
will use them to harmonise the bid and spread the jobs so that there is no
problem. They will come together and make it work faster like joint bidding. We
will liaise with the state government and achieve best option and service
delivery.