Things are looking up for the Delta State government in the pursuit of its economic diversification agenda with more and more investors bringing multi-billion naira businesses to the state
For the Delta State government, it was good news last Monday, courtesy of Tony Elumelu, chairman, Heir Holdings Limited and former managing director of United Bank for Africa, UBA. At a recent seminar/exhibition with the theme: Micro, Small and Medium Enterprises as Drivers for Achieving the Goal of Delta Beyond Oil in Asaba, Elumelu announced that he had finalised arrangements with his business partners to establish a $1.4 billion fertilizer plant in Burutu Local Government of the state. The plant, he said would be completed in 30 months. That is not all. Elumelu said finishing touches had also been put to building two branches of a five-star hotel – Transcorp Hilton Hotel in Asaba and Warri, as well as a state-of-the-art hospital.
The business mogul said the fertilizer plant would have an independent power plant, IPP. He said apart from this, if he was able to get the nod to revive the Ughelli power plant, he would increase its capacity from 300 megawatts, MW, to 600MW in the first nine months, and to 1100MW in the next 16 months.
Since 2008 when the Delta Beyond Oil agenda was unveiled, the state government has pursued it with utmost zeal, building infrastructure and providing the enabling environment to attract investors. For Emmanuel Uduaghan, governor of Delta State, the outcome of the seminar, particulary Elumelu’s cheering investment plans, was an indication of the confidence of the business community in the economy of the state and a confirmation that the government’s diversification efforts were yielding fruits.
There were, however, concerns over issues of security, poor infrastructure and high cost of doing business in the country generally. Emmanuel Ijewere, chairman, Agriculture and Food Security Commission of the Nigeria Economic Summit Group; Albert Okumagba, chairman, BGL, and Elumelu, lamented the inclement business climate in the country and blamed high cost of doing business in the country on the inability of the government to provide electricity, potable water, good roads and security. Elumelu who was the chairman of the session, recalled that “about two weeks after we signed a document for the fertilizer plant, my mother was kidnapped. I got a mail from my partners asking if I was sure we had made the right decision, but I assured them that all was well following the professional way the police and the state government handled the issue.”
He, however, stated that his company decided to expand its business frontiers to Delta State because of the present prevailing peace and security in the state and beckoned on other investors, foreign and local, to take advantage of this as well as the enormous business potential, to invest in the state. According to him, “We need to engage our people in the economic transformation of the state. One of the major reasons why crime rate is still high is because there is no economic hole for the people.” Describing Delta State as a capitalist state, the former UBA boss opined that fund does not constitute a major plank in business transaction and highlighted four major pillars towards capitalism in the state namely, “Deltans for Deltans, long-term investment plan, the input we create when we make money, and creating the right business environment.”
According to Elumelu, government has a key role to play in terms of providing infrastructure and security. “The kind of infrastructure that compels long-term investment. Warri was a booming city but when the Niger Delta crisis started, most of the companies went away. That tells you the significance of security to business,” he explained. He, therefore, implored the state government to create and sustain the right environment for businesses to thrive, noting that given the unique position of the state and its rich natural endowment, “Delta State should be an investors’ haven.” While commending the state government for the giant strides it has recorded in its micro-credit programme, he also lauded it for its initiative in the establishment of the Asaba International Airport, stressing that the airport had the potential of transforming the socio-economic profile of the state.
The airport was one of the key infrastructures that ensured the success of the recent South-south Economic Summit hosted by the state. High-profile guests, including Namadi Sambo, the nation’s vice-president, ministers and international scholars, as well as captains of industry and diplomats, were flown in and out of the state through the airport. Ijewere, in his contribution, asserted that food insecurity was far more dangerous than bomb attacks by militants and advised that “we should make agriculture more attractive,” adding that, “the way to know that there is food insecurity in this state is through the impact of this insecurity in some parts of this country.”
Uduaghan, host of the seminar, highlighted the efforts of his administration in the last five years to create an enabling environment for business and investments in the state. During the governor’s town hall meeting as part of activities to mark the 13th Democracy Day, a major issue was the high operating cost of medium and small enterprises, MSMEs, occasioned by lack of electricity. Uduaghan admitted that, “in reality, easing the power shortage to small businesses will greatly boost their profitability.” He, however, assured that given the government’s huge investments in power, respite may soon come the way of operators of MSMEs. He said the turbines for the state’s power plant at Oghareki in Ethiope West LG had arrived while the civil works at the site were ongoing, adding that, “we are sequencing both aspects carefully to ensure timely delivery of the project.”
The governor regretted a situation whereby the power demand in the state is 1000MW out of which only 100MW or less is available. He said upon completion, the state’s IPP would cater for the energy shortfall in the state and provide for intending investors as well as sell to other states. According to the governor, a second set of turbines was already at Onne Port in Port Harcourt while seven fire service equipment were already at the Asaba International Airport. He said two Rolls Royce Trent 64 MVA Phase IV Gas Turbine and two 64 MVA Brush generators capable of generating 100MW were being expected.
Apart from the IPP project, Uduaghan said about 90 per cent of upland communities in the state have been connected to electricity while in the creeks, the government opted for solar power supply as well as provision of generators, which are being maintained by the benefiting communities. He said a total of 197 transformers had been provided in the rural communities. The governor said his administration has also invested enormously in transport infrastructure like roads, bridges, airport and marine, adding that, “we have successfully designated three major industrial clusters in different parts of Delta State that will serve as tripod and engine of our economic prosperity.” These are the Warri Industrial Business Park, the Koko Export Free Zone and the Asaba ICT Park. He said the parks have already generated “strong expressions of interest from local and foreign investors.”
While recognising MSMEs as a major factor in the production chain, the governor said it is their survival that “keeps the economy humming.” Uduaghan said his administration was determined to continue to support MSMEs. “We are determined to walk with them through this long and arduous journey. We are also taking steps to set up 10 small scale agro-based industries before the end of the year in partnership with the private sector.” He challenged the banking sector “to improve on their risk appetite,” stating that the banks “simply have to come strongly into this partnership.” In his words, “ultimately, there is not so much government can do in terms of supporting with funds and building the right infrastructure if the finance sector does not play their own part. This is the time to show more energy and creativity in engaging with MSMEs.”