Ben Eguzozie, in Port Harcourt
Economists and development experts are advancing several potential negative economic implications that will arise from the emergency rule in Rivers State on Nigeria’s petroleum production, with escalation into a possible pan-Niger Delta crisis.
In particular, these economists, who spoke to Business a.m. described the President Bola Tinubu’s imposition of state of emergency in Rivers State as “back to ground zero”, warning that the President should not forget that, twice the Niger Delta crisis had pushed Nigeria into recession under former president, Muhammadu Buhari, in 2016 and 2019-2020, due to mismanagement of political crisis in the oil-rich region.
“At one point, Nigeria’s oil production dipped considerably to below 400,000 bpd, from initial 2.5m bpd in 2013 to early 2015. That catastrophic drop in production was a direct result of political mismanagement and conflicts in the Niger Delta region.
“It has taken many years of painstaking efforts and significant amount of risks to stabilize the region, stop the sabotage of oil installations, and restore some level of production. Today, Nigeria’s oil production has climbed appreciably to nearly 2m bpd. Does this President understand the difficult and excruciating process it has taken in recouping the country’s oil production? His decision (of state of emergency in Rivers State) threatens to undo all that progress,” one of the economists said in a note to inquiries by Business A.M.
Another development expert warned that President Tinubu might have been ill-advised in rushing to the emergency rule decision, without considering several other options and spiral effects.
“Those who advised the President do not have the best interests of Nigeria at heart. A state of emergency is not a strategy. Rather it is an admission of failure. Hence, I dare say, the President has failed to resolve the lingering Rivers State political crisis,” he said.
He warned: should the situation in Rivers State escalate, as it portends to, we risk another horrendous shutdown of vital oil production facilities in the Delta. We may soon risk renewed sabotages of pipelines. Already we’re still grappling with illegal oil bunkering. Militant activities might resurface. If all these scenarios play out, we risk another economic southward movement—coming at a time Nigeria can ill afford another recession”.
According to one economist at the Institute of Chartered Economists of Nigeria (ICEN) in the South-South, “the global oil market has no place for crisis regions. “Investors would never wait for any oil producing country to resolve its internal political conflicts. They simply take their investments elsewhere. Today, we are sadly witnessing the multi-billion dollar divestments in Nigeria’s hydrocarbon industry to date”.
He said President Tinubu should be reminded that, the current situation is not just about Rivers State per se. It is significantly about the survival of Nigeria’s battered economy. He explained that the President’s emergency rule decision on Rivers State is “reckless and unnecessary”, doubting if it could provide any particular benefit to the Nigerian economy.
