NDDC Investment Ltd; Thinking outside the box for greater efficiency

It is common knowledge that for the twenty four years that the Niger Delta Development Commission, NDDC, has been in existence, it has been relying on funds from the Federal Government and the International Oil Companies, IOCs.

The obvious implication of the above is that the pace of the development of the Niger Delta region is intrinsically determined by the readiness or otherwise of the government at the centre and the IOCs to play their part as and when due.

It, therefore, has become increasingly important for the NDDC to begin to think outside the box to create an independent platform that will generate revenue targeted, also, at the overall infrastructural and human capital development of the region.

Now, more than ever before, there is a compelling need to reposition the Niger Delta region to attract investors in several growth areas beyond oil and gas, because the peculiarities and challenges of the region make it imperative to chart a new course to jump-start sustainable industrial development.

Interestingly, the NDDC Managing Director, Dr Samuel Ogbuku, has given indications that the Commission would henceforth pay more attention to industrialisation. He said that NDDC would do far more than just building of classroom blocks, constructing roads, building bridges, jetties and hospitals.

The NDDC Establishment Act, gives the Commission the latitude to set up investment platforms to enable it benefit maximally from the financial resources at its disposal. In Part II of the Act, which deals with functions and powers, the Commission is enjoined to “conceive, plan and implement, in accordance with set rules and regulations, projects and programmes for the sustainable development of the Niger-Delta area in the field of transportation, including roads, jetties and waterways, health, education, employment, industrialisation, agriculture and fisheries, housing and urban development, water supply, electricity and telecommunications.”

Obviously, this must have informed the current moves by the NDDC management to set up an investment company, which Ogbulu says will hasten the process of industrialising the region.

With the NDDC Investment Limited, the Managing Director is confident that the Commission can use it as a springboard to deploy Special Purpose Vehicles, SPVs, to undertake specific business activities.

Ogbuku believes that the NDDC Investment Limited will be an appropriate platform to bid for high profile investments in several areas, including buying into the oil industry.

Recently, there were opportunities that could have been exploited to the benefit of Niger Deltans.

Last month, Shell announced the sale of its Nigerian onshore oil assets to a consortium of local companies for over $1.3 billion. The multinational company parted with Shell Petroleum Development Company of Nigeria Limited, SPDC, with many oil-producing communities rueing their losses.

Another international energy giant that divested its onshore assets in Nigeria is Italy’s Eni (ENI.MI), which sold its Subsidiary, NAOC Ltd, to Oando. In all these, Niger Deltans are nowhere near the bargaining table.

Yet another blue chip, the Port Harcourt Refinery, is up for grabs and again Niger Deltans are not in contention. Unfortunately, the NDDC Investment company is not yet ready, and cannot be considered by the Nigerian National Petroleum Company Limited as part of the firms to take over the Port Harcourt Refining Company.

It is the thinking of Ogbuku that an NDDC Investment Limited would have approached the Federal Government to be given the right of first refusal to buy over these assets and to run it on behalf of the people of the Niger Delta.  He had this to say, “That is where we are headed to serve Niger Deltans and that is why we have started it.”

The NDDC Investment Limited is also going into Special Purpose Vehicle, SPV,  in different investments, such as owning fishing trawlers.

With strategic partnership and collaborations, the NDDC investment Limited will be in a position to build modular refineries and invest in the region and make it to be self-sufficient. What is the point in building roads and bridges in our cities without building industries.

Every nation, region or society takes different routes towards industrialisation because of their differential socio-economic, cultural and political settings; and what is now universally accepted is that some form of strategic economic planning is necessary for industrialisation to take place, and that different degrees of planning are recognised and appropriate, depending on prevailing conditions.

The Niger Delta region is peculiar in many ways. It is faced with a lot of environmental and developmental challenges that include but not limited to, a decline in agricultural productivity, increasing level of poverty, low level of industrial activities, low job opportunities, environmental degradation and social conflicts.

Traditionally, it is an area that was predominantly involved in farming and fishing activities; but over the years the natural environment has been negatively impacted, with many areas polluted by the proliferation of oil and gas activities.

There is no doubt that the industrialisation of the Niger Delta region will offer immeasurable gains that will positively affect almost every facet of life in the society. It will increase agricultural and manufacturing output, allowing people to take jobs in many other sectors, while increasing the amount of food, consumer goods and services available to the populace.

While increasing economic output, industrialisation will also result in population migration and the associated positive and negative consequences within affected areas. It will spur technological and scientific advances that can change the economic, social and political landscape of the entire region.

In addressing the question of industrialisation of the Niger Delta region, one can rightly ask and be challenged by the speedy growth and industrialisation of the four “little dragons” – Taiwan, South Korea, Hong Kong and Singapore – which all together constitute less than four percent of the world’s population, but has become one of the pillars of the modern industrial world order. How did those “little dots on the eastern periphery” of the globe achieve such a transformational industrialisation?

How can it be done for the Niger Delta region? A number of issues have been identified that will be critical to the success or failure of any strategies to be adopted. One should also acknowledge that the attainment of our industrialisation objectives will depend, to a large extent, on the development of critical infrastructure for industrial clusters and leveraging private sector collaboration.

This in turn, will require the development of efficient, accountable, transparent and participatory governance, the creation of strong, efficient and effective public service institutions and establishment of a competitive private sector-led business environment characterised by sustained macro-economic stability. It will also require the enhancement of regional security.

A very important impact of the growth of the industrial sector will be a reduction in poverty levels. The present singular focus on oil and gas related activities will reduce and the correlation between an improvement in living standards and benefits arising from oil and gas production activities would be seen as complementary. This would stimulate and sustain peaceful coexistence within the Niger Delta region.

The industrial sector in the Niger Delta region comprising manufacturing, utilities and mining (excluding oil and gas operations) has been mostly comatose for many years, as attention had been focused particularly on oil and gas production and related activities.

In the face of a rapidly changing global economic landscape and increasing inequalities, sustained growth of any region must include industrialisation that makes opportunities accessible to all its peoples.

The Niger Delta region surely needs a special investment vehicle to drive the process of industrialisation.