up in the air

Nigeria: Is Rivers State $390m ring road worth it?

By Elfredah Kevin-Alerechi

Posted on August 4, 2023 11:46

Rivers State Governor Siminalayi Fubara says flyovers will attract investment. (All rights reserved)
Rivers State Governor Siminalayi Fubara says flyovers will attract investment. (All rights reserved)

The oil-rich state is spending wildly on new roads and flyovers while battling power cuts and a housing shortage.

Nigeria’s Rivers State recently contracted construction company Julius Berger to build a $390m, 50km ring road with six flyovers in Port Harcourt. Governor Siminalayi Fubara called it a “legacy project” to ease congestion.

Critics question the spending’s impact on attracting investment and improving lives.

Fubara, successor to controversial ex-governor Nyesom Wike, says 75% of the cost is already paid. He claims flyovers will spur real estate and business growth in surrounding areas.

However, opposition All Progressives Congress member Eze Chukwuemeka Eze says credit belongs to former governor Rotimi Amaechi, who proposed the ring road in 2008.

Rivers tax growth

The project adds to 18 flyovers built since 2019 in the oil-rich state, home to Shell and other multinationals. President Bola Tinubu opened 12 flyovers in April. Though they are federal roads, Tinubu says the state will not refund the cost.

The area struggles to supply 17 hours of power daily

Internally generated revenues climbed steadily under Wike, hitting $340m in 2020. Rivers ranked second nationally in state revenues, after Lagos.

But analyst Olusegun Elemo says flyovers alone don’t attract investors. “Government policy, electricity, security and taxes also matter,” he says. Rivers struggles to supply 17 hours of power daily, even near the new flyovers.

Civil society leader Enefaa Georgewill says Wike failed to consult residents on flyovers that disrupted homes and businesses without compensation. Georgewill adds that Rivers’s $480m supplementary budget would be better spent on housing to “ease shortages.”

Christopher Ndubuisi, whose car parts business was displaced during the construction of a flyover, saw sales plunge after relocation. “I didn’t get any compensation from the government or landlords,” he says.

Debt build-up

While Wike improved fiscal sustainability, Rivers’ debt surged on his watch. External debt fell to $87m in June 2021 but had risen to $140m by June 2022, and domestic debt is at $292m.

Fubara made headlines last year when being pursued by Nigeria’s Economic and Financial Crimes Commission over corruption charges, which he denies.

Vahyala Kwaga, a research analyst with BudgIT, which compiles data on government finances for citizen engagement, praises Wike’s capital spending prioritisation but is concerned about the limited transparency. He says implementation reports detailing expenditures are lacking.

While Wike touts flyovers as luring investors, their benefits for residents and businesses disrupted remain unclear. Critics say more fiscal transparency and social spending, not just flashy infrastructure, is imperative to truly deliver growth.

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