DIVERSIFYING MONO-ECONOMIC BAYELSA: Odds, consequences and interventions
With an economy almost solely dependent on the government, Bayelsa State has an overstretched responsibility to meet its core obligation to build infrastructure and improve lives. Some discerning private investors are, however, initiating drastic measures to change the situation for the better, Egufe Yafugborhi reports.

AT a glance, even a first time visitor to Yenagoa, the state capital, notices that the economy in rapidly expanding Bayelsa State revolves around the State Government. As a young state, government at all tiers, particularly at the state level, is saddled with herculean primary task of raising infrastructures and institutions to support development and improve living standards for the surging population.

For the private sector, such an environment is supposed to present an attractive world of new economic frontiers of multifaceted sectors, the reason an observer would think is responsible for the rapid human migration to Yenagoa, the state capital. Ironically since her 1996 creation, the Bayelsa situation has defied this common premise. Everything in Bayelsa is all about the government.

The productive sector noted for sharing the burden of easing mass unemployment with the government is almost nonexistent. Industries for genuine secondary or tertiary production are lacking. The private sector is saturated with service providers, buying and selling, and contracting with government as the super client or customer.

That has left business attentions fixated on government to provide not just basic infrastructures. In specifics, the increasing number of hotels and food chains cannot survive without the patronage from government, its fronts or those swarming the state to look for limited government opportunities. In specifics, all contractors, concentrated in Yenagoa scramble only for limited contracts from government and its agencies or institutions; all applicants have only government to bombard with applications for job engagements. The circle goes on and on.

The challenges, effects: Clearly, the environmental terrain in Bayelsa is constant among the challenges discouraging effective private sector participation in the state’s economy. Emerging indigenous investment giant and former commissioner in the state, Dr. Azibapu Godbless Eruani puts it, “we (Bayelsans) live below sea level.” The cost of investing in a predominantly coastal terrain scares private investors.

Hotbeds of piracy

Beyond this primordial causative factor, insecurity has been the bane of development in no mean measures. At the height of militancy in the Niger Delta, Bayelsa was one of the hotbeds of piracy, kidnapping, mostly of external investors, destruction of established or sprouting investments and wanton killings. Earliest investors who were beginning to grow human and capital resources in the fallow economy were forced out in droves. With investors’ confidence drained by both remote and immediate weaknesses, government is left standing alone with an overstretched burden to develop infrastructures, provide employment and dictate commerce. Because government can only do as much with limited resources, the situation has instigated mass unemployment, the pace of development drastically slowed and  increased cost as government meant everything.

Interventions: If government has been standing alone for so long in the task of developing Bayelsa, the job of regaining investor’s confidence for much needed economic turnaround equally rested squarely with government. Over the years, successful administrations seemed to have concentrated on motion with insignificant movement; all talks, no action.

Going by early manifest results so far, the current administration by Governor Seriake Dickson is widely credited to have started on a note of difference. Matching words with action, the government has impressed with wooing runaway construction giant, Julius Berger back to the state. At the height of militancy in the region, the German firm noted for quality construction projects delivery abandoned its stakes in Bayelsa and the East West Road, forced out after two of its expatriates were killed in uncontrolled violence in the land.

Long term job engagements

The easily measurable gain from the return of Julius Berger is not only of renewed public confidence in the delivery of top quality roads and other infrastructure being handled by the firm. The construction giant has also spontaneously, by its presence in Yenagoa, reduced the growing population of the unemployed in the state by providing short, medium and possibly long term job engagements to deserving applicants, some of who may have been jobless for years.

One of the lucky so newly engaged, Bruce Ekiye testified that, “I have been contending with doing commercial cycling with all the associated risks since leaving technical school. I dropped my bike the minute I was employed as operations support in the Berger yard. It is a thing of joy. The pay is encouraging.”

In added interventions, the State Deputy Governor, Rear Admiral John Jonah, a couple of weeks back also harped on concentrated American investment in the state beyond oil and gas to tourism, agriculture and ports development among other viable investment opportunities in Bayelsa. The deputy governor was challenging two visiting economic advisors of the American Consulate, Lagos.

Limit of government involvement, imperative for drastic private initiatives: Agitated at the stagnated private sector involvement in core investment in the Bayelsa economy, the state government has been tempted to do it all by itself, that is talking about direct investment.

In as many occasions, however, the results have been far from encouraging. Limited by a combination of bureaucratic challenges, changing policies and acrimonious transitions of governments, nothing really cheerful is being derived from the government efforts. In counterproductive appeal, genuine funds needed for development of basic infrastructure ended up being tied down in stagnated investments. For the top two most verifiable of such dragging or ineffective state investment initiatives, there is the five star hotel initiated by President Goodluck Jonathan when he was governor of the State. Many years down the lane, the project, far from completion, has been more a subject of controversy and political muscle flexing among feuding political leaders of the ruling PDP.  Political intrigues

Immediate past Governor, Timipreye Sylva, consciously shunned work on the state hotel project. Only recently, the current governor, Dickson, has deemed it fit to revive  construction on the project which is no surprise to anyone familiar with the political intrigues. In the other instance, the state owns an oil field, acquired at a huge cost since 2003 Federal Government bidding rounds for marginal fields and oil blocks. For this long, no action had been taken to develop the awarded oil interests by the state oil firm established to drive the initiative. No drop of oil has been taken while other investors, private, who won similar opportunities that year have started producing.

The implication, according to Mr. Gibson Ezekiel, a safety and environmental expert, is that government has no business getting in the direct investments. “Government can only provide the infrastructures, peace and security to create the enabling environment for the private sector to come in”, he said.

Concurring to this basic reality, in his  words, Chairman of Bayelsa based Azikel Group of Companies, Dr. Eruani, said: “The political world is different from the business world. Government does not understand the business world.” Beyond spotting the problem, Eruani, a familiar political figure in the state had also long realised that no external investor would come for meaningful venture unless the people who own the land set the pace. “We know the area, we own it. We know it is peaceful now. We know there are lots of opportunities. And we know we can make things work. So we need to prove it before others can come with the confidence to join in developing Bayelsa”, he declared.

Indicators of positive change:Realising meaningful drift from solely government driven economy and development would not gel until indigenous investors take the initiative, stakeholders like Eruani may have taken the bold first move. Built on a sustainable investment template of “starting small and growing big”, he floated Azikel Dredging firm based in Yenagoa.

The sole objective for taking sand from the surrounding rivers, according to the Group President, was to provide cheaper sand at cost effective arms length to government and individuals, knowing the indispensability of that natural resource for massive reclamation of the largely marshy terrain and construction of much needed infrastructure.

Looking back, Dr. Eruani is satisfied that every kobo invested in Azikel Dredging has been worth the venture. The company started without any major operational tool of its own, depending on hired dredgers. At the moment, the company boasts of six intensive dredgers, boats and a fleet of tipping trucks and loading equipment, enjoying near monopoly for its competitively reduced rates. The Group president admits business has been good.

Today, that business has expanded into active involvement in several major projects from channel canalisation and major reclamations for the oil industry, federal government and the host Bayelsa state. In business sense, taking the opportunity was a classical step adopted by the company to gain a greater proportion of government expenditure by reducing the cost of sand for both government and the people of Bayelsa State for ease of development.

Burden of employment

From a human face, the Azikel initiative is also proving to relieve government of the burden of employment for the vast unemployed. With a staff base of 500 currently and still climbing, the group is humbled by being able to create sustainable jobs and offering a new lease of life to families in Bayelsa and from diverse other backgrounds in the Niger Delta.

The Group President measured the significance of Azikel’s contribution to human capital development in the state with two instances. He narrated of an employee engaged as a staff driver initially on a N35,000 monthly pay. Today, he said, the particular staff has been trained into a qualified boat captain, manning one of the boats of the firm with a N350,000 take home. “There is another staff we employed as security personnel. Today, he has been trained on all the rudiments of the dredger operations. He know everything and he is managing one of our dredgers and currently rewarded with up to N450,000 monthly pay.

From the success scored with the dredging interest, Azikel has diversified. Recently, it announced the acquisition of an aircraft to in pursuit of full scale commercial airline. The aircraft, the Oka 800 S125, was delivered to augment a fleet of an existing craft and helicopters earlier acquired by the group’s subsidiary, Azikel Air. The group’s president said the firm has been discreet about the earlier fleet until such a time it was prepared for effective commercial air business.

Long term  strategic plan

Currently, both the Azikel Air fleet are involved in charter flights from a base in Abuja. The President believes in the next couple of months, Azikel should go commercial full scale. In the medium and long term strategic plan, the company has its eye set on establishing the first airline on its home soil, Bayelsa. That predisposes that the company already has the resources and waiting on government to take responsibility for the provision of a functional airport in Bayelsa.

It is confirmed the state government is impressed with partnering talks already at the level of determining technical details to go into the process of airport construction. “Azikel is ready to deliver the first three aircraft to kick-start a Bayelsa owned airport. When that time comes, Azikel Air would shift base to Bayelsa.”

In other interests, Azikel Petroleum has its corporate eyes set on active participation in the oil upstream and downstream sectors. In the next bidding rounds soon to be unveiled by federal government, the group hopes to corner one or more of up to 10 marginal fields up for grab within the boundaries of Bayelsa. The group has boasted of producing crude within eighteen months of winning one of the fields and assets.

The interest in marginal field is the ultimate desire to establish a refinery in Bayelsa to refine a significant proportion of the crude to produce, realising that a basic limitation responsible for the inability of past awardees of refinery licences is the difficulty with guaranteeing adequate crude supply from second parties. “You have to be sure of unhindered crude supply to set up a refinery. That is why we will first produce crude to be able to effectively refine for the needs of our people. We are serious about this and we are confident we will get there because I believe that as Bayelsans, we cannot be home to so much oil and gas reserves and not be actively involved in tapping that resource.

Azikel is also perfecting modalities for involvement in agric development and construction. But all of these ventures added to the efforts of other prospective investors in the Bayelsa economy would not score lasting impressions if peace and security as indispensible ingredients or a healthy investment climate is not sustained. It would not be wise to lure investors in only for the state to relapse into insecurity. This is why the government and other relevant stakeholders must be concerned over recent episodes of violence and piracy in the state.

On Monday, July 16, gunmen waylaid and viciously gunned down two men identified as ex-militants in broad daylight in Azikoro suburb of Yenagoa, their bodies mangled with a rain of bullets.

Identity of killers

In subsequent denial, the Sector 2 Command of the JTF, Operation Pulo Shield discredited the state government as going beyond boundary in insinuating that British was rather working with the JTF for the security of the Niger Delta. The preference for the double denials by both key stakeholders in the security of the state obviously overshadowed investigations into the circumstance of the Azikoro Village shootings and the identity of the killers who remain unknown.

The next Monday, July 23, reports had it that two mariners of a Lagos based fishing firm were kidnapped for four days in the mangroves of Bayelsa where they were held in hunger by sea pirates and kidnappers. They were released only after their company parted with N3m ransom.

Both recent episodes have left several persons wondering whether insecurity was returning uncontrolled to Bayelsa State. There is need for concerted efforts for mutual trust and commitment among stakeholders in an atmosphere of peaceful coexistence to achieve a truly diversified, public/private investors shared Bayelsa economy.