NIGERIA. REGIONS Democracy has allowed entrepreneurial states to take charge of their own development
Opportunities abound in Akwa Ibom

State governor Victor Attah believes the potential for development is enormous

Nigeria’s second biggest oil producing state, Akwa Ibom, already knows what it takes to convince foreign oil companies to invest. It pumps about 28 per cent of the country’s entire petroleum output, mainly through the operations of US giant ExxonMobil. Other multinational oil companies in the state include Anglo-Dutch operation Shell and France’s Elf.

According to governor Victor Attah there is no reason why the US company should not re-locate its Nigerian headquarters from Lagos to Akwa Ibom alongside its considerable operational base. Mr Attah also wants to see other companies locate in Akwa Ibom, not just firms in the oil sector. He believes the challenge now is to broaden investment into new areas such as industry and manufacturing, information technology and food processing.
He says democracy has allowed each state to take charge of its own development, something Akwa Ibom and other regional administrations could not do under former military regimes. “We are working very hard to redress the economic decline that the state suffered,” says Mr Attah. “Akwa Ibom is wealthy, and the potential for development is enormous.”

Mr Attah – a former architect and town planner – believes the state has the potential to become one of the most developed industrial centres in the region, given the right backing from the capital, Abuja.
“We do not ask the government for handouts because we have our own funds from our substantial hydrocarbon reserves,” he says. “What we ask is that we are given the support to implement those policies and projects that will benefit us.”

There are key reforms taking place within the state administration itself to streamline procedures and offer a more transparent and investor-friendly service.
“We are re-organising our public service to run with a private sector mentality and we are upgrading our infrastructure to support increased industrial activity,” he says.
Akwa Ibom is one of Nigeria’s newest states, created in 1987; before then it was part of Cross Rivers. As a key oil producer it is naturally afforded a high priority from the federal government. It also has a significant industrial base.

A new $100 million power station will be opened this year

In a highly competitive market, the state administration must offer something extra to attract investors. It is building up infrastructure and investing in improved education and healthcare services.
The telecommunications sector is being modernised to provide international standard services. The state holds a $65 million investment in Econet, a new mobile phone company, which will provide for its future telecommunications needs. This represents a 15 per cent stake.

One critical project is the development of an independent power plant in the Ikot Abasi free zone which will make the state virtually self-sufficient in electricity. It is being developed in co-ordination with a new 100,000 bpd private refinery at Ikot Abasi which will export fuel products to China. Both initiatives have input from Chinese technical partners
The Ibom Power Company, formed in 2001, is majority-owned by LYK Engineering Company, a subsidiary of LYK Engineering Corp and Tetra Tech Inc of the US, although the Akwa Ibom Investment and Industrial Promotion Council (AKIIPOC) owns a 15 per cent shareholding.

It is looking to build a 240MW gas-fired power station at a cost of $100 million. Some 80 per cent of the project will be debt financed. The plant is due to open this year and will be operated by North China Power Engineering Company.
In addition, the state is also going to have a state-of-the-art gas-to-liquids (GTL) plant which will convert 100,000 cu ft of gas a day into sophisticated fuel products. “This is a very ambitious project and shows how committed we are to reinvigorating the state’s economy,” says Mr Attah.

The entrepreneurial spirit in the state is flourishing. AKIIPOC is the primary agency responsible for promoting the state government’s investment and industrial promotion initiatives. It has already secured strategic partners and core investors in a number of important businesses located there.
But with investments in both telecommunications and power generation it is only natural that Akwa Ibom seek to establish a foothold in the oil and gas business. Akwa Petroleum and Energy, a state-funded holding company set up to facilitate the participation of the state and its people in the oil sector, is looking to sign joint ventures with international partners in three core areas: upstream exploration and production; refining, and gas.
Mr Attah says the government offers attractive incentives to investors including free land, access to research studies, tax holidays, capital allowances and the easy repatriation of profits. He says British companies, which have a long track record in the country, are especially welcome.