Rivers Opens For Business With Ibim Semenitari

On March 1, 2013, one of the world’s most respected rating agencies, Fitch, released new rating for Rivers State in both London and Milan. This was immediately echoed around the world by Bloomberg of  London. Rivers State is one of the few states in Nigeria that have the guts to join the global rating system that tells you the truth in your face about your financials. The state is rated by both Fitch and Standard & Poor’s. The latter had earlier in November 2012, upgraded the financial rating of the state. Now, Fitch has come out with its own version and this has been causing positive ripples in investment circles around the world. The moment this latest rating was flashed by Bloomberg, some financial journalists began asking questions. Below are some of the questions they asked and the answers they got.

We hear Rivers State has received new rating, what are the details?

Yes, Fitch has upgraded Rivers State long-term foreign and local currency rating to a BB- stable from the previous B( +). This rating was released on March I, 2013, and so, Rivers State is one notch higher, as it were. This rating admits that there is a lot of stabilisation, and growth of the non-oil sector has played a key role in this. They do believe that our IGR has continued to grow, especially with the new measures put in place by the Ministry of Finance such as digitalisation of tax administration, tax harmonisation, autonomy for the Revenue Board, the one-stop-shop concept, and all efforts to reduce error. Basically, one of the things we clearly see is that Fitch is impressed with the financials of Rivers State.

When an organisation such as Fitch is impressed with a state, how does the citizen care about this?

Everybody knows that it means big. First, it means that people are looking to do business in an environment that is peaceful and conducive. The rating is interpreted to mean, ‘it’s good to do business with you: That is quite a message, especially in an era where people hardly understand the dynamics of an economy. Now, an agency like Fitch says it is good to do business with you. Remember that this is happening at a time most other economies especially in Europe and America are being down-graded by these top rating agencies. This shows that the ratings are no manipulation.

This rating has been consistent in the past couple of years. What could be those things that the administration is doing to sustain this rating?

You are aware of such measures as sanitising our financial system, trying to ensure that all the ministries reduced wastages, leakages and reduced cost especially by cleaning up our financial processes. There is also the biometric system which ensures that the real workforce is captured appropriately to reduce the incidence of ghost workers. There is effort in terms of how the budget is managed in relation to fiscal disciple. Yes, we are not there yet and nobody is, but every year we improve the system. This year, the governor has said it would be stricter, more improved fiscal discipline to ensure that, again, we are able to render accountable stewardship.

Are there tangible points of evidence to show that the investment community out there around the world is reacting to these positive ratings?

Yes, I will like to go by the rule of the thump. If you checked the hotels in Port Harcourt in 2007/8, they returned not more than 25 per cent occupancy rate. National average is about 51 per cent. But in Port Harcourt, by 2011 survey reports, it moved to over 65 per cent. Now, in fact, some hotels are recording 98 or 100 per cent occupancy rate. Novotel is at 100 per cent, Le Meridien and Golden Tulip are at 98 per cent. That tells you what is happening to this economy because the hotels are a good reflection of an economy.

When you look at air travel into the city and out, you hardly will be able to get a seat any day of the week. Clearly, you can see a reflection. Before, you would see an empty plane coming into Port Harcourt but now, most persons have to fight to get a ticket, including the international flights. In January 2013, when I was travelling for a conference outside Nigeria, I could not get a seat, and this was not the boom period, it was the middle of the month. Some persons had to fly to Lagos to get a flight. It was as bad as that. So, you have a situation where seats in airplanes are being sold out and hotel rooms are being sold out. Clearly, these ratings are doing something good for us.

Again, next year, Port Harcourt is the World Book Capital, that is something huge. We were pitched against Oxford, Moscow, etc, but Port Harcourt won. It is the first in Sub-Saharan Africa. The nearest that won it was Cairo, but it was during the system of handpicking. In 2014, Port Harcourt is hosting the Crans Montana Forum (May 2014). It is the first time it is going to be leaving Europe and this is heading to Port Harcourt . Investors are going to come along. Clearly, we have got to be doing something right here.

Culled from Business Day