Review: The economic impacts of the state of emergency in Rivers State

In March 2025, the Federal Government of Nigeria declared a state of emergency in Rivers State, following months of political conflicts, violent clashes within communities, and interference with governance. The reactions to this decision have been mixed; some view it as a step toward restoring law and order, while others believe it will weigh heavily on the economy. It was finally lifted in September 2025, but the economic impacts remain. 

In this article, I will examine the economic impacts of the state of emergency in Rivers State.

Backdrop of the state of emergency in Rivers State

Rivers State has long been one of Nigeria’s largest oil-producing states. Hence, it is a key leg on which the economic foundation of the country stands. But for rising insecurity, political disputes, and governance breakdown as of 2025, it could no longer be said that the state was functioning well.

The rationale behind the federal government imposing a state of emergency is:

• Escalation of violence in Port Harcourt and adjoining communities.
• Intensification of political instability that halted state institutions.
• Economic dislocations from strikes, blockades, and clashes are impacting local businesses and oil installations.

Declaring a state of emergency meant that governance was temporarily held under federal control, with security forces given wider latitude to restore order. While this may address the immediate instabilities, the long-term and broader effects on its economy are highly complex.

Short-term disruption in the economy

Perhaps the most immediate economic effects of the emergency declaration are in the area of disruption. The sudden transfer of governance and increase in security measures affected normal business activities, albeit with a slowdown.

Markets, transport systems, and small companies have all become victims of the curfew restrictions on the movement of goods and persons. These disruptions have affected both urban centers, such as Port Harcourt, and rural communities that depend heavily on trading routes.

Some quick disturbances and disruptions of this nature include:

• Market activity dwindling: Shops have shorter times of operation and relatively lower foot traffic, and unreasonable logistical barriers.
• Transport disruptions: Roadblocks and checkpoints towards goods for and from Rivers state are delayed in delivery.
• Business uncertainty: Investors and entrepreneurs may postpone embarking on new projects until the situation is more stable.

While these can be regarded as short-term disruptions, if prolonged, such nuisances could further jeopardize many small-business investments. 

Impacts on the oil and gas sector

Rivers State is central to Nigeria’s oil economy because of its many refineries, export terminals, and international oil companies. Therefore, instability in the area has implications for economics nationally and internationally.

There are risks and opportunities posed in terms of a state of emergency. In one way, better security will save the oil installations from vandalism or militant attacks. In another way, depending upon how heavily militarized and politically unstable, these very conditions may discourage oil companies from expanding or investing in their long-term projects.

Direct impacts would include:

• Operational: Companies may halt or scale back production as a result of fears about sabotage or worker movement disruptions.
• Investor confidence: Foreign partners might postpone new investments until stability is ensured.
• Revenue streams: Since oil contributes the bulk of Nigeria’s federal revenue, instability in Rivers has a direct effect on national earnings.

Thus, the oil sector may find itself in the paradox of having greater short-term asset security but poorer long-term investor confidence. 

Effects on agriculture and local trade

Agriculture remains a vital sector in River State, particularly for rural households. Food crops such as cassava, yams, and oil palm, including fishery products, play a major role in food security and employment at the local level.

Emergencies, roadblocks, movement restrictions, and curfews all disrupt agricultural productivity in the state in a multitude of ways:

• Farmers lose income when it becomes impossible to deliver perishable produce to market due to the blockage of roads and curfews. 
• Transport constraints delay or disrupt the supply chain (fertilizers, seeds, farm equipment).
• Due to restrictions on free movement, the timing of agricultural operations such as land clearing, weeding, and harvesting is adversely affected.

For the consumers, it engenders higher food prices and shortages in urban markets, while the resultant loss of income from farming puts farmers under further economic duress.

Effects on consumer welfare

The state of emergency impacts first and foremost on the citizens. Consumers in Rivers State are already battling economic inflation, unemployment, and a rise in the cost of living. The state of emergency suffocates the already dying economy even more.

Immediate effects on consumers are:

• Price instability: Compromise of the supply chain and delivery networks results in price surges for merchandise.
• Decline in purchasing power: Households reduce their non-essential consumption as their income diminishes and costs rise.
• Uncertainty over livelihoods: Workers in the informal economy of transportation, street trading, and hospitality fear losing their earnings in daily wages restricted by curfews.

This all leads to decreasing consumer confidence and further crippling the local economy.

National economic impact 

This event may look like an isolated incident in Rivers State; however, its implied ramifications are broad-reaching and extend beyond the boundaries of the state. Since it is an oil hub and commercial center, instability in the state affects national revenue, foreign exchange, and Nigeria’s economic stability. 

At the national level:

• Increased pressure on revenue as oil operations are interrupted, and investor confidence is also impacted.
• Trade is affected as Port Harcourt accounts for a significant part of the import and export entry points.
• There are perceived political risks to investors about Nigeria being viewed as a more volatile business environment that would subsequently deter both foreign direct investments (FDIs) and local private sector growth.

In the longer term, the extension of the state of emergency undermines Nigeria’s entire diversification efforts and programs looking at attracting foreign investors outside oil.

Stepwise road map towards economic recovery

While the road ahead is clear in terms of economic costs, how that state of emergency is handled will determine the mileage gained. A recovery plan must be strategic, inclusive, and timely.

Security and stability restoration

Peace is the backbone of economic recovery. Businesses will only come fully back to work when there is a minimum security risk. The government must ensure that security measures protect rather than inhibit businesses.

Restoring investor confidence 

Rivers State has to be made fit for investment by both local and foreign investors. It calls for transparency in governance, consistency in policies, and active dialogue with oil companies as well as traders and community leaders.

Support for local businesses and farmers

Small and medium-sized enterprises (SMEs) and farmers absorb the brunt of the havoc caused. Targeted relief like short-term subsidized transport, agricultural support programs, and temporary tax breaks could help cushion such effects.

Improving infrastructure and trade channels

Enhancing port operations, road networks, and logistics within Rivers State will amount to enhanced trade flows and minimal costs, which will aid recovery.

Engaging communities and civil society

Community participation and engaging with all citizens in policy shaping will build stable conditions, which ultimately improve economic growth.

If these stratagems have been implemented with precision, Rivers State could emerge from instability to recovery with better economic resilience.

Conclusion

A state of emergency declared in Rivers State has vast implications for the economy. Although it seeks to restore peace and stability, it nevertheless disrupts trade, agriculture, consumer welfare, and investor confidence. 

In the short run, one can expect small businesses, farmers, and consumers to face dire consequences. In the medium to long run, oil production and thus, revenue at the national level will also be endangered if stability is not quickly restored. 

If handled effectively, with focus on security, community engagement, and economic support, the state of emergency might be turned into an opportunity for resetting governance and economic policies in Rivers State. 

The actual impact will almost certainly depend not only on the federal policies but also on the degree to which other stakeholders (business, investors, and communities) are adaptive and responsive to the emerging situation.