Africa’s Newest International Stadium: A Nest of Waste?
Last Friday, Governor Godswill Akpabio opened a brand new stadium in Uyo, the capital of Akwa Ibom state, Nigeria to huge fanfare. The Akwa Ibom International Stadium already has a nickname, The Nest of Champions, no doubt inspired by the Bird’s Nest in Beijing. Its actual design was also heavily influenced by the Allianz Arena, home of Bayern Munich. At 30,000, its capacity is half that of the Abuja National Stadium, and is rumoured to have cost N40 billion ($250 million).
By all accounts, Godswill Akpabio has done very well in terms of developing Akwa Ibom’s infrastructure, and this new stadium is seen by many as his crowning achievement as he leaves office in 6 months. On the other hand, some will view such developmental strides as something that should be normal, given Akwa Ibom’s status as an oil producing state which receives one of the highest federal allocations, and has a very small population of just 4 million people.
In Nigeria, however, the standard of governance is still low enough to guarantee him high marks, especially when compared to his predecessor, and indeed, his fellow governors around the country since 1999.
Building a spanking new stadium in a football mad country like Nigeria will certainly get the good vibes going, but it takes much more than that to make it worth the expense, irrespective of the level of development the city or country has attained. In much more affluent parts of the world, like America, it slowly became obvious even to them that the positive economic effects of a new sports stadium are at best overstated, or at worst, non-existent, and more to the point, much of the burden is borne by the taxpayer.
As far back as 1997, Andrew Zimbalist and Roger G. Noll wrote:
Advocates argue that new stadiums spur so much economic growth that they are self-financing: subsidies are offset by revenues from ticket taxes, sales taxes on concessions and other spending outside the stadium, and property tax increases arising from the stadium’s economic impact.
Unfortunately, these arguments contain bad economic reasoning that leads to overstatement of the benefits of stadiums.
It is important to keep in mind that we are talking about America here, the richest country in the world, not one in which most people are still struggling to get by.
The Abuja National Stadium opened to similar fanfare under the Obasanjo administration, in preparation for the 2003 All Africa Games. By 2012, reports had already surfaced that the pitch was overgrown with weeds and the structure needed urgent maintenance, which eventually happened. In addition, the stadium itself was underused, because Abuja does not have a team in the Nigerian Premier League, much less one involved in continental competition, and its lack of atmosphere meant that it is not even the first choice of the Super Eagles for home games.
There is no guarantee that this same fate will not befall Nigeria’s newest stadium. Akwa United, based in the capital Uyo and are in the Nigerian Premier League, cannot be called a successful club. They were relegated as recently as 2009 and are not involved in continental competitions either. From next season, they are expected to play their home games at the ‘Nest of Champions’, but are unlikely to be champions of anything soon. Their last 3 finishes in the Nigerian Premier League: 13th, 16th, and 12th.
The more successful a club is, the more people will want to associate themselves with the team and its brand. This success brings with the ability to increase attendance at games, and charge substantially for tickets. It then stands to reason that an unsuccessful club, indeed, one without a history of success, will find it harder to get ‘bums on seats’ and reduce its marketability to potential sponsors.
All this talk about economics is because this stadium has been completed at precisely the period when oil prices, the revenues from which make up the basis for federal allocations, are falling. Only 6% of Akwa Ibom’s revenue is internally generated, and if allocations are sharply reduced for even a couple of years, the financial commitments the state government has to the maintenance of the stadium are likely to come under pressure.
It would be interesting to see the revenue projections for the stadium, which will forecast the point at which it at least pays for its running costs, given that roughly 35 games a year will take place there at a maximum. It can be rented out for events, advertising, catering services, bars, restaurants, and so on, but whether they can amount to substantial revenues remains to be seen.
One of the grand narratives to have emerged from 8 years of Akpabio, is that he has elevated the status of the people of Akwa Ibom from being known as just domestic servants, to being reckoned with nationally. This fits perfectly with Akpabio’s own larger than life persona. So does the stadium, which seems more of a monument to this ego than anything else.
There is nothing wrong with possessing a huge ego, but when it comes at a cost of N40 billion with a questionable economic upside, then questions must be asked. Nigeria’s history is filled with lots and lots of examples of unsustainable investments made possible by the cushion of our oil wealth, while human capital remains underdeveloped. In Akwa Ibom’s case, only 31.2% of its students passed the WASSCE this year.
A new stadium in Uyo will no doubt be a source of pride for indigenes of Akwa Ibom and Nigerians in general, but it may eventually become a symbol of all the misplaced priorities of over 54 years as a nation.
P.S: For further reading about why stadiums are often bad economic investments, this is a good place to start.