Resource control: Starving the golden goose that lays the golden eggs
Niger Delta is the most oil-rich region in Nigeria whose resource generates about 70 percent of the Nigeria revenue, according to the Natural Resource Governance Institute (NRGI). Ironically, the social-economic condition of the region is characterized by underdevelopment, poverty, environmental degradation and infrastructure gaps, a reality that has been the cause of perennial agitation in the delta region. The delta people believe that having a control over their resources will address some of the problems they have been facing since 1956 when the first oil was discovered in Oloibiri in Bayelsa State. In this report, AJIBOLA AMZAT (Features Editor) examines the pros and cons of this position.
Niger Delta Avengers (NDA) declared on Thursday, May 12 on its website (www.nigerdeltaavengers.org) that they have reduced Nigeria’s crude oil production by 50 percent. The following week, the Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, announced that Nigeria’s crude oil production has declined from 2.2 million barrels per day to 1.4 million barrels per day due to pipeline vandalism. This loss is translated to 800,000 barrel per day, representing 36 percent loss as against 50 percent loss claimed by the NDA.
The difference in figure notwithstanding, the Avengers’ attack, together with the crash of the global price of crude oil, has distressed the Nigerian economy in a significant way. Yet the militants have promised to bring down the production to “zero” level through their engagement coded “Operation Red Economy.”
Should that happen, that may also cause the failure of the 2016 budget which, though aims at diversifying the Nigeria economy, but still relies significantly on earnings from oil.
According to the budget speech read by President Muhammadu Buhari in May, oil-related revenues are expected to contribute N820 billion, about 14 percent of the total, to the 2016 budget.
So, the activities of the Avengers left unchecked may foil the Federal Government’s plan to rehabilitate and construct 31 major roads in 2016. It may also frustrate its plan to improve highway connectivity over a distance of 210,093 kilometres and its plan to complete the Kaduna-Abuja-Ajaokuta railway line.
In addition, the administration’s promise to create 1 million jobs before the year ends may also become unrealisable if the armed militants succeed in continuing to blow up the nation’s primary source of revenue.
Already, the plan to reach 7,000 megawatts of electricity generation appears to have been thwarted because the armed militants have lowered the electricity output to 1,000 megawatts in May, Bloomberg has reported.
Nigeria’s life expectancy at birth (years) is 52.29, according to the 2015 United Nations Department of Economic and Social Affairs (UN DESA).
If the Avengers make good their promise, the promises of Buhari administration to reduce the infant mortality rate to 3 percent by 2019, maternal mortality by more than 70 percent and to improve life expectancy by additional 10 years may also be frustrated.
In other words, the human development index in Nigeria may further decline through the activities of the Avengers.
This, perhaps, is the reason why some stakeholders are calling for dialogue. Dialogue is the “solution to the current crisis,” former governor of Delta State, Dr. Emmanuel Uduaghan, was quoted in the press recently.
But the NDA is not interested in a dialogue that leads to nowhere. “We only want a genuine and conducive atmosphere that will make us commit to any proposed dialogue,” said the group spokesperson, General Mudock Agbinibo in a post on the group’s website.
The militants’ response is rooted in history. In 1998, there was Kaiama declaration which, among other demands, called for the ownership and control of all land and natural resources including mineral resources within the Ijaw territory.
Till date, that declaration only exists in cold print; no government has adopted the declaration.
Governors Diepreye Alamieyeseigha, James Ibori , Lucky Igbinedon and Obong Victor Attah of Bayelsa, Delta, Edo and Akwa Ibom started the political mobilization for resource control, but the effort only pitted the governors against the Federal Government.
In 2002, FG led by the former Attorney- General and Minister of Justice, late Bola Ige dragged the Niger Delta states to the Supreme Court over the On-Shore and Off-shore dichotomy case which eventually was ruled in favour of the FG but the 13 percent derivation was introduced to pacify the Niger Delta States. Observers think the 13 percent derivative is tokenism.
Before then, the president of the Movement for the Survival of the Ogoni People (MOSOP), Ken Saro-Wiwa engaged in a nonviolent campaign against environmental degradation of the land and waters of Ogoniland through the operations of multinational petroleum companies, especially royal Dutch Shell Company. He was gruesomely murdered together with other eight MOSOP leaders by the late Sanni Abacha regime.
So in 2006, Movement for the Emancipation of Niger Delta (MEND) introduced attack on oil facilities and kidnapping into the struggle, but rather than address the issue of sustainable development, the government of the late president Umaru Musa Yar Adua/ Goodluck Jonathan in 2008 granted a blanket amnesty to militants and awarded pipeline protection contract to individuals.
Today, the revenue sharing formula in the country still remains 56 percent, 24 percent, and the 20 percent for the federal, state and local government councils respectively. Though the oil producing states get additional 13 percent from the oil revenue, the Federal Government has also set up the Niger Delta Development Commission (NDDC) to embark on projects that will facilitate infrastructural development; this addition has not transformed the Niger Delta communities in a significant way.
According to the Earth Rights Institute, the 13 percent derivation revenue allocated by the Federal Government to the Niger Delta states in 2000 amounted to N66.719 billion. The total figure increased to N99.332 billion the following year. These funds have been largely squandered, the Institute reported.
Recently, the Office of the Auditor-General of the Federation recently announced that about 1,733 NDDC contractors have disappeared with N70 billion as mobilisation fees without appearing at their various sites.
Also, the profligacy of the state governments has left the people of the Niger Delta impoverished and hopeless about the actual dividends of democracy. According to the former Minister of Finance, Ngozi Okonjo Iweala, states in the Niger Delta region earn more than the annual budgets of some neighbouring countries, yet the citizens of these states lack basic amenities. “Why should a state like Akwa Ibom not have a single refinery to shore up its IGR,” asked the publisher of Oil and Gas, Niyi Akinosho.
The state has been receiving the highest monthly allocation from the federation account in the last 6 years.
Okonjo-Iweala once listed Nigeria’s 10 highest revenue receiving states based on the federal allocations in 2013. Akwa Ibom is number one followed by three other states from the Niger Delta. The allocations are as follows: Akwa Ibom N260 billion, Rivers N230 billion, Delta State N209 billion, Bayelsa N173 billion, Lagos N168 billion, Kano N140 billion, Katsina N103 billion, Oyo N100 billion, Kaduna N 97 billion and Borno N94 billion..This pattern subsists till date, yet many communities in the region continue to grapple with basic survival. This is the reason why some observers think throwing more money at the region may not activate development, rather it will only continue to enrich a few individuals in the power circle. But this also is not an argument that is popular in the region.
NDA during the weekend attacked Chevron’s major oil well seven and eight in Delta State.
The group also had blown up crude oil trunk line belonging to the Nigeria Petroleum Development Company (NPDC) also located in Delta State, as well as NNPC crude oil trunk line to Warri refinery.