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Federalism is the answer, after all – Part 57

By Editorial Board
25 November 2021   |   3:55 am
The contention over the skewed federalism that the Nigerian state system is will have no end unless the clarion call for restructuring is achieved.

Oil field

The contention over the skewed federalism that the Nigerian state system is will have no end unless the clarion call for restructuring is achieved. The latest in the unending controversy over fiscal control of the state came from a Bill for an Act to amend the NDDC Act sponsored by Senator Olamilekan Adeola (APC, Lagos West), who argued disingenuously that while outlining the general principles of the bill, that “Following the discovery of oil in Bauchi, Lagos and Ogun, these states have officially joined the league of oil-producing states in Nigeria following the discovery of crude oil in Alkaleri LGA, Bauchi; Badagry, Lagos, and Ipokia, Ogun State…By virtue of this, the states are entitled to the 13 per cent derivation that is due to oil-producing states, according to the provision of Section 162 Sub-Section 2 of the Nigerian constitution.” Fiscal autonomy is a core federal principle and is the nugget of controversy in a fissiparous state like Nigeria. This controversial bill has, however, passed the second reading and committed to a committee.  
 


Nevertheless, the riposte from the representatives of the South-South, the region that is largely constitutive of the Niger Delta Development Commission (NDDC), opposed the bill. In a logical manner, Senator Sekibo from Rivers State said: “I congratulate these states where my friend said they have discovered oil. What I don’t know is that whether the oil is in commercial quantity and they are exploring them for sale and the money going to Nigerian coffers. That one, he has not expatiated on that one…Are they exploring oil, are they refining oil in these places and has the oil caused any devastation in that environment? The purpose of the NDDC is not just because they found oil there, it is because the place has been so devastated and there is a need to see how they can remedy the place and because that place is so backward…Each time there is a law to support a backward people, to support people who are suffering, Nigerians will come out after a couple of years to dampen the strength of that law.” Taking a cue from Senator Sekibo, Senator Matthew Urhoghide averred that he was not “particularly against the sponsor of this bill. I just believe that the bill should be properly posited. Today, what each state gets from the 13 per cent derivation is a function of production…Today, Gombe is fast becoming a host community, Bauchi and some other states. But to say these states belong to Niger Delta is not possible. ..If the idea is you want to share out of the 13 per cent derivation, they are at will as long as they produce oil but to say they must belong to Niger Delta, it makes mockery of the idea in the creation of NDDC.”

The Deputy Senate President Omo-Agege who in his response was forward-looking noted that, “We look forward to the day when indeed all states in Nigeria will not only produce oil but produce one form of mineral resource or the other…What this lead debate clearly shows is that my colleague from Lagos is a classic meddlesome interloper. The NDDC is a regional development commission. We must draw a distinction between the NDDC and the oil and mineral producing commission.” Advisedly, Senator Adeola was told to redirect his effort towards the creation of the South West Development Commission.

This current bill raises several questions: one, how much information do we have about the productivity of the new found oil that just before dawn, some busybodies are already clamouring for sharing of the cake as usual baked by nature? Has the omnibus Petroleum Industry Act (PIA) not addressed some of the points at issue? Is NDDC no longer a dedicated commission meant to address the specific problems of the Niger-Delta? Above all, is frivolity a legislative virtue?

About 2009, oil was said to have been discovered in large quantity in two different locations in Ogun State, namely, Ogun Waterside and Ipokia Local Government Areas. The exact reserve in this is not in the public domain; the Lagos find over which Yinka Folawiyo Petroleum Company Limited (YFP) commenced oil production in the Aje field located in block OML 113 offshore Lagos about 2016 goes beyond speculation. Although the output is not exactly, that claimed capacity for about 40, 000 barrels per day and a storage capacity of about 750,000 barrels. In the third quarter of 2019, NNPC announced that crude oil, gas, and condensates were discovered in the Kolmani River region at a border community between Bauchi and Gombe states climaxing what industry watchers described as over 40 years of exploration. The finding is plagued by opacity. The Minister of State for Petroleum Resources, Timipre Sylva, over a year ago, announced the discovery of about one billion barrels of crude oil in the North East, with a caveat that there was a need for more exploration in the area. In his words, “From the evaluation results that we are getting, the reserve that has been discovered in the North East is about a billion barrels. Those are the kinds of figures that we are seeing and we are beginning to understand the geological structure of the region.”
 


The minister’s viewpoint is sheer speculation and laden with politics. Indeed, experts’ viewpoints are not forward-looking. They argued that there are categories of petroleum reserves at discovery, namely, proven reserves with recoverability certainty, a 50-50 recoverability reserve called probable reserves, and a 10 per cent recoverability chance based on current technology and economic conditions. Specifically, they described the Gongola basin discovery by the NNPC as “tight information” as the one billion barrels figure bandied could mean ‘oil in place’ and not ‘proven’, as the well was not tested.” Except for the Lagos field, the productivity of the so-called finds is in doubt unless new information emerges.
 
Needless to the controversy over the fate of the new entrants in oil production in the country as the Petroleum Industry Act (PIA) has taken care of the oil-bearing community. Similarly, it is too late in the day to bastadise a purpose-fit Commission, the NDDC, put in place to take off the environmental sins in the Niger-Delta and the reparation for the damage done by several years of oil exploration that has fed the venality of state elite. The long and short of these arguments is a return to federalism in which component units of the Nigerian state can exercise fiscal and developmental autonomy without the impediments of lumbering and gluttonous centre. This should be the preoccupation of any serious lawmaker at this point in time that the country is on the precipice than self-serving frivolities. That bill to disrupt the status of NDDC is frivolous and despicable. It should be spiked, immediately.

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