New oil and gas road map: First things first, Mr. President
The basis of the document, according to the president, is that ‘oil and gas still remains the critical enabler for the successful implementation of our budget, as well as, the source of funds for laying a strong foundation for a new and more diversified economy.’
Some of the projections in the new road map include a projected crude output of 2.2 million barrels in the fist few days of 2017. That is just some two months away. It is expected to climb to 3 million in a matter of months. The projected revenues are $5billion and $20 billion in the short and long terms. Government has also promised not to sell refineries for now, but to keep and have them reinvigorated for maximum production. A $10 billion Niger Delta infrastructure fund is to be floated to develop critical infrastructure in the region.
According to the minister of petroleum (state), Ibe Kachikwu, “The whole idea is to set up a fund that is not tied to budgeting, find an international organisations, identify their willingness to put money into the Niger Delta; be able to negotiate with state governments some percentage of what they have to put into this fund; obviously, Federal Government input, oil companies input.” The Buhari government also plans to strip states of 13 percent derivation proceeds, which the constitution guarantees presently. The point made here was that; since the states that presently take delivery of the 13 percent derivation are unable to utilise it for the good of the people, government at the Federal will find a way to ensure a more transparent disbursement.
From the little that has come out of the new road map, it appears the government means well, just as every government in the past had given the impression that they too meant well.
But as stakeholders in a democratic system, we need to interrogate government’s position and perhaps, offer one or two suggestions. I think that the Buhari government should not even bother itself with a fresh road map because we have enough on ground to work with. First, the Niger Delta is not conducive for the grandiose projections in the new road map. And there is so much to be achieved through means other than decrees and military assault. Since Mr. President came on board on May 29, 2015, the Niger Delta has taken on a new garb of hostilities. Apart from the fall in crude price in the international market, there is a significant drop in projected production and revenues, which is affecting the capacity of Budget 2016 to perform better than it is doing presently. Therefore, Mr. President owes it a duty to take some responsibility for the failure of peace, which the previous government sustained in the region.
The situation was far more deplorable, when former President Musa Yar’Adua was elected into office in 2007. In fact, militancy was at its peak then, when the entire region was carved into portions ruled by militias. That was also the recent origin of kidnapping, as oil and gas workers were targeted for ransoms. But not to be deterred, Yar’Adua, a civilian and lover of peace, thought of doing it differently from the ‘carrot and stick’ approach of his predecessor, militician Olusegun Obasanjo. The stick was far weightier than the carrot, so it didn’t work.
Yar’Adua came up with amnesty for repentant warlords and their disciples. It worked and oil gas production returned to a new height. Goodluck Jonathan sustained it and there was peace.
But once the All Progressives Congress (APC) came into office, there were pronouncements to end the amnesty programme by December of 2015. That sent signals that it was not going to be business as usual. While the programme was not yet terminated, outstanding payments to some ex-militants, who were undergoing trainings locally and overseas were halted, perhaps for stock taking, so that by December of last year, there was a clear sign that a return to self-help was in the making. Yes, there was need to review the amnesty and carry out investigations about how funds were spent and who got what. But everything emanating from those in government was all about crime and punishment. No human face.
To make matters worse, the Presidency was not communicating. The body language was in sync with initial statements like rewarding bountifully those who voted massively and giving crumbs to those who voted frugally. It took the President some persuasion to appoint a new manager of the amnesty programme, by which time matters had gone out of hand. Frustration had set in and some of the boys had to look for assurances outside government.
And what has been government’s response thereafter? The Federal Government has deployed soldiers and has continued to issue threats to annihilate militancy and all activities that hamper crude oil production in the zone. That has not worked. Instead, militancy has bourgeoned and has become uncontrollable.
So, government has to first deal with the hostilities before issuing a fresh road map. I am aware government is working on meeting elders of the zone to work out a new peace deal. The efforts have been on for months, but the results are frustrating because Mr. President has not demonstrated a convincing political will. Yar’Adua demonstrated the will and all other things fell in place, but Buhari seems to be interested only in oil revenues to drive his campaign promises, not in the enabling peace that will encourage production.
He does not think there are fundamental issues to be dealt with before you can access oil in another man’s backyard. He does not agree that foundational mistakes had been made in the past and that you cannot continue to forcefully apply military laws that were dubiously transferred into the constitution since 1979. And the last political confab (dubbed 2014 Jonathan Confab), whose report Mr. President does not want to read, has deliberately acknowledged that this federalism is not working and cannot be forced to work. The Confab, therefore, provided a gradual process of reforms that will assuage the anger in the land without disrupting both human and physical Nigeria in any fundamental sense.
I also wonder where the new road map will place the Petroleum Industry Bill (PIB) that has been around for many years and is being frustrated by the same geo-political sentiments and forces of oppression, which conspire to take by force what persuasion and debate could have worked out peacefully. The NASS has been foot-dragging on the bill and the executive is also not deliberate on the matter. It will be interesting to see how government reconciles the PIB with the new road map.
The 13 percent derivation to oil producing states is to enable them cushion the adverse effects of exploration and exploitation activities in host communities. It is true that the management of the funds is not very transparent. Many of the states don’t have much to show for what they have earned since 2000. It will make sense to seek better ways to administer the funds, but that is a constitutional matter. The new road map cannot tamper with what subsists without first approaching the NASS for an amendment of the constitution. The proposed $19billion infrastructure fund for the zone will also need legislative input, because all funds earned must be appropriated before they are expended. It is not known how much legislative buy-in the government has secured, but not much will be achieved, if the executive does not carry the legislature along in this new road map. Not much of collaborative effort between the two arms was visible at the launch, but it is advisable that legislature is in the know.
Why government will not want to sell or privatise obsolete refineries to enhance performance and corporate governance is one mystery only those in government can speak to. But we are waiting to see what the new road map will do differently. Very soon, it will be 2019, and time to render account.
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