Oil in the north, so what?
First discovered in commercial quantity in Oloibiri in 1956, petroleum crude is at the vortex of Nigeria’s geo-political dynamics, exacerbated by the fact that the economy is dependent on it substantially for its foreign exchange needs. And because the commodity has not translated into meaningful wellbeing of ordinary citizens, it is generally regarded as a resource curse, particularly that it has resulted in neglect of other sectors of the economy that would have been more beneficial. So why is the fanfare about the recent discovery of oil in the north, in the Kolmani area between Gombe and Bauchi, beyond the symbolism of a geo-political spread of the commodity within the Nigerian space?
Nigeria’s current proven reserves of crude oil and gas stand at 37 billion barrels and 208.6 trillion cubic feet respectively, ranked 10th and 9th in the world. With four refineries at total refining capacity of 445,000 barrels per day unable to refine, the country is enmeshed in import of primary petroleum products – petrol, kerosene and diesel at great cost to the citizens and in transactions that are opaque, bedeviled by endless subsidies. Right now, the supply of petroleum products is epileptic and the citizens subjected to enormous distress at great cost to secure them.
What then are the benefits of crude oil and gas to the citizens in the absence of a viable downstream sector of the petroleum industry that has the capacity to expand economic activities and promote value-chain industrialisation? In the near term, there is a certain relief that the current hardship in product unavailability will abate when the Dangote refinery at installed capacity of 650,000 barrels per day comes on stream in 2023.
A glance at some countries endowed or otherwise with petroleum crude shows the travesty in Nigeria’s development trajectory. Qatar has a proven reserve of 25 billion barrels, and is 13th in the world. With a population of 2.97 million, it has a refining capacity of 146,000 barrels per day, to meet domestic need and to be a net exporter of petroleum products including petrochemicals. The country just hosted the World Cup at great cost projected to exceed $200 billion.
Singapore with a population of less than 6 million has no mineral deposits, crude oil and natural gas. Yet, with three main refineries, it has a refining capacity of 1.5 million barrels of crude per day with extensive petrochemical industry and is home to some of the world’s largest chemical plants.
Back in Africa, South Africa is not well endowed with crude oil with proven reserve of 15 million barrels. But it has six refineries, four of which are dedicated to refining imported crude oil for a population of about 69 million.
In all this, the control and management of crude oil endowment has a constitutional dimension to it in regard to which the 2014 National Conference made some recommendations. Specifically the Conference proposed (p585 of report) in item 39 of the 2nd Schedule of the 1999 Constitution which states: “ Mines and Minerals, including oil fields, oil mining, geological surveys and natural gas” be retained in the Exclusive Legislative List but amended to read: “Mines and all minerals, including oil fields, oil mining, geological surveys and natural gas provided that: a) the government of the States where the mining activities take place shall be involved in matters relating thereto; b) the government of the federation shall create a special fund to develop mines and minerals in States where such resources are undeveloped.”
One of the objectives of this recommendation was: “————to diversify the economy of the country rapidly and give those States a sense of belonging in the Nigerian nation.” In hindsight, this is modicum attempt to redress the grievances of oil-producing States in their exclusion from the management of the resource, particularly against the backdrop of controversies, not surprisingly that trailed discussions on the subject. It is also in this regard that resource control as canvassed by oil-producing States and the extent to which it could be acceded to was referred to a technical committee to be set up by the federal government (p 592 section 6.4.1 S/N 7 of report).
A more profound recommendation on management of natural resource endowment was made by the El-Rufai Committee on restructuring in 2018 which says: “Mines and minerals including oil fields, oil mining, geological and natural gas —— should be moved to the Concurrent List (of the Constitution, emphasis supplied). However, all off-shore oil shall remain absolutely vested in the government of the federation.”
Sadly, the Federal Government did not look into the recommendations. However to the extent that some of the National Conference recommendations and the El-Rufai committee ones relate to constitutional amendment did not inspire confidence in light of the entrenched interests of those who seek to retain the extant constitutional order. But credit must be accorded the El-Rufai Committee for recognition of the overarching need for a fundamental restructure of the governance system. In particular the recommendation for Referendum to be inserted in our Constitution, the import of which is manifold.
There is no doubt that development in the key sectors – agriculture, energy, iron and steel, petroleum, education and health can have profound impact on the Nigerian economy. There is no doubt too that efforts in this regard by successive government have been hamstrung by a subsisting governance system, which is characterised by policy reversals and somersaults. In other words the governance system stands on the way for a realisation of policy objectives of government.
Some of the presidential candidates of political parties for the 2023 election have rightly identified the need for a paradigm shift in governance through pronouncement such as political restructuring or a movement from consumption to production. In both cases there is the need to interrogate them on their vision and commitment to a new constitution and how they intend to achieve it without which their mission statement will amount to rhetoric.
On political restructuring, many have called for a revisit of the 1963 republican Constitution negotiated by our founding fathers prior to Independence as a convenient starting point because departure from it was a point of inflexion in our development trajectory. In reaction, some have construed this to mean reverting to regionalism. No, it is a needless complication.
States as currently constituted can federate in a truly federal system once oil is deemphasized in the body politic. Yes, a new Constitution and a truly federal system hold the key to a resolution of the complex challenges, social, economic and political that has been holding this country prostrate for so long.
Professor Eromosele is former Deputy Vice-Chancellor, Federal University of Agriculture, Abeokuta.
Get the latest news delivered straight to your inbox every day of the week. Stay informed with the Guardian’s leading coverage of Nigerian and world news, business, technology and sports.