The Niger Delta conundrum
Quite a number of knowledgeable people have commented favourably on the 2018 budget recently presented by President Muhammadu Buhari to the National Assembly. In particular they are enthused by the size of the budget, N8.612 trillion, which is 30% over and above the 2017 budget. But the thrill lies more in the fact that N2.43 trillion will be devoted to capital expenditure. This is about 30.8% of the budget, a strong indication that the government is showing an equally strong commitment to the development of critical infrastructure.
But this thrill is diminished by two factors (a) all our budgets always have a very low actual implementation regime. They end up as mere paper projects (b) the thrill is also diminished by the threat of the Niger Delta Avengers (NDA) to do considerable damage to our oil infrastructure because of the Federal Government’s failure to live up to the promises it made to the Niger Delta people. The Avengers who have the same acronym as the Nigerian Defence Academy, an institution for the training of Nigeria’s armed forces personnel, had observed a ceasefire for the past one year based on the optimism that was fueled by Buhari’s meeting with Niger Delta leaders on November 1 last year. The group called Pan Niger Delta Forum (PANDEF) led by such eminent Niger Deltans as Chief Edwin Clark, King Alfred Diete-Spiff and Obong Victor Attah had submitted a 16-point shopping list to Buhari for implementation.
After that the Vice President, Professor Yemi Osinbajo, embarked on a whirlwind tour of the Niger Delta states. At each stop he made some very interesting remarks which were sweet music in the ears of the Niger Delta people. First, he admitted that Niger Delta was badly treated and that the level of poverty in the region was unpardonable. He threatened to reverse the situation. But the Niger Delta people had heard these sweet nothings many times before and wondered whether there would be a definite difference this time. It seemed like the kind of words that most men use when wooing a potential lover.
But not much has changed since the first few words of hope were uttered by Osinbajo. It can, however, be explained that the delay in implementing some of the promises may be traced to Buhari’s three month absence for medical treatment abroad. Some of the projects also need time for planning and execution as they cannot be implemented with a snap of the finger. The Avengers who called off the ceasefire in the first week of this month have been prevailed upon not to resume hostilities yet. They have announced a three-month extension of ceasefire. Three months is not a long time but it offers the Federal Government a window of opportunity for serious and sincere engagement with the Niger Delta people on the issues that their leaders raised on November 1.
The Niger Delta has a multiplicity of groups claiming to speak for the region. However, PANDEF made up of eminent and respectable Niger Deltans has emerged as the most serious-minded and credible group so far with which the Federal Government can negotiate. People like the Niger Delta Avengers who believe in the force of their AK 47s for resolving the Niger Delta conundrum are an important factor in the equation. Without the bravado of these arms wielding young men the Niger Delta region would have been sunk by the oppressive policies of previous governments. The exception is the government of Alhaji Umaru Yar’Adua who had the courage to institute an amnesty programme which silenced the guns.
The 2018 Federal Budget of Consolidation is based on certain assumptions (a) a benchmark crude oil price of $45 per barrel. At present oil price has climbed to $65. This is because since January this year OPEC and its allies especially the Russian Federation have cut total production by about 1.8 million barrels per day. This means that the global daily supply has been reduced by 2%. What will affect the price in the coming months will be what the Shale oil producers in the United States do. Secondly, oil price may stay at the present high level if OPEC members who will meet on November 30 decide to sustain the current production cut.
The second budget assumption is Nigeria’s oil production level of 2.3 million barrels per day. This is dicey and depends largely on the Federal Government’s ability to bring about a sustained period of peace in the Niger Delta. The ceasefire extension for three months by the Niger Delta Avengers only guarantees stability for three months. If there is an outbreak of hostilities and the disruption of oil production then the magic figure of 2.3 million barrels per day will become a mirage. It is not by the force of arms that peace can be achieved by the Federal Government. So my advice is for Buhari to discourage the armed forces personnel from their current sabre-rattling. What the Avengers and the other militant groups in the region do is guerrilla warfare, adopting the hit and run tactics. There are also about 6000 kilometres of oil pipelines in the region which cannot be effectively policed by our armed forces. Communities where these pipelines snake through must be respected and treated as co-owners of these national assets. Their commitment through systematic engagement with the authorities is the only sure-fire guarantee of peace in the region. The solid minerals project will suffer a similar fate as our liquid minerals if the Federal Government fails to acknowledge the importance of the communities where these minerals are located. Luckily, solid minerals are found in all the 774 local governments in the 36 states and Abuja. The oppressive policies of the Federal Government on the oil rich states may not be enacted in the solid minerals sector since every state has the asset.
The time to begin negotiations with the Niger Delta Avengers and their representatives is now if the 2.3 million target is to be achieved.
Nigeria’s descent into recession was mainly caused by low oil prices in 2016. There was a reasonable level of stability in production because of the ceasefire. The upward swing in price is what led to the 0.55% exit from recession. This is nothing to crow about. As the prices rise we can say that the oil market is gradually turning the bend. But this is merely a tentative conclusion. We can only reach the estimated GDP growth rate of 3.5% if that stability in price and production level endures for the next 12 months. If that happens our foreign exchange reserve will improve, the value of the naira will rise and the government will have the resources it badly needs to implement its programmes.
All these optimistic assumptions depend largely on the government’s ability to redeem the promises it made to the Niger Delta region. Redemption of some of those promises will restore confidence between both parties. Fair-minded people will admit that the region has been in the emergency ward for a long time. If Buhari chooses to perform the needed surgery on the region he will earn the gratitude of these long suffering people.