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Author: Sunny Ofehe
Posted to the web: 7/1/2005 1:12:09 PM

Nigeria is a country that is endowed with abundant natural and mineral resource and also blessed with human talents. Nigeria is the largest producer of crude oil in Africa and the fifth largest within the organization of petroleum exporting countries OPEC. Crude oil export accounts for 98.5% of Nigeria ’s total exports. This clearly shows that the Nigerian economy is absolutely dependent on the production of crude oil.

According to energy reports, Nigeria raked in a whooping $25 billion and a windfall of $816 million from the sales of oil and gas in 2004. Due to the upsurge in the crude oil prices at the international market, the country’s oil revenue may hit a record $50 billion towards the last quarter of 2005. Nigeria’s oil reserves stands at 36 billion barrels, which means at the current rate of exploration, Nigeria has enough oil to last another 50 years if production stops now! The country’s daily output of oil stands at 3 million barrels per day though the country has the technical ability to produce 3.6 million barrels per day (m.p.d), but due to OPEC quota restrictions and restiveness in the Niger Delta region where the bulk of Nigeria ’s crude oil is produced hampered output.

Despite this overwhelming resources availability, economic and social rights, such as the right to health and the right to an adequate standard of living, remained unfulfilled for many Nigerians. Instead majority of Nigerians live on less than US$1 per day. This is widely accepted as a measure of absolute poverty by the World Bank. Due to corruption and lack of ideas on the part of the past and present leadership of the country, realizing the economic, social and cultural rights of the people has been a mirage since Shell Petroleum Company first struck oil in 1956. With more than 40 years of oil exploration and $400 billion net profit from oil sales, the people are still confined in the stagnant waters of poverty.

            Worse hit is the people of the Niger Delta region which is coincidentally the main oil producing area. This region accounts for 90% of the nation’s crude oil production which has made them the main revenue-generating region in the country. Unfortunately, in 40 years of operation, oil companies have left large areas of the Niger Delta unusable for farming and fishing which is the main occupation of this people, due to oil spills, leakages, and the effect of gas flaring or other accidents. Instead of getting compensation, the people of Niger Delta has been economically marginalized, socially degraded and environmentally polluted. They have been deprived of basic needs like good roads, clean water, schools and hospitals. Majority of the populations are illiterates and live less than the minimum level of dietary energy consumption. The Niger Delta region comprise of nine states with more than a population of 45 million people. There are forty ethnic groups speaking 250 dialects spreading across 5,000 communities. The Niger Delta is Nigeria ’s least developed region and the World Bank puts its per capital income at below $280 despites it’s high population. Poverty is widespread, roads are in constant disrepair; power outages are frequent; the water available is of poor quality and is often contaminated; schools are almost non-existent. State run hospitals and clinics are under-equipped or short-staffed or both. Youths have used peaceful demonstrations to draw the attention of the government and the multi-national companies to their poor living standards but the government have use excessive force to quell this demonstrations. This has led to the killing of thousands of defenseless civilians and the burning down of many communities. The Odi massacre of November 1999 and the Odioma destruction of February, 2005 are examples of the many extra judicial killings and Human rights abuses that have occurred in this region in the last 10 years. The massive presence of the Joint Task Force codenamed Operation Restore Hope headed by Brig-Gen Elias Zamani, is a clear testimony that peace is still very far from being achieved. Activists such as late Major Isaac Boro, a first generation, environmental rights activist who first open the window for redressing the criminal neglect and the expropriation and destruction of the resources of the area. Who in 1966 launched a campaign against the Nigerian state and oil multinationals for a free and egalitarian society. 37 years after, the injustice which Boro staked his life for still exists. This cannot be attained without the enthronement of justice as the political, economic and social order. Boro still remain an inspiration to the battle against injustice in the Niger Delta because his quit notice to the oil multinationals and his demand that they compensate communities for the environmental damage caused by them, had echoes in the ultimatums of the late Ken Saro-Wiwa and the Movement for the Survival of Ogoni People (MOSOP), the Ijaw Youth Council’s Kaiama Declaration and the numerous Bills of Rights and charters issued by various Niger Delta minorities in the 1990s. The central government has over the time employed the use of obnoxious laws such as the Land Use Act, Petroleum Act, National Inland Waterways Authority Act and Lands (Title Vesting, etc) Act among others to deny the people of their rights to control and own resources to reflect true federalism.

 

The unity of our country has always been fragile. A potent threat to our unity and democracy is injustice. Every part of the Nigerian nation feels the pinch of the unjust union. Almost everyone feels marginalized or at least claims to be marginalized but curiously, no one takes responsibility for the marginalization.

There is one issue however, on which there is complete agreement that the marginalization and official neglect resulting in the acute under-development of the Niger Delta is real. The neglect of the Niger Delta in spite of its huge contribution to the Nigerian economy is now common knowledge to most enlightened folks. In 1992, the military government of Ibrahim Babangida made an attempt to redress the neglect through the establishment of OMPADEC. Regrettably, OMPADEC performed dismally, leaving only a legacy of abandoned projects and unpaid contracts all over the Niger Delta.

Apparently concerned about the declining security situation in the Niger Delta arising from increased agitation from the oil-producing communities and its consequent threat to the heart of the Nigerian economy, the 1995 Constitutional Conference recommended that in sharing the Federation Account Revenue, 13 per cent should be set aside as derivation revenue to assist the development of oil-producing communities. The intention was very clear - to financially empower the oil-producing states of the Niger Delta to tackle the monumental neglect and degradation of the area given the lack of federal presence and ineffectiveness of federal spending in the area.

In arriving at the 13 per cent compromise rather than the more equitable 50 per cent that was bequeathed to us by our founding fathers, the conferees must have assumed that after taking into account all sectional interests, 13 per cent of the total oil revenue would put a reasonable amount of revenue in the hands of the oil-producing states to assist them in tackling the enormous problems of under-development in the oil-bearing communities. This recommendation was accepted but never implemented. The percentage allocated to derivation remained at a mere 1 per cent of oil revenue. Thus the neglect continued unabated.

Apparently moved by the plight of the Niger Delta people, candidate Olusegun Obasanjo promised to redress the ugly situation through a process of enhanced funding and development. No one doubted him especially as the 13 per cent derivation principle was fortunately enshrined in the 1999 constitution. Section 162 (2) of the 1999 constitution provides that 'The President, upon the receipt of advice from the Revenue Mobilization Allocation and Fiscal Commission, shall table before the National Assembly proposals for revenue allocation from the Federation Account, and in determining the formula, the National Assembly shall take into account, the allocation principles especially those of population, equality of States, internal revenue generation, land mass, terrain as well as population density: Provided that the principle of derivation shall be constantly reflected in any approved formula as being not less than thirteen per cent of the revenue accruing to the Federation Account directly from any natural resources.'

In anticipation of a possible delay in the release of a new revenue allocation formula, the drafters of the constitution inserted S.313, which provides that 'Pending any Act of the National Assembly for the provision of a system of revenue allocation between the Federation and the States, among the States, between the States and the Local Government Councils and among the Local Government Councils in the States, the system of revenue allocation in existence for the financial year beginning from 1st January, 1998 and ending on 31st December, 1998 shall, subject to the provisions of this Constitution and as from the date when this section comes into force, continue to apply' By subjecting the interim revenue formula determined by S.313 to the provision of the 1999 constitution, the intention was that the minimum 13 per cent provision of S.162 (2) was overriding and should become operative from the day the constitution came into effect.

The prospect of its implementation brought relief and hope to the hitherto deprived and neglected Niger Delta people. They invested their hopes enthusiastically on the promise of democracy. They believed that the Nigerian nation had at last woken up to the grave injustice perpetrated against them for decades. They believed that the conscience of the Nigerian nation had been sufficiently pricked and that there was a new a spirit of justice prevailing in governance.

The first sign of betrayal of the Niger Delta people's trust was the inexplicable delay in implementing the derivation principle. Despite protest from some of the State Governors and attempts from similar quarters on the issue, the President conveniently failed to seek legal advice on the critical constitutional issue until April 2000 -a clear ten months into the life of the present civil administration. Belated as the agreement to obey the constitution was, the second betrayal became evident when the President in his infinite wisdom arbitrarily chose January 2000 as the most convenient date to commence the implementation of the Constitutional provision that took effect from May 29, 1999.

Despite loud protest from the Niger Delta people, the President is yet to explain the non-payment of derivation revenue between May 29 1999 and December 31, 1999 . In the absence of any meaningful response, the crucial question at the moment is whether the President has the right to choose when to obey or not to obey the constitution. It is my submission that the Federation clearly owes the oil-producing states the derivation related revenue for the period May 29, 2000 to December 31, 1999 . There is no conceivable reason that can justify the delay in implementing the derivation principle; therefore, this is a debt that must be paid and the sooner the better for our country.

The third betrayal was the introduction of the obnoxious on-shore/offshore dichotomy in oil revenue distribution. Some background to this may be instructive. As part of colonialist imperialist control of our resources, there were deliberate legislative attempts to modify the concept and meaning of land and riparian rights. Successive post-independence governments in Nigeria (mainly military) have amplified these legislative instruments that deny the natural owners of land, rivers and seas of the benefits accruing from the exploitation of their natural bounties.

In 1978, the then military government of General Olusegun Obasanjo passed a decree, which has since become known as the Exclusive Economic Zone Act. The thrust of this decree or act is in S. 2(1) which states that 'without prejudice to the Territorial Waters Act, the Petroleum Act or the Sea Fisheries Act, sovereign and exclusive rights with respect to the exploration and exploitation of the natural resources of the sea bed, subsoil and superjacent waters of the Exclusive Zone rest in the Federal Republic of Nigeria and such rights shall be exercisable by the Federal Government or by such minister or agency as the government may from time to time designate in that behalf either generally or in any special case'.

This obnoxious decree which was not a product of representative government was given further legal muscle by its recognition by S 44 (3) of the 1999 constitution which states that 'Notwithstanding the foregoing provision of this section, the entire property in and control of all minerals, mineral oils and natural gas in, under or upon any land in Nigeria or in, under or upon the territorial waters and the Exclusive Economic Zone of Nigeria shall vest in the Government of the Federation and shall be managed in such manner as may be prescribed by the National Assembly.''

The Federal Government has now presumably interpreted this provision to mean that revenue derivable from offshore production of oil cannot be credited to the states to which that offshore geographically belongs using the Offshore Revenue (Registration of Grants) Act, 1971 Cap, 366 LFN, 1990 as a guide. On the basis of this interpretation, the Federal Government split oil revenue arbitrarily into 60 per cent: 40 per cent as on-shore/off-shore revenue and proceeded to base payment of the minimum 13 per cent derivation revenue from only the 60 per cent. In effect, the Federal Government has merely paid 7.8 per cent of oil revenue as derivation rather than the minimum of 13 per cent enshrined in the Constitution.

Our contention is that the Act used to support this dichotomy is immoral and unjust. Suffice to note that by using a military fiat to declare such territory as Exclusive Economic Zone, what the Federal Government has done is to immorally expropriate the property of some states in much the same way as the so called Decree 52 sought to extend the shoreline of the nations coastal land by 100 meters in land. This was successfully challenged in the Osborne case. The more important question is why was this Act not invoked when the amount set aside for derivation was a mere 1 per cent of oil revenue?

Clearly the invocation of this decree now is a blatant attempt by the Federal Government to reduce the amount of funds flowing to the oil-producing states arising from the implementation of the minimum 13 per cent derivation principle. This manipulation is clearly unjust and an abuse of power. It is an attempt to subvert the spirit of the minimum 13 per cent derivation provision in the 1999 Constitution and an affront on the sensibilities of all the Niger Delta peoples.

In a bid to reverse this injustice to the people of Niger Delta, the South-South delegates have embraced the opportunity offered by the National Political Reform Conference (NPRC) to demand for a minimum 25% derivation from their own mineral resources. It is hoped that the country will seize this moment to renew, remake and reinvent its federalism, so that no component unit or ethnic nationality will feel cheated. It is now time all the states in the country looked inwards to their own resources for self-sustenance. Otherwise, not only shall Nigeria continue to practice distorted federalism, our development will remain stunted. Nigeria is a federation. There is no other federation on planet earth in which some federating units (states) rely solely on other federating units for sustenance, resulting in a total dependence syndrome, hinged on a delusive and distorted belief in co-ownership: “What you have is ours; what I have, I keep”.

The Northern position regarding True Federalism and Resource Control has undergone an unbelievable and monumental somersault since petroleum became a major source of income to Nigeria . Prior to independence in 1960 and the emergence of petroleum as the main stay of our economy, the northern elites only accepted conditions amounting to confederalism for associating with South as one country. The National Conference under the influence of the Northern delegates has agreed on a 17% derivation for the people of Niger Delta. This amounts to an increase of 4% from the initial 13% derivation. Despite its enormous contributions to the nation’s Gross Domestic Product (GDP), for example between 1999 and 2004, crude oil derived from Delta State alone yielded the sum of $37.643 billion amounting to N5.270 trillion credited to the federal account. Now in return the National Conference is endorsing a meager 17% as revenue liable to be paid back as derivation to the oil producing states with which to tackle the Herculean environmental disaster left in the wake of oil exploitation and the dislocated economic needs of the people of the region. The meager 17% derivation thereby makes the tremendous oil and resources of the region a mixed blessing of sorts to its people. With this, the region is being denied the benefit of their wealth and is exposed to devastating environmental pollution and degradation as exemplified in the prodigious flaring of N450 million worth of associated gas per day with attendant environmental consequences on the health of the people.

If the reasonable 25% derivation demanded by the South-South delegates is not accepted, then the region will have to revert to the 1960 and 1963 constitutional revenue sharing formula which gave a platform of 50% derivation for all mineral resources zones in the country. This was enacted in the London conference of 1958 to usher in independence for Nigeria in 1960.

I hereby call on the federal government to accept this 25% derivation as demanded by the South-South delegates without conditions. President Obasanjo should stop his globe-trotting around the world and pay closer attention to domestic issues back home. This issue of resource control if not well handled could lead to greater political and civil unrest in the Niger Delta which will affect the central bearing of the day to day governance of our great country Nigeria . Some militant groups are calling for the blowing up of oil installations in the regions should the government not accept the condition put forward by their delegates. Recent reports say more troops, military helicopters and gunboats have been drafted to this region in anticipation of break down of law and order.

As we cross our fingers and watch the situation of the National Conference as it unfolds, all we ask for is a peaceful resolution to this political quagmire. We pray for God’s divine intervention and that he grant us his peace which transcends all understanding that will guide our heart and mind particularly for those of us in Diaspora. God bless the Federal Republic of Nigeria .

Comrade, Sunny Ofehe.  (sunnyofehe@yahoo.com)

President & Founder

Hope for Niger Delta Campaign (HNDC), The Netherlands