N354bn Derivation Fund:  Monitoring For Good Governance In The Niger Delta

By

David Omozuafoh

Lagos

david.omozuafoh@undp.org

Most Nigerian newspapers reported on Tuesday December 28, 2004 that nine oil-producing states –Niger Delta so-called, are to share a monstrous sum of N354 billion naira in 2005.  This is outside the regular monthly allocations to states and local governments in these states. This means that in the year 2005, 9 Nigerian states will be drowned financially.   Ordinarily this should be a cheering, heart warming and news worth a toast. But considering the type of rogue governments that we have across the country and particularly among the oil producing states, one would only but cry. Experience has shown that the more money these governments have, the more impoverished their states become. Having more money is bad news here.

It is a shame that with the advantages of derivation and NDDC funds, oil-producing states cannot boast of better development than the non-oil producing states. Most small communities, for instance in the North have light, better roads and water as against the oil rich communities in the Niger Delta.

The United Nations Economic and Social Communication for Asia and Pacific has developed ingredients or indices for measuring good governance namely, participation, rule of law, transparency, responsiveness, consensus orientation, equity, effectiveness and efficiency, accountability and strategic vision. These terms are self-explanatory. The understanding however is that what we experience as good governance in Nigerian’s new democracy either at federal, state or local level are derivatives.

Any form of democracy without good governance amounts to despotism. Democracy is about consultation and dialogue. It is about interaction between the elected and the electorate. It is also about resource generation and allocation. According to J. Dryzdek. “The essence of democracy itself is now widely taken to be deliberation as opposed to voting, interest aggregation, constitutional rights, or even self-government. The deliberative turn represents a renewed concern with the authenticity of democracy: the degree to which democratic control is substantive rather than symbolic, and engaged by competent citizens”

This discussion on good governance is basically as defined and seen by the United Nations. I have decided to more or else reproduce it here because it aptly captures the situation in Nigeria.

The terms "governance" and "good governance" are being increasingly used in development literature. Bad governance is being increasingly regarded as one of the root causes of all evil within our societies. Major donors and international financial institutions are increasingly basing their aid and loans on the condition that reforms that ensure "good governance" are undertaken.

Governance has been defined as the process of decision-making and the process by which decisions are implemented (or not implemented). Since governance is the process of decision-making and the process by which decisions are implemented, analysis of governance focuses on the formal and informal actors involved in decision-making and implementing the decisions made and the formal and informal structures that have been set in place to arrive at and implement the decision.

Government is one of the actors in governance. Other actors involved in governance vary depending on the level of government that is under discussion. In rural areas, for example, other actors may include influential land lords, associations of peasant farmers, cooperatives, NGOs, research institutes, religious leaders, finance institutions political parties, the military. The situation in urban areas is much more complex. At the national level, in addition to the above actors, media, lobbyists, international donors, multi-national corporations may play a role in decision-making or in influencing the decision-making process.

All actors other than government and the military are grouped together as part of the "civil society." In some countries in addition to the civil society, organized crime syndicates also influence decision-making, particularly in urban areas and at the national level.

Similarly formal government structures are one means by which decisions are arrived at and implemented. At the national level, informal decision-making structures, such as "kitchen cabinets" or informal advisors may exist. In urban areas, organized crime syndicates such as the "land Mafia" may influence decision-making. In some rural areas locally powerful families may make or influence decision-making. Such, informal decision-making is often the result of corrupt practices or leads to corrupt practices.

Good governance ensures that corruption is minimized, the views of minorities are taken into account and that the voices of the most vulnerable in society are heard in decision-making. It is also responsive to the present and future needs of society.

Participation by both men and women is a key cornerstone of good governance. Participation could be either direct or through legitimate intermediate institutions or representatives. It is important to point out that representative democracy does not necessarily mean that the concerns of the most vulnerable in society would be taken into consideration in decision-making. Participation needs to be informed and organized. This means freedom of association and expression on the one hand and an organized civil society on the other hand.

Good governance requires fair legal frameworks that are enforced impartially. It also requires full protection of human rights, particularly those of minorities. Impartial enforcement of laws requires an independent judiciary and an impartial and incorruptible police force.

Transparency means that decisions taken and their enforcement are done in a manner that follows rules and regulations. It also means that information is freely available and directly accessible to those who will be affected by such decisions and their enforcement. It also means that enough information is provided and that it is provided in easily understandable forms and media.

Good governance requires that institutions and processes try to serve all stakeholders within a reasonable timeframe.

There are several actors and as many view points in a given society. Good governance requires mediation of the different interests in society to reach a broad consensus in society on what is in the best interest of the whole community and how this can be achieved. It also requires a broad and long-term perspective on what is needed for sustainable human development and how to achieve the goals of such development. This can only result from an understanding of the historical, cultural and social contexts of a given society or community.

A society’s well being depends on ensuring that all its members feel that they have a stake in it and do not feel excluded from the mainstream of society. This requires all groups, but particularly the most vulnerable, have opportunities to improve or maintain their well being.

Good governance means that processes and institutions produce results that meet the needs of society while making the best use of resources at their disposal. The concept of efficiency in the context of good governance also covers the sustainable use of natural resources and the protection of the environment.

Accountability is a key requirement of good governance. Not only governmental institutions but also the private sector and civil society organizations must be accountable to the public and to their institutional stakeholders. Who is accountable to whom varies depending on whether decisions or actions taken are internal or external to an organization or institution. In general an organization or an institution is accountable to those who will be affected by its decisions or actions. Accountability cannot be enforced without transparency and the rule of law.

The only way the oil-producing communities can benefit from the derivation funds and other allotments to the states and local government councils is through proper monitoring. It has been demonstrated since the emergence of democracy in 1999 that these states are neither transparent nor accountable. The basic elements of good governance as defined by the United Nations are lacking in all the states and local councils.

The challenge here is for the non-state actors to get involved in ensuring good governance in the Niger Delta. All the non-governmental organizations – women groups, youth groups, traditional and religious groups, town unions, chambers of commerce and industries, professional associations, human rights, pro-democracy, development and environmental groups should coalesce into a motoring group in each of the oil-producing state. This coalition once formed should monitor the disbursement of the derivation (N354 billion naira) and other regular allocations to the state and local councils in the state. The coalition should seek opportunities; create fora for constructive engagement with the government and demand to be part of the process of deciding how the funds are to be spent. The constructive engagement should from time to time determine what projects are priorities within the communities. This is one way to ensure ownership and invariably sustainability of such projects.  This will also lead to transparency and accountability.

The reason for youth restiveness has often been attributed to bad governance – the states abdicating their responsibilities. If the funds available to states in the Niger Delta were used reasonably well, youth restiveness will reduce.  Only good governance can reduce youth restiveness. Youth in the Niger Delta have often engaged the oil companies constructively and some times destructively.  This is a misdirected and transferred anger. The oil companies do not have the primary responsibility of developing communities. Although they have social responsibility, it is the duty of states and local councils to develop their communities. 

It is sad and disheartening the number of times economic activities have been stopped by youth in the Niger Delta. If the anger of the youth were directed at the governments – both local and state, and may be federal, situations in the area would have changed for the better by now. That there are no roads, schools, hospitals, electricity, water and other amenities is purely the fault of government and not oil companies. The oil companies cannot replace government at whatever level. The questions that should agitate the youth towards the oil companies is whether they –the oil companies, are paying their taxes regularly and complying with environmental orders. Once these are answered in the affirmative, the youth should demand good governance from their governments.

In conclusion, one source of empowerment for collective action is information. It is important to recognize the role of Internet and e-mail in development today. It is a good thing that the Federal Ministry of Finance now publishes allotments to states and local councils. The coalition can readily source their information here on how much has been disbursed to the states and local councils from time to time. Here also they will find how the derivation fund is being disbursed. However, the FMF must be honest enough to publish the information when it should be useful. If the information is released 2-3 months after the monies must have been released and spent, how do they expect people and organizations to monitor the utilization of the funds? What stops the FMF from publishing this information as the monies are being released?

No one will tell Nigerians of zero allocation any more.  Finally, to the civil society, I bequeath this to you – DEMAND GOOD GOVERNANCE NOW. And to the government, ENSURE GOOD GOVERNANCE NOW. You can only deny good governance at your own peril. Nigerians are all awake, watching and taking judicial notice of activities of all elected persons.