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PEOPLE AND POLITICS BY MOHAMMED HARUNA Breaking the Resource Control Deadlock
Probably the most prophetic editorial any Nigerian newspaper has ever written was that of the New Nigerian of June 29, 1974. Titled “Oil Money: Honey or Poison?”, the editorial predicted that by the nature of our oil wealth, combined with our corrupt and wasteful ways, oil would, sooner or later, land us in a big mess. “The nature and source of oil money,” the newspaper said, “is in a class of its own… No effort is involved on our part. It is the foreigners who employ their capital and skills to exploit the resource and we simply receive huge autonomous additions to our national income. Such un-worked for riches can land a country in trouble of a peculiar kind. There is soulless opulence of the few in evil contrast to crushing poverty of the many. There is unimaginable corruption and disastrously wrong allocation of resources.”
“How,” continued the newspaper, “will an economic historian 50 years hence explain the relative expenditure on agriculture and on various forms of so-called ‘culture’: All-Africa Games, Black Arts Festival and all the rest of it? He must conclude that we had taken leave of our collective senses.”
From all indications our economic historian has not had to wait for fifty years from 1974 to enter the verdict that we have indeed since taken leave of our collective senses. Thirty one years after the editorial in question, we have not mended our corrupt and wasteful ways. On the contrary, the experience alone of the last six years when we received unprecedented amounts of oil money, suggests that things have only gotten worse, far worse. Today we are rated as the third most corrupt country in the world. And life has become nastier and much more shortish and brutish than it was when the New Nigerian wrote its editorial.
Oil, in short, seems to have become a curse rather than a blessing. As the on-going stalemate over resource control at the National Political Reform Conference has shown, we have lost our collective senses not only in spending our oil fortune but, not surprisingly, we have also lost our senses even in sharing it. This explains why positions have hardened since the NPRC broke off rather unceremoniously about a couple of weeks ago, principally over resource control.
As positions hardened, civility in the language of debate has receded and all you hear these days are such emotive labels like greedy, snakes, locusts, vultures, parasites, etc. Such uncivil language can only make matters worse, not better.
To break this vicious circle of trenchant language and entrenched positions over resource control, it might help to recall what I believe were the dispassionate interventions on the subject of some key players in our economy and the oil sector in similar controversies in the past. Here I would crave the reader’s indulgence to quote extensively from press interviews given by Professor Sam Aluko whose experience has straddled the worlds of academia and practice. I would also like to quote from a press interview by Chief Frank Kokori, himself from the South-South and a former labour leader in the oil sector.
To begin with Aluko, in an interview in The News of October 9, 2000, he said the 13 percent revenue allocation for derivation was not enough for the oil producing states but added that transparency and accountability was more important in solving the problems of the region. “It”, he said, “isn’t enough. The only problem we have which I don’t think the oil producing areas appreciate is that they have no input in the exploration of oil. They just sit down and want this money. I keep telling them. The states that have cocoa, they have 100 per cent of the cocoa: they have to plant it, tend it, harvest it, dry it, bag it and sell it... And then they pay taxes. Unlike cocoa, the whole country’s money is used to exploit petroleum. It is not the money of the indigenes of the oil producing areas. It is just the manna from heaven. But in spite of that I think 13 percent isn’t enough. We discussed it when I was in government because I was monitoring OMPADEC, the Oil Mineral Producing Areas Development Commission. I said 20-25 per cent could be enough because the money we make from there we don’t spend it there.”
About one and a half years later Aluko spoke in a similar vein in an interview with another newspaper. Its correspondent had asked the professor what he thought of the Supreme Court decision which, in effect, reaffirmed the Constitutional dichotomy between onshore and offshore oil. “That is what I told them before,” he said in The Country of May 20-26, 2002. “I told them they could never win it. No state can say it wants to control resources offshore...When the case began, I wrote to the Attorney-General that I wanted to join the Federal Government in the suit against the states. And I cited examples in Canada, Australia and United States judgments on this type of resource control, that in every instance, they lost… And some of them were my friends. Governors Dr. Peter Odili of Rivers State and Chief Lucky Igbinedion of Edo State where I grew up and Chief James Ibori (and) Dr. Diepriye Alamiyesiegha of Bayelsa where my wife comes from. She is Ijaw.”
In the same interview, Aluko put the greater blame for the crushing poverty-in-oil-riches of the Delta region on its own elite than on the federal government. “I have,” he said, “said it before that the amount of money which the federal government has pumped into the Niger-Delta since 1958 is amazing. But an outfit like the NDDC cannot work... Why not scrap (it) and channel the money straight to the government elected by the people?
“When I was chairman of NEIC (National Economic Intelligence Committee), we monitored OMPADEC. It was calamitous. You would weep for the people seeing what their leaders did for themselves. They were living like lords and ladies at the expense of their own people. Now they are blaming Nigeria… Even when you look at the revenue that each of these oil states gets per capita, it is about eight or nine times that of what a state like Ekiti has. So what are they doing with it?”
If Aluko seemed harsh on the leaders of the South-South, Chief Frank Kokori, former Secretary-General of NUPENG and a leading civil society activist, was even harsher. In an interview in Saturday Punch of June 2002, he argued that the demand for resource control was foolish. He also blamed the region’s political leaders more than the federal government for the plight of the region.
“In a federation like ours,” he said, “only a fool would think he could get 100 percent resource control. When they say these things they say it to the illiterates not people like us. You cannot tell people you want resource control in a federation unless you want to secede… The way out is accountability and good governance. I know that the governors of South-South junket everyday and they spend so much money… It shows how prodigal they are with the funds of the Niger-Delta.”
However, “prodigal” or not, I believe that a case can be made for increasing the revenue allocation for derivation to at least 20 per cent. I believe that even with the highest degree of transparency and good governance, one would need more than the current 13 per cent derivation money to deal with the environmental problems and the poverty prevalent in the Delta region. I also believe that such an increase should not be conditional upon transparency and accountability of the leadership in the region, imperative as transparency and accountability is for development. To make such an increase contingent upon good conduct by the region’s leadership would amount to double standards, because leadership misconduct is not peculiar to the region.
Having said an increase of the allocation for derivation to no less than 20 percent is probably necessary for meaningful impact on the region’s poverty, I would like to enter at least threat caveats. First, I agree with Aluko that we should scrap the NNDC and share its appropriations directly to the oil producing states as part of the increase on the current 13 percent. Second, on the issue of onshore/offshore dichotomy, we must return to first principles. The universal principle is that the territorial unit of any littoral state in a country does not extend to the high seas. Also nations deal with each other as a whole and not with each other’s constituents. Therefore the offshore oil cannot be subject to derivation. Third, at nearly 60% share of the federation account, the federal government has too much money and the states and local governments too little to share. There is therefore the need to give states more legislative responsibilities and more resources to carry them out. Accordingly the federal government should get no more than 40%.
In the light of all this, the Northern delegates to the National Conference should not regard the 17% on offer by the majority of the delegates to the South-South as closed. Similarly the South-South delegates should not regard their demand for 25% as irreducible. They should realize that the solution to the problem of poverty is less how much money you have or how much you throw at it, than how well you spend what you have.
This is why a tiny island country like Singapore that started poorer than we were at Independence and which had no natural resources, could move from the status of a Third World country to the First in under 50 years while Nigeria, with all its large size, huge population and natural endowment, would slide into even greater poverty during the same period.
Paris Club: premature celebrations
I hate to sound like a damp squib, but I must say that the universal rejoicing since President Olusegun Obasanjo announced last Thursday that the Paris Club has granted us an 18 billion dollar debt relief sounds premature to me. I have read and re-read the statement from the club as published in Thisday of July 1, and I cannot find anything that remotely resembles debt forgiveness. The members of the club merely “expressed THEIR READINESS, CONSISTENT WITH THEIR NATIONAL LAWS AND REGULATIONS, TO ENTER INTO NEGOTIATIONS with the Nigerian authorities in months to come on a comprehensive debt treatment.”(Emphasis mine). Perhaps my English language fails me but I do not see how an invitation to negotiate amounts to a decision to forgive.
Typical of the doublespeak bureaucratese of high finance, the Paris Club statement was full of jargons like “IDA-only borrowing status,” “policy support instrument (PSI)”, “Naple terms”, “long term debt sustainability”, etc. Such jargons invariably hide critical details from the casual and the not-so-knowledgeable reader. And as the English would say, the devil is always in the detail.
Not only is the statement laden with obfuscating jargons, there are too many ifs and buts for anyone to have stated categorically that we have been given a debt relief. For example, the club operates on the principle of unanimity. In other words, if even one of its 20 disparate members objects to something because it is inconsistent with its national laws and regulations, then there is no deal.
I am therefore truly amazed that virtually all the newspapers in the country lead their July 1 editions with the story in blazing headlines, simply because the president said so. I am also amazed that the president would even say so.
His long and arduous exertions on the debt front may yet pay off, and certainly the decision of the Paris Club to even consider a way out of our debts is a big achievement, but for now all I see from the club is an invitation to discuss a relatively wonderful debt relief package and not a decision to write off a huge chunk of our debt.
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