Keen to sustain the new-found ceasefire in the Niger Delta region, the Federal Government has presented a fresh plan aimed at further defusing tension in the region. The Minister of State for Petroleum Resources, Ibe Kachikwu, having been encouraged by the lull in the vandalism of oil and gas assets that has pushed up crude production, rolled out a 20-point proposal last week. The chronic attacks by militants on oil installations have devastated the economy, so it could be a good starting point for the Muhammadu Buhari administration to restore sanity to the region.
Really, the Nigerian economy has taken a big hit from hostilities in the oil-rich area. In 2016, the country lost “a million barrels daily,” and “an average of over $50-$100 billion unearned income as a result of disruption,” laments Kachikwu. This, combined with the fall in oil prices, triggered an economic downturn and a massive job loss. The recession is so complicated that even if oil prices were to average $100 per barrel today, that would not solve the problem, says Kemi Adeosun, the Minister of Finance. Militancy accounted somewhat for the reduced operations of the Nigerian National Petroleum Corporation, which lost N197.4 billion in 2016, according to the corporation’s latest report. The national currency unravelled as government could not fund a weekly forex demand of $2.5 billion, according to Audu Ogbeh, the Minister of Agriculture. On Monday, $1 sold for N520 at the parallel market. For a nation witnessing double-digit inflation, this is a serious setback.
The country is in virtual darkness because the thermal power stations that generate electricity are linked to the gas pipelines in the Niger Delta that have been repeatedly mutilated by belligerent groups, claiming to be crusading for the emancipation of the region. Generation crashed to less than 3,000 megawatts during the period, though relative peace brought generation to 4,302MW on February 16, according to the Ministry of Power, Works and Housing.
Socially, the region is a disaster waiting to happen. The locals cannot farm: their farmlands have been polluted by oil spills and highly-prized aquatic life almost wiped out. Residents of the region are prone to cancer as well as respiratory and lung diseases because of air pollution and hydrocarbon emissions (soot), says a new medical report. There is also a high rate of gun violence and kidnapping, owing to militancy.
Specifically, Nigeria’s ability to fund its N7.29 trillion 2017 budget, exit recession and build infrastructure is closely connected to stability in the Niger Delta. Kachikwu’s 20-point agenda, therefore, could not have come at a better time. Essentially, the plan is woven around decentralisation, inter-agency collaboration and upgrading of the scope of the intervention programmes. For example, Kachikwu says the Federal Government will no longer treat militancy as a national issue, but use “a ring-fenced approach” that will entail a state-by-state formula. This needs to be well-thought-out.
Controversially, the Amnesty Programme, which took off in 2009, will be decentralised, with the states now to play a major part because “the Federal Government can no longer fund” it alone due to dwindling oil revenues, Kachikwu says. However, states receive 26.72 per cent of national revenues, while Abuja collects an allocation of 52.68 per cent. How then will the states cope?
Also, oil companies will engage communities and state governments on their peculiar issues; government will “focus on creating 100,000 jobs in each Niger Delta state in the next five years,” revamp gas infrastructure to boost power supply, clean up the environment, and domesticate the oil business to achieve greater participation by the indigenes. Apart from this, the government is to establish the Maritime University of Nigeria in the region.
On paper, this sounds good. But there is nothing really extraordinary about it. It is just another short-term measure, which will only buy time for the government when a long-term sustainable plan is the solution. It has happened before, but the country is still grappling with the monster. There was a temporary reprieve in 2009 when the late President Umaru Yar’Adua implemented the Amnesty Programme. Militants were pardoned and coerced to return their weapons. The repentant ones received a monthly stipend and vocational training.
In 2000, the government had also placated the agitated communities by setting up the Niger Delta Development Commission to develop key social infrastructure within the South-South region; and created the Ministry of Niger Delta in 2008 in an attempt to mollify restive youths. But with the emergence of Muhammadu Buhari as President in May 2015, militants returned to the trenches, causing serious distress to the economy.
The game-changer that will end the Niger Delta agitation is to re-work the pretentious federal structure, ceding the control of natural resources to the constituent units where they are produced. The current arrangement, in which the oil-producing states receive a derivation of 13 per cent, is unrealistic and unjust. Back in 2008, a government-appointed committee had recommended that derivation for oil-producing states be increased to 25 per cent. Even this is a half-hearted measure.
In truth, the Federal Government must wake up to the reality of fiscal federalism. That is the only redemptive plan. In the First Republic, the regions warehoused 50 per cent of income generated in their domain; 30 per cent was distributed among them; and 20 per cent went to the centre. It worked well.
