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Oil Revenue And Northern Governors’ Agitation

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Government admitted that 40,000 oil spills had occurred in the past 53 years of oil exploration. In the report, the World Bank claimed that the palm groves, shorelines, creeks and other habitable areas would be washed away by erosion as well as spills due to vandalism, system failure and crude oil theft.  Apart from effects of oil spills, gas flaring constitutes a veritable hazard. It causes acid rain which acidifies the lakes and streams and damages crops and vegetation. It reduces farm yields and harms human health; increases the risk of respiratory illnesses, asthma and cancer and often causes chronic bronchitis, decreased lung function, blindness, impotence, miscarriages and premature deaths. Constant heat and the absence of darkness in some communities have done incalculable damage to human, animal and plant life in affected areas. Gas flares also cause affected places to be covered in thick soot, making even rain water unsafe for drinking. A United Nations Environment Programme (UNEP) report, last August, criticised how the Shell Petroleum Development Company (SPDC) deals with the environmental damage it has caused in the Niger Delta, especially in ogoniland. UNEP said Ogoniland needed the world’s largest ever oil clean_up, which would cost an initial $1billion or N160 billion and could take 30 years. How Ogoniland and other polluted communities would be cleaned is a matter of conjecture. If now that oil revenue is available the areas cannot be cleaned, is it when the revenues cease that the task will be embarked upon? By projection, Nigeria currently has proven crude oil reserves of about 37.2 billion barrels which at the current rate of exploitation (2.5mbp) may be exhausted in the next 40 years unless new deposits are discovered. Like most oil-bearing areas of the world, the Niger Delta has a tough terrain, which needs huge funds to be developed. Often times, oil producing areas are marshy or arid and most of the parts of the Niger Delta is marshy. The devastation of the Niger Delta region has been attributed, among others, to many failures of policy in the region and refusal of the government to pay special attention and inject funds into the area for development. Till date, no city in the region has been mapped out for a special development as the government did in Lagos and Abuja.”

“In the beginning: In 1958, before crude oil became a critical factor in Nigeria’s development, Sir Henry Willink’s Commission recommended that the Niger Delta region deserved special developmental attention by the Federal Government because of its difficult terrain. In response, the government established the Niger Delta Development Board (NDDB) in 1960 to tackle the developmental needs of the region. The board in  its seven years of existence achieved little or nothing. It was consumed by the military coup of 1966 and the outbreak of the civil war in 1967. Before and shortly after Nigeria’s independence in 1960, the federating units (regions) retained 50 per cent of revenues derived from their areas and contributed the rest to the central pool. It was on this basis that the regional governments led by late Chief Obafemi Awolowo (West); Dr Nnamdi Azikiwe (East); Sir Ahmadu Bello (North) and later Dennis Osadebey (Mid-West) unleashed unparalleled development in their respective areas. However, the 50 per cent derivation principle was kicked aside by the military in 1967 as earnings from crude oil skyrocketed. First, parts of the proceeds were used to prosecute the Nigeria-Biafra civil war of 1967 to 70. After the war, the military rulers refused to return to the status quo and chose to disburse funds to the states as they deemed feat. The military also created numerous states and local councils, which were funded with oil money. The oil producing areas were short-changed in the series of state and councils creation sprees. The President Shehu Shagari Administration set up a Presidential Task Force (popularly known as the 1.5 % Committee) in 1980 and 1.5 per cent of the Federation Account was allocated to the Committee to tackle the developmental problems of the region. This committee could not achieve much. There were doubts if the government actually disbursed 1.5 per cent of the revenue to the committee. And most of the funds released were allegedly looted.

So, when General Ibrahim Badamasi Babangida came to power, he set up the Oil Mineral Producing Areas Commission (OMPADEC) in 1992 and allocated 3 per cent of federally collected oil revenue to it to address the needs of the areas. Like its forebears, the OMPADEC, which initially raised hopes also failed to deliver as it perceptively became inefficient and corrupt. When General Sani Abacha took over, he set up the Petroleum Trust Fund (PTF) headed by Major General Muhammadu Buhari (rtd). The PTF did not meet the yearnings of Niger Deltans as its mandate covered all parts of the country. With critics saying that the PTF carried out more projects in northern parts of the country, restiveness in the Niger Delta assumed a higher gear. Abacha convened a National Constitutional Conference (NCC) in 1994, where conferees agreed on at least 13 per cent derivation. Abacha did not live to implement the recommendation. His successor, General Abdulsalami Abubakar included it in the 1999 Constitution, which he handed over to President Olusegun Obasanjo on May 29, 1999. On his part, Obasanjo scrapped the PTF and established a special body, the Niger Delta Development Commission (NDDC), to undertake rapid development of the impoverished oil region. He foot-dragged on the payment of the 13 per cent derivation until the oil producing states got a court judgment, which forced him to pay the proceeds beginning from June 1999.”

“At the National Political Reforms Conference (NPRC) convened by Obasanjo in 2005, South-South delegates insisted on 25 per cent derivation and had to walk out on the gathering when the other parts of the country said they could not approve anything more than 18 per cent, which was later recommended. However, this recommendation did not see the light of the day and died with Obasanjo’s alleged third term ambition. On succeeding Obasanjo, late President Umaru Musa Yar’Adua established the Ministry of Niger Delta Affairs, to offer more palliatives to the region. When militancy took the upswing in the area and knocked down oil production to about one million barrels per day, he also offered amnesty to the militants, a programme that has gulped billions of Naira.

The current fire of derivation controversy raging in the polity was ignited a few weeks ago when a host of northern leaders including Central Bank of Nigeria (CBN) Governor, Malam Lamido Sanusi; Niger State Governor and Chairman of the Northern Governors Forum (NGF), Dr Mu’azu Babangida Aliyu; the Arewa Consultative Forum (ACF) and Dr. Junaid Mohammed decried the huge revenues going to the oil producing states and sought reduction of the proceeds to free more money that could be allocated to northern states. Some of them attributed the Boko Haram insurgency ravaging many northern cities especially in the North-East geo-political zone to poverty arising from disproportionate revenue allocation to the North. The northern demand drew the ire of some Niger Deltans, who demanded true federalism and 50 per cent derivation.

“Disturbed by the dangerous dimension the derivation question and other issues such as insecurity and stunted growth were taking in the country, former Commonwealth Secretary General, Chief Emeka Anayaoku, has canvassed a return to true federalism, to address the issues. Speaking a colloquium to mark Asiwaju Bola Ahmed Tinubu’s 60th birthday in Lagos, he said: “I do believe that a true, rather than our current unitarist federalism, will better promote peace, stability and development in Nigeria. There can be no doubt that Nigeria was making more progress in national development in the early years of its independence when it practiced a true federalism of four regions with more extensive powers devolved from the centre to the regions. Those were the days of the significant export of groundnuts,  hides and skins, and the tin ore from the North; of cocoa from the West; of rubber from the Mid-West; and of palm produce and coal from the East of Nigeria. They were also the days of such achievements as the free universal education and introduction of television in Chief Awolowo’s Western region, and of the budgeoning industrialization of Dr Okpara’s Eastern region.”

“To return to true federalism, we need a major restructuring of our current architecture of governance.  We would need six  federating units, instead of our present 36, which not only sustains an over dominant centre, but also compels the country to spend not less than 74 per cent of its revenue on the cost of administration.

“We need to convene a national conference of appropriately chosen representatives of the six geopolitical zones to dialogue on how to face these serious challenges. I believe that if we are to recapture the zeal with which the then regional Premiers and their electorates embarked on the development of their regions, if we are to arrest  the present destructive competition between our various ethnic groups for the control of power at the centre, and if we are to repair the collapse in our societal value system which is at the root of the pervasive corruption and degradation of our public services, we should aim at getting the national conference to reach a consensus on devolving from the centre to the six federating units responsibility for such areas of governance as internal security including the police, infrastructure, education, health and economic development.” Anyaoku’s suggestion has the endorsements of many eminent Nigerians drawn from all parts of the country.

The agitation against the 13% oil revenue derivation to oil producing states and the attendant ecological and devastation from oil exploration without commensurate infrastructure development of the region is unfair and unjustifiable in the face of recent Boko Haram insurgence and agitation for more revenue from the Northern States.

Dr. Akpogena, a Christian devotional Writer/Minister, Educationist and Consultant writes from Port Harcourt.

 

Lewis Akpogene

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Osinbajo Solicits Support For FG’s Housing Scheme

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Vice President Yemi Osinbajo has urged financial market experts to support the Federal Government’s efforts by developing an appropriate housing finance model that will significantly transform the housing sector on a large scale.
Osinbajo stated this on Monday when he received, on a courtesy visit to the Presidential Villa, a delegation from the Financial Markets Dealers Quotations Group (FMDQ) led by its Chief Executive Officer, Bola Onadele; who came alongside a delegation from the Independent Petroleum Producers Group.
Senior Special Assistant to the Vice President on Media and Publicity, Laolu Akande, disclosed this in a statement titled ‘Let’s unlock Nigeria’s housing deficit, Osinbajo tasks financial market experts.’
Economic experts posit that the housing deficit in Nigeria is estimated between 18-22 million housing units, while the ratio of mortgage finance to GDP in the country is only 0.5 per cent, it is 31 per cent in South Africa and two per cent in Ghana and Botswana.
In his address, the Vice President said, “I like the point you made about the National Housing Blueprint. I very strongly believe that if we can unlock the conundrum in the sector, we can get things working.
“In our ESP, we have something on social housing but one of the critical issues there is how to market these houses, how we can provide the finance so that people can afford to buy them. These are houses that are in the order of about N2 million or N2.5 million.
“But there are still constraints on account of the fact that we just do not have anything like a feasible housing finance model, I think it is time for us to do so. It just looks like it has always escaped our capacity to find a real solution to the problem”.
Speaking on the possibility of having a model that will work, Osinbajo noted that “everyone recognises that we are in very challenging times. But I agree with you that the sheer range and vastness of our potentials make it seem almost intuitive that we are bound to succeed.
“I have no doubt in my mind whatsoever, that given the right mix of policy initiatives, we can get these things done. And your characterization of what needs to be done like attracting capital and sustaining it is so important because ultimately, capital will go where it is best treated.
“And if we are able to attract it (because we have the market, we have everything going for us), even in the worst of times, despite the situation, you find that there is still a great deal of interest.”
Speaking earlier, Onadele said the visit was to inform the Vice President about the transformation taking place in the FMDQ and the need for government support in growing the financial market for the benefit of Nigerians and the economy.

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Nigerians Spent N2.33trn On Petrol In 13 Months – NNPC

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The Nigerian National Petroleum Corporation (NNPC) on Monday said that the total revenue generated from the sale of petroleum products for the period of May 2020 to May 2021 stood at N2.35tn.
Out of this amount, the corporation disclosed, Premium Motor Spirit contributed about 99.61 per cent of the total sales with a value of N2.34tn.
A statement by the Group General Manager, Group Public Affairs Division of the Corporation, Garba-Deen Muhammad, said the figures were contained in the May 2021 edition of the NNPC Monthly Financial and Operations Report.
The statement was titled, “NNPC records crude oil, gas sales of $219.75m in May …posts N295.72bn from sale of petroleum products”
It read in part, “Total revenues generated from the sale of petroleum products for the period of May 2020 to May 2021 stood at N2.345tn where Premium Motor Spirit contributed about 99.61 per cent of the total sales with a value of N2.336 trillion.
“In terms of volume, the figure translates to a total of 2.241 billion litres of white products sold and distributed by PPMC in the month of May 2021 compared with 1.673billion litres in the month of April 2021.”
Total sales of petroleum products for the period May 2020 to May 2021 stood at 18.65 billion litres and PMS accounted for 99.69 per cent of total volume.
The corporation also recorded a total crude oil and gas export sales of $219.75m in May this year.
The $219.75m represents an increase in sales of 180.29 per cent when compared to the previous month of April this year.
The report stated that crude oil export sales contributed $181.19m (82.45 per cent) of the dollar transactions compared with $4.22m contribution in the previous month, while the export gas sales component stood at $38.56m in May 2021.

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Forex: CBN To Engage Crime Agencies To Fight Fraudsters

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The Central Bank of Nigeria (CBN) has vowed to engage financial crime fighting agencies to pursue fraudsters who have been deceiving the banks with fake documents to buy foreign exchange at cheap rates and sell at higher rates at the black market.
The apex bank had, few weeks ago, stopped selling forex to Bureau De Change operators and asked legitimate travellers to approach the banks to access cheap forex.
This is against the backdrop that many customers have been deceiving commercial banks with fake documents to obtain the forex at cheaper rate, and prevented genuine travellers from gaining access to forex.
The CBN Governor, Godwin Emefiele, had in an earlier statement, said that the BDCs defeated their purpose of existence to provide forex to retail users and had become wholesale and illegal dealers.
“They have remained renegade and so greedy, recalcitrant with abnormally high profit from these sales, while ordinary Nigerians have been left to feel the pain and therefore suffer,” the CBN boss said. 
Emiefele had posited that the CBN had maintained its stand to discontinue the sale of forex to the BDCs.
He urged Nigerians with legitimate business to approach the banks for cheap forex.
According to him, travellers could access up to $4,000 for personal travelling allowance and $5,000 for business travelling allowance.
Findings, however, showed that commercial banks have been reporting fraudulent forex demands to the CBN.
Confirming this, the CBN governor said, “We conducted a study; one of the banks in one day sold to 52 people who said they wanted to travel. After two weeks, they went to check, 40 out of the 52 had cancelled their tickets.
“How could you have a situation where about 70 per cent or 80 per cent who went to bank to buy BTA on the reason that they want to travel, banks sold to them, they turned back and went and sold to the black market. They were asked to return it and we are going to pursue you if you are involved in these nefarious activities.
“If you go to bank with fake visa, fake passport, we have told them not to sell to you. If they sell to you mistakenly, and after two weeks, we check and find that you cancelled your ticket or your visa is fake, they will call you because you are their customer.
“They have your BVN, they have your number, they will call you to return the dollars. If you do not return it, they will place your name on their website, your BVN on their website, we will pick those details.
“We will send them to EFCC and other crime agencies, they will pursue you and you must return the dollars because you cannot acquire it illegally. That is our position”.

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