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.
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