INTRODUCTION: In convening the 2014 National Conference, the President, Goodluck Ebele Jonathan, is following on the footsteps of his predecessor in office, Chief Olusegun Obasanjo whose earlier exercise was called National Political Reforms Conference, 2005.
Unlike the familiar “constitutional” conferences held both under the colonial period and military rule, the motive or purpose for calling these ‘National Conferences’ by Nigeria’s Presidents have never been clear to all Nigerians. On the contrary, they have tended to be gimmicks used by the Presidents to push through certain agenda that they fear cannot possibly pass through the National Assembly. Besides, the Presidents are quick to discard and abandon reports of these conferences once they failed to get what they wanted.
The unmistakable conclusion to be drawn from the history ofthese exercises is that the 2014 National Conference, like its 2005 predecessor, is intended to permit Mr. President to take certain actions and decisions which are not allowed without changing the constitution and which the National Assembly may not otherwise endorse.
In other words, the National Conference is a device designed to blackmail the citizenry especially the National Assembly, into a position where they may be powerless to prevent the introduction of certain policies or changes no matter how obnoxious they may be to the majority of the population. Of course, the President won’t tell anyone in advance what the hidden agenda are with respect to the Conference. One is, therefore, left to second guess his motives and to do so by analyzing his pedigree, his speeches and actions as well as those of his supporters and advisers in the five years he has been in office. On this score, the tell-tale signs of his secret ambitions are unmistakable.
President Jonathan’s supporters have missed no opportunity to remind everyone that he is the first democratically elected president of Nigeria who is both from an ethnic minority and from the oil rich Niger Delta. Both facts are pregnant with significance for what he might want to do, particularly in the light of the endless agitation by people from that part of the country to confiscate all revenue accruing from oil exploitation for themselves alone.
Whatever his motives might be, it behooves the Delegates to this Conference to ‘shine their eyes’ and use a magnifying glass while looking at all proposals being brought for their consideration. It is our hope that Northern Delegates would find the analysis and data contained in this publication helpful in appreciating some of the issues likely to prove contentious at the conference. We wish to express our appreciation to the Northern Governors, the Arewa Consultative Forum and the Sir Ahmadu Bello Memorial Foundation for their decision to constitute this Think-Tank and to have found the membership suitable for the task of thinking-through the key issues before the Conference. It is hoped that this intervention will help the Northern Delegates assist the Conference move Nigeria forward not backwards.
Derivation and Revenue Sharing
Under Nigeria’s Federal arrangement, the central government shares responsibilities and resources in stipulated covenants (established by the colonial masters at the inception and severally affirmed by Nigerians at different conferences and Constitutions) that seeks to achieve equity, justice and fairness to all the units for balanced development of the units and a strong enough centre for national security and ensuring orderliness and managing international relations.
How much the regions have to contribute to the centre from revenues they generate and how much they receive from revenue surpluses accrued to the centre (Federal Government) and what resources should the units and the federal government have control on, remained central issues in defining the Nigerian federation.
Records show that the Northern region contributed 75.18 per cent to the centre but it received only 18.94 per cent in services between 1914 and 1946, while the South that contributed only 24.18 per cent received 81.06 per cent. The North clearly played a key role at significant disadvantage so as to ensure a balanced development of the nation early in its history. In fact, the contributions of the North were used for the development of the oil sector and other regions whose contributions fell short of their needs as at then. Similarly, agriculture in the North still contributes much more to the national economy than is currently appreciated; the sector saves the nation billions in foreign exchange which would otherwise have gone into food and raw materials importation.
The increasing role of petroleum oil in the national economy and a declined cash contribution of the agricultural and other traditional factors (e.g. cattle tax) to the central account have agitated the South, particularly the Niger Delta to demand for new definition in revenue sharing and control of resources.
The Federal Government since 1999 has taken steps which negated the principles of justice and equity to the entire federating units, clearly threatening the balanced development of the country for the common good of all. For example, the revenue received by the six states of the South-South from the Federal allocation from 1999 to date amounted to N17.74 trillion (each of the six states received on average N2.96 trillion), while the 19 states of the North received only N10.53 trillion (an average of only N554 billion per state). On the other hand, the eleven states of the South-West and the South-East combined together received N8.79 trillion (an average of N799 nillion per state) .
It is the position of this paper that the agitation made by the Niger Delta states for the abrogation of the onshore/offshore dichotomy are uncalled for and did not appreciate historical facts or meet the tenets of the federal system that we operate. The Supreme Court ruling on the onshore/offshore oil dichotomy has settled the case. Moves made by the Federal Government in awarding the contract for the protection of the pipelines and oil producing structures to ex-insurgents (purportedly for greater involvement of citizens of the oil producing areas in the management of oil matters) is ill advised and in the light of subsequent events, a security threatto the whole nation.
Recommendations: The paper, therefore, recommends that the country takes the path of equity and justice and a commitment to a balanced development of every part of Nigeria as expected in a federal system.
Claim to oilresources
The North also recommends the rejection of claims to oil resources by oil producing areas that led to the cancellation of the onshore/ offshore oil dichotomy which action gave away a national resource to littoral state, seriously eroding revenue available for distribution to all parts of the country. The North demands a reversal to status quo ante. All mineral resources should remain under the exclusive rights of the Federal Government as provided for by the international law (1982 United Nations Converltion on the Law of the Sea UNCLOS, Article 76) on territorial waters/boundaries which stipulated that 200 nautical miles off the continental shelves belongs to the central government exclusively.
The derivation which is now at 13 per cent should be reduced to at best five per cent, and must be limited only to oil on the onshore. The North demands a new revenue sharing formula which seeks to empower the strata of government closer to the people than the centre, i.e., the states and the local governments to be able to deliver on their governance responsibilities to the people. The formula is also to ensure a strong enough Federal Government for the security of the country, and give the country the stability of direction and focus on human and economic development.
Here, we recommend a vertical revenue sharing formula as follow: Federal Government, 26 per cent; States 39 per cent; Local Government Areas, 35 per cent. Also we recommend a horizontal revenue sharing formula for the states and local government areas as follows: equality 35 per cent; population 30 per cent; population density two per cent; land mass 20 per cent; terrain five per cent; internal revenue generation effort five per cent; and social development factor three per cent.
Frequent assertionson North’s population
The North rejects the frequent assertions by the South on the population figures of the North and state clearly that the rate of population growth attributed to the North over the years is extremely understated.
The North recommends that all institutions and programmes established for the benefit of a few states be abolished. These include the Niger Delta Development Commission, the Ministry for Niger Delta, and the Amnesty Programme for the Niger Delta militants and the component C of the SURE-P programme, the HYPADEC.
The responsibility for the security of the nation, including its territorial waters, and national assets should be that of the recognised security outfits (Nigerian Army, Nigerian Navy, Nigerian Police, and Nigerian Air Force) as enshrined in our constitution. The engagement of the ex-insurgents as armed coast guards should be immediately stopped while the Nigerian Navy should be adequately funded to perform their functions. The North recommends a multi-tier local government system that brings the people closer to the government and increases their level of involvement in governance. The revenue allocation formula review as recommended above (FGN 26%, States 39% and LGAs 35%) is to support the realignment of responsibilities of the tiers of government, reducing allocation of the federal government in favour of the states and the local governments. (For appreciation of the recommended formula, see the detailed report).
Resource control, onshore/offshore dichotomy, PIB Bill: The clamour for resources control has become heightened in recent years, especially due to: the increase in the profile of petroleum oil in contribution to the national income.
In addition, agitation for resource control was affected by the growing sense of ethnic chauvinism and waning attachment to the Nigerian federation in the real patriotic sense, and, an overwhelming feeling that the oil producing areas are unduly contributing more to the national coffers in relation to, particularly the North. The fallacious assumption that oil is the major contributor to the national income.
While these assertions and assumptions have taken colossal proportions, the fact is, agriculture is the main stay of the economy, providing over 60 per cent of jobs and contribution to GDP. A simple exercise in per capita distribution of amounts received from the monthly allocation of revenue from the centre in the average by a northern state comes to a mere N600 per month per head. Kano State, for example, with a population of about 15 million received the sum of N6,812~887,206.72 in federally allocated revenue in February 2014. This amount distributed per head among the population will give only N462 per person for the month. This is hardly enough to feed anybody for a day. It is evident that other sources provide the bulk of the revenue for sustenance than the revenue received from the centre.
Therefore, this fervent increase in agitation for total resources control that overemphasised revenue from oil mineral producing states (the Niger Delta) is a complete over hyping of the contribution of to keeping the nation together. This is needless to say that the agitation is a complete negation of the tenets of a brothers’ keeper of a federal system of government which Nigeria had decided to practice long time ago. The demand for resource control is indeed also oblivious of other relevant facts:
The Nigerian constitution gave the ownership of all mineral resources found in any part of the country to the Federal Government of Nigeria. The history of revenue sharing between the regions and the centre was 50:50, but limited to revenue derived from activities that involved human effort. All mineral resources had belonged to the centre, and this new adventure on resource control is totally new concept, and alien to the practice in Nigeria..The abrogation of the onshore/offshore oil dichotomy was at best done to bend to undue, unjustifiable pressure and criminal militancy in the region led to the eventual abrogation of the onshore/offshore dichotomy, the justification rested mainly on moral justification rather than soundness of the arguments for the claims or the law.
Similarly, the international law is very clear on the claim to ownership of resources that lie outside of the continental shelf and or low water marks of the littoral states. International law also gives us a guide as to really who a littoral state is. Clearly, the coastal states of Nigeria where oil minerals are extracted are not “States”; rather, they are part of the Nigerian State who is the littoral state by the definition in international law. Therefore, in addition to the constitutional provision that all mineral resources in the country belong to the Federal Government; the coastal states where oil mineral is currently being extracted should not claim the resource as their own. International laws (decided cases in the US, and Canada) include: Article 27 of the International Convention on United States vs. California, United states vs. Texas, Canada vs. the Province of British Colombia
By international conventions governing territorial waters and boundaries, all territorial waters within 300 nautical miles off continental shelves, and resources therein belong to the exclusive preserve of the central government (the State) not regions or communities resident by such shores. That is why it is the responsibility of the Federal Government to provide security and protect the integrity of the country, not just of coastal communities. The adherence by Nigeria to principles, conventions and laws it has signed and ratified cannot be selective, or at the convenience of local interests. If that is the case, then, for example, Nigeria should not have agreed to hand over the Bakassi Peninsula to the Cameroun.
Nigeria is bound by international laws and cannot, therefore, decide at will, on issues decided by international laws and conventions to suit narcissistic purposes. The Federal Government has no liberty to deliberately create social and economic imbalance between regions simply to please an agitated group. The onshore/off shore case was merely addressed on moral grounds rather than on the legality of the case or on soundness of argument. Therefore, there must also be a moral argument, which is constitutional and more sacrosanct for engendering equity in development effort, stability and national security for the return to status quo In the onshore/offshore oil dichotomy.
Financing of oil exploration
Therefore, unless the Constitution is amended to take away this ownership from the Federal Government, total resource control by any Nigerian state is a breach of the covenant of the federation as enshrined in the Constitution and hence, akin to claim to pullout of the Nigerian Federation. Similarly, all regions of the federation are stakeholders in the Nigerian oil. In particular with regards to petroleum oil: The North played a key role in the financing of oil exploration in the Niger Delta; And made sacrifices in resources and human life to develop the oil industry, and protect the Niger Delta from total eclipsing by the protagonist of the Biafra contraption;
The reasons for the hyped clamour for total resource control are, therefore, untenable. Nevertheless, the country may be better off if all states took 100 per cent ownership of all natural resources buried under their lands. Revenue derived from activities that have material and direct human effort in their accumulation and or making should be shared in relation to the effort required in their generation.
All royalties and taxes due to the Federal Government on all mineral resources, both oil and non-oil should continue to be paid to the centre for the benefit of all the states.
The funding of the NDDC should revert to the Niger Delta states taking 100 per cent control of their resources. Thus, the NDDC shall totally be the responsibility of the states and not the Federal Government. The Niger Delta States can, however, benefit from Ecological Funds, just as all other states that have environmental challenges. Other institutional support programmes established for the Niger Delta or specifically the oil producing states should also be scrapped including the Ministry for the Niger Delta.
Onshore/Offshore Dichotomy: The basis for the abrogation of the laws that ensured the inclusion or otherwise of oils extracted from offshore wells for the accruing of revenues earned from mineral oil for the calculation of the percentage allocation on derivation (to take care of particular developmental challenges) to oil mineral producing states has been subject of intense debate. Clearly, the Supreme Court has ruled that revenues from oil gotten from deep water seas and offshore wells should not be part of the sums available for calculation of the derivation percentage to be given to coastal states. We must demand for reversal to the old order (status quo ante) and the states that unduly benefited from the baseless decisions of the recent past should be made to refund such all sums for sharing by the three tiers of government.
Other related issues:.
The Petroleum Industry Bill: It is important for our delegates to be aware of the inherent dangers in the PIB which is now in the National Assembly for ratification as law. Passing the Bill in its current form will perhaps be worse than the results of the abrogation of the onshore/offshore oil dichotomy. In particular, three areas that should be of major concern to the North are: •The proposed powers of the Minister of Petroleum, nearly boundless over policy, regulatory and operational issues, •The provision on National Frontier Exploration, which is consigned to an administrative unit in the office of the Minister. This is against what was preserved for all other key industry activities which are to be conducted through specific and autonomous institutions •Provision of a Host Community Fund. This is of course another layer of funding, over and above what is already being given through the NDDC, the Ministry for Niger Delta and the percentage derivation allocation to the Niger Delta states.