Ending Off-Shore Derivation

By Nafata Bamaguje

The recent demand by Northern governors for more equitable distribution of the nation’s resources has prompted ridiculously inane responses from Southerners who should know better. Driven by rabid hatred for the North, they obstinately refuse to critically examine the issue at stake, which is simply that off-shore oil revenue from our distant territorial waters belongs to the entire federation, not the littoral states. This is not a northern position, but a constitutional one as affirmed by our Supreme Court in April 2002. But for Obasanjo’s reprehensible contempt of that Supreme Court ruling in order to placate Niger Delta agitators, we wouldn’t be having this debate of a constitutionally settled issue. Frankly I’m surprised non-littoral states did not sue the FAAC, Federal ministry of finance and the Presidency to enforce compliance with the Supreme Court verdict. Since no one challenged OBJ’s intransigence, littoral Niger Delta states now erroneously consider off-shore derivation their inalienable right. International law confers the 200 nautical mile EEZ (Exclusive Economic Zone) on the nation, not on any federating unit. Our EEZ overlaps with that of some neighbouring African countries, hence our joint venture agreements with them to develop the contained resources. Is it Akwa Ibom or Rivers state that should enter international agreements with Equatorial Guinea or Sao Tome to explore resources in our overlapping EEZs? In other words even if we practice the sort of federalism where states control mineral resources on their soil, our EEZ would still be federal. Not even in the United States – poster nation for Nigeria’s opinionated ‘true federalists’ – do coastal states derive revenue from off-shore drilling in distal territorial waters. So one is aghast as to where greedy Niger Delta chauvinists got the idea of coastal states cornering our off-shore wealth. The present unconstitutional illegality which benefits only 5 littoral states (Akwa Ibom, Rivers, Bayelsa, Delta & Ondo), resulted in the absurdity of Akwa Ibom which does not produce a drop of crude oil earning the highest derivation revenue with her monthly allocation exceeding that of the entire South East zone…Even though some SE states (Imo, Abia) actually have crude oil. In other words the 5 gluttonous littoral states are ripping off and short changing the rest of the nation, not just the north. Thirty one states (including most Southern states) stand to benefit from equitable distribution of off-shore revenues, but blind irrational hatred for the North has beclouded the reasoning of shortchanged Southerners. Given the incessant religious violence in our Islamist north in which southerners are often deliberately targeted, this animus against the North is quite understandable. But that is no reason for them to cut their noses to spite their faces, as many southern states are also in dire financial straits and would benefit from improved revenue. Thus this is not a south-vs-north issue as scheming Niger Delta agitators would have the rest of the clueless south believe, nor is it a south-south issue as Edo and Cross River are also short-changed by the present unjust arrangement. It is simply the 5 aforementioned littoral states against the rest of the country. Even littoral states like Lagos & Cross River stand to benefit. Among the specious sophistry peddled by Niger Delta jingoists selfishly insisting on continuing the off-shore injustice; is that Niger Delta suffers environmental degradation due to oil exploration & drilling. So what!! Niger Delta states do not clean up oil spills nor do they pay compensation to affected communities. Oil companies are fully responsible for that. So environmental degradation has absolutely nothing to do with derivation. In any case the bone of contention here is revenue from off-shore drilling, far off in the Atlantic ocean that they are not implicated in the spillages that have devastated some riverine communities. As severally stated by the oil companies and verified by a UNEP (UN environmental program) investigative report last year, most of the oil spillages in our Niger Delta are due to deliberate vandalization of on-shore oil installations by locals to steal oil for illegal refining & bunkering. They then deviously demand compensation for the resulting spillage to the tune of millions of Naira…which is far more lucrative than fishing or farming. Just this month, the Senator Magnus Abe led Petroleum Resource Committee investigation also attested to the menace of pipeline vandalization in Niger Delta. Shell, Mobil, Chevron and other oil companies in our Niger Delta are responsible corporate citizens that drill for oil around the world. It’s only in our corrupt dysfunctional country that they are often in the news for oil spillage and environmental degradation. Granted that since our inept corrupt leaders have abysmally failed to utilize our tremendous resources to positively transform the nation for the benefit of all; many Niger Deltans resort to criminality to get a share of the wealth taken from their land. But to use their self inflicted calamity as pretext for extortion and scamming the rest of the nation, smacks of despicable 419. And they have the gall to insult we northerners as ‘lazy,’ as if oil wealth in Niger Delta is due to their hard work. The North produces the bulk of the food consumed in this nation. It’s certainly not our fault that the agricultural produce which our ‘lazy’ farmers sweat for, doesn’t fetch high value dollars like crude oil which our Niger Delta compatriots do not work for. It costs about five dollars to produce a barrel of our highly priced Bonny light crude oil, which currently sells for over 120 dollars i.e. more than 24 times the cost of production. No agricultural produce yields that kind of stupendous profits. It is therefore mischievous and patently unreasonable for disingenuous small minded Niger Delta propagandists to compare derivation in the first republic which was mainly derived from agriculture (cotton, groundnut, cocoa, oil palm, rubber) with crude oil; particularly as farmers retain most of their profits as incentive to continue farming. Furthermore, there were just 3 or 4 large federating units encompassing much larger and more diverse groups of Nigerians, such that in those days when crude oil wasn’t a major revenue earner, Niger Deltans benefitted from coal & oil palm revenues from Igbo hinterland. Just as all northerners benefitted from Jos tin mines revenue. It therefore amounts to unconscionable greed and ingratitude for today’s Niger Deltans to demand all the crude oil for themselves after enjoying the resources of others. With our present 36-state pseudo-federation, it is patently unreasonable to talk of 50% derivation as obtained in the 3 to 4 region first republic… the structure of today’s polity being radically different. In fact since there are now nine times more federating units as in the first republic, and our present states are accordingly nine times smaller; mineral resource derivation should also be nine times less i.e. 50/9 = 5.6% …if all Nigerians are to equitably enjoy our collective national resources that none of us put in the ground. Thus it is obvious that even by their first republic 50% derivation fallacy, the greedy oil producing states are collecting much more than their fair share and cheating the rest of nation – 13% derivation, NDDC, Niger Delta ministry. So enough pandering to the selfish greed of unintelligent Niger Delta agitators who are bereft of any ideas of wealth creation other than awoof oil money. Like the rest of Nigeria, the problem of underdevelopment in the Niger Delta will not be solved by carelessly throwing money around and feeding corruption, but by honest purposeful & visionary leadership judiciously utilizing available resources. A lopsided federation with marked economic disparity among the federating units is not in long term interest of our dear motherland. Ultimately, the enduring solution to this lingering revenue quagmire is diversification of our economy away from crude oil and natural gas into manufacturing and agriculture. This requires massive investments in infrastructure (especially power, transport, heavy industries), which is not forthcoming as majority of the small unviable pseudo-federating units we glorify as ‘states’ waste most of their budget on bloated civil services and corrupt elected/appointed politicians, leaving little for meaningful capital development. Thus there is urgent need to restructure our polity into no more than 10 federating units – 3 north, 3 middle belt & 4 south – so that more resources are available for transformational capital investment to realize the much vaunted Vision 2020. It is only then we can have meaningful ‘true federalism.’ Unfortunately, given the incessant agitation for creation of more states, Nigerians are not serious about true federalism.


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One Comment on “Ending Off-Shore Derivation”

  1. James Igboha
    March 27, 2012 at 5:10 pm #

    This article appear to be interesting by acknowledging the regular massacre of Christians and/or Southerners in the North. The problem arises when you want a share of wealth produced from areas indigenous to the group. It creates the impression that you want the people gone to enable you confiscate her property..

    Offshore/onshore exists for Nigeria because the Delta people are Nigerians and the argument ends if they decide otherwise. The assumption that the supreme court or constitution.of Nigeria is legitimate is debatable because some believe that the said constitution was imposed by the North through her soldiers who illegally seized power. Therefore anything that has occurred in Nigeria since 1966 is blatantly illegal and illegitimate. The other problem with the write up is the tone – you cannot abuse the Niger Delta people and expect them to be amenable to your request to share wealth that is available only because they accept to belong in the same country with you.. In 2012, people are no longer forced to belong to a country against their will.
    The writer should apologize. for the tone and name calling. Nigeria should have a conference to determine a constitution or revert back to the 1963 one pending an agreement on a new one..

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