Nigeria - Offshore Trouble, Onshore Terror By Simon Kolawole

Nigeria! It always seems there will be no end to our troubles. As we are getting out of one, we enter into another. While we are still battling tooth and nail with terrorism in the North—with no hope of resolution in sight yet, I must add—another potentially explosive item is making its way into the agenda. It is called offshore/onshore dichotomy in the sharing of oil revenue. It is an old wound that is being reopened. The aim of the agitators is to make sure littoral states do not enjoy 13 per cent derivation from the oil mined off their shores. Instead, it would be treated as a federal territory and the revenue will go straight into the central pot, from where the rest of the country will share it.
The very idea of derivation formula is rooted in the concept of compensation. First, it is about natural justice. How can I mine resources from your land and not allow you enjoy a special benefit from it? Second, it is about environmental impact. Drilling oil in your vicinity means you will suffer certain damage to your environment—whether it is onshore or offshore. The motive, therefore, is to pacify your pain. In Indonesia, for instance, oil-producing provinces and districts receive 15 per cent and 30 per cent from oil and gas revenues respectively as compensation for exploration activities. It is common sense, I would love to say.

If oil is drilled offshore Rivers State, for example, the impact will certainly be more felt in its environment than in faraway Kogi State. But the apostles of dichotomy are suggesting, directly, that my state and Rivers should benefit the same from such exploration activities. I don’t think this is fair. I believe we are looking for trouble yet again. Of course, if I want to be short-sighted and selfish, I would support that Rivers State should be denied the offshore derivation payment because it means more money will come to my state. But the real question is: would that be fair and just?
There are two points I want to emphasise here. Revenue allocation in Nigeria is a zero-sum game: my gain is your loss. If one naira is taken away from the revenue of the oil-producing states, non-oil producing states will automatically benefit. Therefore, ordinarily—as I have said—I should be arguing in support of reinstating the onshore/offshore dichotomy so that my people can gain more from the petrodollar pot. After all, my village, my local government and my state rely heavily on the oil money to survive. But this is absolute nonsense.
By the way, I have grown bored and tired of hearing our Niger Delta friends go on and on about “our oil” and how the rest of Nigeria would starve to death “without our oil”. I am sick of it. I am eternally in favour of developing the human resource and relegating oil to the background. I would rather my state produces a Bill Gates than a Sheikh Monsour. I have argued a million times that the rest of Nigeria should begin to focus on turning federal allocation to “pocket money”. They should expend their energies and resources on developing their own productive bases, rather than hoping to live on oil forever or seeking ways to short-change the Niger Delta through onshore/offshore dichotomy. This is where I stand any day.
However, I am also sick and tired of hearing people argue that the Niger Delta governors are mismanaging their derivation earnings. I say: to hell! Let them burn the money if they like! It is for their citizens to complain and hold them accountable. When there was no derivation and the rest of Nigeria was sharing all the oil money, how did it benefit us? Was Nigeria better off? Was the money spent prudently? The impression being created is that while the other governors are spending their own share of the oil money judiciously, the Niger Delta governors are the only ones mismanaging theirs. That is ridiculous. I will never buy such a clever-by-half argument. This patronising attitude is, after all, one of the major reasons behind the prolonged agitation in the Niger Delta which ultimately led to militancy.
But while someone like me will always argue that the militancy that ravaged the Niger Delta between 2005 and 2010 was more of opportunism than activism, the fact remains that we prepared adequate grounds for these chaps to exploit—with the way we had been treating the oil-producing region since we hit the black gold in 1956. We had a revenue-sharing formula in place that was abruptly skewed after we hit oil fortune. Any sincere analyst or commentator would agree that this was the beginning of the destruction of the production bases of the regions/states. Everybody abandoned their value-added economic base and started rushing to the federal capital every month to share oil money in the form of monthly revenue allocation. We can all see where we have found ourselves today.
At a time in our history, we did not even reserve anything for the oil-producing areas. There was nothing like derivation principle. All the revenue went into the central pot and we started distributing it on the basis of population, land mass and all sorts. Later, we started toying with 1 per cent, 1.33 per cent and such like as derivation. It was the 1995 constitutional conference convened by Gen. Sani Abacha that eventually recommended derivation payment of “at least 13 per cent” to the oil-producing areas. President Olusegun Obasanjo, on assuming power in 1999, refused to implement it for several months, even though it had been incorporated into the 1999 constitution.
Then, suddenly, the highly explosive issue of onshore/offshore dichotomy was reintroduced into the formula. We have always been seeking to take what belongs to the Niger Delta through the back door. The National Assembly eventually enacted a law in 2004 providing for the application of the derivation principle to oil produced within 200 metres water depth isobath for littoral states. This effectively addressed this dichotomy problem and I don’t think there has been any reason to go back on it. So I just can’t understand what we are trying to do now.
My final point: we are looking for trouble if we, in the name of anything, attempt to take more from the Niger Delta states under the guise of onshore/offshore dichotomy. It is one more trouble we don’t need to add to our CV. I want it on record that I, Simon Gbenga Kolawole, Adult, Male, Christian, did warn on August 26, 2012 that if we succeed in reintroducing the dichotomy and depriving the oil-producing states a legitimate share of the oil revenue, we are courting another round of prolonged crisis. The so-called ex-militants (I believe they are still militants) are now richer, better trained, better equipped and better prepared—with a heavier war chest—to unleash terror. In fact, some of them are now trained pilots (under the Amnesty Programme). So we may not be dealing with just AK47s this time around. Fighter jets easily come to mind. After all, whoever thought Boko Haram would turn bombs to household items in Nigeria today?

1 comment

  1. Very objective point of view!!
    Quite refreshing, for once...