Kolmani Oil Field Launching: Should the Common Man of the North Celebrate?

Adamu Muhammad Hamid, PhD

Aside from the polemical provocations between them and northerners, do the common people of Niger Delta have anything to show for hosting oil fields for the country? NTA Network News reporter rounded up his report on Tuesday about President Buhari’s launching of Kolmani Integrated Development Project that oil discovery and drilling at Kolmani mean “better days ahead” for the local people there. But was he right?

At the flagging off of the project by HE Muhammadu Buhari on Tuesday at the oil exploration fields of Kolmani, many political statements were made by governors, members of parliament, etc. That oil is now removed as a factor of political tussle and competition between North and South; that the discovery would change the fortunes and destiny of the people in the north, that it means more infrastructure and health facilities; that it would generally positively affect the educational, entrepreneurial and commercial wellbeing of the local communities, etc. To understand how all these would work it’ll be good to derive lessons from the Niger Delta experience.

The Niger Delta region had suffered and is still suffering worse environmental degradation with severe health outcomes and the erosion of culture, values and livelihood.  These predicaments engendered agitations and political instability marked by the emergence of armed groups since 2004.

The major problem of monetary allocations in Nigeria is misapplication by state governments. The statutory advantage of hosting oil fields in Nigeria is the accruable 13% derivation revenue. As for the Niger Delta for example, through that process, close to N10tr was allocated and released to the region between 2000 and 2018 but the deplorable conditions in the communities persist. Last year, the saga involving the minister of the Ministry for Niger Delta, one of their senators and the executive director of the Niger Delta Development Commission revealed that the Commission does not own a structure called headquarters. They’ve been renting since the establishment of the NDDC, despite huge sums released to it by the government. The N10tr received by Akwa Ibom, Rivers, Delta, Bayelsa, and Edo states since December 2000 was enough to transform West African Countries like Niger into world-class states during the same period. What’s more startling about Nigeria’s experience with oil was, while oil money continues to accrue to the producing states, absurdly, most oil-producing communities remain in abject poverty, plagued by unemployment, and are devoid of basic social amenities like potable water, hospitals, electricity, motorable roads and conducive learning environment in their schools. 

Data from the National Bureau of Statistics (NBS) revealed that on the 13% derivation principle, Rivers got from 2000 to 2017 over N2, 512, 958, 965, 608t; Delta got between 2000 and 2018 over N2, 220, 952, 447, 827t.  Between 2000 and 2018, Akwa Ibom received over N2, 637, 953, 892, 850t. From 2000 to 2016 the rest got as follows: Bayelsa N1, 707, 765, 122, 689tr,  Edo state, N528, 131, 627, 879. You get over N9, 607, 762, 056, 853tr when you do the Maths. In spite of these colossal sums, governors kept racing in building heaven-on-earth mansions, living ostentations affordable to only world-class billionaires to the neglect of the oil communities, which has led to amplified levels of dissatisfaction in the region.

While infrastructure like good roads, schools and standard hospitals are concentrated in State capitals such as Asaba, Port Harcourt, Uyo, Benin and Yenagoa, basic social amenities have continued to elude the communities where the majority of the people live in appalling utter poverty.

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In 2019, the Board of Trustees of HOSCON (Host Communities Producing Oil and Gas in Nigeria) under its Chairman, King Alfred Diete-Spiff visited President Muhammadu Buhari to complain that their communities lack basic social services, and were plagued by social deprivation in spite of the 13 per cent derivation received by their State governments. The President replied, “The derivation fund is constitutionally enshrined and hence all affected oil communities must partake in it. The relevant constitutional laws regarding the 13 per cent derivation fund must be duly observed by the affected State governments in the Niger Delta region.’’

Going to specific examples in the region, despite Ibeno Local Government of Akwa Ibom (made of 26 villages) having one of the most abundant fields in the Niger Delta, the town is beset by shanty communities, deplorable levels of poverty, unemployment and underdevelopment.

At 2019, they had one Secondary Grammar School, Upenekang, which the state government-owned. In the school, students sit on the floor and potable drinking water and hospitals are non-existent. They had over ten abandoned water projects, and there was no electricity. Yet Ibeno communities have persistently been ravaged by crude oil spill.

One of the youth leaders of Ijaw, Eric Omare once said, “You have a state legislature which is an extension of the state governor. So there is no checks and balances. The problem with 13 percent is that the state governors see the money as their own and so they don’t see themselves as having an obligation to the oil-producing communities. They don’t know that communities producing oil face peculiar challenges and the money is to address their peculiar challenges.”

 Another leader in Delta, David Ugolor, hailing from Oghara, a major oil-producing community in Delta state reechoed Omare saying, the reason why the 13 per cent derivation isn’t reflecting much is a governance problem. “Governors are now emperors. They are commissioners for 13 percent derivation, they are not accountable. And most unfortunate of all is the culture of impunity, even if they are found to have stolen money, nothing happens. The evidence of the stolen money is everywhere, the properties they buy, and their children are overseas attending very expensive schools. The evidence is there. The money  is moving around in the banks.”

 I tell you all these so you might understand the implication of oil discovery and the plight of the northern Nigerian common people.

On human development indicators, the northern Nigerian common people perform poorly as compared to their counterparts in southern Nigeria. According to the World Bank report last year, 87 per cent of Nigeria’s poor reside in the North, specifically, about half of them in the northwest. Seven out of ten states with the worst unemployment rate are in the North, according to the National Bureau of Statistics. As shown in the crude oil lessons for the Niger Delta common people, the same thing would be expected in the North, given that Nigeria’s political class as a whole is a homogeneous group. Oil discovery would mean competition for government houses of Bauchi and Gombe states will be fiercer and tougher. Government would be a bigger business. There’ll be a more 13% derivation money to squander on ostentatious life, especially for sons and daughters and wives of governors.

There is practically no link between the common man of the North and the much talked about expected or accompanying proceeds of hosting crude reserve as would be expected in the ideal situation.  As it is now, crude oil production would not bring fortune to the common people of the region; instead, it could lead to the loss of livelihoods through the pollution of agricultural lands and fishing sites. Oil exploration in Nigeria’s north may only increase the region’s developmental gap with the south. It may also likely worsen the security situation by raising the stakes for resource capture between the state and violent extremists looking to take over most parts of the region. Rate of kidnapping and armed banditry activities, if not properly checked by activating the right mechanisms, is likely to rise. And this is logical! Motivations for kidnappings are largely huge sums of money. Remember, oil activities are characterized by the movements and big interests of big businessmen and women. God forbid, the net of kidnappers will be all over the place.

According to the book Community Relations Strategy: A Primer for Corporate Players in Developing Nations published recently to address corporate-community issues given the advancement of oil exploration at Kolmani, the local communities are likely to experience culture shock. As a result of a massive influx of strangers and expatriates, local culture and tradition would be endangered! Communality of collectivism and sharing would give way to capitalist individualism, and so forth.

Perhaps the only advantage of oil discovery in the North to the common people is that it would now shield them from the perpetually crass mockery of the people in the south that they are economic parasites in the nation because of lack of oil fields. The mere discovery of oil fields is now a source of pride and dignity to them. The discovery and final actualization of drilling will be a step towards balancing regional contributions to the nation’s foreign exchange earnings since it is largely dependent on oil production. Perhaps proposals for any attempt of restructuring Nigeria’s system may now see the light of day.

Of course, the nation should also not be unmindful of the fact that as far as energy is concerned, technology is tilting toward “green”. Fossil energy as a major supplier is being threatened and challenged, so the country must also be fast and proactive to tilt towards other major areas of comparative advantage as sources of foreign exchange; gari processing value chain example. Governors, ministers, senators and other people in government are already used to feeding fat on oil ‘cool money’; if the world jettisons it for a cheaper alternative, then the common man may have to pay higher tax to sustain the lifestyle of these big people.

Finally, the focus of Nigeria’s oil sector should be to curb corruption and find ways to move up the production value chain. This isn’t the time for the country’s leaders to bet on oil at the risk of further marginalising its most vulnerable regions – especially since there is no evidence that the government has learnt lessons from the Niger Delta.