Resource allocation: North suffering most
Though the Niger Delta deserves developmental attention due to devastating oil exploration activities, it appears most parts of Nigeria and its institutions tend to ignore the wide margin in resource allocations to the Niger Delta and the rest of Nigeria. The gap is so wide that some observers have described the Niger Delta and the […]
Though the Niger Delta deserves developmental attention due to devastating oil exploration activities, it appears most parts of Nigeria and its institutions tend to ignore the wide margin in resource allocations to the Niger Delta and the rest of Nigeria. The gap is so wide that some observers have described the Niger Delta and the rest of Nigeria as fast becoming ‘two states in one nation’. Only last year, the Education Trust Fund tipped Rivers State as the best in primary education development, this was largely due to the multi million naira primary school edifices built by Governor Rotimi Amaechi’s government to replace old primary schools in different parts of the state. Each of these modern schools, built with over one hundred million, has one imposing building with well structured sporting facilities that make any onlooker wonder if they are in Nigeria. The ETF awarded 400 million naira to Rivers State as prize. Clearly, the ETF compared other states getting far less resources with Rivers State. Happy with what Rivers got for from the ETF, Amaechi himself has recently, inaugurated a states peer review committee under the Nigerian Governors Forum to assess the performances of state governments after which high ranking states will be eligible for cash grants from international organizations. Perhaps, the governor expects the committee to go the way of the ETF and compare states regardless of their earnings.
States in the Niger Delta, comprising of oil producing states: Rivers, Akwa-Ibom, Cross River, Bayelsa, Delta, Edo, Ondo and Imo have remained far distinct from the remaining states of the nation in terms of resources. Governor of the Central Bank, Sanusi Lamido Sanusi cited on Thursday while he was in Rivers State as reported last week by Weekly Trust, that “some states in Nigeria seem to be having problems with too much money while others have problems with too little”. He revealed that from 1999 to 2008, Rivers State received a total of one trillion and fifty two billion naira (N1.052 trillion) from the federation account apart from some excess crude moneys while Kano with the nation’s highest population of over 9 million people received two hundred and eighty five billion naira (N285b) within the same period.
The CBN governor was a special guest to the Rivers State government at a gala night that was chaired by Governor Amaechi as part of discussion sessions lined up for a 3-day Rivers State investors’ forum, organized by corporate bodies in collaboration with the state government which held at the Government House in Port Harcourt.
“We have to recognize that it is not easy to think of Nigerian states today as having one difficulty. While one state seems to have a problem with too much money, other states have problems with too little money. So before we go out praising governor Amaechi for all what he had done, you need to know how much money Rivers State has been getting compared to other parts of the country. And Governor Amaechi, I have the facts here. And I hope the people of Rivers are going to watch you (looking at Amaechi) for the next four years. I am going to tell them how much money they have gotten so that they can ask a question. I did some analysis of the money that was gotten and was distributed. This does not add the excess oil governor Amaechi is getting from Akwa Ibom. It is interesting when you look at the fund allocation, derivation and population. Now look at the numbers between 1999 and 2008, I found that Rivers State for example, received a total of N 1 trillion and 52 billion. And that is on an average based on the population numbers of 2006 of N202, 506 per head. And I took a state like Kano with a population of over 9 million and over the same period, it received N285 billion at the average of N30, 000 per head. Rivers is one example. Now take a state like Bayelsa with a population of a little over one million received N660 billion over the same period.”
Amaechi didn’t allow Sanusi’s remark to go without reaction as he was quick to say in his speech that Rivers State spends about N7.8 billion monthly on salaries, pension, gratuity and other recurrent expenditure. He also said that the cost of road construction in Rivers State is far too expensive compared to Kano because the latter’s climate is more favourable. The governor didn’t however add that Rivers generates N5.2 billion as internal revenue which should almost take care of the monthly recurrent bills. But more tellingly, Governor Amaechi has indicated that his government will be purchasing a private jet. There is probably no further indication than this that Rivers is awash with cash. Sanusi’s insight has brought a spotlight once again on the Niger Delta and its difference with the rest of Nigeria.
Taking Kano as the CBN governor did is somewhat a good example because Kano has the highest population going by the last census figures and it is one of the non oil producing states that receives the highest allocation, only surpassed by Lagos, but even at that, Kano receives little in relation to Rivers State and other Niger Delta states in terms of fund allocations. There are many states in the rest of Nigeria that receive far less than Kano.
In the case of the Niger Delta, each state, depending on oil deposit, receives 13% derivation as constitutional royalty for having oil resources. Added to this is the multi billion naira Niger Delta Development Company, NDDC, set up as an intervention establishment to better the lives of the citizens of the Niger Delta. Hundreds of billions have been allocated to the NDDC since it changed name from OMPADEC in the year 2000 with headquarters in Port Harcourt. For instance in July, 2011, then Managing Director and CEO of NDDC, Mr. Chibuzor Ugwoha had said that from 2009 to 2011, within two years alone, the commission had spent two hundred and fifty billion naira (N250 billion) on projects and programmes in the Niger Delta region. He said the money was spent on “over 70 mega projects”. Yet some of these funds are misappropriated. The NDDC has regularly been rocked with series of corruption allegations. Not long ago, the management of the company was investigated by a presidential panel after which its board was sacked. Beside the NNDC, there is also the federal government’s amnesty package for ex-militants. Only for this year, 2011, President Goodluck Jonathan, a native of the region, had budgeted 78 billion naira for allowances to repentant militants and for other activities under the amnesty programme. Beside this, are also moneys allocated to the Ministry of Niger Delta, created by late President Umaru Musa Yar’adua while Jonathan was his vice president. In November, 2010, the federal government under President Jonathan said it was mobilising over 1.8 trillion naira for coastal roads in the Niger Delta. Following controversies, Vice President Namadi Sambo directed the NDDC which was keen on spending the funds for coastal roads in the Niger Delta to handover technical details and designs to the Ministry of Niger Delta because the fund was above the budget of the NDDC. In the 2011 budget, 56.6 billion naira was allocated to the ministry out of which 53.4 billion naira was meant for capital projects in the Niger Delta. Earlier in the 2010 budget, 64. 4 billion naira was allocated through the same ministry for the region. There is also the Niger Delta Basin and Rural Development Authority established for development (especially agriculture) in the region with headquarters in Port Harcourt even as some of the states in the Niger Delta, like others across the country, have river basin authorities.
Now, all of these trillions especially moneys allocated to states and the NDDC haven’t visibly impacted on the welfare of citizens in the Niger Delta. In Edo State for instance, which was said to have received over 800 billion between 1999 and 2008, not even the road leading to the Benin airport was dualised until barely about four years ago. The ancient city remained with ancient roads, though this is now changing with the recent coming of the Adams Oshiomole-led government in the state.
In Rivers State, the level of development witnessed in Amaechi’s little over 4 years administration, to be fair to him, exceeded those in the entire 8 years of his predecessor even when most part of the over one trillion referred to by Sanusi went to Amaechi’s predecessor. Though Governor Amaechi himself appears to be confused about what to do with money. He is planning to buy an official jet for himself at over 7 billion and a chopper for security surveillance at nearly five billion naira. Awash in cash, he is planning on building a university at 150 billion naira, a monorail at nearly over 20 billion naira and many other grandiose projects.
In Akwa Ibom, the governor is building numerous roads but he has been accused by opponents for allegedly dishing out state funds to top politicians, apparently to maintain his grip on power.
In Bayelsa, even though the state has now been opened up by a dual carriage road, it still maintains its rural outlook. Governor Timipre Sylva has remained a popular host of award dinners for celebrities, allegedly supported with public funds. There are also allegations of misappropriation in Imo under the past administration. In Delta, the opposition said the governor is merely doing what he likes.
By general assessments, projects across the Niger Delta do not justify the funds allotted to the region. There are always allegations of corruption trailing them. In some cases, NDDC and state government officials keep squabbling over executed projects, each claiming it executed the same projects.
While Rivers is getting so much as an oil producing state, it is also investing into agriculture. This poses a challenge to many northern states who despite low federation allocation as well as poor internally generated revenue, have been unable to revive the once robust agriculture that used to be the major source of revenue for the region. The dilemma of the northern states hinges on the fact that they too are faced with the embezzlement of state funds by officials in addition to the huge sums spent monthly on recurrent expenditures that leave very little for capital projects that will provide infrastructures that will support agriculture and other sectors like industry and manufacture. In addition, the mineral resources in the north, mostly solid minerals which experts say could bring in more revenue than oil, has remained largely untapped.
As Sanusi said during the Rivers forum: “As a country, I look at a question we need to ask. We talk about derivation, but is oil and gas the only resources available? And why haven’t we focused on other resources like solid minerals? I looked at the numbers, and just in preparing for this, those state that are not producing oil, what other resources do they have? I was shocked by what I discovered. I checked out the list of the minerals that we have established, I took the prices of gold, metal, including iron on the 10th of May this year, did a calculation. Assuming that the federal government has 25% of this proven reserves and it takes 13% derivation, you know what that lead to? N16 trillion, that is 13% of 25 % of reserves that are not oil and not gas, N16 trillion.”
But all that mineral wealth buried in the northern soils is useless. Meanwhile, as the federal government continues to focus attention on the oil sector and continues to grant special allocations to oil producing states, a disparity in development is being created with non-oil producing states disadvantaged. Clearly, if non-oil producing states are to achieve their development goals and be financially self sufficient, they need the funds that will help develop their infrastructures. “When you think of oil and gas,” said Sanusi, “also think of other sources. We have to look at ways that state governments can stop depending on monthly allocation and that is how we can achieve sustainable development.”