Conference Reviews New Measures to Stem Economic Losses in Niger Delta
Chineme Okafor writes on the federal government’s new resolve to address issues behind agitations that often endanger the oil infrastructure in the Niger Delta
Ingraining transparency and accountability in all facet of activities in the extractive industries is the underlying bedrock upon which the pillars of peace and mutual understanding rests
In a recent podcast he released in Abuja, Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, said but for the timely interventions of the federal government through backchannel consultation and open dialogue with militants who resumed bombing of oil facilities in the Niger Delta in 2015, Nigeria could have been crippled economically. Kachikwu explained that at the height of the militancy, Nigeria’s oil production dropped to about 800,000 barrels per day, which he said was not enough to fund the country’s national budget or investments in infrastructure.
The minister stated that bombing of oil facilities in the region went on a stretch of 10 months within which period the integrity of the facilities, especially the pipelines, was compromised. According to him, the government realised that if it failed to act fast, the militants would cripple the oil industry and Nigeria’s economy, which is still heavily reliant on revenues that come from oil from the region.
“His Excellency, the President, was kind enough to appoint me to hold the twin positions of both the GMD of NNPC and the Minister of State for Petroleum. Niger Delta was a burning issue at the time, there was key unrest in the Niger Delta. A huge amount of militancy activities going on, there were reductions in production volumes, a consistent loss that led to almost crippling of the oil industry,” said Kachikwu in the podcast. He further noted, “The sheer amount of problems we inherited in the Niger Delta meant that literarily if nothing was done, the country was getting crippled. No money for investments, no money for infrastructures or to run the budget… “Everybody basically watched out for when the next alarm bell was going to be. We moved in rapidly and dealt with three main fundamentals.”
The key causes of the troubles in the Niger Delta are environmental degradation, deprivation, and economic exploitation of the people whose lands host the oil and gas production that generate the bulk of Nigeria’s revenue.
Poor stakeholder management and marginalisation of major stakeholders in decisions that affect them directly have also been identified as reasons for the intermittent tensions in the Niger Delta. Kachikwu aide on Niger Delta affairs, Mr. Charles Achodo, disclosed at the 2018 edition of the Sustainability in the Extractive Industries (SITEI) conference that about 11,000 of all the existing contracts awarded by the Niger Delta Development Commission went to companies and individuals from the region. Achodo, however, regretted that the contracts were hardly executed. According to him, “From the government to the IOCs, to the people, there is lack of active citizenship participation in asking solid questions regarding how funding is deployed. The Niger Delta has become a cacophony of voices but without a purpose, it has also become a region with a cacophony of all kinds of projects.
“If you look closely from the past 10 years, up to $40 billion has been made available for that region and you can never tour the Niger Delta and see a N1 billion or a N500 million investment, but I am telling you, collectively, for the past 10 years, that was what has gone into that region,” he said.
Achodo said, “We have to review the way we deliver programmes in the Niger Delta. We have to change the institutional strategy that is being adopted in the delivery of development projects in the Niger Delta.
“Get organisations like Julius Berger, deploy them and release those resources for them to begin to build the region. That is an accepted way, provided the people in the region would not be angry that that money should be given to them. The institution and modality for delivering the development should be changed.”
According to him, the main challenge of the region is weak institutions, which includes government inability to provide security for IOCs there.
“It is unfair that we expect the oil companies to build roads for you, but oil companies do this because there is marked absence of government institutions to do them. You look at issues of security, oil companies have security. Why would oil companies have security? It is because the security structure and institutions are weak,” Achodo stated.
In his presentation at the SITEI conference, Achodo indicated that the government and oil companies in the region had agreed to do things differently to develop the region. He said between now and 2021, the government and oil companies will contribute up to N1.7 trillion for the development of infrastructure and social economy of the Niger Delta. This fresh funding would be used for short and medium term development projects in the region as part of a compact development plan for it. “When you look at the Niger Delta Development Compact, which we have, which covered the short term, medium term, from now till 2021, you are looking at a total investment of N1.7 trillion that is earmarked for the region and that covered what the oil companies are putting into the region, what government agencies are putting into the region and all kinds of investments required in that region,” said Achodo. Kachikwu in his podcast indicated that the government had a process that would address the issues holistically. He said the government took up the environmental and security issues in the region, within which it engaged key stakeholders and created the Pan Niger Delta Development Forum (PANDEF) to amplify its efforts. He also noted that thr clean-up of Ogoniland was the next issue it took up, as well as initiating a gas flare commercialisation framework to ensure that the immoral practice of gas flaring was tackled.
Kachikwu said modular refineries had also been initiated to help the region’s communities get involved in productive activities. “Modular refineries concept was initiated. Ten had been approved, two are on ground constructing and could be ready in the next one year. Eight more are ready for financing,” he stated. The minister said capacity development for communities in the region had been taken up by the government, but warned that more needs to be done to sustain peace in the region. “A lot of work needs to be done. Sustained engagements, active exploration of opportunities to ensure that communities get benefits. Ogoni clean-up must continue and funds budgeted must be released on time to enable the clean-up move from the drawing board to the field,” Kachikwu said. He also noted that communities would be involved in the protection and policing of oil pipelines in the region. According to him, the work done so far to keep the region stable would be sustained if the government remained focus, oil companies focus on their key social responsibilities in the areas, government agencies keep up with their intervention responsibilities and communities realise that destruction of oil platforms would always lead to confusion and mayhem.
Experts at the SITEI conference offered their views on how the country could overcome its challenges with the Niger Delta and other troubled extractive minerals destinations in the country. They included Executive Secretary of NEITI, Waziri Adio; Executive Secretary of NCDMB, Simbi Wabote; Founding Director, HOMEF. Nnimmo Bassey; and founder, Stakeholder Alliance for Corporate Accountability, Fr. Kevin O’Hara. The experts emphasised the need for constant and sincere stakeholder engagement in the pursuit of sustainable peace. They also called for fair sharing of extractive revenues, considering that host community members are now aware of the wealth that comes out of their land, and would most likely make trouble when they don’t feel its impact.
They also pointed out that the opacity and lack of accountability that enveloped the activities of operators in the oil sector often led to distrust among stakeholders, which in turn bred suspicion and trigger disagreement and violence.
“Ingraining transparency and accountability in all facet of activities in the extractive industries is the underlying bedrock upon which the pillars of peace and mutual understanding rests,” they explained.