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Abstract
This paper explores the developmental outcome of resource abundance when the analytical focus shifts from the macro (national) to the micro (subnational) level, especially to areas where resource abundance is expected to have its greatest impact. It focuses on the Niger Delta, Nigeria's ‘oil republic’ whose resource curse has involved environmental devastation, relative deprivation, resource distribution injustices, political marginalisation and material underdevelopment. However, in spite of the huge resource flows to the core oil-producing states of the region and other political and social benefits, which were expected to obviate the curse, oil wealth has not made the region more developed than other parts of the country. This is due to the inability of subnational governments in the Niger Delta whose performances are crucial to this determination to translate the advantages to the benefit of citizens in the region and because the other material benefits from the national government have been monopolised by a privileged few. The paper concludes that the key to transmuting resource curse to blessing lies in how the abundance is used rather than who controls the resource.
Acknowledgements
This paper was written when the author was at the University of London as the Emeka Anyaoku Visiting Professor of Commonwealth Studies. The author acknowledges the support of colleagues at the Institute of Commonwealth Studies and the London School of Economics who commented on earlier drafts of this paper at seminars.
Disclosure statement
No potential conflict of interest was reported by the author.
Notes
1. In this regard, the report of the Raisman Committee which reviewed the system of revenue allocation in the country after the discovery of oil in 1956 is worth quoting at length:
The problem is oil … While the yield from oil royalties is at present comparatively small, we cannot ignore the possibility that the figure may rise very markedly within the next few years … There is therefore a double obstacle in our recommending the simple continuation of the existing method of allocating mineral resources. First, it would involve … crediting the Eastern region [where the Niger Delta was located at the time] with a source of income which is at once too uncertain to build upon and too sizeable to ignore. Secondly … [it would affect] stability for the future since oil development might take place in any one of the regions on a scale which would quite upset the balance of national development … Our considered conclusion is that the time for change is now, while there is still uncertainty as to which of the regions may be the lucky beneficiary or which may benefit the most. (Raisman Report, Citation1958, p. 24)
The committee accordingly recommended a drastic reduction in the use of the derivation principle which previously gave regions 100 per cent of revenues from resources to 50 per cent.
2. This was reinforced by the Exclusive Economic Zone Act of 1978 which gave the federal government sovereign and exclusive rights over exploration and exploitation of the natural resources of the sea bed, subsoil and superjacent waters of the exclusive zone.
3. Based on 2009 estimates, the population of Kano state, 9,401,288 the highest in the country, was equivalent to the combined population of Rivers (5,198,716) and Delta (4,112,445) states, the most populous oil-producing states. Similarly, the combined land mass of Borno (71,130 square kilometres or sq kms) and Bauchi (64,605 sq kms) was more than double the combined land mass of the four major oil-producing states of Rivers (11,077 sq kms), Delta (18,050 sq kms), Akwa Ibom (6187 sq kms) and Bayelsa (10,773 sq kms).
4. The Act provides that an area of 200 metre water-depth isobaths contiguous to the littoral state would be deemed to belong to the state for the purpose of derivation.
5. Ten major bills, declarations and resolutions were submitted to the federal government by various groups: the Ogoni Bill of Rights (1990); the Charter of Demands of the Ogbia People (1992); The Kaiama Declaration (1998); Resolutions of the First Urhobo Economic Summit (1998); the Akalaka Declaration (1999); the Warri Accord (1999); the Ikwerre Rescue Charter (1999); the Oron Bill of Rights (1999) and the Niger Delta Peoples’ Compact (2008).
6. For SURE-P, federal government got N48.88 billion (US $317.4 million), states N24.79 billion (US $161 million), local governments N19.11 billion (US $124 million), while N13.86 billion (US $90 million) went to derivation. For NNPC refunds, states got N11.23billion (US $72.9 million), local governments N8.65 billion (US $56.2 million) and derivation N2.97 billion (US $19.29 million) (The Guardian, 11 March 2014, p. 11)
7. In 2010, a federal high court in Abuja awarded damages of N15.4 billion (US $100 million) against the Nigerian Shell subsidiary for oil spill that affected 255 hectares of Ejama-Ebubu community lands in 1970. In December 2012, the ECOWAS Court found the federal government of Nigeria and six oil companies (Shell, Total, Chevron, Exxon-Mobil, Elf, Total and Agip) guilty of violating the rights of oil communities to a generally satisfactory environment and natural wealth and resources, which are guaranteed under the African Charter on Human Rights which Nigeria ratified in 1983 (The Guardian, 15 December 2012, p. 2). Another landmark judgement was by a Dutch court in January 2013 that held Shell's Nigerian subsidiary responsible for the pollution of farmlands and fishponds in Ikot Ada Udo of Akwa Ibom State in 2000, 2005 and 2008, and asked it to pay compensation to the community.
8. For example, the oil companies have exploited the law denying compensation where spillage is due to sabotage by claiming that most spillages result from sabotage, as well as the law binding them to unspecified ‘best international practices’ in environmental safety and protection.
9. The institutions include the National Oil Spill Detection and Response Agency whose responsibility includes monitoring and remedying spillages and pollution. NASREA has however been poorly funded and lacks the technical capacity to do its work, and it has so far relied greatly on the oil companies it is supposed to be regulating to do its work. For transparency and accountability, there is the Nigeria Extractive Industry Transparency Initiative, which was created in 2004 to address issues of transparency, accountability and corruption in the extractive industry.
10. One notable corporate social responsibility initiative was that of the Deep Offshore Community Affairs Group, a consortium of deep offshore operators (Shell, Chevron, Statoil, Total, Petrobas, British Gas and NNPC), which undertook collaborative social interventions. Although the group regards the entire country as its community since deep offshore operations have no single host community, the Niger Delta has been a major beneficiary of its projects. Another is the Indorama Eleme Petrochemical Limited's initiative which allocates 7.5 equity partnerships to communities in its areas of operation, which has yielded nearly US $26 million to six communities in three years (2010–2013).
11. The system in use by March 2014 gives 52.68 per cent of the Federation Account to the federal government, 26.72 per cent to the states and 20.60 per cent to local governments.
12. As of December 2011, Bayelsa State's domestic debt was N163 billion (US $1.1 billion), Delta N91 billion (US $591 million), Rivers N84 billion (US $545.5 million), Ondo N48 billion (US $311.7 million) and Akwa Ibom N41 billion (US $266.2 million) (Daily Independent, 16 October 2013, p.12).