Published on International Journal of Social, Politics & Humanities
Publication Date: April, 2020
Emejuru, Peter Ikechukwu & Young Minanyo Ayotamuno
National Orientation Agency, Rivers State Directorate Port-Harcourt
Rivers State, Nigeria
Journal Full Text PDF: Revenue Allocation and Minority Agitation (Nigeria’s Niger Delta in Focus).
This study examined the dynamics of Niger Delta agitation, its evolution, climax and its impact on the state as well as its implication for national integration. To that effect, it evaluated different problems which include unacceptability of revenue allocation principle by the Niger Deltans which has a negative impact on attainment of national integration by the Nigerian government. It employed frustration aggression theory which explained the situation of Niger Delta people. The research utilized qualitative method of data collection and descriptive method in analysis of data. Findings of the study revealed that unequal revenue allocation has brought about minority agitation in Niger-Delta which has negative impact for national integration. Finally the study recommends that government should interact with these agitating groups to ensure cordial relationship among them.
Keywords: Niger-Delta, Revenue Allocation, National Integration,Government and Agitation.
The inspiration and quest for the study comes from the desire to examine critically the extent to which “Revenue Allocation” has contributed to the problems of minority ethnic groups and stimulated their agitations for justice and equity which necessitated a given attention to be paid. For adequate execution in order to maintain societal peace and decorum for further development as well as enhance the federal stability, greater inter ethnic equalities and reciprocity and good responsible government in Nigeria polity.
Revenue Allocation also has been mystified and tends to unsmooth on the sores of ethnic minority group rather creates chequered fortune from the cumulating political turbulence in the government and make unethical association by the minority ethnic groups in other to defend and advance rights this association in Nigeria includes; Middle Belt Forum (MBF) the southern minority forum, the Nigerian chatter of minority Right organization of Africa etc.
None the less the issue of ethnicity and minority agitation has been mystified by the class that benefits from the system no wonder the minority and their unending agitations have been mirage despite all the effort of the government to solve it (Suberu 1996). As earlier noted ethnic conflict has been recognized as one of the fundamental threat to political institution stability, order and state cohesion and national integration in multi ethnic societies of the third world nation like Nigeria. Thus ethnic phenomenon has given a general acknowledgement of inherent complexity which has affected National integration.
Therefore, this study is designed to examine in practical terms the interface between revenue allocation and minority agitation focusing on finding out the implication for national integration.
1.1 The Problems
The major problems which threaten national integration, security and cooperate existence of Nigeria is the protest and agitation in Nigeria’s Niger Delta Area. The devastating consequences of neglect suffered by oil communities over the past fifty years, pushed jobless youths into varying degree of violent protest such as; restiveness, rascality and radicalism, against the spillage caused by oil exploited from their areas.
The recent action in Niger Delta is the sabotage of national power and periodic hostage taking of foreign oil expertise and employee you can see where the problem lies clearly. Due to marginalization of the minority ethnic group they have started retaliating in which their various forms of retaliation has threaten the cooperate existence of Nigeria which hinders national integration. Loyalty is on ethnic groups instead of the center which is the federal government.
The Niger Delta people such as Akwa Ibom, Delta, Bayelsa etc have nothing to show for the oil resources extracted in their lands they have been devalued and restless in Nigeria polity even the barrels, of crude oil. Nigeria’s main source of revenue is being derived from those states and communities marginalized.
1.2 Research Question
For the purpose of this research the following are the research questions;
a. Has the agitation for a favourable revenue allocation by the minority ethnic group affected National integration?
b. Does the acceptability of the revenue allocation principle by the Niger Deltans have an impact on the attainment of National integration by the Nigerian government?
2. Derivation Principle in Nigeria: An Overview
A more widely supported demand of oil producing states and communities is that significant proportion (usually put at not less than 10 percent) of federally collected mineral revenue should be returned to the oil producing area on the bases of derivation principle (Suberu 1996). Derivation is of course along standing distribution stipulated that a significant proportion of revenue collected in a locality should be returned to that locality or segment.
Essentially the principle of derivation requires that all revenues which accure from or attributed to a particular state should be allocated in part or full to such a state irrespective of the fiscal jurisdiction or the machinery for their collection. In Nigeria, the question of revenue derivation and allocation have been central to the socio-political tension and the bitter struggle for power between, the federal and state governments and amongst the ethnic nationalities that constitute the Nigerian Federation (Nwokedi 2002). The crisis over the subject began with the creation of a central account for the federation to which the regional government contributed and received their allocation of revenue under the scheme of amalgamation of the north and south protectorate in 1914, introduced by Lord Fredric Luggard, the first Governor General of the amalgamated Nigeria.
The scheme according to Nwokedi (2002), placed administrative area of the Northern and Southern Nigeria under two Lieutenant Governors, each with its responsibilities for the area department which were practically indivisible and whose function were common to both were centralized under the direct control of the central government. Each of the religious levels in an inferior position. Thus the vertical revenue allocation of Federal Government enjoys a greater ability to rise revenue to meet its functional expenditure obligation than state and local governments do. The continuation of the military rule, civil war and arrangement whereby all the proceeds from oil goes to the federal government exclusively reserved situation in the early 1960’s when there was substantial revenue and expenditure decentralization. According to Anyanwu (1997). These have therefore been increasing wave of discordant voices from state and local government over revenue allocation to correct unbalance between submitted separate budget proposal, which were incorporated in a centralized annual budget at the time of amalgamation of the two regions, the principle of derivation was in vogue each of the regions collected revenues of its internal resources mainly excise duties, agricultural, cash or export crops, taxation etc. The mineral sector which was the responsibility of the central government had not yet been developed to become a major national income carrier. There came many commissions in Nigeria with various strategies on how the revenue should be allocated, example Author Richard condition 1946, the Oliver Littleton Constitution 1954, the chicks commission Report 1953, etc which gave many allocation formular and recommendation.
Finally, it should be carefully noted that whether the principle or its application would result to regional inequality which appears to be deliberate manipulation, for the principle has been adopted and practiced to the fullest when revenue collected accones mostly from the agricultural sector in the 1940’s and its rent and royalties paid absolutely without negotiation. Therefore, it should be seen as an imbalance, if changed and not properly put to practice, when crude oil exploitation that causes hazards to the southern Nigerian Ecology becomes the prime sources of revenue earnings the heartening contradictions and consistencies is more or less irrational and psychological, that inmates calberaing communities will consciously fight against these oppositions until their plea is addressed as well as observed in the statement of MOSOP, in the Guardian (17 March 1993). “Oil royalties and rent are the properties of land lords and the Federal Government must as a matter of fact return to the oil bearing communities all royalties and rent must be paid to it, by oil companies 1958.
2.1 Minority Agitations an Overview
Minority agitation here has to do with activities of minority ethnic groups in other to show their grievances over a particular problem or situation the central government as acting nonchalant about. According to Suberu which argued that the escalation of political violence in Niger Delta has closely mirrored the stages of political and economic evolution of Nigeria. At the heart of this is what affirms to be the security tension in fact the security problem is the fear of domination of minority group by the majority have marked the evolution of Nigeria’s political history. This is also the opinion of scholars like Okoli, as he was quoted in ethnic majority conflict in Nigeria that there has been an expansive body of knowledge generated by the phenomena this has led to the intensification of social conflict over the use or control of mineral resources. This is reinforced by the perception of the so call majorities that crude oil export and revenue attributable to their activities has become the mainstay of the Nigerian state.
2.2 Niger Delta in Perspective
Rich region of poor people (2005) this work is a collection of opinion of scholar it is ground in a deep sense of injustice over the lack of infrastructural development in the Region by successive government. Wangbu et al grew out of profound sense of injustice from which Niger Delta people seek liberation. One of the opinion made by Kekong Bissong in Article “profit maximization and Abuse of human Right in oil rich Nigeria” says that communities in oil producing areas (OPA) feel that their resources are taken away and wasted or used elsewhere in ways that do not ultimately profit them or the country as a whole as they are victims of environmental degradation through spills and arrant neglect. Between 1996 and 1991 on the Niger Delta as a whole, official and highly underestimated figures quated 2,976 oil spillage (2917 barrels) every week. It is such feeling that gives room for youth violence and agitation in the region which has great implication on national integration.
The case for the provision of special funds for rehabilitation and development of mineral producing areas have been more compelling than this demand for allocation of revenues to states on a derivation bases (Suberu 1998). Accordingly, Anyanwu (1997) Rightly points out, that, it is often argued that oil producing areas suffer from great damages consequent to the activities of oil companies exploration, serious damage has been done to the marine lives of communities apart from the damage to the ecology, the community life of citizen are in jeopardy. Indeed Osagie (1992) asserts that Nigeria living in oil producing areas have continuously voiced their disillusionment about the neglect and insensitivity have been experiencing the population and continuous flooring of gas creates health hazards and rendering farming activities almost impossible. Consequently, those need are enunciated by independent observers and oil producing communities themselves include. The indiscriminate destruction of marine life by explosive used in the seismic survey, the pollution to water, land and vegetation by spills from oil wells, tankers and exposed high pressure pipe lines and devastation of crops and trees by intense heat resulting from glass flaring. All of this is of course compounded by naturally difficult terrain of oil producing area (OPA). Asiodu (1993) straitened that like in many oil rich areas of the world. Regions where oil is found in Nigeria is in hospitable they are mainly in swamp ank creeks. They, therefore require massive injection of money in their conditions and standard of living are to be compared with what obtains elsewhere in the country where possibility of agriculture and diversified industry are much greater. Therefore in this light there is disbursement of special funds though an independent federal government agency rather through the state government concern and designed to make sure that fund are not deverld to other purpose by the state government but used to meet special needs of communities affected by the risk of oil exploration, immediately and directly. Amersfoot (1989).
The federal government adopted three policies for the claims and the activities of ethnic minority oil producing communities. These are redistributive reorganizational and regulatory policies are state decision that consciously dispense valued resources to the group at the expense of other claimant to state resources. Reorganizational policy refer to the state effort to restrictive in order to accommodate group demand or strengthen the efficiency of centralized state power regulatory policy entails the mandatory imposition of sactions or restriction on individuals or groups that are perceived to pose a threat to state cohesion and other (National integration).
Generally, the Niger Delta attracted considerable multidisciplinary attention and therefore has rich literature. The literature on Niger Delta agrees that oil industry has and promoted the development of the region, rather it has undermined the area’s development Ikein (1991) has noted that oil has merit for the indigenes of Niger-Delta wrenching prority. People’s right have come under severe assult by the ecologically unfriendly practices of oil transnational corporations to (INC’s). In addition, state laws and policies as they relate to petroleum resources, expropriate the indigenous people of the Niger-Delta of their right to their natural resources. According to brown, the local economies of the oil economy of Nigeria. The success of oil economy has not promoted the social engine of the society. The point is that oil based environmental degradation and ethnic based political domination has combined alieriate the people from the use of their natural resources for their non development oil exploration and production is associated with a number of activities that devastate the environment and impact negatively on economy and society. Naanen (1995) has demonstrated the impact of oil industry on the economy and society of Niger Delta. Oil spills killfish and agricultural crops, in addition to reducing nutrient value of the soil. Studies have shown that gas flaring demish agricultural productivity. It has been noted that Caps planted about 200 meters from flare site experience 45 percent less in yield and 10 percent loss in yield for crops planted one kilometers away from gas flairs (Salua 1993). But how have the agitation for favourable revenue allocation by minority ethnic group affected national integration? The result are productivity losses, occupation displacement and increased poverty (UNDP 2006) development have stagnated, and no matter how hard peasant work they remainant the same point and sometimes their situation get worse. This has caused frustration and as psychologist have noted conflict are a response to the frustration which occurs as a result of obstacles against the actualization of set goal Anikpo (1998) clearly because they have been no address to the issue it threatens national integration as it leads to violence and militancy.
3. Theoretical Framework
For purpose of investigating the problems of study the frustration aggression theory will be employed. This theory explains why people became frustrated and aggressive when their goals and aspiration are not achieved. In 1939 researcher at the Yale University Institute of Human Relation published a small monograph that has best a tremendous impact directly or indirectly almost on all behavioural science had best a tremendous impact directly or indirectly almost on all behavioural science had by John Dollard, Leonard Drob, Neal Miller (1959). The group attempted to account for virtually all human aggression with a few basic ideas. Most of the studies investigating the cause and consequences of aggression in the immediately following decade were oriented. In some extent the least toward issues raised by the Yale’s group analysis frustration can relate to aggressive inclination even when they are not arbitrary or aimed at subject personality.
Applying this theory to the research, revenue allocation is an issues which calls for agitation by the minority ethnic groups especially the Niger Delta Region where the oil which happens to be the main stay of Nigerian economy is gotten and because of the frustration of the people by the federal government who has refused to listen to their pleas and agitations has lead to aggressions in the sence of militancy, killing, kidnapping, bombing of oil wells which has threaten national integration that is unity in diversity because the mining ethnic group (i.e. Niger Delta) feel marginalized and wants to be treated equally like other ethnic groups (majority) especially for the fact that their lands produce the resources used up to keep up the economy. This the theory fits into the research because it mirrors how frustration leads to aggression as in the case of Niger Delta.
3.1 Minority Ethnic Group and Agitation for Revenue Allocation: Towards National Integration
The first major expression of this resurgent minority mobilization took place in October 1990 and involved a confrontation between youth of the community and staff of the oil multinational, shell. The Nigerian army was subsequently called in on shells behalf leading to the killing of people. Because of this the wide spread of Revenge and anger broke open all over Niger Delta. Masop was founded and adopted the Ogoni Bill of right which called for a haft to environmental degradation and control of Ogoni resources. The Federal Government did not response to the bill so in 1993 the Niger Delta people conducted mass demonstration and a demanded that the 1993 presidential election should be boycotted this amounted to the Repudiation of the legitimacy of government (Wangbu 2005) which caused violent clashes.
The Major Demands of Niger Delta ethnic minorities, enunciated in various documents including Ogoni bill and Kalama Declaration, is that of resource control. The criterion for the allocation of federally collected revenue to the region was the principle of derivation. Under this principle region were entitled to 50% of revenue collected from their territories. Gradually there was abandonment of the principle it declined from 50 percent in 1993 to 2 percent in 1995 and 1 percent in 1997 (Sauberu (2001). The Demands for favourable revenue allocation persisted there have also been demands for a national conference of ethnic group as a path to the restoration of a truly federalist constitution which will guarantee self determination of various ethnic minorities of the Niger Delta. Coupled to their particular demand was the minority complaint that while their resources were being used to develop other parts of the country, their areas where left without basic social amenities and subjected to environmental pollution (Oha, 2010) the South South Region inspite of its natural resources endowment in oil and gases still very poor and deprived of some basic necessities of lives and marginalized in certain political office compared to other region with little or no resources contributing to the wealth of the country. The people in this region are vastly neglected an oppressed not only by activities of oil exploration by multinational corporations but by in sincerity on the part of government to adequately compensate them for loss of their lands, sea, watter system, displacement, diseases suffered from oil spillage and gas flaring by the government. An economy of conflict slowly emerged. By September, 1999, about 50 shell workers had been kidnapped and released. Their motive for doing this was very clear “if they do not benefit from oil output, then they will stop the oil from being produced”, then they began a regions of violent and armed resistance by youth militias and militant group principally in response to state repression on corporate violence and as a part of action to compel concession in respect of regional autonomy and greater oil benefits. The region has since become the scene of the most extensive military operation since the Nigerian civil war which has lead to the threatening of national integration. (John 2010).
Nigeria’s federalism is characterized by marginalization where virtually every geo political zone complains of one form of deprivation or the other. In attempt to reveal the extent to which marginalization has affected minority ethnic groups in Nigeria. Scholars have different interpretations for it, for instance (Ojukwu 2005) in his view notes that marginalization is a state of relative deprivation or deliberate disempowerment of people or a group.
National integration have been hindered a whole lot because Nigeria often preach of unity in diversity but taking a close look at the system there is no unity. One particular ethnic group over shadows the rest giving room for bias tendencies. In Nigeria by now there should troups of foreign expertise coming from all conner of the world to invest but because of insecurities, corruption and agitations left, right and center has made them not to invest. Another ethnic group cannot be in harmony without being in constant competition with the other.
It draws the attention to the plight of the people in the Niger Delta within the context of existing fiscal relations in Nigeria as well as lack of true representation of the oil producing areas in revenue allocation decision making process. Niger Delta people are agitating for a more favourable revenue allocation that can help them improve their situation and the way things are going from the inception of all this agitations till date. The federal government have taken no step to improve their lives that instead it has moved from bad to worse and because of these the Niger Delta people have sworn not to make peace reign in Nigeria because they have refuse to take note of them as the region that has improved Nigeria to the rank it has been and to their effect national integration is endangered because there is no unity (Olayinka 2013).
An acceptable revenue allocation formular has yet to evolve, particularly with respect to revenue allocation for different tiers of government particularly the state have continued to express dissatisfaction with the existing formular which gives over 50 percent revenue to the federal government, about 26 percent to the state and 20 percent to local government. Under the conditions in which the federal government dominance of both tax jurisdiction. Revenue and expenditure have resulted in only limited effectiveness of its expenditure. Very importantly the revenue allocation formula and principle have not given adequate incentives to states and local government fully inspite their own internal sources of revenue.
A tabular representation of Nigeria’s revenue allocation formular as shown below;
TABLE 1: VERTICAL ALLOCATION FORMULA (VAF)
Under the current revenue allocation formular, the federal government takes 52.68 percent, the state 26.72 percent and local government 2060 percent with 13 percent derivation revenue going to oil producing states. The changes in revenue sharing arrangement falls short of the demands of the oil producing segment and their objective needs as ecologically endangered and economically disposed communities. Consequently, there have been demands for an increase institution allocation to the federation account or collected mineral revenue allocation has led to people to no choice then to revolt which has threaten national integration. The revenue allocated to the center (i.e. federal government) is too much because hungry politicians vandalise the money without using in to develop the country, State Government and local government should have a higher percentage so as to help develop the unseen parts by the federal government. If the grass root is developed there will be massive improvement and agitation will be at a bearable rate and national integration will slowly set in (Obiajulu 2015).
TABLE 2: HORIZONTAL ALLOCATION FORMULA
Source: Revenue Mobilization Allocation and Fiscal Commission (2018).
Yet, the centralized redistribution of oil revenue; whole provoking resentment in Niger Delta, has hardly produce contentment in the rest of the federation. Rather intense interstate and inter local disagreement have surrounded the choice and application of the current general principle of horizontal sharing namely population equity of the state, internal revenue generation, land mass, terrain as well as population density. Indeed the entrenchment of these principles in the constitution has effectively entrapped Nigeria in horizontal distributive regime of the past three decades with fixation on the simplistic principle of population and inter unit equity. The 40% allocated to equity in Nigeria is not applicable because some region gain higher than other region especially the north where nothing is gotten from is financed more than the oil producing state (Obeji 2016).
Coming directly on the heals of OMRADEC is the Niger Delta Development Commission (NDDC). The intervening years witnessed a escalation in the general restiveness among Niger Delta people largely occasioned by prolonged neglect of infrastructural development in the Region. Their concerted demand for an equitable share of oil revenue gave to Niger Delta Development Commission Bill under the Olusegun Obasanjo Administration. The Niger Delta region had become a volatile zone characterized by protest, agitations on May 1999 President Olusegun set the national assembly a bill to establish the Niger Delta commission as an agency. (Hamisu Muhammad 2018).
To implement a program for sustainable development of the Niger Delta region the main objective of the bill was to formulate policies and guide lines for the Niger Delta; concave plan and implement projects and programs for the development of the regions in areas of transportation, health, education, housing urban development. It is too early to say of NDDC will live up to the expectations of developing Niger Delta or weather it will become another bureaucratic sink hole and an agency of patronage and corruption. But at the end of the day the NDDC because a sink hole as predicted to be has some elite as they always do went to the agency to corrupt the system the projects meant to be executed were abandoned. The agitation for a more favourable revenue allocation increased day by day as integration seems to be far from Nigeria.
Minority agitation keep on going on because in the case of allocation of development projects the non oil producing centers have lots of project assign to them and the region where oil is gotten from is left to not in abject poverty. No state wants to be left behind every state has to move along with the pace development but the Nigerian Government does not pay great concent to that the main priority is to know how many barrels of oil can be sold and how much can be made from it to make their money division secure.
TABLE 3: Distribution of Projects in the Six Geo-political Zones in Nigeria (2017)
Source: Federal Inland Revenue Service Publication (2017)
In summary it is clearly stated in the table above you notice that the Niger Delta region gets less project allocated to the region and region that have little or no natural resources especially the north West and North east have higher developmental projects allocated to them their region gets more developed and the Niger Delta region where the main stay of the economy being derived from get poor and poor by the day. The derivation principle is just a more principle on the lips of the government that has not been practicalized that is the reasons behind all these minority agitations which have become a threat to national integration. As it has been rightly noted;
Like in many other oil rich areas of the world, the regions where oil is found in Nigeria are very in hospitable, they are mainly in swamps and creeks. They, therefore, require massive injection of money if their conditions and standard of living are to compare with what obtains elsewhere in the country where possibilities of agriculture and diversified industry are much greater (Asiodu 1993).
The difficulties and deprivation of the oil producing communities have invariably brought them into direct confrontation with oil prospecting companies. Thus, these have challenged what they have described as “Environmental recklessness” of the oil companies. Moreover the communities have demanded that the oil companies pay reparations or compensation for past neglect and exploitation of the oil rich areas, and contribute to the creation and expansion of infrastructural facilities and socio economic opportunities in these areas.
3.2 The Impacts of Revenue Allocation Principle on The Attainment of National Integration
Political sentiment have been applied in administering the percentage derivation due to natural resources producing states. The practice has indeed fall short of its expectation due to its political manovering of reaping revenues to the central government: where the ethnic majority and non oil producing states have higher control of power and in return providing the minority and oil rich states with a token of compensation for playing host to the central governments joint ventures with oil companies. This has become possible because the 1976 constitution vest all mineral rights exclusively to the control of the federal government. The application of the principle since the country’s independence has failed to encourage and attract the development of others abundant natural resources other than oil and natural gas as percentage deviation due to mineral producing states continue to decline currently, it is set at 13%, which is still insignificant, unfair and unacceptable to the agitators of resource control (Niger Delta). Although, there is an increase compared to in immediate past 1% derivation. A problem with the present percentage derivation is the lack of sound technical basis or traceable mathematical derivation formular rather, it is a politically imposed type of compromise between ethnocentric parties. For example, the current 13% derivation is mean agreed value of a political negotiation in a constitutional conference hold in 1995 between proposition by dominant 8% and opposing 18% parties (Ikpatt, 2003). Another problem with the current percentage derivation is a constitutional one traced back to the supreme court ruling in 2002, where the federal government field a sheet against the littoral states at court requesting a resolution of sea ward margin of wloral state within the federal republic of Nigeria for purpose of calculating the amount of revenue accruing the federal account directly from any natural resource obtained for the state in pursuant to section 162(2) of the 1979 constitution, the sea ward margin will be low-water mark of the land surface there of or in specific cases (like Cross River State) with arch ipelago of island the seaward will be that of the inland waters with the state. This judgement created a total dissatisfaction to the litteral states of the Niger Delta region especially Akwa Ibom and Ondo States whose oil resources are virtually 100% offshore (probably beyond the low water margin and in land waters within the state), thereby tactically sidling them from offshore derivation benefits accurable to the federations account.
3.3 Negative Impact, Political and Capacity Problems
The highly competitive but fragmented system in Nigeria coupled with the lack of checks and balance pose a major challenge to implementation of the expected derivation principle in terms of capacity we believe Nigeria has come of age, but the influence of the former tends to weaken the latter. Today, we have seen some sub-natural government performing well above average in Nigeria. This is possible because these government decade to invest in human capacity development in order to strengthen their labour force. Unlike Nigeria, the Peruvian fiscal decentralization policy based on the system of automatic transfers to mineral producing areas failed because it never took into consideration the strength of its human capacity at the local level before implementing the policy despite its longer period in the mining business, conflicts within neighbouring countries on territorial issues and political interest at the local love land short term policies contributed to the failure of fiscal policy (Adedayo, 2010).
3.4 High Dependence on Oil
It is a well known fact that oil contributes over 90% of Nigeria’s foreign earnings and also it national budget are predicated on the basis of yearly crude oil production and price. These dependence continues to sustain its importance and attract high political actors and interest and also explains why oil is considered now in the country as a natural resource for all unlike period where coca and groundnut dominated the export market. In other words, upholding the expected percentage of derivation may be perceived as unlashing financial threat on the government of Nigeria and non oil producing state.
3.5 Positive Impact
3.5.1 Reduction of Hostility
Despite the fact that the oil producing Niger Delta region has long been agitating for resource control, marginalization, a fair percentage derivation will reduce the agitation turned hostility especially on oil installations in the region and any other region in future.
3.5.2 Proper Development
The present percentage Derivation has failed to replict the needs for the local people and its governance. State and local government should be able to handle development according to this felt needs and provides and not being marginalized and constrained by lack of finance. Applying the derivation principle in its original sense may increase the chances of implementing programmes according to the needs and priorities of the people. For example the Niger Delta region confined to call for remediation of its polluted environment whose damage came as a result of oil exploration, rather the federal government has invested in what is not considered top priority.
It is possible to identify three forms of state responses to claims and activities of ethnic minority oil producing communities. These are redistributive, reorganizational and regulatory state policies or responses. Redistributive polices are state decision that consciously dispense valued resources to one group at the expense of other claimants to state resources. Reorganizational policies refers to state effort to restructure on configured political or administrative institution and relationship in order to accommodate group demands or strength the efficacy of centralized state power. Regulatory policy entail the mandatory imposition of sactions or restructions on individuals or groups that are perceived to pose a threat to state cohesion and order. We now turn to an examination of the implementation and impact of each of these type of policy responses to ethnic minority ferment in the oil producing areas. In response to the growing agitation among the oil-producing communities, the federal government in 1991 announced a new policy designed to give some satisfaction to the development needs and demands of these communities, the federal government in 1991 announced a new policy designed to give some satisfaction to the development needs and demands of these communities. The policy required the Nigerian National Petroleum Corporation (NNPC) and its joint venture multinational oil companies. To elongated three percent of their total capital investment to community development purposes. This policy was a depature from previous practices according to which the companies voted any amount as they deemed fit for developing specific projects in their communities (Akapn and Umodong 2010).
Following intensive agitation by the oil producing communities and their elated representatives and governments however, the federal Governments in June 1972 announced the following revision in fiscal and administrative arrangement for revenue sharing (the Guardian, 7 June 2012) the statutory allocation to mineral producing area was increased from 1.5 to 3 percent of federally collected mineral revenues. The statutory commission was established to administer this allocation, thereby putting an end to the practice of disbursing the mineral producing area fund through an adhoc presidential committee. Named the oil mineral producing Area Development Commission (OMPADEC) this 12 members agency had it headquarter in Port Harcourt and state office in Abia, Akwa Ibom, Cross River, Delta, Edo, Imo , Ondo and Rivers State. The statutory allocation for the amelioration of ecological problems throughout the federation was increased from 1 percent to 2 percent of the federation account, the government committed itself to the establishment of new national bodies which the extant responsibilities of the national Emergency Relief Agency: (Nwachukwu 2011).
It is useful to note that the increase in statutory allocation to the mineral producing area and the ecological fund entailed a corresponding reduction by 1.5 and 1 percent, respectively of statutory allocation from the federation Account to the federal and state government. (Nwachukwu 2011). This is the nature of redistubutive policies, which characteristically involve the gratification of some interest or demand at expense of others. The increase in federal allocations to the mineral producing areas and establishment of OMPADEC have endangered mixed reaction from oil bearing communities. The some representatives of Niger Delta area, for instance, the Federal Government initiatives reflect its magnanimous and godly spirit in sympathizing with the lot of suffering and impoverished oil producing communities of the country.
The commissions formula for distributing development project among the oil producing communities has also provoked criticism. This formular prescribes that each communities share of OMPADEC sponsored development project to tried to the size of current contribution to the total volume of oil. Apart from unavailability and unreliability of the required data, the requirement has the potential impact of marginalizing those communities, like Ofobiri which were major oil producers in the past, but which no longer produce oil in appreciable quantities. In essence, the governments effort to motify the oil producing communities through changes in the revenue sharing system have hardly achieved their interdent impact, however, no definite statement can as get be made about value and viability of the commission.
It has been proven that up till date revenue allocation principle has not been accepted by the Niger Deltans which has made the Nigerian government not even being close to national integration. Kidnapping in the oil rich but impoverished Niger Delta region of Nigeria is a product of political and economic factor and forces deeply rooted in the country’s history. The effort by the people of Niger Delta to get the Nigerian state to address the issue started two years before independence in 1960 and initially consisted in request and agitation for creation of separate state for them and became more focus on remediation of their environment by oil exploration and demands for more oil revenue for the development of their region and up till now the government still acts diff about their agitation and bring up principles that are ineffective. Kidnapping has become a veritable weapon to compel attention of the Government. Kidnapping have become a popular means by which unemployed youth demand welfare from politicians within the Niger Delta who may have dumped them after arming and using them as political things in series of election. This various kidnapping shows the unacceptability of revenue allocation principle by the Niger Deltan’s which has hindered the attainment of national integration by the Nigerian government because no matter how much the try if there is no favourable revenue allocation principle that will better the lives and environment of the Niger Deltan there will always be serious to this which will hinder national integration. The table below shows a police record of hostage taking and sea piracy in the Niger Delta region so far on their unacceptability of the revenue allocation principle has hindered national integration because day by day the Niger Delta people have vowed that until their demand are met there will always be kidnapping, vandalization of oil pipeline, and militancy, which makes the corporate existence of Nigeria hostile and unfavourable for investment, accommodation, economic activity and a host of others.
Table 4: Police Record on some cases of kidnapping/Hostage taking and sea piracy in Niger Delta Region (Bayelsa).
Sources: Crime Diary of Bayelsa State Police Command in Eseduwo No. 8:502
From the table there is clear indication that three of the cases representing were family members of politicians. The list of those attack is endless because till date they are still issues of agitation for a more favourable revenue allocation principle which has hindered national integration as the Niger Deltans have sworn never to until they are heard and compensated respectively.
3.6 Derivation Principle
Revenue allocation in Nigeria has been on of the most intractable and controversial issues particularly the principle of derivation” has been highly contentious in the country’s fiscal federalism since oil was discovered in 1958. Since the introduction of the principle by the then colonial administration, the formular underlying it has undergone numerous retrogressive alteration following a pattern that has concentrated revenues with the central (federal) government, the percentage revenue due to producing state has declined from the initial 30% share to 1% in the 1990’s and subsequently was increased gain to 13% share which does not reflect full offshore derived revenue (Suberu 2001). This has been considered unfair and unacceptable by the oil producing states especially Akwa Ibom State whose oil is virtually 100% offshore which technically limits their benefits from the principle of derivation. This has resulted to continuously seen agitations by those states for equitable share of her God given natural endowment for its effective development (Government views on Revenue allocation).
The equitability proposed by the derivation principle in its original sense is of great importance because it is an instrument that can promote diversification of revenue generation streams for the country and support economic development as well as reduce hostility in Niger Delta and any other recourse rich region with natural resource endowment other than oil and gas will now be compelled to develop these natural resources(s) and hence, benefit from the principle.
Considering the evolution of the principle of derivation and the rationale behind its applicability prior to the discovery of oil in Nigeria, it is expected in a fair sense, and in the absence of true federalism in Nigeria that the principle bequeathed to us by the Government be maintained. Many bodies and groups have asked for the original 50% derivation used in the era when groundnut from the north and cocoa from the west dominated the countries export market. For example the Karama declaration (3) of 1988 lamented the declining trend to the percentage derivation since discovery of oil in the Niger Delta and called for a reverse of the principle. This is what the oil rich Niger Delta countries to ask for, since federalism in Nigeria has become a politically manipulated practice by the power dominant majority, creating a serious barrier to resource control agitators. The expected percentage derivation should be able to reflect positively on the citizenry under normal circumstances. However political despite Nigerias developing state, it would have been possible to maintain the expected principle, especially now that the coca/work force has improved. Political sentiments have been applied in administering the percentage of derivation due to natural reproducing state (Adowo 2013). It has indebt fall short of expectation due to the political manoevuring of reaping revenues to the central government, where the ethnic majority and non-oil producing state have higher control of power, and in return providing the minority and oil rich states with a token of compensation for playing host to the central governments joint ventures with oil companies. (Adejoh, 2005).
The application of the principle have failed since independence turn courage and attract the development of other abundant natural resources other than oil and natural gas as percentage of derivation due to mineral producing states continue to decline. Currently, it is set at 18 which is still insignificant, unfair and unacceptable to the agitators (Niger Delta) although there is increase compared to the immediate past 1% derivation (Nwachukwu).
The attitude of the Federal Government to the agitation in the region is well known. The use of force to keep the people down and exploit their oil and gas resources cannot resolve the agitation. The study points out that the Niger Delta people are grieved and anguished by decades of syndication oppression. This is epitomized in the abuse, misuse and over use of resources and wealth beneath their feet, enmeshed in the mess of institutionalized injustice and effrontery on the reflects of human right by both multinational agencies. In line with the aspiration of peaceful development and reconstruction in Niger Delta, various oil portraying communities and ethnic group have come together to clearly articulate their position, demand and perspective on the Niger Delta question. The questions encompasses demand for resource control, environmental protection and fiscal federalism.
Consequently revenue allocation will always cause for agitation in Niger Delta which will hinder national integration. The research is suggesting that the current revenue allocation should be review and the derivation parameter increased to at least 50% in contradistinction with the 13% derivation. In the same vein the exploration acuities of the on shore and offshore should be resolved as well oil companies should move their operating headquarters to oil producing state especially states where they have more operating headquarters because by so doing they will be forced to develop to develop to develop communities where their staff reside in the other way helping to develop their host communities.
The re-check of revenue allocated to the Niger Delta region to curb their agitation will promote national integration the research points out the reasons for these agitation and positive approaches to curb these agitations. Revenue if allocated equivalently will reduce agitation and develop unity in diversity in Nigeria because as it stands now it is threaten. In a country like Nigeria which has diverse ethnic group revenue should be equitably distributed to avoid agitation either from the minority or majority angle. This study has proven that there is a negative impact of minority agitation on national integration of revenue is not allocated equitably in the Niger Delta Region.
In order to improve this study, the following recommendation are listed which if addressed, minority agitation in Nigeria’s Niger Delta will be at its bearest minimum;
a. The quality of leadership is important or effecting necessary compromises in Nigerians reconciliation system. Thus, there is the need for transformation of political contractors and touts into genuine politicians, a new search for political leaders and statesmen. Also, on vertical revenue allocation the recognition of derivation principles an autonomous criterion for vertical revenue allocation, the drastic recognition in the share of federal government in the Federation Account from 48.5 percent to 40 percent to curb the santa- clause propensities in the center. Thirty percent of mining rents and royalties to be returned to producing state.
b. The Nigerian Government to listen to the demands of the Niger Delta region so as to subside the agitations because if they are not settled the agitation will go on and on which has a negative effect on national integration. Niger Delta region has been tagged “Rich region of poor people” there should be a change of this tag. The government should provide amenities to the region to make development equal in the nation. In order to respond to the challenges of distribution of resources, there is need for the revision of legislative list, revisiting the onshore/off shore dichotomy and increasing intergovernmental interaction so that some state won’t feel left out.
c. Ecological problems arising either as a result of mineral exploration or as a result of natural disaster such as flood and erosion should be given consideration. Presently there are no concrete effort by government to redress the problem of degration in the Niger Delta beyond the promulgation of laws and a lot of verbal posturing. Government should recommend reforms of policies and practices that encourages social dislocation and environmental degradation, to address poverty induced causes of environmental degradation and social tension; an to improve public sensitivity and understanding of environmental issues as well as capacity of people to deal with environmental problems in their local space. Government as a matter of policy endeaviour to dialogue with youths instead of seeing them automatically as enemies to be crushed. There were cases in which security forces threatened, beat and jailed and brutalized delegation from host communities before they presented their case. In this circumstance, the youth were left no option but to resort to violence. If government does not open up avenues for dialogue, the youths come to think of violence is the only way to open up the communication line and it does work. The governments effort to dialogue with the leaders of this agitation group, is a step in the right direction. The end result of this will be nationalism, patriotism, peaceful coexistence, etc which still hammers on national integration.
d. Finally; provisions should be made for periodic reviewing of fiscal formular to reflect changing prevailing circumstances in the federation. In other words they should be periodic fiscal review to reflect the prevailing realities in the country, the principle of revenue allocation based or need and derivation should be prioritized. This will bring the Nigerian revenue sharing practice close to “Equity Rationale”.
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