Nigeria: Niger Delta Human Development Report - Amazing Paradoxes
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Vanguard (Lagos)
ANALYSIS
August 1, 2006
Posted to the web August 1, 2006
Some amazing paradoxes have come from the development of the Niger Delta region.
Ordinarily, the Niger Delta should be a gigantic economic reservoir of national and international importance. Its rich endowments of oil and gas resources feed methodically into the international economic system, in exchange for massive revenues that carry the promise of rapid socio-economic transformation within the delta itself. In reality, the Niger Delta is a region suffering from administrative neglect, crumbling social infrastructure and services, high unemployment, social deprivation, abject poverty, filth and squalor, and endemic conflict.
Enormous possibilities for industrial development abound in terms of the abundance of raw materials in the region, but these remain unrealized. Beyond vast oil and gas deposits, the delta is blessed with good agricultural land, extensive forests, excellent fisheries, and a large labour force. But juxtaposed against the potential for economic growth and sustainable development are deteriorating economic and social conditions that have been largely ignored by contemporary policies and actions (Jonathan 2004: 20- 21). With local inhabitants subjected to abject poverty and suffering in the midst of plenty, some view the oil and gas endowments as a curse and a double-edged sword
The Niger Delta is a region suffering from administrative neglect, crumbling social infrastructure and services, high unemployment, social deprivation, abject poverty, filth and squalor, and endemic conflict.
Social and economic deterioration, ignored by policy makers, undercuts enormous possibilities for development. In the Niger Delta, with a view to fostering a people-centred development agenda that can unleash the region's enormous natural and human capacities.
CONCEPTUAL FRAMEWORK
In recent years, development programming has been focused on the overriding issues of equity and equality in the distribution of the gains from development efforts. A lot of concern has been expressed about the predicament of the rural poor and the imperatives of several baseline requirements for human development. These include access to land and water resources; agricultural inputs and services, including extension and research facilities; and participatory development strategies to tackle rural poverty, with social equity and civil participation viewed as essential to well-rounded socio-economic development.
If management of oil-related revenues could be based on transparency, accountability and fairness, oil revenues will become a source of substantial benefit for the populations of these countries (Gary and Karl 2003).
Negative development trends are similarly associated with oil and mineral production in general. There tends to be an inverse relationship between economic growth and natural resource abundance, and sustained poor performance on such social indicators as education and health. These outcomes have been dubbed the oil resource curse.
Development that ventures beyond the calculus of economic growth enlarges human choices across all economic, social, cultural and political dimensions.
This relatively new orientation has produced concepts such as 'people-centred development', 'participatory development' and 'sustainable human development'. The concept of people-centred development states that meaningful development must be people-based or human-centred, since development entails the full utilization of a nation's human and material resources for the satisfaction of various (human) needs. In more specific terms, a development programme that is people-centred is expected to achieve the following objectives (Chinsman 1995):
l enable people to realize their potential, build self-confidence and lead lives of dignity and fulfilment;
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lfree people from poverty, ignorance, filth, squalor, deprivation and exploitation, recognizing that underdevelopment has wider social consequences; and
l correct for existing economic, social or political injustices and oppression. The notion of 'participatory development' bridges the interrelated goals of development and the empowerment of people. Development has to be designed to capture what the people themselves perceive to be their interests and needs. Participatory development, sometimes interchangeably called popular participation, is "a process by which people take an active and influential part in shaping decisions that affect their lives" (OECD 1995: 8).
People or communities that enjoy active participation in decision-making over issues that concern their livelihood and interests should be able to realize their human potential, build self-confidence, and lead lives of dignity and fulfilment. Participatory development builds civil society and the economy by empowering social groups, communities and organizations to influence public policy and demand accountability. The process links democratic institutions with human development motivations (OECD 1995; Bass 1972: 212-216).More recently, the United Nations has popularized the multidimensional term 'sustainable human development'. This is defined as:
Development that not only generates economic growth but distributes its benefits equitably; that regenerates the environment rather than destroys it; that empowers people rather than marginalizing them. It gives priority to the poor, enlarging their choices and opportunities, and provides for their participation in decisions affecting them" (James Speth, former UNDP Administrator). Speth says further that "sustainable human development is development that is pro-poor, pro-nature, pro-jobs, and pro-women. It stresses growth, but growth with employment, growth with environmental friendliness, growth with empowerment, and growth with equity." Development has to be designed to capture what the people themselves perceive to be their interests and needs. "Sustainable human development is development that is pro-poor, pro-nature, pro-jobs, and pro-women."
This report takes a human development approach to the situation in the Niger Delta. This approach questions the presumption of an automatic link between expanding income and expanding human choices, and places people at the centre of development.
A people-oriented approach correspondingly shifts the emphasis, for example, from how much a nation or region is producing, economically and in the aggregate, to how its peoples are faring in terms of quality of life and general social well-being. This means venturing beyond the calculus of economic growth and considering how to enlarge human choices across all economic, social, cultural and political dimensions.
RATIONALE
Since 1996, UNDP has produced four national human development reports on Nigeria (in 1996, 1998, 2000/2001 and 2004). This report is the first on one of Nigeria's six subnational geopolitical regions, the Niger Delta. The attention to the delta should be explained. One of the main conclusions of the Nigerian Human Development Report 1996 (UNDP 1996) was that "wide regional disparities are Nigeria's Achille's heel--the primary source of its perennial conflict, political instability and social unrest." Since 1996, with the degeneration in the Niger Delta, it is obvious that the regional disparities remain. It is also evident that in spite of ongoing reform programmes, inequities in the allocation of resources from oil and gas and the degradation of the Niger Delta environment by oil.
The Tenets of Human Development Indeed, defining people's well-being as the end of development and treating economic growth as a means have been central messages of the annual Human Development Reports published since 1990.
Top-down development plans have made little impact on the real lives of people in the delta--or on their perception that development planning is little more than an imposition by the Federal Government.
Inequities fan increasingly intense and frequent conflicts that threaten Nigeria as a whole, and Africa at large. spills and gas flares continue to adversely affect human development conditions.
The inequities fan increasingly intense and frequent conflicts.The potentially adverse impacts of the Niger Delta crisis on Nigeria, and on Africa as a whole, make the focus of this report on the delta imperative and timely. The report serves as an instrument to review the multidimensional nature of the problem and its history, as well as the consequences on the income, education and life expectancy of the people who live in the delta, and on environmental sustainability.
Early concerns about the plight of the Niger Delta region referred to the part now sometimes called the 'core' Niger Delta, comprising Bayelsa, southern Delta and Rivers states. The present definition and composition of the Niger Delta region is a pragmatic one that brings together all oil-producing states in the Nigerian Federation, because they have common ecological and socio-economic problems.
The following sub-section briefly reviews some of the causal factors behind the poor state of human development in the delta, including the pitfalls of traditional development planning, revenue allocation problems and the failure of governance. Pitfalls of Traditional Development Planning Development planning in Nigeria, in the modern sense, dates back to the formative 10- year national development plan for 1946-1955 prepared by the colonial administration.
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After political independence in 1960, successive post-colonial governments initially prepared mostly medium-term development plans, namely 1962-1968, 1970-1974, 1975- 1980 and 1981-1985. A series of two-year rolling plans followed between 1990 and 1998. These efforts were often associated with the income-centred development paradigm.
Short term and based on official convictions, they lacked essential civil society and grass-roots inputs or participation. They failed to be sufficiently far-reaching, longitudinal or symmetrical enough in scope and coverage to pursue the inclusive goals of human development. In most cases, traditional planning efforts amounted to ends in themselves. They ended up either not being implemented or, at best, being largely unimplemented.
Since the colonial era, some policies and programmes within national development plans have been formulated to address the minority status, agitations and perceived marginalization of the people of the delta. But the recurring feeling in the region is that it is often pushed aside within the Nigerian Federation. This is particularly true for minority ethnic groups. The first major attempt to address these grievances was in 1957, when the colonial administration set up the Willink's Commission of Inquiry to investigate the fears of minorities and how to allay them. The Commission reported in 1958 that "the needs of those who live in the creeks and swamps of the Niger Delta are Inequities in the allocation of resources from oil and gas and the degradation of the Niger Delta environment by oil spills and gas flares continue to adversely affect human development conditions very different from those of the interior."
The Commission also noted that "it is not easy for a government or legislature operating from the inland to concern itself or even fully understand the problems of a territory where communications are so difficult, building so expensive and education so scanty in a country which is unlikely ever to be developed." Perhaps more importantly, the Commission concluded that "a feeling of neglect and a lack of understanding was widespread...a case has been made out for special treatment of this area. This is a matter that requires special effort because (the area) is poor, backward and neglected." That conclusion is as true in the Niger Delta today as it was in 1957. Be that as it may, the immediate post-independence Government eventually responded to the Willink's Report by setting up the Niger Delta Development Board (NDDB) in 1961. The NDDB could not solve the problems of the Niger Delta enunciated in the Willink's
Report. Subsequent bodies included the Niger Delta Basin Development Authority (NDBDA) set up in 1976, and the Oil Mineral Producing Areas Development Commission (OMPADEC) set up in 1992. But they also failed woefully. In the case of the NDBDA, organizational problems bedevilled it from inception. None of the board members appointed by the Federal Government to run the Authority came from the Niger Delta. During the civilian administration of Shehu Shagari, 11 river basin development authorities were created; several now have jurisdiction in the delta, including the Niger River Basin Development Authority, the Anambra-Imo River Basin Development Authority, the Benin-Owena River Basin Development Authority, the
Niger Delta Basin Development Authority and the Cross River Basin Development Authority. But these authorities also have had very little impact. For one thing, their boards often comprise politicians who have regarded their tenures as opportunities to reap the 'dividends of democracy'. They have often been viewed as drains on the nation's finances. OMPADEC was established in July 1992 and given the statutory responsibility to receive and administer, in accordance with the confirmed ratio of oil production in each state, the monthly allocation of the Federation Account. This is set aside for the rehabilitation and development of the mineral producing areas and for tackling ecological problems that have arisen from the exploration of oil minerals. Between 1993 and 1997, OMPADEC collected about N17.42 billion, a little over US $135 million. At first, OMPADEC was allocated three per cent of the Federation Account, but this was raised to 6 per cent in 1995. The Commission did not make any meaningful impact on the lives and environment of the Niger Delta people. It was noted for its profligacy and extravagance. Contracts were awarded in anticipation of funds, with the result that contracts worth billions of naira were awarded that were not eventually backed with cash. At the time it folded, the The needs of those who live in the creeks and swamps of the Niger Delta are very different from those of the interior.
Commission owed its contractors billions of naira and left the Niger Delta with numerous abandoned projects. The Chief Executive of OMPADEC had identified three pressing problems at the Commission. There were no available data for planning purposes, such as the crude oil production quota by state. The Commission had no means to cope with the volume of demands given decades of physical neglect and deprivation. And funding was inadequate. While the decree establishing OMPADEC stipulated that it should receive three per cent of the Federation Account, the Commission claimed that what it actually got was three per cent of net revenues from the Federation Account.
When the present federal administration came into power in 1999, it constituted a new body, the Niger Delta Development Commission (NDDC) to take over from OMPADEC. At the inauguration of its pioneer board, in December 2000, the President of the Federal Republic of Nigeria noted that the NDDC has the potential to offer a lasting solution to the socio-economic difficulties of the Niger Delta, which successive governments have grappled with even before independence. To achieve its mandate, the NDDC board identified areas of focus including:
l development of social and physical infrastructure
l technology
l economic/environmental remediation and stability
l human development
l pursuit of a peaceful environment that allows tourism to thrive and supports a buoyant culture
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As a development agency, the NDDC quickly identified the need for a master plan as part of its overall strategy, which has now been completed. In the interim, the NDDC board elaborated a plan involving the construction of roads, shoreline protection, rural and urban water supply schemes, and the rehabilitation of schools and health centres.
This is in addition to human capacity development in new centres that help people acquire skills and build sustainable livelihoods.
By November 2002, the board had reported awarding contracts for more than 650 projects worth over N35 billion or US $271.3 million in the nine states of the delta region.
The NDDC funding structure includes contributions from the Federal Government, the oil companies operating in the region, the Ecological Fund and member states in the delta. The Federal Government accounted for 78.03 per cent of the N44 billion or US $341.1 million that was disbursed to the Commission between 2001 and 2004. Annual federation allocations to the NDDC from 2000 to 2004 are, respectively, N0.944 billion (US $7.3 million), N10.0 billion (US $77.5 million), N13.9 billion (US $107.8 million), N9.0 There were no available data for planning purposes, such as the crude oil production quota by state. OMPADEC had no means to cope with the volume of demands given decades of physical neglect and deprivation. And funding was inadequate. Member states have yet to contribute directly to the commission, and there is continued wrangling over the contributions from oil companies. In spite of the provisions of the NDDC Act on financing (see box 1.3), the NDDC is facing some of th e same problems with funding that plagued OMPADEC.
Financial Provisions in the NDDC Act, 2000
(1) The Commission shall establish and maintain a fund from which shall be defrayed all expenditure incurred by the Commission.
(2) There shall be paid and credited to the fund established pursuant to subsection (1) of this section--
a. From the Federal Government, the equivalent of 15 per cent of the total monthly statutory allocations due to member States of the Commission from the Federation Account; this being the contribution of the Federal Government to the Commission;
b. 3 per cent of the total annual budget of any oil-producing company
operating, on shore and off shore, in the Niger-Delta area; including gasprocessing companies;
c. 50 per cent of monies due to member States of the Commission from the Ecological Fund;
d. Such monies as may, from time to time, be granted or lent to or deposited with the Commission by the Federal or a State Government, any other body or institution whether local or foreign;
e. All moneys raised for the purposes of the Commission by way of gifts, loans, grants-in-aid, testamentary disposition or otherwise; and
f. Proceeds from all other assets that may, from time to time, accrue to the Commission.
(3) The fund shall be managed in accordance with the rules made by the Board, and without prejudice to the generality of the power to make rules under this subsection, the rules shall in particular contain provisions--
a. Specifying the manner in which the assets or the funds of the Commission are to be held, and regulating the making of payments into and out of the fund; and
b. Requiring the keeping of proper accounts and records for the purpose of the fund in such form as may be specified in the rules.
It is probably premature to assess the achievements of either the NDDC or similar state initiatives. With the production of a Regional Master Plan for the Niger Delta, however, the NDDC is at least poised for positive action on its founding objectives. Earlier bodies had never managed or bothered to produce a plan, whether at regional or sectoral levels. But the NDDC does not seem to have made any positive impression on the peoples of the Niger Delta.
Comments by participants at focus group discussions and stakeholders' meetings indicate that people still see the NDDC as an imposition from the Federal Government, and a top-down approach to development planning and implementation. The local people had no say in determining its composition; it primarily comprises appointees of the Federal Government. As far as ordinary people are concerned, the loyalty of the NDDC is not to the Niger Delta but to the Federal Government and the oil companies that provide the bulk of its budget.
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Revenue Allocation The politics and dynamics of revenue allocation have also manifested in attempts to address the peculiar development challenges of the Niger Delta as an oil-producing region. At the root of the amalgamation of the Southern and Northern Protectorates by Lord Lugard in 1914 was the issue of cross-subsidization--the richer South would subsidize development endeavours in the poorer North. The level of cross-subsidization was not clearly specified. The first attempt to write down the basis and levels of sharing revenues among the component units (or regions, as they were then called) of the Nigerian Federation was in 1946, when the Phillipson Fiscal Commission, set up by the Colonial Administration, proposed the derivation principle as a basis for fiscal federalism. The idea was that revenue should be shared, among other things, in proportion to the contribution each region made to the common purse or central government. Derivation became the only criterion used to allocate revenues among the regions in the 1948-1949 and 1951-1952 fiscal years.
In the period shortly before independence in 1960, the disparity in allocation largely reflected the degrees of enterprise and levels of production in the regions. This meant that, by merely looking at the levels of allocations, one could easily discern the regions with high levels of economic activities in areas such as cash crop production (e.g., cocoa, rubber, palm oil, cotton, hides and skins, groundnuts, etc), earnings from export and excise duties, etc. The incentives embedded in the revenue allocation inevitably encouraged competition among the regions, with each striving to contribute more in.
People still see the NDDC as an imposition from the Federal Government, and a topdown approach to development planning and implementation. The local people had no say in determining its composition; it primarily comprises appointees of the Federal Government. The central control of petroleum resources has denied local people the right to benefit from the land on which they live order to get more from the centrally allocated revenues.
