FISCAL FEDERALISM AND SOCIAL CONFLICTS IN NIGERIA: A SURVEY OF THE NIGER DELTA EXPERIENCE

Rose .N. Nwankwo

Chief Lecturer,

Department of Public Administration,

Federal Polytechnic, Oko.

Anambra State, Nigeria.

Email: rosenwankwo@gmail.com

Abstract

Our work on fiscal federalism and social conflicts in the Niger Delta region of Nigeria is primarily motivated by the desire to identify and explain the reason(s) behind the volatile conflicts that have come to engulf majority of the once peaceful states of the Niger Delta region of Nigeria.  It is hoped that clear identification of the problem and solutions to be proffered, will be adopted by policy makers to resolve these conflicts permanently.

Introduction:

The Niger Delta remained largely quiet and agrarian until the discovery of oil in commercial quantity at Oloibiri in 1956. This discovery and subsequent exploitations have generated billions of petro-dollar into the ‘Federation Account, while on the other hand, the land and people of the Niger Delta largely have misery, pollution, Failed aquatic (marine) environment and poverty, sickness and death, to show for it. The people have watched helplessly, but with mounting frustration, how the wealth generated from resources under “their soil” is being applied to make life comfortable for Nigerians in other parts of the country. On their part, oil-exploring activities have forced them out of their primary sources of livelihood like fishing and farming because of factors like oil spillage, pollution, gas flaring and acid rain, among others. The result of these realities is that at some point, frustration has set in with its concomitant effects, aggression and conflicts. The people of the Niger Delta argue that the present Nigerian state structure is fashioned in a way that a class of Nigerians perpetually exploit, and marginalize the minority groups, who have been favoured with one natural resource or the other. Thus, there seems to be a relationship between the clamour for fiscal federalism and the conflicts in the Niger Delta region.

The Niger Delta region of Nigeria has in recent times become a “War Zone” of some sort. A number of armed youth groups have sprang up in the mangrove areas of the region to assert their rights. Government agents have declared their activities illegal and criminal. However, the people of the Niger Delta argue that they are like the proverbial donkey which, when pushed to the wall has no alternative than to take a u-turn at that point, irrespective of the danger behind. Consequently, they have used several media to express their frustrations with the structure and functioning of the Nigerian state. In the course of these expressions, worthy sons of the Niger Delta have been killed and labeled saboteurs. These include people like Adaka Boro, Ken Saro Wiwa, the Odi people and several others. The bottom line of their agitations is the argument that the Niger Delta region, which presently produces more than 90% of the nation’s foreign earnings, does not get a fair share of the proceeds accruing to the nation from the exploitation and exportation of crude oil. It is argued that implementation of fiscal federalism will serve as a panacea to these problems arising from resource generation and sharing.

CONCEPTUAL CLARIFICATION

Federalism

Federalism as a doctrine or form of government denotes a state or political arrangement, which showcases two or more levels of government (referred to as constituent units). Each of these levels of government is allotted its own area (sphere) of governmental legislative and administrative jurisdiction, all clearly outlined in a written constitution. In the words of Ofoeze:

---the concept “federalism” refers to a state of affairs in a country whereby the exercise of governmental legislative power is shared through constitutional legal provisions, among different levels of co-ordinate governments (Ofoeze, 1999:2).

Ofoeze’s postulation agrees with the earlier classical pioneering work on federalism by K. C. Wheare, who had described the federal concept as a principle which denotes:

---the method of dividing governmental legislative powers so that the general (central) and regional (component) governments are each within a sphere, coordinate and independent (Wheare, 1963:10).

Thus, unlike the unitary form of government which emphasizes the permanent (habitual) exercise of supreme legislative authority by one center, the federal form is built on the principle of structuring a government on the basis of the existence of multiple levels/layers of governments that are to a large extent, independent to one another in carrying out their constitutionally assigned functions. Federalism has been adopted in many countries (like the United States of America, Canada, Nigeria, etc) as a device for the management of ethnic, regional and religious diversities that, most times constitute primary sources of conflict in a number of societies. The federal form of government therefore, is a “political contrivance intended to reconcile national unity with the maintenance of states rights” (Dicey, 1959:63).

FISCAL FEDERALISM

 Fiscal federalism is a usage in federal practice that refers to the fiscal (monetary) relationship between the different tiers of government. This relationship revolves around expenditure and revenue matters, and fiscal federalism connotes revenue and expenditure decentralization. Fiscal federalism is thus expected to be the product of some form of voluntary association involving certain division of responsibilities, functions, powers and authority. Consequently, fiscal federalism refers to the allocation of resources (vertical and horizontal) among the tiers and component units of a federal state, and institutions for the discharge of their constitutionally assigned responsibilities and functions.

THEORETICAL FRAMEWORK

 Having clarified the major concepts above, it is necessary for us at this point to adopt a theoretical guide with which to lay a foundation for the remaining parts of our work. Given the focus of our paper, which is to locate the relationship between agitations (conflicts) in the Niger Delta region and the demand for full implementation of fiscal federalism (other-wise referred to by the Niger Deltans as resource control) in Nigeria, we will adopt the class theory as our theoretical framework. This theory seeks to analyze the implications of “structural groups as they relate to the productive forces, the reward system and the consumption of economic goods” (Ifeanacho and Arokoyu, 1999:130).

Nigeria was incorporated into the world capitalist system several decades before colonialism in Africa began. Hence, many analysts have argued that classes do exist in Nigeria. By class in this work, we are referring to the model propounded by Lenin and his fellow socialists. Lenin as cited in Anikpo defines Class as:

Large groups of people differing from each other by the place they occupy in their historically determined system of social production by their relation (in most cases, fixed and formulated in law) to the means of production, by their role in the social organization of labour and consequently, by the dimensions of the share of social wealth which they dispose and the mode of acquiring it. (Anikpo, 1991:14).

In an attempt to extend this conception further and in a way that better reflects the Nigerian structure, which has contributed greatly to the crisis recorded in the Niger Delta, Nzimiro has argued that the “Ruling Class” constitutes the controllers of the state power and inversely, the resources of the country. They (ruling class) consist of:

Those who make decisions on how the economy should be run, how amenities should be shared; who should enjoy this or that privilege; which major government project should be set up and where; what sort of relationship should exist between the government and foreign governments, how the army should be structured and the ruling class are those in the commanding heights of state power (Nzimiro, 1981:261-262).

The relevance of this theory to our work stems from the fact that to the people of the Niger Delta, there is the general belief that, as was expressed before independence, the major ethnic groups (as represented by their leaders) have constituted themselves into an exploiting class. The groups referred to are the Hausa-Fulani, Yoruba and Igbo, which have ruled the country at one period or the other for the past fifty-one years. That, by the various decrees and legislations they have passed into law, the federal government (controlled by them) has taken control of 100% of the land and natural resources deposited in any part of the country, including the crude oil found in the Niger Delta. Through these laws, the resources generated from oil are being shared to states as far as Sokoto, Kano and others that contribute little or nothing to its generation. They equally argue that a critical review of revenue sharing formula in Nigeria shows an abnormality; where, on the principle of population and number of local governments, a state like Kano, with the largest number of local governments in the country gets higher monthly allocations from the Federation Account than Bayelsa and Delta States combined who have eight and twenty five (thirty three) local governments respectively. Presently, the Niger Delta states are clamouring for at least 25% of the proceeds from oil, but the powers that they (ruling class) have argued that they have been magnanimous enough in allocating 17% to that region and that this cannot be adjusted upwards for the sake of national unity.

The Niger Delta’s Fear of Marginalization and Domination by the Three Major Ethnic Groups

The minorities’ problem in Nigeria has remained a recurring decimal in the nation’s history. From the colonial era till date, the minority ethnic groups have expressed the fear of marginalization and domination by the three major ethnic groups of Hausa-Fulani, Yoruba and Igbo. Hence, just before independence in October 1960, these groups demanded for separate regions from existing regions. These included the demand for a Middle Belt region, Mid-West Region and the COR (Calabar, Ogoja and Rivers) Movements, among others.  The Niger Delta region falls between the last two categories.  The colonial administration had to set up a commission chaired by Sir Henry Willinck to look into the fears expressed. The recommendations of that Commission were neither implemented by that colonial regime nor the succeeding Nigerian democratic administrations. At best, it promised the people that their interest would be protected through enabling constitutional provisions.

The Niger Delta region of Nigeria is a peculiar section of the country mostly because of its topography (wetlands) and the fact that presently, more than 90% of Nigeria’s foreign earnings are derived from the sale of oil tapped from that region. The Niger Delta area has been variously categorized into the following constituent zones:

1.         Fresh water alluvial zone                    -           2, 730sq. miles

2.         Saline (mangrove) zone                       -           2,460sq. miles

3.         Beach ridge zone                                -           5,500sq. miles

4.         Sombreiro Warn Deltaic plain             -           30sq. miles

5.         Ogoni: Excluding Saline soils -           360sq. miles

Source: Anderson, B. 1966:1

The Willinck Commission already alluded to above, made accurate description in its report on the specific location of the Niger Delta Area.  According to that report:

To the east of Ibo plateau lies the valley of Cross River, which is fed by streams from the Cameroon’s as well as from the plateau-this forms a broad vertical strip containing people who are not Ibos. Across the South of the region from the Niger in the West to the mountains in the East, stretches a broad horizontal belt of swamps and low-lying country. These two strips of the coastal belt and the Cross River Valley together make a rather sprawling reversal ‘L’ which encloses the Ibo plateau (Colonial Office Report, 1957).

In a report by a team set up by the Shell Petroleum Development Company of Nigeria Limited (SPDC), it is recorded that: “the region consists of a total area of 70, 000 Square kilometers inhabited by six million people across twelve major ethnic groups living in 800 communities” (SPDC, 1966:1). While the landmass and the number of communities may not have changed significantly, same cannot be said of the population. Going by Nigeria’s population growth rate of not less than 2.7% annual growth rate, the Niger Delta population cannot be less than 12million people.

In his categorization, Nna (2001), like many analysts of politics of that region, noted that:

These communities now form what is known in Nigeria’s political nomenclature as the South-South ethnic minority zone. Interestingly, petroleum is almost exclusively produced in this area. Although, oil one of the main resource endowments of the Delta accounts for more than 80% of Federal Government Revenue in Nigeria, the prevailing argument is that not much is used in the development of the area. The reality therefore is that the communities remain economically and socially backward owing largely to the dearth of basic infrastructure and social amenities. (Nna, 2001:8).

Nonetheless, it is this reality of being the major economic contributor to the national purse of Nigeria without commensurate reward that is presently leading to the volatile agitations in the Niger Delta creeks of the country. In not too distant past, that region had assumed the hot bed of the Nigerian polity. The youths have picked up arms against troops of the Federal Republic of Nigeria, kidnappings of prominent men, oil (foreign) workers have been taken hostage and their release tied to a number of demands from the Federal Government; the core of which is the demand for fiscal federalism, generally referred to as resource control. This minority’s problem has become a major part of the “national question” which no administration in Nigeria has successfully attended to, by way of legislating acceptable and lasting policies.

However, from January 15, 1966 when the first military coup took place and soldiers were appointed as military administrators to the regions and states, the concept of coordinate relationship that permits the practice of fiscal federalism between the federating units in the Nigerian federation was completely jettisoned. The country was from that regime subjected to military dictatorship and even under democratic regimes the form of government and fiscal practice has remained largely unitary. When the Gowon administration created 12 states in 1967, that action was aimed at weakening the base of the newly declared Biafran Republic. Gowon, among others, appointed military administrators to manage the newly created states and these were made to be directly accountable to the Head of State and Commander in Chief of the Armed Forces. From that period, the country fell into the firm grips of military dictators and even under democratic regimes, the form of government has remained largely unitary in practice and majority of the nation’s resources were from that period brought under the direct control of the Federal Government. This policy thrust was achieved through the promulgation of a number of decrees like the Petroleum Decree No.51 of 1969, Petroleum Production and Distribution (Anti-Sabotage) Decree 1975 and the Land Use Decree (1978), among others. A quick review of the contents of these decrees would shed more light on the anti-federalist practices of the Nigerian Federal State.

1.         The Petroleum Decree No. 51 of 1969

This Decree was a re-affirmation of the exploitative, colonial administrations “Minerals Ordinance” of 1949. Subsection I of section 1 of the Decree states that:

The entire ownership and control of all population in, under or upon any lands shall be vested in the State.

While subsection 2 of that section 1 adds that:

All land (including land covered by water), which is in Nigeria or under the territorial waters of Nigeria, which forms part of the continental shelf, shall be vested in the state.

Consequently, this decree like others after it “denied the communities and oil producing states, not only onshore oil but offshore oil as well” (Nna, 2001 :37). Decree No.51 of 1969 places the responsibility for issuing mining rights or mining leases and licenses, for “petroleum prospecting, lease, search for mine, work, carry away and dispose of petroleum” on the Minister of Petroleum Resources. This is why under the then administration of Olusegun Obasanjo, the president decided to attach this office to that of the Presidency. This implies that he is both the Head of State and Minister of Petroleum Resources. He is particularly interested in this area that presently generates more than 90% of the nation’s foreign exchange.

Decree 51 of 1969 equally empowers the Minister of Petroleum resources to arrest without warrant, and hand over to the law enforcement agents, any person who commits an offence under the Decree. It thus makes it an offence for anybody to interfere with or:

Obstruct the holder of a license or lease granted under section two of this decree (or his servants or agents) in the exercise of any rights, power or liberty conferred by the license or lease.

The stipulated penalty for such an offence is one hundred pounds or imprisonment for a period not exceeding six months or both.

By this Decree, the concept of fiscal federalism was completely jettisoned from governmental practices in Nigeria. While it brought all oil resources under the control of the Federal Government, and protects the interest of oil prospecting and exploiting companies, it did not put enough mechanism 

in place to cushion the negative effects of oil exploration on the oil-bearing communities.

2.                              The Petroleum Production and Distribution (Anti-Sabotage) Decree  1975.

Like Decree 51 of 1969, already mentioned above, this Decree was to further add to the hardship faced by the Niger Delta people, while the federal government’s foreign earnings remained on the increase. According to Akolokwu, this Decree “was directed against the peasantry in the oil producing areas and oil workers” (Akolokwu, 1986:134). This Decree, among others, makes it an offence, punishable by death by firing squad or twenty-one years imprisonment for anybody to do anything with intent to:

Obstruct or prevent the production or distribution of petroleum product in any part of Nigeria or willfully do anything with intent to obstruct or prevent the procurement of petroleum products for distribution in any part of Nigeria, willfully does anything in respect of any vehicle or public highway with intent to obstruct or prevent the use of the vehicle or public highway for the distribution of petroleum product.

Prevention of oil prospecting companies or their tools from mobilizing to site thus constituted sabotage and those caught in the act were to be tried by military tribunals, not subject to any laws or court in Nigeria.

3.         The Land Use Decree 1978.

This was one of the major decrees used by the federal government to transfer the ownership of all land within Nigeria’s territory to the center. The decree states, inter alia that:

whereas it is in the public interest that the rights of all Nigerians to the land of Nigeria be asserted and prescribed by law, and whereas it is also in the public interest that the rights of all Nigerians to use and enjoy land in Nigeria and the natural fronts thereof in sufficient quantity to enable them to provide for the sustenance of themselves and their families should be assured, protected and preserved, now therefore, the Federal Military Government decrees as follows: Subject to the provisions of this decree, all land comprised in the territory of any state in the federation are hereby vested in the military governor of the state and such land shall be held in trust administered for the use and common benefits of all Nigerians in accordance with the provisions of this decree.

With such amount of powers and resources under the control of the Federal Government, many analysts have argued that Nigeria practices a lop-sided federalism. This absolute revenue control powers of the center contradicted among others, the revenue sharing formula provided for by the 1963 Republican Constitution, which was based on the formula of 50% derivation principle. With the intervention of the military in the body politic of Nigeria, the revenue percentage accruing to the Federal Government remained on the increase while those of the constituent units were reduced steadily. This factor remains the most fundamental issue threatening the unity of the present Nigerian federation and indeed the source of the brewing conflicts in the Niger Delta. To buttress the serious problems which fiscal federalism poses to the present federal practice in Nigeria, the United States of America intelligence report (2005) declared that if a number of the crises of the Nigerian federation, especially those of the Niger Delta minorities are not resolved on time, Nigeria would disintegrate in the next fifteen years.

This security report seems to further buttress the need for affirmative action to be taken on the problems of the oil-producing states of Nigeria. This quick action is necessary because during the lifespan of the then democratic regime, militant groups have risen up in arms against the oil producing companies, taking their workers hostage for weeks and, indeed engaged the Federal Government troops in shoot outs at the creeks of the Niger Delta. These armed and civil challenges seem to constitute the external expression of fears entertained by these minority groups of the country that feel that fiscal federalism ought to be fully introduced and enforced in Nigeria. Even with the meeting held between the Federal Government and delegates from oil producing states in April 2006, at Abuja, the coast does not yet look cleared for peace to reign in the creeks of the Niger Delta.

Conclusion

We started off in this work by acknowledging the fact hat the Niger-Delta region of Nigeria has become a hotbed of violent activities. This violence is perpetuated by youths of the area who express the fear and frustration that, that region has been shortchanged for too long. They have therefore, decided to take their destiny in their hands by attempting to force the Federal Government to drop or change a number of the existing “obnoxious” legislations which work against the (economic) interest of the region; being the major source of Nigeria’s foreign exchange earner for more than four decades now.

As a result of these agitations in the creeks of the Niger Delta, lives and resources have been wasted as a result of hostage taking, shoot-outs between soldiers and aimed militant groups, petroleum pipe-line sabotage, leading to oil spillage and pollution of the environment, etc.

Recommendations

As a follow up to the above, we shall proceed to make a number of recommendations, which if implemented by the Nigerian Government may serve as permanent solutions to the conflicts in the Niger Delta region of Nigeria.

First, the Nigerian state should abide strictly by the tenets of true federalism, which is the form of government its founding fathers chose to

practice as far back as 1954.

           Second, true fiscal federalism should be fully practiced in the system. This approach could take the form of going back to introduce into the 1999 Constitution, the 1963 constitutional provisions which provided for 50% derivation or adopt the request by the people of the Niger Delta for 25% which should graduate into 50% in the next ten years.

Third, frantic efforts should be made to improve upon the environment of the Niger Delta areas by providing essential basic amenities like roads, pipe borne water and schools.

Fourth, Niger Deltans should be given scholarships to be trained in fields that will give them the requisite qualifications for employment in the oil industry. This will equally demand a massive job employment scheme for indigenes of that region.

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