By

Otive Igbuzor, PhD

Executive Director,

African Centre for Leadership, Strategy & Development (Centre LSD)

Headquarters:  Suite 27-28, Second Floor, Tolse Plaza, 4, Franca Afegbua Crescent,

Off J. S. Mariere road, Near Apo  Legislative Quarters, Abuja.

Niger Delta Office: No. 1 Amb. Ralph Uwechue Way,

 Off Okpanam Road, Opposite Legislative Quarters, Asaba, Delta State.

Website: www.centrelsd.org

E-mail: otiveigbuzor@yahoo.co.uk; info@centrelsd.org

A KEYNOTE ADDRESS PRESENTED AT THE LAUNCH OF CHRISTIAN AID NIGERIA STRATEGY FOR NIGERIA: PARTNERSHIP FOR CHANGE ON 7^TH FEBRUARY, 2013 AT CHELSEA HOTEL, ABUJA.

 

 

 

1.                                                                                       INTRODUCTION

The challenge of development and poverty eradication has attracted the attention of scholars, leaders and the international community over the years. Although different scholars have different perspectives on development, most students and practitioners of development accept that it must mean progress of some kind.[i] It is seen as a multi-dimensional process, one that changes the economy, polity and society of the countries in which it occurs. Amartya Sen sees development as a process of expanding the real freedoms that people enjoy. According to him, development requires the removal of major sources of unfreedom: poverty as well as tyranny, poor economic opportunities as well as systematic social deprivation, neglect of public facilities as well as intolerance or over activity of repressive states.[ii]  In this conceptualization, freedom is central to the process of development and the achievement of development is dependent on the free agency of the people. For the people to be agents of their own development require advancement in five distinct types of freedom namely political freedoms; economic facilities; social opportunities; transparency guarantees and protective security.

Similarly, the 2010 human development report opined that human development is the expansion of people’s freedom to live long, healthy and creative lives; to advance other goals they have reason to value; and to engage actively in shaping development equitably and sustainably on a shared planet. People are both the beneficiaries and the drivers of human development, as individuals and in groups.[iii] According to Pat Utomi, development simply put is discipline. It is about how discipline drives the human spirit to triumph over odds of poverty trap, physical geography, fiscal trap, governance, cultural barriers, geopolitics, lack of innovation and demographic trap.[iv] Kambhampati argues that development requires growth and structural change, some measure of distributive equity, modernization in social and cultural attitudes, a degree of political transformation and stability, an improvement in health and education so that population growth stabilizes, and an increase in urban living and employment.[v] Cowen and Shenton have argued that the modern doctrine of development was invented in the first half of the 19^th century to control the social disruptions of poverty, unemployment and human misery caused by capitalism.[vi]

From the above, it is clear to us that even though there are different perspectives to development, there is a general consensus that development will lead to good change manifested in increased capacity of people to have control over material assets, intellectual resources and ideology; and obtain physical necessities of life (food, clothing & shelter), employment, equality, participation in government, political and economic independence, adequate education, gender equality, sustainable development and peace.[vii] However, the reality of the world today is that many countries are very poor and cannot meet their development needs. It has been documented that more than 1.2 billion people, one in every five on earth live survive on less that US $1 per day.[viii] Wealth is concentrated in the hand of a few people while the majority wallows in abject poverty. The UNDP in its 1998 report documented that the three richest people in the world have assets that exceed the combined Gross Domestic Product (GDP) of the 48 least developed countries. Similarly, the 1000 richest people in the world have personal wealth greater than 500 million people in the least developed countries.[ix]

 

 

Robert Chambers aptly captured it when he wrote:

I am so angry at what has been done, and continues to be done, in our world. It is hard to believe that the nightmare is real. We seem trapped in grotesquely unjust systems, more and more dominated by power, greed, delusion, denial, ignorance and stupidity, fuelled by symmetries of terrorism and fundamentalisms.[x]

In a similar vein, Amartya Sen pointed out that:

We live in a world of unprecedented opulence, of a kind that would have been hard even to imagine a century or two ago…And yet we also live in a world with remarkable deprivation, destitution and oppression. There are many new problems as well as old ones, including persistence of poverty and unfulfilled elementary needs, occurrence of famines and widespread hunger, violation of elementary political freedoms as well as of basic liberties, extensive neglect of the interests and agency of women, and worsening threats to our environment and to the sustainability of our economic and social lives.[xi]

There is no doubt that the challenges of development and poverty eradication are enormous. But in the last two decades, there has been a lot of discourse on what needs to be done to deal with the challenges. The UNDP has consistently argued that the Millennium Development Goals can be met if there is political will combined with good policy ideas which are then translated into nationally owned, nationally driven development strategies guided by good science, good economics and transparent accountable governance.[xii]

Nigeria, which was one of the richest 50 countries in the early 1970s, has retrogressed to become one of the 25 poorest countries at the threshold of the twenty first century.  It is ironic that Nigeria is the sixth largest exporter of oil and at the same time host the third largest number of poor people after China and India. Statistics show that the incidence of poverty using the rate of US $1 per day increased from 28.1 percent in 1980 to 46.3 percent in 1985 and declined to 42.7 percent in 1992 but increased again to 65.6 percent in 1996. The incidence increased to 69.2 percent in 1997. The 2004 report by the National Planning Commission indicates that poverty has decreased to 54.4 percent.  But by 2010, the poverty rate has increased again to 65.1 percent.   Nigeria fares very poorly in all development indices.

In this keynote address, we discuss the challenges of development of Nigeria and Christian Aid contribution to addressing it through the partnership approach. But first, we draw lessons from the experience of development trajectory across the world.

 

1. 2 GLOBAL LESSONS ON DEVELOPMENT

Over the past several decades, there are a lot of lessons that has been learnt which can help in accelerating the development of any society. In 1990, the United Nation’s human development report focused on development and pointed out that people are the real wealth of nations. In 2010, the UN human development report reviewed the progress for the past two decades and made some conclusions that will be very helpful in the development of any nation. First and foremost, the report shows that human development is about sustaining positive outcomes steadily over time and combating processes that impoverish people or underpin oppression and structural injustice hence the principles of equity, sustainability and empowerment are important.[xiii] Secondly, the report shows that almostall countries of the world have progressed in human development measured by the human development index (life expectancy, schooling and income). Of 135 countries studied, only three-the Democratic Republic of the Congo, Zambia and Zimbabwe- have a lower HDI in 2010 than in 1970.[xiv] Thirdly, the report shows that there is no significant correlation between economic growth and improvement in health and education. In other words, economic growth can occur without improvement in the health and education of citizens. In similar vein, there can be substantial improvement in the condition of citizens without fast growth with the right policy, innovation and citizen participation. For instance, the Indian State of Kerala, Costa Rica, Cuba and Sri Lanka attained much higher human development than other countries at their incomes. Fourthly, the report shows that institutions are a key determinant of human development. However, “the policies and reforms compatible with progress vary widely across institutional settings and depend on structural and political constraints.”[xv] In addition, the report argues that “markets are very bad at ensuring the provision of public goods, such as security, stability, health and education.”[xvi] It therefore advocates regulation which requires a capable state as well as political commitment. Finally, the report opines that human development is not only about health, education and income-it is also about people’s active engagement in shaping development, equity and sustainability, intrinsic aspects of the freedom people have to lead lives they have reason to value.[xvii]

1. 3. CHALLENGES OF DEVELOPMENT IN NIGERIA

The challenges of development in Nigeria are enormous. In recognition of the importance and enormity of development, governments especially in Africa gave a lot of prominence to development planning in the 1960s and 1970s. It has been documented that in Nigeria, right from the colonial period, development planning was viewed as a major strategy for achieving economic development and social progress, particularly, in the spheres of socio-economic infrastructures, industrialization, modernization, high rates of economic growth, poverty reduction, and significant improvements in living standards.[xviii] Three plans featured in the pre-independence era for the periods 1946-1956, 1951-1955 and 1955-1962. Over the 1962-1995 period, three major phases in the planning experience emerged, namely, the fixed medium-term planning phase (1962-1985), policy oriented planning (1986-1988), and three year rolling plan phase (1990 till date). [xix] Scholars have pointed out that the golden period of planning on the African continent, 1960s and 1970s, could not be sustained from the 1980s because of two major factors: failure of development planning to meet the high expectations of rapid growth and development; and the resurgence of liberalism and the implementation of short-term stabilization and structural adjustment programmes which are predicated on liberalization and deregulation. Meanwhile, these programmes that substituted for national development plans are counter plans which have failed to solve Africa’s myriad of economic problems.[xx]This is why some scholars have referred to the 1980s and 1990s as the “lost development decades” for Africa.[xxi]

The National Economic Empowerment and Development Strategy (NEEDS) identified the challenges to development in Nigeria to include among other things low per capita growth; inefficient, highly volatile and unsustainable public sector spending; domestic debt; low productivity; poverty; dysfunctional educational system and weak institutions.[xxii] Similarly, the draft of NEEDS 2 identified the challenges of development to include growth without employment;  high level of poverty; poor infrastructure; poor energy situation; abuse of human rights, gender inequality; weak institutions; capacity constraints; weak monitoring framework; weak data management culture; slow development of the private sector; poor public sector performance; ethnic and religious conflicts; desertification; import dependency etc.[xxiii]

The United Kingdom Department for International Development (DfID) identified the fundamental constraint to Nigeria’s development to include institutionalized mismanagement of public revenue particularly from oil; institutionalized corruption and weak formal accountability; and a combination of “Dutch Disease” and institutionalized rent-seeking behavior that has undermined activity in non-oil areas of the economy (particularly agriculture and manufacturing), reducing non-oil sector economic growth, fueling unemployment and exacerbating poverty and conflict. [xxiv] But according to the Economic Commission for Africa, the biggest threat to Nigeria is its structural vulnerability-problems of governance, volatile oil prices, and ethnic tensions.[xxv]

Several scholars have written on the challenges to development in Africa. One of the most profound is that by Claude Ake who posited that:

Many factors have been offered to explain the apparent failure of the development enterprise in Africa: the colonial legacy, social pluralism and centrifugal tendencies, the corruption of leaders, poor labour discipline, the lack of entrepreneurial skills, poor planning and incompetent management, inappropriate policies, the stifling of market mechanisms, low levels of technical assistance, the limited inflow of foreign capital, falling commodity prices and unfavourable terms of trade, and low levels of saving and investment. These factors are not irrelevant to the problem, alone or in combination they could be serious impediments to development. However, the assumption so readily made that there has been failure of development is misleading. The problem is not so much that development has failed as that it was never really on the agenda in the first place. By all indications, political conditions in Africa are the greatest impediment to development.[xxvi]

From the above, it is clear that over the years, various scholars, organizations and institutions have documented the challenges of development in Nigeria. [xxvii] The challenges include among other things poor leadership; bad followership; poor strategy for development; lack of capable and effective state and bureaucracy; lack of focus on sectors that will improve the condition of living of citizens such as education, health, agriculture and the building of infrastructure; corruption; undeveloped, irresponsible and parasitic private sector; weak civil society; emasculated labour and student movement and poor execution of policies and programmes. As a matter of fact, the lived experiences of many Nigerians have turned them to experts of the challenges of Development in Nigeria.

It is important to point out that various theories have been propounded to explain the challenges of development and underdevelopment of Africa. These theories include classical theories; develop mentalist theories and Marxist theories.[xxviii] The classical theories argue that underdevelopment arise from rapid population growth, lack of comparative advantage, low savings and investment and low economic growth. The developmentalist theories point out that underdevelopment arises from market failure, unbalanced growth, poor linkages and inability to reach the “take off” stage for development. The Marxist theories argue that underdevelopment comes from exploitation by external and internal collaborators with negative impact from colonialism, imperialism, World Bank, International Monetary Fund and the general dependence of Africa on the developed world coupled with the stagnation and incorporation of Africa into the world capitalist system.

It is necessary to analyse the Nigerian situation and apply these theories to the Nigerian situation. In our view, Nigerians must change course for the country to develop. We are of the view that what needs to be done to bring about development is known. It is clear to us that every society has the capacity to develop and people are the real wealth of a nation.[xxix]  From past experiences, development scholars have concluded that while there are no silver bullets, some development approaches bring better outcomes. For instance, it has been proven that progress in health and education can drive success in human development. In addition, it has been shown that country factors such as policies, institutions and geography are important. Meanwhile, there is a lack of significant correlation between economic growth and improvement in health and education e.g. kerala in India, Costa Rica, Cuba and Sri Lanka attained higher human development than the countries at their income level.  Similarly, experience has shown that markets are very bad at ensuring the provision of public goods such as security, stability, health and education and a capable, focused developmental state can help achieve development and the growth of markets. Nigerians must strive for the right kind of knowledge that can develop the country.

1. 4. PARTNERSHIP FOR CHANGE

In the last three decades, the concept of partnership has emerged as the “new big idea” in development discourses.[xxx]  The concept of partnership is at the heart of development discourse across the world today. Most governments across the world are involved in one form of partnership or the other to bring about positive changes to their societies. For development to happen in many societies require political, economic, social and cultural changes. Partnership has been recognized as one of the approaches to make change happen. Bilateral and multilateral agencies, the World Bank, International Non-Governmental Organisations (INGOs) and regional organizations including the African Union and the European Union, national and subnational governments across the world have all embraced the concept of partnership.

Partnership has been defined in various ways by different scholars. Partnership has been described as a collaborative relationship between entities to work toward shared objectives through a mutually agreed division of labour.[xxxi]  It has also been described as the highest stage of working relationship between different people brought together by commitment to common objectives, bonded by long experiences of working together and sustained by subscription to common visions.[xxxii]

Development is a complex process requiring actions at both the strategic and practical levels. Partnerships are complex vehicles for the delivery of practical solutions on the ground and at the strategic level.[xxxiii]  Partnership is characterized by cooperation or collaboration.

In the 1960s and 1970s, some scholars pointed out that poverty can be understood in terms of the non-existence of development.[xxxiv] Others argued that the act of development by some countries led to the perpetuation of underdevelopment in other countries leading to the emergence of partnership models to address the structural, political, economic, social and cultural causes of underdevelopment.

There are certain characteristics of partnership which include shared responsibility, reciprocal obligation, equality, mutuality and balance of power, accountability, joint decision making, mutual respect, trust and transparency.

The development of a “global partnership for development” is one of the eight millennium development goals adopted at the United Nations Millennium Declaration by leaders across the world in 2000 to address the problem of poverty and promote sustainable development. The other goals are eradicate extreme poverty and hunger; achieve universal primary education; promote gender equality; reduce child mortality; improve maternal health; combat AIDs, malaria and other diseases and ensure environmental sustainability.

The partnership approach to development was further endorsed by the Paris Declaration on Aid Effectiveness (2005), The Accra Agenda for Action (2008) and the Busan Partnership for Development Effectiveness (2011). The Paris declaration lays out a practical, action-oriented roadmap to improve the quality of aid and its impact on development. The Paris Declaration outlines the following five fundamental principles for making aid more effective:

1. Ownership: Developing countries set their own strategies for poverty reduction, improve their institutions and tackle corruption.

2. Alignment: Donor countries align behind these objectives and use local systems.

3. Harmonisation: Donor countries coordinate, simplify procedures and share information to avoid duplication.

4. Results: Developing countries and donors shift focus to development results and results get measured.

5. Mutual accountability: Donors and partners are accountable for development results.

In 2008, the Accra Agenda for Action (AAA, 2008) took stock of progress and set an agenda for accelerated advancement towards the Paris targets. It proposed three main areas for improvement namely ownership, inclusive partnerships and delivering results:

1. Ownership: Countries have more say over their development processes through wider participation in development policy formulation, stronger leadership on aid co-ordination and more use of country systems for aid delivery.
2. Inclusive partnerships: All partners – including donors in the OECD Development Assistance Committee and developing countries, as well as other donors, foundations and civil society – participate fully.
3. Delivering results: Aid is focused on real and measurable impact on development.

It also emphasized the need to build the capacity of countries to manage their own future and ensure sustainability.

In 2011, the Busan Partnership for Development Effectiveness agreed framework for development cooperation that embraces traditional donors, South South cooperation, the BRICS (Brazil, Russia, India, China and South Africa), CSOs and private funders. It further emphasized the principles of  ownership of development priorities by developing countries, focus on results, inclusive development partnership and transparency and accountability to each other. Among other things, the actions to be taken from Busan include inclusion of new actors on the basis of shared principles and differential commitments; improving the quality and effectiveness of development cooperation; increasing ownership, results and accountability; transparent and responsible co-operation; promoting sustainable development in situations of conflict and fragility; partnering to strengthen resilience and reduce vulnerability in the face of adversity; promoting the role of private sector in advancing innovation, creating wealth, income and jobs and combating corruption and illicit flows.

1. 5.THE ROLE OF CHRISTIAN AID

International Development partners operating in Nigeria have roles to play to in overcoming the challenges to development in Nigeria. First, they will need to provide more and better aid to Nigeria. There is no doubt that aid spent well would make a lasting difference to the lives of millions of people across Nigeria who live in extreme poverty and see their basic rights –to education, safe water and healthcare violated daily.^[xxxv]  It has been documented that in order to make adequate progress towards achieving the Millennium Development Goals (MDGs), Nigeria for instance will require additional external financing .^[xxxvi] Even if the resources in the country are used effectively there will still be challenges in meeting the challenges of development.  Meanwhile, Nigeria is seriously under aided. According to the World Bank, in 2005, Nigeria received only US $2 per capita in ODA compared to the average for Africa of US $28 per capita.^[xxxvii] But according to the European Union, in 2005, Nigeria received per capita aid of about $4 compared to $35 for Malawi, $32 for Ghana and $46 for Senegal.^[xxxviii]  It is therefore necessary for development partners to increase their level of aid toNigeria. This is particularly important asNigeria hosts the third largest number of poor people in the world afterChina andIndia.

 

Apart from the volume of aid, there is the need to increase the quality of aid not only to Nigeriabut all over the world. It has been estimated that roughly half of global aid is “phantom aid”, that is, it is not genuinely available to poor countries to fight poverty. ^[xxxix] Phantom aid is aid provided by donors to meet their own priorities; spent on technical assistance from their own countries; allocated according to donor commercial and strategic priorities; tied to goods and services from the donor country; double counted as debt relief; or lost through cumbersome and poorly co-ordinated procedures and systems. Similarly, it has been estimated that at least quarter of donor budgets is spent on technical assistance, on consultants, research and training.^[xl] This is despite a growing body of evidence- much of it produced by donors themselves and dating back to the 1960s- that technical assistance is often overpriced and ineffective, and in the worst cases destroys rather than builds the capacity of the poorest countries.

 

Finally, the approach of development partners to work in Nigeria should be such that would lead to overcoming the developmental challenges. Several studies and reports indicate that the challenges include among other things mismanagement of public revenue, institutionalized corruption, weak formal accountability, poor economic management, poverty in the midst of plenty and poor provision of services especially to the poor and excluded.^[xli] Development partners have a great role to play in overcoming these challenges. However, the amount of money brought by donors to Nigeria is so small that it will have very little impact if it is to be used to provide services directly. It has been documented that:

Nigeria’s federal overall annual budget (for 2006) is about 1.9 trillion naira, which is equivalent to 11.9 billion euros or about 91 euros per capita. State and local government together receive about the same again, meaning the total budgets must sum to over 20 billion euros. All these budgets are based on a benchmark price of $35, whereas the actual price is around $70, meaning over 40 billion euros per year is available to the Nigerian government, to be spent or saved. In 2005, annual donor funding to Nigeriawas running at about $400-$500million: less than 1 percent of government revenues.^[xlii]

 

Despite the little amount from donors compared to government revenues, as the European Union has argued, donors should not be dismissed as an important factor because their funding is insufficient.^[xliii]They can advance an approach that will help to overcome the challenges to development by funding catalytic projects that would help to increase transparency and accountability, empowerment of citizens to hold public officials accountable and building of structures and institutions that are sound, effective, professional and culturally valid.^[xliv]

 

Christian Aid Nigeria has produced a strategy to guide its operations from 2012-2017.  The Strategy is anchored on Partnership for Change. The strategy recognizes that “most of Nigeria’s wealth is held by tiny economic and political elite, while power lies within both formal institutions and the informal structures of familial and ethno-religious patronage.” (p.5). It also points out that “the misuse of oil revenue, widespread corruption and other questionable practices have stifled development in Nigeria.” (p.5). It underscores the fact that “rapid growth over the past decade has been matched with increasing inequality and poverty.” (p.5).

It is important to note that Christian Aid has been working in Nigeria since 2003. It has touched lives of over one million people through its Strengthening Community Health and HIV programme; provided education to on malaria prevention and distributed 930,000 bed nets to more than 475,000 households; provided support to over 15, 000 Orphans and Vulnerable Children (OVC) and caregivers and built the capacity of several citizens and organisations to claim their rights and hold government accountable. Over the past decade, Christian Aid has built a “reputation in Nigeria as an organization which respects its local partners, delivers quality and cost effective programmes and is willing to learn from, and share its learning with others.” (p.6).

ChristianAid believes in the partnership approach and Christian Aid Nigeria strategy for 2012-2017 is titled Partnership for Change. It is anchored on a theory of change to build a movement for change to challenge and change the system and structures that perpetuate poverty, inequality and injustice. It will implement several strategies including gender analysis and gender sensitive programming; empowerment of poor people (especially women and girls) to engage meaningfully in their own development; strengthening civil society to act as counterweight to government and private sector and power analysis, policy analysis, advocacy, campaigns and communications.  It is expected that implementation of the strategy will lead to the desired change and we will have “a just, equitable, and peaceful Nigerian society, in which poverty has been eradicated and every person is empowered to live life in all its fullness.” (p.7)

In our view, the Christian Aid Nigeria strategy is timely and relevant. The approach is well thought out and grounded on Nigerian political economy and experience, and will contribute to overcoming the challenges of development in Nigeria.

Let me end this keynote address by congratulating the management, staff and partners of Christian Aid Nigeria for this very important, relevant and timely strategy. But I must point out that as Ralph Stayer counseled, leaders can design wonderful strategies, but the success of the organisation resides in the execution of those strategies. I challenge the management and staff of Christian Aid to ensure that there is a well thought out implementation plan and the right kind of staff and partners to implement this strategy. We look forward to celebrating the achievements of this strategy in 2017.

1. 6. CONCLUSION

The challenges include among other things poor leadership; bad followership; poor strategy for development; lack of capable and effective state and bureaucracy; lack of focus on sectors that will improve the condition of living of citizens such as education, health, agriculture and the building of infrastructure; corruption; undeveloped, irresponsible and parasitic private sector; weak civil society; emasculated labour and student movement and poor execution of policies and programmes. Development partners can contribute to overcoming the challenges to development in Nigeria and accelerate the development process by supporting catalytic programmes that will bring about the required change. It is important that development partners do not engage in much of direct provision of services but catalyzing the change process.

The Christian Aid Strategy titled Partnership for Change is well thought out and grounded on the political economy and experiences of Nigeria. It is very relevant and timely. If well implemented, the strategy will contribute immensely to the development of Nigeria.

 

ENDNOTES

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OIL JUSTICE IN NIGERIA

 

 

By

Otive Igbuzor, PhD

Executive Director,

African Centre for Leadership, Strategy & Development (Centre LSD)

Abuja, Nigeria.

Website: www.centrelsd.org; www.otiveigbuzor.com

 

A PAPER PRESENTED AT THE ROUNDTABLE ON OIL, POLITICS AND SECURITY ORGANISED BY THE OIL JUSTICE MOVEMENT (OJM) ON 3^RD JULY, 2012

 

 

 

 

 

 

1. 1.      INTRODUCTION

Oil is very important in the economy of many countries in Africa including Nigeria, Algeria, Libya, Egypt, Angola, Gabon, Equatorial Guinea, Chad, Sudan and more recently Ghana. Crude oil production in Africa has expanded from a million barrels per day (mmbd) in the 1950s to over 10 mmbd in 2006.[1] It has been documented that the oil and gas sector in Africa is beset with a lot of challenges including low technological development, corruption, low value addition, domination by multi-national corporations and distortion of the agrarian economies in the countries with oil.[2]

It is important to point out that oil has brought a lot of revenue to the countries where it has been discovered. But a major challenge remains that the distribution of the resources has brought about perceived injustice leading to a lot of challenges including security challenges. In this paper, we look at oil justice in Nigeria. But first, we examine the concept of justice.

1. 2.      THE CONCEPT OF JUSTICE

The notion of justice is basic to peace and security in any society and the concept of justice incorporates a lot of issues including ethics, rationality, law and equity.[3] The importance of justice in any society cannot be over emphasized. Without justice, there will be anarchy as many people will resort to self-help. This is why John Rawls argues that justice is the first virtue of social institutions.[4]  Justice is a prerequisite for peace, social harmony and co-operation among peoples and communities. The United Nations emphasizes the vital importance it attaches to promoting justice and the rule of law as an indispensible element for peaceful co-existence and the prevention of armed conflict.[5]

1. 3.      POLITICAL ECONOMY OF OIL

Oil has and continues to play a crucial role in the world. Oil producing countries receive enourmous revenue and play a lot of role in world politics. All countries of the world need oil because of the place of oil in energy production and utilization. But oil has also played a critical role in wars across the world.[6] Global wars and global conflicts have been influenced by oil underlying the importance of oil in political affairs. For instance, in World War II, a decisive factor that helped the allied forces to win the war was the possession of many oil fields which was organized and produced to fuel planes and other wartime technology compared to Germany and Japan which had no oil.[7] The political economy of oil has been central to Middle East and North Africa politics. In international politics, oil has been frequently used as a bargaining tool for economic and political gains. Several scholars have argued that the so called Iranian threat is not about the pursuit of nuclear bomb, but rather about oil.[8] It has been pointed out that Iran’s ability to project force beyond its borders is limited and the pursuit of nuclear weapon is a deterrent strategy.

It has been documented across the world that resource-rich countries have performed worse than those with smaller endowments leading to phenomenon that scholars now refer to as resource curse:

Countries that depend on oil for their livelihood are among the most economically troubled, the most authoritarian, and the most conflict-ridden in the world. The consequences of development based on the export of petroleum have tended to be negative during the past 40 years. Detrimental effects include slower-than-expected economic growth, poor economic diversification, dismal social welfare indicators, high levels of poverty and inequality, devastating environmental impacts at the local level, rampant corruption, exceptionally poor governance, and high incidences of conflict and war.

 

When compared to countries dependent on the export of agricultural commodities, mineral and oil exporting countries suffer from unusually high poverty, poor health care, widespread malnutrition, high rates of child mortality, low life expectancy, and poor educational performance- all of which are surprising findings given the revenue streams of resource-rich countries.

Due to the highly volatile nature of oil markets, oil exporting nations often fall victim to sudden declines in their per capita income and growth collapses of huge proportions. The statistics are startling: In Saudi Arabia, whose proven crude oil reserves are the greatest in the world, per capita income has plunged from $28,600 in 1981 to $6,800 in 2001. In Nigeria and Venezuela, real per capita income has decreased to the levels of 1960s, while many other countries- Algeria, Angola, Congo, Ecuador, Gabon, Iran, Iraq, Kuwait, Libya, Qatar, and Trinidad and Tobago- are back to the levels of the 1970s and 1980s. The surprisingly negative outcomes in oil- and mineral-dependent countries are referred to as the “resource-curse.”[9]

Scholars have shown clearly the linkage between overdependence on oil exports and the production of weak public institutions, authoritarianism, corruption, conflict and primitive accumulation of wealth through collection of bribes and contract inflation:

Overdependence on oil exports is strongly associated with weak public institutions that generally lack the capacity to handle the challenges of petroleum-led development …the influx of rents from petroleum tends to produce a rentier state-one that lives from the profits of oil. In rentier states, economic influence and political power are especially concentrated, the lines between public and private are very blurred, and rent seeking as a strategy for creating wealth is rampant. Rulers tend to stay in power by diverting revenues to themselves and their supporters…authoritarian rulers use petrodollars to keep themselves in power, prevent the formation of opposition groups and create vast militaries and repressive apparatuses…As a group, oil exporting countries are significantly more corrupt than the world average (even if Canada and Norway are included). Nigeria, Angola, Azerbaijan, Congo, Cameroon, and Indonesia compete for the position of the “most corrupt” in the annual ratings of Transparency International…policy makers in oil-exporting countries tend to favour mega-projects in which payoffs can be more easily hidden and the collection of bribes facilitated, while eschewing productive long term investments that are more transparent…petroleum is more associated with civil war and conflict than any other commodity. Countries dependent on oil are more likely than resource poor countries to have civil wars; these wars are more likely to be secessionist, and they are more likely to be of even greater duration and intensity compared to wars where oil is not present. Oil may be the catalyst to start a war; petrodollars and pipeline may serve to finance either side and prolong conflict.[10]

From the above, it is clear that oil occupies a central position in world affairs. The management and governance of oil is therefore crucial for peace and stability of the world.  This recognition has led to the development of the Natural Resource Charter.

 

 

 

1. 4.      OIL INJUSTICE IN NIGERIA

Oil has caused a lot of problems and injustice in Nigeria. The political economy of oil in Nigeria has destroyed the values of ethical conduct, rationality, law and equity. In relationships and even in civil and criminal cases, ethical considerations are jettisoned. Money is now a big influence in determination of issues. Rationality is now economically determined. The law is breached and manipulated by the big, powerful and wealthy. Equity and fairness is seldom utilized in decision making.

The reality is that oil exploration, exploitation and derivation of benefits has led to environmental degradation, violation of human rights, conflict, violence, corruption, boundary conflicts, oil theft, insecurity and underdevelopment.[11]

One of the greatest injustices of oil in Nigeria is the revelation that poverty is communities with oil is higher than communities without oil.[12]

Another great injustice is that discovery of oil in any community in Nigeria is an invitation to conflict. Communities that have lived together for centuries will suddenly begin to fight each other as a result of injustice in the derivation of benefits from oil discovery.

Another huge challenge is boundary issues. For many communities in Nigeria, there are no clear boundaries. Communities give land to each other for the purpose of farming for decades. But as soon as oil is discovered, the boundary must be clearly delineated to determine who owns the land and will enjoy the benefit of oil. This same challenge goes to states. The case of Cross River and Akwa Ibom is a case in point. Both States were actually one until the creation of Akwa Ibom State. But today, both states are in court to determine issues of boundary and who owns 76 oil wells.

1. 5.      OIL JUSTICE IN NIGERIA

The political economy of oil in Nigeria is characterized by a struggle for control over the use of oil with a continuing tension between demand from producing regions for a share of the oil resources and a call for redistribution for all other regions.[13] The history of successive arrangements has been accompanied by distrust, inadequate information flows, a lack of transparency and uncertain accountability.[14]

Injustice breeds conflict, insecurity and violence. The only way to promote a peaceful and prosperous Nigeria is to promote justice. Oil justice in Nigeria will entail the following:

• Oil bearing communities should benefit from oil revenues including payment of royalties, participation by the citizens, job opportunities on oil companies, contract to competent local contractors, local content development and provision of infrastructure and social services.
• Oil bearing communities benefit from payment to states based on derivation formula and not mismanaged or embezzled by Politicians and bureaucrats.
• The management of proceeds from oil must be such that it benefits all Nigerians to decrease the tendency for struggle for oil resources thereby compromising peace and security.
• There is the need for peace education and transformative conflict management across communities and states in a way that will promote justice, equity, fair play and harmony.
• Participation of communities and states on matters involving oil exploration, exploitation and derivation of benefits is key to peaceful and harmonious existence.

It is important that communities, organizations and governments are guided by these principles to prevent breakdown of law and order in the society.

 

 

1. 6.      CONCLUSION

Oil is very important in the political economy of countries with oil. Unfortunately, oil has promoted injustice to citizens, communities and states through the methods used in exploration, exploitation and distribution of benefits. This has inadvertently led to protests, insecurity and violence in oil producing communities and states. There is therefore the need to promote oil justice and ensure ethics, rationality, law and equity. Unfortunately, lesson from across the world show that:

Many countries rich in natural resources exploit and squander that wealth to enrich a minority while corruption and mismanagement leave the majority improverished.

Breaking that pattern is difficult because of their resource wealth. Such countries do not have to borrow money from multilateral lending agencies that insist on fiscal transparency and good budget practices. The world’s leading democracies dependent on importing oil, gas or minerals often have little appetite to use diplomatic pressure to demand better fiscal practices from resource-rich countries. And multinational energy companies which depend on good relationships with host governments to allow them to continue extracting natural resources, are also unlikely to press for good economic management.

As a result, the citizens of resource-rich countries-the actual owners of their countries natural wealth bear a special responsibility to push their governments toward transparency and spending those resources to public needs.[15]

Nigeria must learn from these lessons. Citizens, communities and governments must work together to promote oil just to ensure peace, stability and development of the country.

ENDNOTES

 

POLICY DIALOGUE ON MANAGEMENT OF PUBLIC

ENTERPRISES IN NIGERIA

The meeting started with an opening round of introductions and opening ceremony. by

Ms Priscillia Achakpa

• The public enterprises should be subject to some degree of control and monitoring
• PHCN is supposed to be a public enterprise, which was somewhat privatization-how much have we benefited from the change in ownership.
• Water- privatizations of water eg cross river state.
• These public facilities have been a huge challenge to public services, which has been detrimental to the public.

Elizabeth-Benue State University

• Public enterprises-privatized and those in the process- have been challenging, looking at the social impact of privatization. Widening the gap between the rich and the poor.
• The issue of corruption- the monies realized from the privatization of the enterprises have not been accounted for
• Continued protection of the public interest
• Foreign dominance in the sector, and a few benefiting from the whole process

Ojobo

• Challenges that privatization is not solving
• Political will
• Social impact
• Inefficiency within the public enterprises
• Protection of public interest

Mr Abraham-BPE

• National council on privatization approves the processes and activities of BPE as regards privatization
• The failures and challenges that have been faced by BPE has not been a privatization issue but the policies of the government.
• Ethical issues of policies that restrict the success of privatization
• Social safety net-which is taken as important but have not been implemented. Which is a key area that BPE is to be working on and till now, nothing is been done.

Dr Otive Igbuzor

• The argument in his paper was what can be done, apart from privatization.
• There are global success stories of PEs with high level of performance
• The challenge is to build the political commitment to drive home
• The success story of some African countries should be learnt from
• Reconstruction of the Nigerian state to become a developmental state
• Policy and ideological change.

Discussant-Ken

• Unemployment and the challenges of  PEs
• Financing; how government can fund the enterprises
• Appropriate regulatory framework
• Corporate governance

Discussions:

• Absence of strong institutions
• Commercialization and privatization are twin issues. The missing link of looking at the effect of commercialization on the public
• Social safety net- we need to do more in the area of public management, the capacity of the government should be looked at
• Building institutions is key
• The diversity of our country in comprise with Kerala should be noted.
• We should look at enforcement in addressing problems
• We should look at where we have missed it in Nigeria-where we are coming from and the successes we use to have.
• The BPE is pursuing Public Private Partnership-PPP
• Monitoring and evaluation of PEs-the BPE has a department called the Post privatization monitoring department for follow up, and the enterprises is sanctioned at their failure to keep up with standard leads to government taking over

Corporate Governance- Soji Apampa

• Separation of ownership and control
• Control mechanisms- market mechanism, bureaucratic mechanism, clan mechanism