Charting a New South-south Devt Agenda

The Frontlines By Joseph Ushigiale

When the federal government team decided to ignore and stayed away from a meeting slated to hold with leaders of the South-south region in Port Harcourt, the Rivers state capital; some of us from the region waited with baited breathe for the next line of action from those who were at the botched meeting.

The meeting which had the governors of Akwa Ibom, Emmanuel Udom, Cross River, Ben Ayade, Rivers, Nyesom Wike, Edo, Godwin Obaseki and Delta state, Ifeanyi Okowa in attendance including prominent paramount rulers from their respective states had vexed speakers after speakers berating the federal government for belittling leaders of a region from where the nation draws over 90 per cent of its livelihood.

Governor Okowa who chaired the meeting had to save the day for the federal government when he announced that he received a call from the presidency stating that the federal team was held up in Abuja where it was attending a meeting. He also said a new date for the meeting would be agreed soon.

At the rescheduled meeting, Okowa told the federal delegation that the South-south is committed to restructuring the country to guarantee “true federalism” and devolution of powers to the states to create and manage their own police and security architecture under a federal structure.
The regional leaders also called for the relocation of the headquarters of major oil companies, NNPC subsidiaries from Lagos and Abuja to the South-south region.
They also requested the immediate implementation of the consent judgment entered in the Supreme Court Suit No: SC/964/2016 to enable the South-south gets its fair share of $55 billion collection shortfall on deep offshore and inland basin production sharing contracts.

Okowa emphasized that “True federalism’ guided by the principle of derivation, revenue sharing and control of resources by each state of the federation as it was the case in the first republic is what we want.”
According to him, the geopolitical zone desires a federation where its constituent units are constitutionally empowered to create their own structures like local government areas, manage their elections and control their judiciary.

He said: “We are all aware of the huge endowment of this country. As such, it is imperative to stress that with a little bit of efforts, imagination, hard work, sacrifice and leadership, every state of the federation as of today, has the ability and capability to contribute to the national purse. This should be encouraged rather than the whole country depending substantially on a region of the country.

“What is worse and even more painful in this ugly situation is the deliberate lack of understanding, empathy and the uncompromising attitudes of some Nigerians, who have refused to understand the challenges of the South-south region of the country, especially, the degradation of the environment and our waters. As a result, most of the demands of the region have remained unattended to while the resources of the region have been used continually to develop other parts of the country.”
The governors called for the reconstruction and rehabilitation of the region’s major seaports in Port Harcourt, Calabar and Warri to enhance the economic development of the region. They demanded that the two refineries in Port Harcourt and Warri should be privatised.

That is not all, just as Okowa rightly pointed out, the rail line conceived by the Goodluck Jonathan administration to cross crisis the entire zone including the east west road, have all been abandoned by the present administration in preference for development in not even only the north but extended into Niger republic, a foreign country.

Therefore, the leaders should insist on the rejuvenation of these very important projects that have capacity to transform and leapfrog the zone to greater heights. What’s more? Apart from huge deposits of hydrocarbons in the region, it also commands huge gas deposits in excess of 180 trillion mcf. Yet, majority of this gas is flared daily causing environmental degradation and pollution.

Given these proven reserves and the huge prospects of being a leader in both the local and foreign gas markets, the region must insist on the quick implementation of the gas master plan to end gas flaring and generate revenue. One of the quick fix is for the leaders to convince the federal government to reintroduce a new partner for the implementation of the P&ID project in Calabar, Cross River state because completely abandoning it would amount to throwing away the baby with bathe water.

As part of the botched deal, the P&ID was required to build a state-of-the-art gas processing plant to refine natural gas (“wet gas”) into “lean gas” that Nigeria would receive free of charge to power its national electric grid. The P&ID was not entitled to be paid for this work: instead, it was to own the by-products created by the refining – such as propane, ethane and butane or natural gas liquids and was to have the exclusive rights to sell them on the international markets. This market was projected to be worth billions of dollars over the 20-year lifespan of the contract.

To begin with, Nigeria is known to flare most of its gas released during oil drilling. Until recently, the penalty for gas flaring also known as flare payments (penalties) was N10 per thousand standard cubic feet. However, a revised penalty issued few years ago increased or reviewed it upwards. A statement from the Nigeria Gas Flare and Commercialization Programme (NGFCP) said “the upward review in the case of any one producing 10,000 barrels of oil or more, to $2.0 USD per thousand standard cubic feet of gas and, in the case of anyone producing less than 10,000 barrels of oil per day, to $0.50 USD per thousand. This year, government has projected a revenue of N104b receipt up from N45b which accrued to the federation account in the past.

Thus, it was cheaper for the oil majors to make flare payments rather than investing in gas production which would have had multiplier effects including generating revenue for government and improved electricity supply to millions of homes in Nigeria.

So was the project desirable and was it going to have positive effects on the people and the economy? Yes it was because at present, the World Bank estimates that only 59% of the country have access to reliable supply of electricity. It also acknowledged that with almost 8 billion cubic meters of gas flared annually according to satellite data, Nigeria is the seventh-largest gas flarer in the world. At the same time approximately 75 million Nigerians lack access to electricity.
According to the records, the GSPA was signed during the administration of President Umaru Yar’Adua. The duo of Mr. Michael Quinn and his partner Brendan Cahill proposed the project to late President Yar’Adua in August 2008. At that time, the late Rilwanu Lukman, a 2-time OPEC Secretary-General, who was Minister of Petroleum Resources at the time, signed the GSPA.

It was learnt that the P&ID and the Nigerian Government entered into a 20-year Agreement – known as the Gas Supply and Processing Agreement (GSPA) – to refine natural gas for powering Nigeria’s electricity grid. Specifically, the GSPA was to generate an additional 2,000 megawatts of power for the national grid. Such a major increase in low-cost electricity supply brought by the P&ID project could have been transformative for millions of Nigerians.

The most unconscionable act of the present administration is to turn a blind eye to the sufferings of the people of the Niger Delta and choosing to totally neglect and deploy resources from the region to develop the north and Niger republic. The leaders of the Niger Delta have to realise that its oil is principally the collateral for the foreign loans which are being used in developing the north.

It stands to reason that leaders of the region have to close ranks, identify viable projects that have the capacity of pulling the region out of poverty for recommendation to the present administration to source loans for their implementation.
The federal government has no choice than to pamper the region especially now that peace and tranquility have replaced the volatility that enveloped the region unleashing different militia groups including the Avengers who disrupted oil supply and cutting off revenue accruing to the federation account.

It is unpardonable to allow the region slide into another era of restiveness arising from neglect and marginalization of a region that lays the golden egg. We are all witnesses to the calamity that befell countries like Kuwait and even Libya recently and the huge losses recorded when their oil fields were taken out. Nigeria which depends solely on oil revenue for survival would grind to a halt.

This should not be allowed to happen and should be prevented not through a repeat of blood letting that we saw and crude methods of gunboat diplomacy and reign of terror in the region. Rather, the federal government should hold such consultations regularly, genuinely and transparently carry the people of the region along for peace to reign.