Okowa and the new oil revenue
Evidence of improvement in the nation’s revenue profile was indexed in the latest revelation by the Nigeria Extractive Industries Transparency Initiative (NEITI). A statement by the nation’s extractive industry watchdog suggests a massive jump in the disbursements by the Federation Account Allocation Committee (FAAC). A total sum of N6.418 trillion was disbursed in 2017 showing an increase of 25.8 per cent and 6.8 per cent when compared to total disbursements of N5.1 trillion and N6.011 trillion in 2016 and 2015 respectively.
Though, FAAC disbursements increased in 2017 over the preceding years, they were still 34.1 per cent and 25.3 per cent lower than total disbursements of N9.742 trillion and N8.595 trillion in 2013 and 2014 respectively.
Tangential to this increase in cash disbursements is increased receipts from crude oil sales which in itself is a direct function of the improved crude oil production and a gradually increasing price of crude oil in the international market. This is cheery news for an economy that has been sagging and dragging.
Aside revenue from non-oil sectors including agriculture and mining, the oil and gas sector remains the buffer and bulwark of the nation’s economy. It is therefore a no brainer to reason that once the production of oil and its pricing are imperiled, the Nigerian economy suffers. It showed right from last quarter of 2014 when the price of crude oil started nosing down. It got worse in 2015. And as if on cue, the perennial conflicts in the Niger Delta popped up to add to the basket of trouble. The end-point was low crude oil production coupled with low price per barrel which ultimately resulted in low revenue receipts.
The NEITI statement attributed the revenue increase in 2017 to rising crude oil prices, improved oil production, and greater attention towards development of non-oil revenue sectors. It is far beyond these. At the core of this stroke of fortune is the stability and peace in the Niger Delta region particularly in Delta State which currently ranks as the highest producer of crude oil in Nigeria.
For a nation that has drifted from an era of grave slump in oil production, at a time it was far below 1.5 million barrels per day, it is heartwarming to see a rebound made possible by the return of peace to the oil-bearing communities. This is where Governor Ifeanyi Okowa of Delta State deserves some plaudits.
Unbeknown to many, global oil production comes with its own troubles. In the case of the Niger Delta, the presence of oil and gas deposits has spawn several bouts of crises especially among the youths of the region. And you cannot really blame them much. Oil comes with blessings and curses. For the Niger Deltans, it has been more curses than blessing. Environmental degradation, human capital exploitation and total ambivalence by the oil majors and successive Nigerian governments to the cries of the people of this area compelled the youths to demand fairness and justice. Their agitations, sometimes pushed beyond the ken of reason, has forced some of the oil majors to declare force majeure. They simply abandon their operations in the trouble spots. When this happens, Nigeria loses.
The Niger Delta region is very strategic in the global oil market. The implication of a force majeure is a slump in the volume of crude oil production by Nigeria which translates to lean revenue. But all that seems to have changed, thanks to Okowa’s calculated pacifism. His peaceful approach to conflict resolution has birthed a new social order in the oil-rich region.
The Governor’s inclination to peace takes its root from his SMART agenda. That was his mantra and battle-cry during his electioneering days. SMART is acronym for Strategic wealth creation projects and provision of jobs for all Deltans; Meaningful peace-building platforms aimed at political and social harmony; Agricultural reforms and accelerated industrialization; Relevant health and education policies; Transformed environment through urban renewal.
The late Nelson Mandela, a man who sacrificed his comfort for the freedom of his people, once said that “peace is the greatest weapon for development that any person can have”. This is as sure as it is true. Without peace, every plan and projection for development amounts to zilch. Okowa understands this. But peace does not come cheap. It has a price. In the history of humanity, those who won peace staked their own life; their comfort. They took on the toga of meekness just so virtue will triumph over villainy. They stooped to conquer, making compromise deals and choosing to suffer the affliction of the moment for the peace of tomorrow.
This is the story of Okowa in Delta State. He has sacrificed his socio-political comfort for the sake of peace in the state. Delta is like a trigger in Nigeria; the livewire of the nation’s economic being. It is relevant both today and tomorrow. Delta is home to the brightest and best brains in any field of human endeavour. Its special breed (call them hybrid) of human capital are both home and abroad breaking new grounds and widening the frontiers of knowledge. Besides its rich repository of fecund human capital, it is home to the highest gas reserve in Africa. And if the future is gas as we often say, then Delta holds the key to the future of Nigeria. Each time Delta sneezes, there is a hiccup in Nigeria’s oil production output which translates to low revenue.
Okowa has long realized this and he has taken critical steps to ensure that peace barbs the often volatile estuaries in the creeks. The evidence of Okowa’s wisdom is manifest. Nigeria’s crude oil production, including condensate hit 2.057 million barrels per day (bpd) in the month of December 2017. That was more than the 1.93 million bpd including condensate recorded at the end of the third quarter in September, 2017.
This increase is not down to Nigeria suddenly discovering a smarter technology to explore and exploit crude, it is a function of the stability and peace in the area which has reinforced investors’ confidence. Last year alone, Indonesia said it will increase its off-take of Nigeria’s crude from 90,000 bpd. Saudi Arabia was already buying 140,000 bpd of Nigeria’s crude. There are other new markets being created for the nation’s crude. With increasing crude oil production and rising price of same, the auguries for 2018 looks bright.
However, as we gather in Abuja at month end to share the spoils from the Federation Account, financed majorly by receipts from crude oil, let us remember that a certain Governor Ifeanyi Okowa, a Senator, a man who qualified as a medical doctor at the record age of 22 from the University of Ibadan, is all over the creeks appeasing, pacifying and pleading with the platoon of sufficiently agitated and justifiably angry youths to toe the path of peace. It is that peace that has brought much yield in product and revenue from which we all now share. Okowa, and indeed other governors of the Niger Delta states, deserves our collective pat on their back. But they must not relent. Internal vigilance is key to sustaining this new-found peace.
Culled from Sunday Sun