ONSHORE/OFFSHORE DICHOTOMY: A threat to Nigeria?s survival (1)
On August 29, 2012 ? In Viewpoint


IN the matter of revenue allocation, especially as it relates to the re-institution of ?onshore/offshore dichotomy,? it really begs belief that Northern political leaders won?t let sleeping dogs lie. The current attempt to re-visit the issue is ill-advised and insensitive to current national realities.

Indeed, it bodes ill for the continued existence of Nigeria as one indivisible national entity.

The threatened re-introduction of ?onshore/offshore? dichotomy completely, perhaps, even contemptuously, ignores the historical reality that the extant policy position on the distribution of offshore oil revenues represents a negotiated compromise which, as with the 13 percent derivation principle itself, the people of the affected states only grudgingly accepted as an interim measure and in the interest of national cohesion.

People of goodwill, within and outside Nigeria, know for a fact that the exclusion of revenues from offshore oil production from the distributable pool was intended to unfairly and illegally deprive littoral states of their? due.

Before the emergence of petroleum oil as the major source of revenue in Nigeria, the revenue allocation formula was based on 50 percent derivation principle.? During the same period and based on the 1963 Constitution, the continental shelf of a region (state) was deemed part of that region (state) for the purpose of revenue allocation under the 50 percent derivation principle.

Even import duties on a range of products, less administrative expenses, were fully payable to the region (state) for which the products were destined!

These, along with other re-enforcing provisions, constituted the bases on which our founding fathers agreed to build a federal Nigeria.

The advent of oil and the usurpation of the people?s power by the military were to completely alter the revenue sharing arrangements and the basis of our federation to the detriment first, of oil bearing states as a whole and second, of littoral oil bearing states in particular.

At a certain point the derivation principle came to an ignoble one (1) percent while offshore oil revenue was deemed to belong wholly to the central government.

In case it has escaped their collective memory, leaders of the North need to be reminded that these were the obnoxious circumstances that led to the agitations and struggles for a better deal for oil-bearing states and communities.

Derivation principle
The minimum of 13 percent derivation principle enshrined in the 1999 Constitution and the 2004 Act of the National Assembly that provides for the application of that principle to oil produced within 200 meters (water depth isobaths) for littoral states were the direct result of a national consensus to give oil-bearing states a modicum of justice and now, almost a decade after, some people want to turn back the hands of the clock.

Two questions immediately arise: At what cost? And to what purpose? If history is any guide, the cost to the nation of any attempt to re-introduce onshore/offshore dichotomy will be very high, perhaps, unaffordable.

Regardless of the arrogance and insensitivity of people, who live comfortably distant by hundreds of kilometers, from offshore oil operations, the people of littoral states have seen the ugly face of oil production and they simply won?t go back to bearing its full brunt without any substantial benefits and/or compensation.

No, indeed, after more than 50 years, that dog won?t hunt.? The level of agitation and militancy, which we saw some years back in the Niger Delta would be a child?s play compared to the eruption that would accompany the unjustified re-introduction of onshore/offshore dichotomy so late in the day when the people are beginning to hope that the worst in deprivation and neglect is behind them.

It is on record that, at some point under former President Olusegun Obasanjo; militancy had driven oil production to a mere 30 per cent of available capacity.? And precisely because such militancy would be driven by righteous anger, pacification by force of arms would have limited success.

If advocates of the re-introduction of onshore/offshore dichotomy are motivated by a desire for development, then they need to do a serious re-think.? For the fallout of such a retrogressive step would not allow any meaningful development.

*Umanah, Akwa Ibom State Commissioner for Information and Communications, wrote from Uyo.

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