May 15, 2016 - 5:10 AM EDT
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Onshore-Offshore Dichotomy and the Abrogation Act

Nigeria is facing another round of dire times. As a result of the fall in price of crude oil by over 70 per cent in less than 18 months, revenue accruing to the Federation Account has nosedived. Government at all levels is in obvious financial distress.

Despite the bailout granted to states recently, only a few days ago, the chairman of the Nigeria Governors' Forum (NGF), Abdulaziz Yari of Zamfara, was shown on television, profusely pleading with the federal government to once again come to the aid of the states by, among other things, reviewing the revenue allocation formula. The minister of finance, Femi Adeosun, on the other hand, was reported to have ruled out any further bailout. Instead, she advised the states to look inwards, improve their financial management and be innovative. Before Governor Yari spoke, Governor Aminu Bello Masari was the one that first raised the alarm on the finances of states, warning that without federal assistance, some states might collapse.

It is becoming a routine for states to run to the federal government for rescue whenever they are in financial crisis. Ironically, it is the same states that always clamour for less federal government control in the spirit of "true federalism." But when it comes to taking up more responsibilities, the states are quick to shy away.

In this regard, one might recall the stiff opposition of many states when the idea of state police was muted in public discourse only a few years ago. Most of them would rather the federal government continued to shoulder the burden of internal security by being solely responsible for financing the Nigerian police. It does appear like the states want to eat their cake and have it at the same time.

Not long ago and before the advent of the of bailout era, the states, in their desire to access more allocation from the federal government, would always pick on a certain aspect of revenue allocation formula and complain about it.

For the oil-producing states, the clamour had persistently revolved around full resource control in the spirit of "fiscal federalism." Although mainstream politicians from the oil-producing states are hardly at the forefront of the agitation for full resource control (they actually don't need to), the array of all manner of ethnic nationalists and militants make such agitations a full-time career (and evidently a lucrative one at that) on their behalf.

As for the non-oil producing states, particularly northern states, their hopes and agitations tend to focus on a change in the revenue allocation formula, especially on the re-instatement of the onshore-offshore dichotomy, which the 2004 act abrogated. In their view, the abrogation had put them in a severely disadvantaged position vis-à-vis the oil-producing states.

Perhaps, the most vociferous of such complaints was expressed by a former governor of Kano State, Rabiu Musa Kwankwaso in an interview with the Daily Trust newspaper of August 8, 2012. In the interview, Kwankwaso mistakenly blamed the northern members of the National Assembly of 1999-2003 session for the passage of the law, whereas the law itself was actually enacted in February 2004. In a subsequent rejoinder, a former speaker of the House of Representatives, Ghali Umar Na'Abba, corrected Kwankwaso's misrepresentation and absolved the 1999-2003 set members of responsibility for the enactment of the act.

Technically speaking, his "blame" was directed at the 2003-2007 members, of whom one happened to belong. When the act was passed in February 2004, one was indeed a principal officer in the House of Representatives, and by that virtue, was fully conversant with developments leading to the passage of the act.

While reading Kwankwaso's interview, it became apparent that, not only was he mixing up the dates of the passage of the act, it's either he had not read the act (at least the one passed by the National Assembly) or he lacked an understanding of the difference between "200 nautical miles" (which he spoke about) and "200-metre depth isobaths" (which the act provided for). Former Governor Kwankwaso's claim was patently misleading.

One had refrained from reacting to set the records right, preferring to await the day when Kwankwaso would be a member of the National Assembly and observe the magic he would conjure to correct the "imbalance/injustice" of the Abrogation Act of 2004. Alas, Kwankwaso has been a member of the Senate for almost a year now and his silence on the Abrogation Act, an issue he had expressed such passionate views on, has been very conspicuous, to say the least. Though one has been keenly following developments in the National Assembly these past 11 months one has not heard any earth-shaking speech on the floor of the Senate by Kwankwaso on an amendment of the act, neither has one heard of any private members bill tabled by him to amend the act. Has Senator Kwankwaso come to terms with his limitations as a legislator in any attempt to bring a change in any law or to go against the wish of the executive, the very limitations he had refused to acknowledge in us despite having been once a legislator before becoming a governor?

Senator Kwankwaso's failure in this reminds one of the meetings the leadership of the House of Representatives had with a delegation of northern governors soon after the abrogation act was passed in 2004. The delegation consisted of then governors Ahmed Makarfi (Kaduna), Abdullahi Adamu (Nasarawa), Danjuma Goje (Gombe) and deputy governors Magaji Abdullahi (Kano) Philips Salau (Kogi) Shettima Dibal (Borno State). They came to bitterly complain about the implication of the passage of the act on the finances of the non-oil producing states, especially the northern states. At the meeting, then speaker Aminu Bello Masari, restated the rationale he had offered the writer when the latter had cause to personally discuss the issue with him on the day the bill was to be passed in the House. Masari asserted that the bill, as it was then presented, was a product of "political compromise" without specifying who the "parties" to the "compromise" were. The delegation left without extracting any concession or even a commitment to review or amend the act.

One would have expected that once such governors had the opportunity to serve in the Senate, their first and major priority would be to table a private members' bill and go through the rigours of lobbying and seeing to the amendment of the act such that the dichotomy would be re-instated. Disappointingly, for all the years they served and some still serving in the Senate, no such moves came up from them. For example, up till the end of his two-terms in the Senate and even serving as chairman of the Finance Committee, Senator Ahmed Makarfi, to the best of our recollection, never made any attempt to speak in favour of amending the act. The same applies to Senator Danjuma Goje, who in addition to being in the Senate ever since he vacated the governor's seat five years ago, is now occupying the highly influential chair of the Senate Committee on Appropriation. Similarly, nothing has been heard from Senator Abdullahi Adamu as to the repeal or amendment of the act. The question that readily agitates one's mind is: Why would these ex-governors turn round to be seemingly unmindful of the supposed consequences of the Abrogation Act on the finances of their respective states after becoming senators, even though they have at least a theoretical chance of getting the act amended or repealed? Could it be that the issues were only relevant when they were in charge of their states? Could they be that selfish? Or could it be because Nigerians have short memories and don't bother to challenge their elected representatives on opinions and promises expressed prior to being elected to public offices? Or could it be that the positions they took previously turned out untenable after entering the legislature? Or that the task becomes too daunting to pursue? Either way, the electorate deserve an explanation or apology.

It is our considered view that the Abrogation Act, passed 12 years ago, has not achieved much by way of dousing agitations and bringing peace to the Niger Delta. On the one hand, there is a pervading feeling amongst the non-oil producing states of being shortchanged by the provisions of the act, more so because they are more populous, and therefore, have greater need for revenue. On the other hand, the perpetual agitations by the oil producing states for full resource control seem to have no end in sight. Clearly, therefore, it is time to revisit the Abrogation Act of 2004. Our view is that the act be amended such that the on-shore/offshore dichotomy be restored in accordance with the Supreme Court judgement and international law

Hon. Salik was a member of the 5th and 6th National Assembly and served as the Minority Leader, House of Representatives between 2003 and 2005.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to:

Source: News (May 15, 2016 - 5:10 AM EDT)

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