May 5, 2014

13% derivation Controversy: N/Delta’ll not last 24 hours as a country—Junaid Mohammed

Junaid Mohammed

Dr Junaid Mohammed

Second Republic lawmaker and a delegate at the National Conference, Dr Junaid Mohammed, in this interview, speaks on why the North wants derivation reduced to five per cent, accusing former Head of State, General Abdulsalami Abubakar (rtd) of unleashing injustice on the polity with the help of Justice Niki Toby.


On what informed the northern delegates’ call for reduction of derivation from 13 percent to five percent
Part of the confusion arising from the derivation is the way it has been applied or misapplied to the detriment of all the 36 states of the federation and this has to do directly with the way former Head of State, General Abdusalami Abubakar introduced the term ‘derivation’ and it to be loosely applied as to include other funds which are significant and which are not covered by oil.

This injustice done by Abdusalami was in violation of the Constitution and the principle governing this great injustice was put into the constitution without any debate and the constitution itself was never passed by referendum.

Map of Nigeria

Map of Nigeria

Derivation principle
In short, what is contained in the derivation principle is the understanding that first, oil producing communities do suffer deprivation arising from  oil exploration/exploitation and need to be compensated but not through a smuggled phrase coined by Niki Toby and smuggled with the help of Abdusalami Abubakar into the constitution.

There has been mention of the need to compensate the communities who suffer directly or indirectly in terms of environment degradation, their means of livelihood and other adverse effects of oil exploration. Decree 20 of 1992 created OMPADEC and what was at stake then was that in passing Decree 20 of 1992, Ibrahim Babangida took it to the then legislative arm of the Nigeria government which is the Armed Forces Ruling Council but in the case of Abdusalami, he did not do that.

Secondly, as to what percentage to accord those oil producing states, you decide to call it derivation which is misnomer. Thirdly, the wording of the derivation section was deliberately and loosely defined to mean all monies accruing to the coffers of the Federal Government which is what we call Consolidated Revenue Funds; the Niger Delta states must take 13 percent of it. If you give them a fraction of what belongs to them, you cannot also rake others and give to them.

For example, the value added tax which is a consumption tax and which is an indirect tax of everything you buy in Nigeria, others like export duties, import duties, etc are now included into the Consolidated Revenue Fund of the Federation and 13 percent is automatically removed before anything is shared to anybody including the Federal Government.

Abdusalami should have known that this kind of arrangement is unacceptable. What he did was to set in motion what may break up Nigeria because people are not going to live in a country where there is half-free and half-slaves. We cannot allow this kind of lopsided application of fiscal principle to undermine the integrity of the nation and there is no way this revenue allocation law can subsist and we will have peace.

The International law provides what is called law of the sea convention and it provides that a state bordering the sea has what is called territorial waters of 12 kilometres, beyond that the state may also claim what is called a contiguous zone of another 12 kilometres, beyond that, everything at sea is a common heritage of mankind which however have been structured in a way that nations who are contiguous with the sea can benefit from what is common heritage of humanity.

By any standard, international law is superior to domestic laws because there are many laws that have been passed in Hague which make international laws superior to domestic laws to a certain limit. What they are now saying is that anything found in the sea that has to do with oil production belongs to them and the rest of Nigeria are saying no and it is not just the question of Northern states

Fraction of oil proceeds
So if elected Nigerians decided that they are going to cede a certain fraction of the oil proceeds accruing from the oil production, it should be limited to onshore production and until this matter is resolved, I can tell you that we will be lurching from one constitutional problem to another.

We all know how the dichotomy was removed, the Supreme Court in its judgment of 2002 said unambiguously that it affirms what is already in section 44 sub section 3 of the constitution and section 62 also of the constitution and it says without mincing of words that offshore production belongs to the whole of Nigeria and even what is onshore and the entire mineral resources either gold or oil belong to the Federal Government as the epitome of Nigeria’s sovereignty.

Junaid Mohammed

Junaid Mohammed

The states whose lands abate the sea are basically Rivers, Delta, Akwa-Ibom, Bayelsa and Ondo states. Now you are saying these five states should be ceded what belongs to everybody including the other 31 states. It is something that I find criminally impossible.

Are you now saying the Niger/Delta states don’t deserve the revenue they are getting right now?
The situation we have found ourselves today is such that the people of the Niger-Delta have been pampered and they are now saying they are entitled to 13 percent of all revenues accruing to the Federal Government and not just oil alone and they are now asking to be given more.

What we are saying is that, without prejudice to whatever quantum you are signing to them out of onshore production, we must re-introduce that dichotomy so we know what is onshore and which can now be argued they are entitled to something. We also said we must disambiguate our own income because you cannot lump oil money with import and export duties and value added tax.

If these issues are not resolved, what it means is that the oil producing states now take 13 percent of all revenue going into the federation account.

Insurgency in the north
Nobody needs to be told that this lopsidedness in the formula led to insurgency in the North. I have no respect for Boko Haram and I find their understanding of Islam bizarre. So in a way, those who are clamouring for resource ownership, derivation, if they own the oil, why are they talking about derivation? They should own it 100 percent. So you can see their ignorance or agitation carried too far.

You can never own or control what you never had, if you agree to drive something, it must be something you own 100 percent and you decide to drive it any extent to satisfy yourself but I don’t see any sense in the agitation other than the fact that they now have one of their own as the President of this country.

When they talk, they always talk about Kuwait and Dubai, these countries were not made by money alone, people prepared to work very hard. Also, the terrain in Dubai and Kuwait is different from ours and they don’t have the kind of revenue formula we are practising here in Nigeria.

I have also been to Yemen, a very poor country but it has oil and when you compare the population of those countries and the population of Nigeria, you can see that per capita, our oil money is a peanut. What is the population of Kuwait? Saudi Arabia is about 20million. Libya is less than that. So if our oil production is at par with that of Libya, Libyans will only have to divide what they have by 20 million but in the case of Nigeria, we have over 170 million and I still believe we are under counted.

If they don’t want to have Nigeria, fine, but let me tell you that the day you make the Niger-Delta a country, it will not last 24 hours because they have nothing in common aside this agitation, nothing in their culture is common, in terms of language and religious beliefs.

I can tell you that very soon, Nigerians will no longer accept this situation whereby the par capita income of the Niger-Delta zone is higher than that of some countries that are developed and on top of all that, the Federal Government is still responsible for the Amnesty programme which gulps about 450 billion yearly.

There is also the Ministry of the Niger-Delta which does projects in the Niger/Delta and the Niger Delta Development Commission (NDDC). These things are clearly unacceptable. Virtually, each of the big states that I have mentioned has 80 percent revenue more than their northern states counterparts put together.