Nigeria: Financial distrust threatens weak peace and civility in Niger Delta

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A dispute between the Niger Delta communities of Nigeria and government officials over who must manage the ten percent of oil revenues promised them by the Nigerian government in a peace process that brought an end to rebel activities in the oil-rich region, threatens to reignite civil unrest in the region.

According to the spokesperson of the Host Communities of Nigeria (HOSTCON), Dr. Mike Emuh, “the attempt in some quarters of the government and local communities to somehow manipulate the management of the expected oil funds could spark off another round of crisis in the oil producing areas of the Niger-Delta,” whilst insisting that its members are capable of successfully managing the huge funds. But some quarters in the Niger Delta claim the association of oil and gas producing communities is incapable of managing the funds.

A civic right

HOSTCOM’s arguments to take control of the promised Oil Equity Funds is however in line with the initiatives put forward at the 5th Edition of Africities, on Dec.16, 2009 in Marrakech, Morroco- a project which advocated for a population-focused involvement that will empower those who have been deprived of their civic right to partake in issues that concern their own welfare, and help build social structures through a decentralization process geared towards the achievement of set Millennium Development Goals (MDG).

While some analysts have argued that the communities should be trusted with the money, to take charge of the fate of their immediate communities, the Delta State Governor, Dr. Emmanuel Uduaghan, remains unsure of the decision to allow the HOSTCON body to control such enormous funds.

The governor has argued that the management of the oil funds by an independent, foreign financial institution may be more realistic and beneficial to the host communities. He has suggested that the 10 per cent oil revenue, the structure of the communities as well as the management of the Fund should be included in the PIB (Petroleum Industry Bill).

Interest or Embezzlement?

“These managers, we expect, would put the money to good use so it can yield interest. It is the interest from the investment of this money that can now be given to the communities,” Dr. Uduaghan is quoted as saying.

“On the management of the 10 per cent equity, we are saying do not give it directly to the state or local government, but create a trust fund and get international fund managers to manage it because of its size,” the governor added.

HOSTCON however suspects the move of having another institution come between the host communities and the 10 per cent Oil Equity Fund is a ploy by certain politicians to embezzle a substantial bulk of the money. According to a statement by HOSTCOM, the Governor Uduaghan’s suggestions was a threat to national development and a call for more trouble in the Niger-Delta region.

While HOSTCOM and the Delta state governor debate whether or not the funds should be supervised by international fund managers, some observers insist either institutions would be better off than state or local government management.

5 billion dollars

As the struggle for custody of the promised oil funds continue, the Niger Delta Ministry has promised to expedite action on the establishment of nine industries and 12 modular refineries at the cost of the five billion U.S. dollars in the oil-rich region.

To enhance its credibility, HOSTCON spokesman, has reiterated the groups commitment to develop the region. The group has called on the Federal Government to hasten the approval of a proposed Pipeline Surveillance Task Force in order to checkmate oil bunkering and pipeline vandalism as well as to guaranty the employment of youths in the region.

The issue of corruption and mistrust is evident in the allocation of the oil funds. neither the community association nor the local and state governments trust each other to utilize the funds for the purposes it is intended. Thus, experts have backed the Delta state governor’s argument that a foreign financial institution or the inclusion of the fund in a Petroleum Industry Bill, would be better for the people of the Niger Delta.

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