Abolishing the onshore-offshore dichotomy in deciding oil revenues upon which derivation will be paid to littoral states is unfair and has worsened poverty in the North, Kano State governor Rabiu Musa Kwankwaso said in an exclusive interview with Daily Trust.
He said northern states will push for the revival of the dichotomy in the next phase of constitution review, such that the littoral states of the Niger Delta will receive derivation funds only on crude oil found within their land borders.
The onshore-offshore dichotomy was abrogated in February 2004 following two years of legislative and political rigmarole aimed at working out a solution to a 2002 Supreme Court ruling that affirmed the Federal Government’s powers of control over oil derived offshore.
Based on the law, oil extracted offshore will form part of the computation of the 13 per cent derivation in revenues allocated to the littoral states. This system has over the years funneled hundreds of billions to the oil states bordering the sea, namely Rivers, Bayelsa, Cross River, Akwa Ibom and Delta, thereby slashing revenues that would have been shared among all the 36 states.
Speaking to Daily Trust in Abuja on Monday night, Kwankwaso said this has been unfair to majority of Nigerians especially the northern states. “You see if you have gold in your land and you are claiming certain percentage to be paid to you, one can understand that. But if you have oil wells 200 nautical miles away from your land and you are claiming that that well is your own, I don’t think that is correct,” he said.
Kwankwaso blamed the passage of the onshore-offshore bill on members of the National Assembly from the North who served between 1999 and 2003, saying they sold out even after they were forewarned on the consequences.
The dichotomy abolishing process started in 2002 but did not gain the force of law till February 2004. “I remember...of course Obasanjo refused to sign the (initial) bill because it was not fair and it was taken back to the National Assembly for two-thirds (to override the veto),” Kwankwaso said.
After Obasanjo’s refusal to sign the bill passed in late 2002, the House of Representatives passed it by a two-thirds majority in March 2003 but did not get concurrence from the Senate up to the end of the Assembly’s tenure in June 2003.
“The night before (the veto override) there was nothing I did not do to my members in Kano, especially,” the governor said. “In fact, the night before Senator Gemade, then national chairman of the PDP, called me, and also called all the governors in the North to beg us to talk to all our members, seeing that our members were going to give two thirds to the bill.
“I called all our members but to my dismay they went and supported onshore-offshore (abrogation) and sold out. That is the most unfortunate thing that happened to the North in this political dispensation from 1999 to date. “We knew what happened. How could that bill get two-thirds without the support of our members? The unfortunate thing is that because our capacity is so low, even those who did that are pretending to be heroes of the North.”
Kwankwaso said poor finances of northern states and the attendant poverty are partly the consequences of that action of the legislators who he added failed to see beyond their noses. “Whether we like it or not, what we are seeing today is partly the consequence of the action of the past that made the North very poor,” he said.
“And I think that is what is binding the North together –we are poor, we are illiterate, we are sick; I don’t see anything that is common to us which we can mention other than these.” Kwankwaso said he was looking forward to the constitution review to lead efforts to revisit the dichotomy abrogation.
“I am personally concerned about constitutional amendment because I have the feeling that if care is not taken, many of us will be made poorer. And of course I don’t believe it is in the interest of the North; I believe it is also not in the interest of the South,” the governor said.
“I say this because in a country where you have two sections, one for the rich and one for the poor, that is the beginning of a huge crisis. That is why we are appealing to our members in the National Assembly and all those concerned to be more cautious.
“I also want those who will benefit from our weakness to be conscious of the fact that the more the rich makes the poor poorer, certainly the more the poorer will not sleep and when the poorer does not sleep, the rich will find it equally difficult to sleep.” He also called on members of the National Assembly to be wary of the contents of the Petroleum Industry Bill (PIB) lest it worsen the situation.
Dichotomy: In the beginning…
The onshore-offshore law lifted the barriers between oil extracted onshore and offshore for the purpose of computing derivation revenue to be given to the littoral states. The law provides that for the purpose of computing derivation benefits it shall be immaterial whether the oil is derived onshore or offshore.
In October 2002, the Senate and the House of Representatives, at separate sessions, passed the first bill abrogating the dichotomy, but the version passed got enmeshed in controversy arising from technical definitions and political horse trading, causing then-President Obasanjo to withhold assent. The original bill initially sent to the lawmakers by Obasanjo sought to limit application of the offshore revenue to 24 nautical miles spanned by the ‘contiguous zones adjoining the coastal state’, which implied a distance of 45 kilometers.
But lawmakers, lobbied by the littoral states, extended its application to 200 nautical miles which it termed the ‘continental shelf and exclusive economic zone contiguous to a littoral state.’ The bill was first passed by the House of Representatives on November 12, 2002, during the tenure of Ghali Na’Abba as speaker of the House but it was not signed into law.
Obasanjo wrote a letter to the House dated November 26, 2002, saying he would not assent to the bill because it was far-reaching and was a potential source of conflict between Nigeria and its neighbours. The letter was read on the floor of the House on December 12, 2002. In withholding assent, Obasanjo said he was willing to grant only 24 nautical miles from the coast to the littoral states because any more distance into the sea might violate other countries’ claim to the international waters.
The National Assembly threatened to override Obasanjo and pass the law by two-thirds majority, which the House did on March 10, 2003 but did not get concurrence from the Senate up till the end of their session in June 2003. Later, in a follow-up letter to the next session of the National Assembly, Obasanjo said there was a flaw in both the 24 nautical mile and 200 nautical mile arrangement.
He then proposed that the lawmakers look at the United Nation’s law of the sea which defines continental shelf as either a distance of 200 nautical miles or the outer edge of continental margin, whichever is farther. Obasanjo therefore asked that the phrase ‘contiguous zone’ in the original bill or the phrase ‘congenital shelf and exclusive economic zone’ inserted into the version passed by the National Assembly to be replaced with ‘200 meter water depth isobath’.
The National Assembly accepted this suggestion, and the bill was passed by the House on January 21, 2004 during the speakership of Aminu Bello Masari, and also by the Senate under Adolphus Wabara, before Obasanjo signed it on February 16, 2004. The recourse to political solution on the onshore-offshore dichotomy was a consequence of the Supreme Court ruling of April 5, 2002, which said only the Federal Government had control over the resources derived offshore, effectively affirming the dichotomy.
The onshore-offshore bill was a political solution apparently to pacify the littoral states which stood to lose huge chunk of derivation revenues that would have to be pooled together and shared among all the states.
Kwankwaso: No to state police. In his interview with Daily Trust, Governor Kwankwaso also spoke about issues of insecurity, particularly the agitation for the creation of state police.
Northern governors recently resolved to oppose the idea, weeks after the Nigerian Governors Forum of which they are part of called for it.He said despite the security challenges in Kano, he would prefer that the federal police is strengthened to do the job. “We don’t support state police,” he said, adding: “Kano has 7000 police now; Lagos has 37000; Rivers has 18000 (to) 19000; I think Kaduna has between 13 and 15000.”
The governor said he was devising means to assist the Federal Government to boost police presence in Kano. “Police are not happy to go to Kano now for whatever reason, so we are trying to get the approval of Mr President to allow the Nigeria Police Force to go and recruit police in our state –Nigeria police, not state police. “In fact Kano State government is willing and ready to assist in training them and let them be posted to Kano because we don’t have enough. We don’t have enough but when it comes to the issue of state police we don’t support it,” he said.
Onshore and offshore dichotomy must return — Kwankawaso