Nigeria’s Oil: Boon or Doom?

Address by Archbishop John Onaiyekan

ENUGU, Nigeria, NOV. 25, 2006 (Zenit.org).- Here are excerpts from a speech that Abuja Archbishop John Onaiyekan gave at a Nov. 2-3 gathering of the Catholic bishops’ conference of Nigeria. The theme of the gathering was “Making Oil and Gas Wealth Serve the Common Good.”

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Ethical Issues
By John Onaiyekan
Archbishop of Abuja

The oil and gas phenomenon anywhere in the world today is a highly technical and specialized issue. … On a few occasions, I have looked at the reports issued by government on the movement of incomes in the oil sector. They are written in such technical language that the more you look, the less you see; the closer you read, the less you understand.

Since the crude oil is underground in deposit, how do we know how much is taken out and how much is left? I imagine we have to rely heavily on the experts, most of whom are also our partners in business. This is probably why the oil sector is so liable to manipulation and dishonest practices. I leave others to go into these technical details. Thanks be to God among the speakers during this workshop, there are indeed experts in the field.

I hope that they will present their contributions in a language that we shall all be able to understand. I look forward indeed to being enlightened by them. On my own part, however, I believe that whether we understand the intricacies of the oil business or not, we should be able to address some ethical issues that surround the oil and gas industry in Nigeria, seen in terms of a gift of God to our nation. It is in this perspective therefore that I make my brief contribution.

The wealth of the nation

I wish to start with the observation, which for me is a strong conviction, that the most important wealth of any nation is its people. Persons are the most valuable resources of any nation. In the case of Nigeria, we are blessed with huge population of over 130 million men, women and children. …

Apart from sheer numbers, we have also proven that Nigerians are resourceful, highly motivated and can show themselves as brilliant as any group of people can be. This is our greatest wealth.

Our nation will never be truly great until the people are well managed and motivated to perform at their optimal standard. In a nation where many young graduates roam the streets unemployed for years or are underemployed, selling phone cards and newspapers, there is something seriously wrong.

Every able-bodied hand that lies idle is a loss on the nation. Every well-trained brain that is left to lie fallow is a major dent on the productive capacity of our country. In many countries, the rate of employment is a major concern of public authorities. People win or lose elections on the basis of how many of their countrymen are in productive employment.

Unfortunately, in Nigeria, this has not been the case. Government and governance has been practically reduced to merely manipulating oil wealth. It seems nobody really cares whether Nigerians have jobs or not. So we spend all our resources buying from all over the world, goods that other people have produced, while our factories are left to rot.

Worse still, as some recent clamorous events have shown, many of our leaders steal the monies of the people and use it to buy up useless property abroad, or stash it in foreign banks. We should note that these funds are not just sitting in the vaults of the foreign banks. Rather, they are being used to oil the industries of those countries, thereby giving jobs to their own people while Nigerians have no capital available to carry out small- and middle-scale industries.

It is not surprising that the authorities in these countries look for every excuse not to release to us the loot that they are holding. I believe that the nation needs a complete change of attitude in this regard and we pray that our leaders will understand this.

The example of some countries clearly illustrates the truth that people are the wealth of a nation. Some of the nations that are now in the frontline of the world economy have little or no natural resources. Japan, Singapore and Hong Kong are examples. They have no crude oil, hardly any minerals, and little or no land even to farm on. All they have are people who are educated and prepared to work and who are put in the position to work and to produce. The result is a wealthy and an affluent nation.

I read recently that Dubai, the gem of the Gulf States, derives only 10% of its fabulous wealth from oil. The rest comes from the good human management skills of their rulers and the keen business acumen of its citizens.

There can be no substitute for proper deployment of human resources. Lack of natural resources can be remedied, if the people are resourceful. But no matter how rich a country is in natural resources, if the people are not well managed, little will happen.

Our country is a good example. In a recent article, the British Economist magazine (Oct. 21-27, 2006, page 50) talks of oil wealth as the “curse of black gold,” and makes this telling statement about our country: “Despite billions of petrodollars flowing in since the 1970s, Nigerians are considerably worse off today than they were in 1980. About 71% of them live on less than $1 a day, infant mortality is high and the country is unlikely to achieve any of the UN’s millennium development goals by 2015.”

This somber picture seems to me closer to the realities under which the average Nigerian lives today than the glowing picture of a “vibrant economy,” which our official sources continue to paint and project at home and abroad.

We might also cite many other countries of Africa that are rich in natural resources but wallowing in poverty: for example, the Democratic Republic of Congo, Angola, and to some extent also Gabon. Indeed the proper management of the people is the major responsibility of public authorities. If they do their duty in this regard, the people themselves will manage their economic affairs and manage them well. When shall we ever learn?

Natural resources

It is only after we have properly appreciated the importance of our human resources that we can then begin to look at our natural resources, including oil and gas. But we must look beyond oil and gas.

We take so much for granted and yet there are a lot of other great gifts of God to our nation. On three levels: on the ground, above and below, the nation is rich. Above ground, God has blessed us with wonderful environment and climate. Generally mild, with no extremes of cold and heat, we can nurture life for both animals and plants.

When we look at our soil, we have vast arable land, fertile soil that can produce a wide variety of crops and plants, trees and forest. We recall that in the colonial days, our nation produced a lot of wealth from the cultivation of cash crops, most of which have in the meantime been totally neglected. Even food production, which ought to be a major concern of every nation, has suffered the same serious neglect. An example is rice. One of the many unenviable records assigned to our nation is that we are the greatest rice market in the world. While we go all over the world buying up surplus rice produced by others abroad, our local rice production is stifled almost out of existence.

Finally there is the subsoil, the minerals under the ground. The discovery of oil has unfortunately led to the neglect of other mineral resources in our country. Despite the effort of the Ministry for Solid Minerals, it is still mainly oil that is our concern.<br>
We have neglected other mineral resources like our traditional coal and tin, which even our colonial masters did a lot to develop and exploit. Our nation will do well to diversify our sources of mineral wealth by paying greater attention to the different kinds of mineral resources with which our nation has been blessed.

Oil and gas resources

This is the major wealth generating natural resources that we have put practically all our attention on. We are lucky that as things stand, it is still a good money generating resource. But we need to put the oil issue in its proper perspective. We have to remember that oil is nonrenewable. Whatever is taken away now, will not be available for the generations that will follow us.

We therefore have a responsibility to future generations in the way we exploit and extract the oil resources. The least we can do is to use our present oil incomes to put in place structures, services and amenities which will be of lasting value for present and future generations. Obvious areas of concern would include education, health services, housing, transport and communications network. The present dubious drive for privatization is hardly a step in such a direction.

We should also not forget that the demand for oil, even if it is not exhausted, will not be forever. We know for sure that those who are now buying our oil are working frantically for alternative sources of energy. They are doing their best to liberate themselves from their dependence on oil. That day will come earlier than we think. It may not hit us during our lifetime but we definitely must think of those who are coming after us.

And this leads to the third observation: exploitation of oil at what price? As we seek to make as much money as we can from oil, we need to pay attention to how this is being done. Much of the crisis in the Niger Delta is a result of a callous and careless exploitation of oil without due regard for the environment today and the consequences for the years to come. It would be grossly unwise to destroy our environment simply because we want a few couple of million more dollars.

Those who design and implement our policies in the oil sector have to look seriously into this. I am not fully informed of the relationship between our government and the oil companies. Whatever this may be, it is surely the duty of government to work on behalf of their people, to ensure that those who come here to extract oil do so at least with the same care and attention that they use when extracting in their own countries.

It is a shame for companies to operate in Nigeria with principles and methods totally different from what they use elsewhere only because our rulers either do not know or do not care. Money is important but not the end of everything.

Responsibility of civil authority

It is the responsibility of civil authority to pursue the common good of all citizens. This is a basic principle that calls for a brief expatiation. By the nature of things, man is a social being. We cannot live as lone individuals. We live in community. That is why we have families and nations and peoples. From a Christian perspective, we believe that this is the plan of God for the humanity that he has created. On the one hand, every individual has his inalienable rights. Made in the image and likeness of God, it is only to God that he must give absolute allegiance. In principle, no one can have absolute power over anyone else.

On the other hand, in the exercise of one’s rights, one must also take note of the needs of others and the good of the society at large. Since we cannot trust every one to do this well and consistently, there is need for a civil authority, with power to enforce good order. Enforcement of good order for the common good is the only justification for the authority that those who rule wield. When they use their authority in any other way but for the promotion of the common good, they would be misusing their authority. Consequently, they would no longer morally deserve to be obeyed.

Pope Benedict XVI expressed this in a blunt way by quoting a no less blunt African bishop and Father of the Church, St. Augustine of Hippo. He describes as “a band of robbers” those rulers who divert public resources to their private uses, neglecting the care of the people entrusted to their care. Thus it is the duty of civil authority to reconcile individual interests with the good of the society at large.

From [the] point of view of resources, this has serious implications. On the one hand, it is a clear principle of our Catholic social doctrine that the goods of this earth are destined for the good of everyone. This is called the “principle of the universal destination of goods.” Indeed the Lord God has made available sufficient resources to take good care of everybody on the earth.

At the same time, it is also a basic principle of Catholic social doctrine that individuals have a right to private ownership or private property. Indeed their right to private property sustains the individual rights vis-à-vis the society. Again, it is the duty of government to balance the demands of the respect of private property with the principle of the universal destination of goods.

This is why civil authority has every right to introduce mechanisms for redistributing wealth among citizens, so that those who have surplus are not only encouraged but also even obliged to release what they do not need for others who are in dire need. This is the rationale behind the taxation system in many developed countries, where the rich are taxed heavily to sustain free or at least affordable social services for all.

Thus we come back to what we started with namely: the primacy of the human person. In all that the state does for the common good, the human person must be at the center, the apex and the criteria of development. Policies of government that ride roughshod over human beings are immoral. We should never sacrifice human beings on the altar of policies; no matter how good and carefully worked out they may be thought to be.

Particularly, it is a crime crying to heaven for vengeance for the state to make the poor to pay for the human costs of its misguided policies. This consideration is relevant when talking of making oil and gas wealth serve the common good of our nation.

Oil as common wealth of all Nigerians

In Nigeria, by law, all natural resources underground belong to government. But this is a far-reaching ideological option that our nation has taken. Some say in fact that this has been imposed on us without proper discussion and negotiation. However, it is not the only option possible.

I am told that in America, you are the owner of the oil that is under your garden. In any case, the gold rush and the early oil explorations in the United States were on this basis of private ownership of oil fields and mines. Therefore, the question “who owns the oil” needs to be properly addressed and answered. Having decided that government owns the oil, this puts a heavy burden of responsibility on civil authority that is supposed to act on behalf of the people to ensure that this commodity is properly used for the sake of the people.

The decision that all minerals including oil belong to the state is another way of saying that they all belong to all of us together. It is the duty of government to ensure that this is really so. I am quite convinced that, all things considered, it is the best option. We can imagine what would happen if every village (or indeed villager!) were to take charge of the oil deposits in its farmlands.

It would have been impossible to mobilize the resources necessary to extract even a barrel of crude oil. But having decided that the state shall control this commodity, it is also necessary that this common wealth of all be indeed for the common good of all and everyone. This brings us to the issue of economic and political management of oil resources.

Resource management

It is a fact that huge sums of money are accruing to the Nigerian state from the sale of oil. The state has a moral responsibility to ensure that this wealth is prudently managed for the common good of all Nigerians. It is no longer a secret that there have been serious lapses in this regard. Recently, Mallam Nuhu Ribadu, who ought to know these things, confirmed the long-circulating rumors that over the years, considerable portion of our oil revenues has ended up in private pockets. He spoke of “billions of U.S. dollars. There is only one word to describe this: stealing.” The nation is still waiting for a government that would have the moral courage and credentials to address this colossal looting.

The demand by host communities for special consideration in the distribution of the oil incomes has strong merits. This is especially because they bear the brunt of the environmental negative implications of oil exploration and exploitation. Justice demands that the damage caused by oil production activities be repaired with the resources of the oil business. This is the justification for disbursing more funds to oil-producing states than to others.

We are all familiar with the clamor for “resource control” by the politicians in the oil-producing states. Their demand is legitimate, provided it also means that there will be proper resource management. It would solve no problem if politicians collected huge checks from Abuja, only to lodge them in private accounts at home and abroad, leaving their people in squalor and misery. In fact, if the federal government had done its duty well by developing oil-producing areas and ensuring that the environment is properly looked after, there would have been less need for a clamor for resource control.

The issue has clearly a political angle. This is not only a matter of economic distribution. It has to do also with honesty of administration, with a sense of justice for all and a concern for the weakest. Unfortunately, the record of our leadership in this regard has been dismal. The national leadership has been guilty of gross neglect. But unfortunately, not seldom, the local leaders too have at times duped their own people rather than serve their pressing needs and genuine interests. The tragedy of Ogoniland, culminating in the Ken Saro Wiwa affair of almost exactly 11 years ago, is only a clamorous instance of a widespread and sad situation.

The oil companies

Before concluding my reflections, a word about the oil companies. You will notice that I have made only indirect and passing references to them so far. This is because I believe that as far as the specific theme of our conference is concerned: “Making Oil and Gas Wealth Serve the Common Good,” the primary responsibility lies with us and with our civil authorities.

I presume that since Nigeria nationalized the oil sector of our economy, we have taken control of, and must assume responsibility for whatever happens in that sector. We invite the oil companies — or welcome them — to exploit our oil resources for us, obviously for a fee. We have to tell them what to do and lay down the conditions for their operations in our land. We should therefore not blame the oil companies for our irresponsibility. For example, if the host communities are neglected in basic amenities, the fault lies with government who rakes in the income from the oil sales, not with the oil companies who are only doing their work on behalf of our government.

The oil companies are not missionaries, nor are they philanthropic organizations. They are businesspeople here to make money, sometimes at great risk to their very lives. They will try to make as much money as they can, taking advantage of any loopholes in our system if necessary or possible.

But this does not exempt or absolve them from all moral responsibility for the way they conduct their business with us. For example, they should give us a fair deal. They should not steal our crude oil under any pretext. Those of them who buy our crude oil should pay fair prices. But all this will not happen through our pious exhortations and spiritual advice. It will happen only to the extent that our government insists on honest and transparent dealings with our oil business partners.

We should note here that there are also Nigerian companies that have become big players in our oil and gas business. They too have no less moral responsibility than the foreign companies. The fact that they are Nigerians does not give them any right to steal our oil and enrich themselves unjustly.

Often in this area, we begin to swim in very murky waters. The allocation of the famous “oil blocks,” instead of being a means of judicious management of our oil sector, has become often a powerful instrument of political patronage or coercion, as government fiat creates and annihilates millionaires overnight! Besides, there are rumors that some of the so-called Nigerian oil companies are merely fronts either for Nigerians in power or for foreign companies or both. To the extent that this is true, it must be denounced as the height of moral corruption, not as political sagacity!

Finally, we note that since the second term of President Obasanjo, he has taken direct and personal responsibility for the oil sector of our economy, with no Minister for Petroleum. We know where the buck stops and where the final responsibility lies.

Conclusion

The oil and gas phenomenon is a paradigm of the Nigerian predicament, characterized by inept management, greed, selfishness and shortsightedness. That is why our natural resources have hardly served us in such a way as to bring wealth and well being to our nation. Many have referred to our oil boom as an oil doom. We have the human resources to ensure that this oil and gas wealth are properly harnessed and deployed to serve the common good. In order that this may happen, there is need for a better political management of our people and especially of those with talents in this regard.

This is why it is important that those who are elected into office be men and women of integrity, ready to really serve. This is why it is necessary to have a proper and honest political environment where rigging of election would no longer be tolerated. It is only then that government can ensure that our experts will protect our interests in the oil industry and defend us against the predatory tendencies of the exploiters of oil industry, most of who are foreigners from the rich nations out to maximize profit.

It is only then too that we can control and restrain the excesses of many who are misusing their talents and positions for stealing our oil resources, employing all sorts of strategies for bunkering and high sea robbery.

Many Nigerians are working for the oil companies. To a large extent they are serving foreign interests, sometimes against the interests of the nation. These “mercenaries” ought to be converted and brought back to work for the good of the nation. In this connection, we should mention that many of our talented people have completely checked out of this nation in search of greener pastures and safer grounds. With a good government that puts in place an enabling environment for honest work, many of them would come back to make sure that our oil and gas wealth serves our common good.

When we shall be able to recover the talents of our people and bring back the exiles from their places of Diaspora, when we shall be able to change the orientation of the nation to welcome talents, then God’s design for Nigeria as a great nation will be realized. Then would Nigeria be home for all to live in dignity and in relative well-being.

Indeed Nigeria would become a haven for many from poorer nations to come to look for greener pastures, like our own young men and women are now unfortunately doing in foreign lands. May the Lord God hasten the day when this will happen. Amen.

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