Capital flight in Nigerian oil industry blamed on government

Oct 21, 2004 02:00 AM

Bayelsa State Deputy Governor, Dr Goodluck Jonathan, has blamed the capital flight associated with the oil industry on government's patronage of imported items.
Dr Jonathan who stated this in a lecture he delivered at the Cross River State Council of the Nigeria Union of Journalists Press Week, entitled, "The Niger Delta: Challenges of sustainable Development" in Calabar lamented that if the sum of $ 1 bn was projected for a major investment, less than $ 50 mm would be spent in Nigeria. Given this trend, he expressed pessimism that Nigeria's economy can develop.
"Oil was discovered in China two years after it was discovered in Nigeria by the same Western companies. Today, more than 60 % of the inputs of the oil industry in China are produced locally. In Nigeria, everything needed in the oil industry is imported," he noted.

Since oil contributes more than 90 % of Nigeria's foreign earnings, Dr Jonathan insisted that it is only the oil industry that can revolutionise the industrial take-off of the country and so, stressed the need for oil companies to be compelled to increase their local content to not less than 40 %.
By this position, he said simple economic forces will compel the oil companies and rich individuals to set up subsidiary tools and equipment manufacturing companies which will further enhance job creation as well as improve the value of the naira.

"Needless to say that some of the subsidiary companies will not manufacture tools for the oil industry alone but will produce similar equipment for other industrial use. This is the only way to launch Nigeria into the industrial revolution and strengthen our research and development. The mere acquisition of satellite alone cannot lead Nigeria into the technological world.”
"For the local content to positively impact on the people of the Niger Delta, the subsidiary companies must be compelled by legislation to be sited in the Niger Delta. This will create jobs, thus creating wealth," he maintained.

The deputy governor expressed disappointment in the 22 governors on the resurrection of the on/off shore dichotomy controversy which has already been passed into law through an Act of the National Assembly. According to him, the governors position on that matter was a demonstration of insincerity and hypocrisy to the Niger Delta situation.
Similarly, he blasted the Federal Government for being insincere to the course to developing the Niger Delta regions.

"The political history of this country has witnessed the setting up of many intervening agencies meant to concentrate on developing the Niger Delta. These range from the NDDB through its various modifications to the oil-related agencies such as NDDC. But can one satisfactorily say that the Federal Government over the years, has shown sufficient political will to improve on the quality of life of the Niger Delta people?”
"The answer is a capital No. The story of the Niger Delta Development Board was very abysmal. It was the first to be set up in the country but the least in funding. The story of the 1.5 special Presidential Task Force and OMPADEC are the same. In OMPADEC, the commission received only 15.28 % of the funds statutorily meant for it.”

"A study of the revenue allocation in Nigeria based on derivation from 1953 when oil was not a factor through the 70's to date when oil contributes more than 80 % of the country's revenue shows how the Federal Government steadily and consistently ensured that less revenue come to the Niger Delta region," Dr Jonathan stressed.

Source: Daily Champion
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