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Dealing with NDDC’s funding challenges

After 23 years, the Niger Delta Development Commission, NDDC, established to facilitate the rapid, even and sustainable development of the Niger Delta region that produces over 90 per cent of Nigeria’s oil wealth, is still contending with funding challenges.

It is unfortunate that despite spirited efforts by successive governing boards and managements to transform the oil-rich region, the interventionist agency has been constrained by several factors, including inadequate funding.

In 1957, the Sir Henry Willink’s Minority Commission was established to look into the concerns and agitations of Niger Delta minorities and to find means of allaying their fears. The commission’s report in1958 characterised the Niger Delta as infrastructurally and generally poor, backward and neglected. It, therefore, advised the government to establish a federal board to address the problems of the area.

The Niger Delta Development Board, NDDB, which emerged from the recommendations of the Willink’s Commission, was a special purpose vehicle. It was meant to pay keen interest to the needs of communities in the Niger Delta, given the challenging terrain which requires huge funds and efforts to develop. Subsequent development agencies, like the Oil Mineral Producing Areas Development Commission, OMPADEC, were expected to follow the same path.

Without doubt, the Niger Delta region is confronted with ecological and environmental challenges that should perforce attract huge funds from the federal government and the oil companies operating in the region.

Sadly, this has not been so, thus limiting the capacity of the NDDC to fulfil its mandate of driving the development process and transforming the Niger Delta region into one that is “economically prosperous, socially stable, ecologically regenerative and politically peaceful.”

It is rather unfortunate that despite the spirited drive by successive boards and managements of the NDDC to live up to the expectations of the people, their efforts have not been matched with commensurate funding.

As the new NDDC board settles down to work, the issue of inadequate funding is rearing its ugly head again. Indeed, it is an inconvenient truth that will remain in the front burner until it is fully addressed.

That explains why the NDDC managing director, Samuel Ogbuku, highlighted the issue during interactive sessions which the commission’s board and management held with the relevant committees of the National Assembly in Abuja.

Ogbuku told the House of Representatives Committee on NDDC, chaired by Hon. Ibori-Suenu Erhiatake, that the commission is owed over N2 trillion, arising from withheld funds and underpayments by both the government and the oil companies. He blamed this on non-compliance with the Act establishing the commission. 

The NDDC boss said: “I want to raise an important issue. When we talk about funding, the NDDC Act says the monthly allocation from the federal government is 15 per cent of the allocation of nine states of the Niger Delta. But I can tell you that since the inception of the NDDC, we have not received that”.

Ogbuku lamented that the shortfall in funding had placed a huge debt burden of the commission, forcing it to adopt alternative means of financing its key projects and programmes. Even as he rues the negative side, there is a bright side to it. As is often said, necessity is the mother of invention. In this case, because the NDDC was boxed into a corner, it was forced to think out of the box.

According to Ogbuku, the commission settled for the Public Private Partnership, PPP, arrangement to fund big-ticket projects. From all indications, the PPP approach is the right way to go, considering that so much is expected of the NDDC.

The strategy, which prioritises building strong and effective partnerships with relevant stakeholders, is beginning to yield fruits. Recently, the NDDC and the Nigeria Liquefied Natural Gas Limited, NLNG, signed a Memorandum of Understanding, MoU, to leverage shared aspirations and collaborate on diverse fronts in the delivery of sustainable development projects in the Niger Delta region.

The PPP model also gives the NDDC the opportunity to leverage on the resources, expertise, and goodwill of various partners, such as federal and state governments, local communities, non-governmental organisations, international agencies, and private sector companies. Obviously, by working together with various partners, the NDDC is better placed to mobilise more funds, reduce costs and improve efficiency. 

It is curious that the federal government which is supposed to lead the way in ensuring adequate funding for its foremost interventionist agency is failing to meet its statutory obligations to the commission. Available records show that right from inception, the NDDC was getting only 10 per cent, instead of 15 per cent from the federal government.

This is contrary to the provisions of the law, as the NDDC Act states clearly how the commission shall be funded. Section 14[2] provides that “there shall be paid and credited to the fund established pursuant to subsection [1] of this section; [a] from the federal government the equivalent of 15 per cent of the total monthly allocation due to the member states of the commission from the federation account, this being the contribution of the federal government to the commission; [b] three per cent of the total annual budget of any oil-producing company operating onshore and offshore in the Niger Delta area, including gas processing companies; [c] 50 per cent of monies due to member states of the commission from the ecological fund…” and other sources such as grants and loans.

Apart from the federal government which does not comply with the provisions of the NDDC Act, some of the oil companies have also not been paying the three per cent of their annual budget as required by law. Available facts indicate that they deduct first charges before calculating the three per cent from the balance. In doing this, they are more or less, hurting themselves because what they spend for the development of the Niger Delta is for their own good at the end of the day.

Given the enormous impact of their activities on the environment, the oil companies are expected to be at the forefront in the critical task of urgently developing the oil basin that has suffered so much neglect in the past. It is, in fact, in their interest to develop the communities where they operate in order to guarantee peace, which is very necessary for them to continue with their work.

Thankfully, both the Senate and the House of Representatives have promised to assist the NDDC to recover its outstanding funds. In their different interactions with the NDDC leadership, the lawmakers frowned at the disregard of extant laws relating to funding the Commission.

The chairman of the Senate Committee on NDDC, Senator Asuquo Ekpenyong, expressed displeasure over the disregard of the law by the International Oil Companies, IOCs and promised to call them to order. He decried a situation where the NDDC is put in a bind over revenue issues because the IOCs and the Federal Government were not fulfilling their statutory obligations.

He said, “When you have a situation where you have a debt profile of over a trillion naira, you are no longer talking about sustainable development. With such a high debt profile, contractors who have the capacity to deliver on projects will run away from executing your contracts. We have to reverse the trend.”

The Senate committee chairman stated that proper funding would help NDDC to adequately address the sustainable development of the Niger Delta region, noting that the challenge of developing the region was enormous and that all relevant contributors to the NDDC must play their roles diligently.

Senator Ekpenyong said that in discharging its oversight functions, his committee will ensure that every contributor to NDDC pays what they owe the commission, “because we cannot afford to toy with the development of that very important region. We owe it to the country to make sure that we improve the living conditions of the people of the region.”

It is comforting to note that both chambers of the National Assembly are concerned about the disturbing funding challenges facing the NDDC and that they are doing something to redress the situation. Apparently, the lawmakers understand that we have a responsibility to adequately fuel the vehicle chosen to drive the development process in the Niger Delta region.(THE NATION)

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