Loomnie

From Vanguard:

Nigeria’s excess crude account has dropped from $20 billion (N3.004 trillion) at the beginning of the year to $11.2 billion (N1.646trn) in June. This implies that in the last six months, the various tiers of government in the federation have shared a total of $9bn (N1.323tr) from that account.

This use of the fund was to beef up revenue allocation to the three tiers of government following the dwindling revenue accruing to the federation account as a result of the global economic recession that has resulted in the fall of prices of crude oil- the major revenue source of the country.

And you would have probably been hearing stuffs like this (this time around, it is from the Nigerian Minister of State for Finance, Mr Remi Babalola):

“We are addressing the issue of funding through revenue diversification. Our plan is to diversify from oil and gas based economy to other untapped areas such as agriculture and natural resources. Agriculture, however, remains very high on our list as it currently employs 68 per cent of labour force, contributes 40 per cent of GDP and provides 88 per cent of non-oil earnings.”

Sometime ago I wrote a post about my efforts to understand the Nigerian oil industry. Some Next reporters have done an article on their efforts to understand the industry. Nobody seems to know how much Nigerian exports, or how much it makes from oil:

Even a cursory check by NEXT has revealed that various agencies of our government give conflicting figures of how much oil we produce and sell.

The Central Bank, the Ministry of Finance, the Department of Petroleum Resources, the Nigerian National Petroleum Corporation (NNPC) cannot agree on exactly what the numbers are.

And:

The Nigerian National Petroleum Corporation, our state oil company which enters into joint ventures with the oil multinationals, even goes so far as to say on its website that it cannot be held responsible for the accuracy of the sales figures it publishes.

The Central Bank, which receives the money on behalf of the Nigerian people, also would say nothing regarding the veracity of these numbers.

The Department of Petroleum Resources (DPR), the industry regulator, makes the astonishing claim that it does not know the figures.

After more than two weeks of constant calls, text messages and email, the department’s acting director, Billy Agha, informed us through a spokesman that “we only corroborate what NNPC gives to us.”

Oil workers too do not know:

Even oil industry workers don’t have a clue. Peter Esele, former president of the Petroleum and Natural Gas Senior Staff Association, says, “Whatever information that is gotten from the NNPC is from the producers.

“One thing is clear, DPR does not even have the capacity to undergo or even know the quantity of crude. They don’t have a meter, they don’t have a measuring meter. Now, if you go to NNPC, the figure is different, DPR’s is different, producers’ different, CBN is different. So you cannot really reconcile all this.” Esele for a time had served in NEITI.

Peter Akpatason, president National Union of Petroleum and Natural Gas Workers, said: “Officially we don’t know. But we have access to the information each time we want to get them.

“But, it is not as if on daily basis, we get the figures. I’m sure you know that there is always discrepancy of some sort between what NNPC declares and what DPR declares.

“What somebody explained to us in DPR is that NNPC figure is taken at the point of production while DPR take theirs at the terminal.”

Really sad state of affairs. The full story is here.

$140 per barrel is the appropriate price of crude oil - Rilwanu Lukman, Nigerian Petroleum Resources Minister. Hat-tip to Nigeria, What’s New?.

Mr Obasanjo on Hardtalk.

The disconnect of the Pope.

Are we really in the age of mass intelligence?

Individuals give NGOs more funds than donors.

The Berlin wall came down 20 years ago this year. A look at Berlin by The Economist’s More Intelligent Life.

The credit crunch is dragging down the global economy and raising political tensions.

At the urging of Oz of Mootbox, some months ago, I downloaded a podcast from the Cato Institute. While listening to the podcast I was almost screaming out at the suggestion of one of the panelists. Military strategist and historian Edward N. Luttwak suggested that African governments should be left to fail instead of being propped up by aid from developed countries. His argument, the substance of which is not exactly original, is that African states did not evolve like modern states did in Europe, and so the relationship between the people and the state in Africa is not the same as one would find, for instance, in Western Europe and Northern America.

Peter Ekeh and the two publics
Anybody who is familiar with the literature on state and civil society in Africa would be aware of a similar analysis. Prof Ekeh wrote, in a now much-quoted article,  that an average African has two publics, one was the civil public of the nation-state, while the other is the more relevant immediate group. The immediate group could be the age-grade, the hometown association or even the larger ethnic group. He argues that it is morally acceptable – and maybe even expected – that one robs the civil public of the nation-state to feed the more immediate public. Conversely, it is more of a moral hazard, and therefore more frowned upon, for one to steal from the hometown association or the age-grade association. (For more about Professor Peter Ekeh see here. To get the 1975 paper you would need a subscription, so if you would really like to have a copy leave me a message and I could try to arrange that.)

Back to Edward N. Luttwak
Mr Luttwak suggests that western governments leave failing African states to fail, arguing that that failure would lead to the growth of a more organic structure that is closer to the reality of African societies. Mr Luttwak’s mistake is that the African people of his imagining are long dead and gone; the Africans of today live in a world where there is a state, and where the state has its functions, and they are oh so well aware of that. Go to any village in western Nigeria and you would find how much of a reference point the state is, even if that reference is more about its absence and inefficiency. Ask them what they want and they would likely tell you that they would like the government to remember them, shortly after telling you that ‘ijoba o ranti wa’ (Yoruba for ‘the government does not remember us’). I might be economically liberal in many ways, but I understand the importance of a state. Just ask the directors of Lehman Brothers, or even the private-jet owning bosses of the big car-manufacturing companies in the US. The state is important, and perhaps even more so in less developed countries.

Somalia now
Probably the most vivid case for the importance of the state is that of the most (in)famously failed of all African states: Somalia. The problem that is the failed state of Somalia is most highlighted by piracy along its coasts. Most recently, the pirates have become much bolder and their attacks have become more frequent. For instance, the Sirius Star, one of the world’s largest oil tankers, was recently hijacked. The Economist reports:

As if to underline the point, the tanker’s capture on November 15th, with $110m of crude oil bound for America, was followed by several other hijackings by Somali pirates, including a Thai tuna boat, a Turkish chemical tanker, an Iranian freighter loaded with wheat and a Greek bulk carrier.

Still think there is no need for the state?
There is a great need to police the Somali waters, and one of the ways to do that is to strengthen the capacity of the state to police its own waters. Just so this is not taken as a call to simply equip the state with the latest warships, I hurry to add that increasing the capacity of the state should be a comprehensive approach. That approach has to include incentives to not become pirates. Job creation and the provision of basic infrastructure should be part of these incentives. While there is a need to link the two publics of Professor Ekeh, there is no over-flogging the importance of that civil public.

Hat tip to Mootbox

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Ogho Okiti of BusinessDay has a nice analysis:

How about another $5 billion for subsidy?
Thanks to soaring crude oil prices, we are receiving significant amount of income from crude oil exports.
Never mind that the government and the economy would have been in so much trouble by now, underlined by significant short fall in projected production, but for the huge price increases in oil.

Thanks once again to soaring crude oil prices, and our inability to refine the oil we produce, we are paying increasing amount for petroleum products we import. In response, it has been suggested by the government that it is prepared to subsidise the price of diesel at the pump, in the same way that the prices of petroleum motor spirit (PMS) and kerosene are subsidised. The suggestion came from a recent statement credited to the Minister for State, Petroleum, Odein Ajumogobia, that the government is looking for ways of ameliorating the pace of increases in diesel price…. Read more.