Cargo Cult Arithmetic and Anambra Oil

By Biko Agozino

“The primary association in cargo cults is between the divine nature of "cargo" (manufactured goods) and the advanced, non-native behavior, clothing and equipment of the recipients of the "cargo". Since the modern manufacturing process is unknown to them, members, leaders, and prophets of the cults maintain that the manufactured goods of the non-native culture have been created by spiritual means, such as through their deities and ancestors, and are intended for the local indigenous people, but that the foreigners have unfairly gained control of these objects through malice or mistake. Thus, a characteristic feature of cargo cults is the belief that spiritual agents will, at some future time, give much valuable cargo and desirable manufactured products to the cult members.” ^{(Wikipedia, citing} Harris, Marvin. Cows, Pigs, Wars, and Witches: The Riddles of Culture. New York: Random House, 1974, pg. 133-152)

In The Trouble With Nigeria, 1984, Chinua Achebe lambasted the leaders of developing countries who were always boasting that they were prepared to steal technology if those who possess the know-how refuse to transfer it to them. Achebe chided their cargo cult mentality and explained that technology is not like some material possession waiting to be stolen but a way of life and a worldview that can be learned through disciplined study. Rather than look for technology to steal, why not develop your own technology by funding research and development projects?

As oil and gas deposits are being discovered all over Nigeria and in some other parts of Africa, giving rise to claims and counter claims by communities who contest the ownership of the oil-rich land, we need to pause for some sober reflections. There is a gross overestimation of the potential income from oil and gas and as a result, there is an excessive expectation by even learned elites that oil wealth would be enough to banish poverty from the land whereas only a select few are likely to line their pockets from petrodollars. A Professor of Political Economy in Nigeria recently circulated this formula online to rather uncritically buttress the oil bounty hypothesis:

‘1. Crude Oil production/day - 2.5M barrels
2. Current Price = $113/barrel
3. Daily Sales = 2.5M x 113 = $282.5million
4. Monthly Sales = 282.5M x 30days = $8.475billion
5. Yearly Sales = $8.475billion x 12 = $101.7billion
6. Naira Equivalent = 101.7billion x #160 = 16.272trillion Naira per year.
7. Nigeria's budget for 2012 = 4.5trillion Naira.

Even if you take 90% of 16.272trillion naira as the Fed Govt's Share of the barrel, which comes to14.645 trillion naira we still expect over 10 trillion surplus!!! Now, the question is: Where is the surplus going?! -(Analysis by Femi Falana (Senior Advocate of Nigeria/Activist, on Channels Tv).’

I agree with some of the the cargo cult logic in Falana's arithmetic above: Even 10% of the profits from oil since 1960 should be enough to Chinarize Nigeria or out-Cuba Cuba and beat Japan, Singapore or Finland (all with less natural resources than Nigeria) in the improvement to our Human Development Index. However, the danger in overestimating the potential income from oil and gas is that other sectors of the economy end up being neglected even though they contribute more to the economy than oil and gas.

It is cargo cult arithmetic to simply multiply the oil barrels per day by current market price and project to national revenue. In my opinion, such calculations falsely raise the sense of relative and absolute deprivation among the people and potentially heat up communal violence in the struggle over scarce resources.

I recommend that readers should consult the chapter, ‘Revenue Allocation and the National Question’, by Professor Eskor Toyo in the book edited by Abubakar Momoh and Said Adejumobi, The National Question in Nigeria, which I published in the series that I edit for Ashgate Publishers.

According to Professor Toyo, the contribution of oil to the national revenue is less than 50% with the rest coming from taxes (paye taxes and sales taxes mostly) and other sources of revenue from sectors like agriculture, customs and excise, and culture. Surprised? Well do not be surprised. The explanation is that the Nigerian state, like most oil-producing states, is not an oil-producer but a rentier state that collects rents or royalties from the oil companies. The National Bureau of Statistics confirms this by reporting that the contribution of oil and gas to the GDP in the second quarter of 2012 is less than 14% while the contribution from agriculture is 40% http://www.nigerianstat.gov.ng/

This is why oil which contributes over 70% of internal revenues from taxes also contributes a small part of the GDP and the GNP compared to agriculture which employs 70% of the working population: An oil company receives the license to explore for oil in a field; the company invests billions of dollars and sometimes strikes it lucky or fails; when it fails it bears the loss, perhaps written off as tax deductions; when it succeeds, it pays royalties of 10% to the government on the profits (after deducting operating costs, research and development, etc.).

Surprisingly, 10% is considered a generous royalty considering that authors get 8% or less from book publishers as royalties (I think that they are so miserly that they should be called peasantries), with questions emanating about the accurate declaration of sales figures, wastage, theft, subsidy scams and fraud. The recent dispute in Ecuador over agreements with gas companies exposed the exploitative arrangements internationally. The new left-wing government insisted on getting more than 10% in royalties and the gas companies refused. 

 

Anambra State Government under Peter Obi should be commended for having the foresight to form an oil company (perhaps the only state government with such an investment in Nigeria, nothing stops the other states from doing the same) to refine the oil from the area and thereby maximize the benefits to the state but the people should still be made aware that the expectation, even without corruption and the likely harm to the environment through oil spills, will not come close to the expected revenue and benefits from agriculture. Yet Anambra state continues to neglect the agricultural sector like the rest of Nigeria.

Peter Obi has invested billions of naira to develop Orient Oil Company for Anambra State, building on the foundation laid by his predecessors, starting with Mbadinuju. The question the people of Anambra should be asking is how many billions has Peter Obi invested in agriculture which employs approximately 70% of the people and provides food and wellness beyond anything that the oil industry could aspire to?

The answer is provided in the Anambra State contribution to Vision 2020 in which Governor Obi reports that Agriculture receives less than 1% in capital expenditures of the state compared to 77% for transportation while recurrent expenditure for agriculture is less than 2% compared to 37% for education (I commend this prioritization of education, if only the federal government would fund education as generously at the national level). The report proposed to increase livestock and fruit trees in the state but did not specify how.

Rather than invest heavily in agriculture to modernize it and maximize its contribution to the economy, environment and society, Kogi State and Enugu state communities are already lining up cargo cults to contest ownership of the Anambra oil deposits with an eye on the potential royalties. Yes, there is oil in Enugu state too, especially in Awgu Shale, according to the geological map of Nigeria. Kogi State probably has oil too as oil is being discovered all over the country. All I am saying is that the states with oil should be forewarned not to neglect the golden goose that laid the golden eggs - agriculture. As Nigerians will say, na oil we go chop?

If these states prioritize agriculture they would reduce unemployment much more than is possible through oil and gas and they will create massive wealth for the people and potentially reduce the threat of kidnapping and violent crime. Orient Oil is only a refinery and so it does not really matter where the oil comes from given that Kaduna with no oil had a huge refinery located there by military regimes that strategically refused to cite any such factories in Eastern Nigeria probably out of grudge over the Nigeria-Biafra war.

Peter Obi appears to have tapped into the can-do attitude of the Igbo by actualizing the dream of making Anambra an oil-producing state in spite of the federal government intentions. My warning is that the cargo cultists around an oil refinery should be reminded that oil is a finite resource (as the sunflower logo of Orient Oil symbolizes) and that existing oil refineries in Nigeria are sitting dormant in disrepair whereas agriculture is a renewable resource, a gift that will go on giving forever.

I conclude with my tireless call for the revenue allocation formula to be changed constitutionally to guarantee that 10% of the annual budgets at the federal, state and local governments will be allocated directly to Nigerians to invest as they see fit, similar to the farm subsidies and business or research grants that all industrialized countries disburse constantly to their privileged citizens. In ten years, we will count the miles after the race.

As E.F. Schumacher put it in his classic, Small Is Beautiful: ‘…in agriculture and horticulture, we can interest ourselves in the perfection of production methods which are biologically sound, build up soil fertility, and produce health, beauty and permanence. Productivity will then look after itself.’ He goes on to demonstrate that if we plant one tree for every citizen of Nigeria every year, within 10 years we will have billions of new trees in Nigeria that could help to check erosion and desertification, provide food and beauty and create wealth without requiring a lot of work since the trees will generally look after themselves and also look after us as our best friends.

Governor Kayode Fayemi got the memo and I am impressed to hear that he just distributed half a billion naira to 140 unemployed youth who were retrained and funded to start their own farms in Ekiti state. Governor Peter Obi did get the memo too and distributed 100 million naira to unemployed youth to start their own businesses in Anambra. Comrade President Yaradua surely got the memo when he allocated 200 billion naira to be distributed to unemployed youth for start-ups before he died (and I agree with Baba Soyinka that his death should be investigated thoroughly).

Obasanjo and Okonjo-Iweala snatched the idea up when I first aired it in 2006 and proposed 50 billion naira grants just for cassava farmers and reserved 30% for women but I advised that it is not just for one crop and that women should get 50% of the funds. In reviewing my proposals for poverty eradication in his column in The Guardian, the socialist mathematician, Dr. Edwin Madunagu, agreed with some reservations and suggested that 10% of the budget is too small for this purpose. He may be right, my proposal said that it should be at least 10%.

I commend these tentative steps and urge policy makers not to make them a one off but an annual commitment and not to regard them as loans but treat them as grants. If this is done consistently at the federal, state and local government levels, we will no longer be trying to calculate the square root of minus one or zero with cargo cult mentalities. Obviously, we cannot do this systematically without democratically contesting for power on a progressive platform at the global, continental, regional, national, state and local levels and thereby use our abundant resources to empower the tremendous talents of our people.

Biko Agozino is a Professor of Sociology and Africana Studies, Virginia Tech.

Press Release on Black Unemployment

Press Release: African Criminology and Justice Association Policy Proposal on Black Unemployment

The unemployment rate for African Americans (16.7%) has been reported to be at its highest level since 1984.[i] At nearly double the national average (9.1%) or over double the rate for white Americans (8%), the members of the African Criminology and Justice Association, meeting in Washington DC, November 2011, hereby vote to propose feasible policies for the elimination of such a scandalous level of unemployment among African Americans in particular and Africans in general who were always at the receiving end of hardship even in 1984 when unemployment was lower than it is today.

Source: Wall Street Journal, September 12, 2011.

We disagree with the rightwing proposal of Mr. Arthur Laffer, chairman of Laffer Associates, who is co-author, with Stephen Moore, of "Return to Prosperity: How America Can Regain Its Economic Superpower Status" (Threshold, 2010).[ii] In an opinion editorial article published in The Wall Street Journal of September 12, 2011, Mr. Laffer called for the creation of ‘Enterprize Zones’ in the inner cities where a) There should be zero payroll tax on employers employing people who live in the inner city zone; b) The minimum wage legislation would be suspended; c) Building codes in the zone should be audited quickly with the view not to constrain entrepreneurs and union membership requirements should be suspended; and d) Profits from the zone should be taxed at one-third the normal tax rate.

Such a policy of sweat-shop zones in American inner cities would make matters worse by turning our fellow citizens into working poor who would be trapped in unsafe working conditions with less than minimum wages while corporate fat cats would enjoy tax holidays. Mr. Laffer’s ludicrous suggestions would only take African Americans back to the years of share-cropping with all the attendant oppression, exploitation and impunity. There must be a better way for African Americans and indeed for all people of African descent.

First of all, we call on President Obama and all the presidents of African countries to look beyond the Jobs Bill and consider an entrepreneurship bill for African Americans and all Africans. Obama needs to set aside at least $50 billion from the proposed Jobs Bill (estimated at $470b) to be disbursed to unemployed Americans to enable them to set up their own small and medium businesses. The same way that the government gives out huge grants as agricultural subsidies and business start-ups for the richest one per cent, we call on the government to initiate enterprise subsidies for the urban poor. 

We commend the governor of Anambra State in Nigeria, Mr. Peter Obi, for disbursing one hundred million naira to a thousand unemployed youth after their training to help them to be self-employed. We urge him to make this an annual part of the budget and not a one off and to increase the size of the checks given to some to enable them to become medium to large-scale entrepreneurs. Governor Kayode Fayemi of Ekiti State in Nigeria has also implemented a similar grants program worth about fifty million naira while the federal government announced that it has fifty billion naira set aside for similar purposes. 

We condemn the plan of Donald Trump and Newt Gingrich to turn poor inner city school children into janitors and toilet cleaners for their schools in the guise of training them as apprentices on the assumption that poor children have no work ethics even though poor people are the hardest working people.

The entrepreneurship policy we advocate will work as follows: select 1000 unemployed citizens from each state and send them to be trained as apprentices by successful businesses. On completion of the short apprenticeship, award each of them one million dollars to set up their own enterprises. If each of them goes on to employ 100 people, that will be 5,000,000 new jobs every year! Repeat this every year and we will be creating millions of jobs every decade while making sure that the wealth created will stay in our communities to help transform the urban neighborhoods into zones of prosperity. The Hip Hop generation has been telling us that they are not into seeking jobs to work for Massa anymore, they want to be their own bosses and our simple and practical proposal will help to do this quickly and save the economy too. The government already does this to bail out Wall Street, it is time to bail out the street corner too.

We support the current Occupy Movement that is sweeping across the world but we go beyond the call to occupy Wall Street and to occupy cities to call for the occupation of the prison industrial complex. The excessive incarceration of African Americans and other minorities is helping to fuel to job crisis because corporations that rely on prison labor would be unlikely to hire free labor until we end the inhumanity of what Michelle Alexander[iii] aptly dubbed The New Jim Crow and free the captives from the unjust drug wars, decriminalize all drugs and restore the voting rights of all felons.

Across Africa, unemployed youth are increasingly being drawn into violent armed robbery and kidnapping for ransom gangs. We believe that have every African state implement our entrepreneurship policy proposal would result in massive wealth creation and possible reduction of street violence across Africa. Every industrialized country gives out massive grants to spur entrepreneurship while African countries neglect the creative talents that abound in Africa and only call on developed countries to end subsidies to their own entrepreneurs.

With the decriminalization of drugs and the ending of the war against African Americans in the guise of the war on drugs, as we have called for in a previous Press Release, many of the youth who may not get grants to start their own businesses could grow their own marijuana and sell them legally to medical patients and recreational users alike, pay taxes on their sales, create jobs that will pay well and end the ‘homey-cidal’ violence that is associated with the war on drugs. We can rely on education to get our fellow citizens to say no to drugs the same way we do with more dangerous drugs like alcohol and tobacco which kill more people than all the illicit drugs put together.[iv]

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[i] ‘Black unemployment at highest level in 27-years’ Chicago Tribune, September 2, 2011.

[ii] Arthur, Laffer, ‘How to Fight Black Unemployment: The tragedy of the failed stimulus is felt hard in minority communities. There's a better way.’ Wall Street Journal, September 12, 2011.

[iii] Alexander, M. The New Jim Crow: Mass Incarceration in the Age of Colorblindness, New York, New Press, 2010.

[iv] Rieman, J. (1979). The Rich Get Rich and The Poor Get Poorer. New York: Wiley.

Anambra as Litmus Test

ANAMBRA STATE AS LITMUS TEST

By Biko Agozino

"But my fear is that the furore that has grown around the Anambra voters register may become a battle ground, with the corpses that we did not see on February 6 showing up on the streets soon enough when the Obi administration chooses to organise the pending local government council elections in the state." This was the conclusion to Ruben Abati's 'Hope Deferred' assessment of the governorship election in Anambra State but where is Dr. Abati expecting those corpses to come from, his own village? 

Let me start with a confession of a personal momentary dilemma on December 11, 2009, after the Africana Studies Program at Brown University-hosted Achebe Colloquium on Africa. The event gave me the opportunity of shaking hands on the same day and in the same hall with some of the greatest heroes of Nigeria - Chinua Achebe, Wole Soyinka, Emeka Ojukwu, and Peter Obi. My dilemma was similar to that of one of the characters in Ngugi’s latest novel, The Wizard of the Crow. In the novel, a business man, Titus Tajrika, refused to wash his subsequently smelly and gloved hand after shaking hands with the corrupt head of state. Oh yes, I have been washing my hands since the hands that I shook were clean hands while Tajrika may have stopped washing his hand to retain the odour of contamination because he shook an unclean hand.

Anambra State of Nigeria was pronounced the litmus test for the wobbly Nigerian democracy at that first Achebe Colloquium at Brown University, Rhode Island and Anambra people have managed to pass the test to the delight of many Nigerians. The election of February 6, 2010, was not perfect but the results reflected the wishes of the majority of the voters to see Governor Peter Obi of the All Progressives Grand Alliance (APGA) continue in office for a second term. Based on his track records, this was a deserved victory for which I join many Nigerians in congratulating him.

During the Achebe Colloquium, I was surprised that no Nigerian present could challenge the views of presenters like the former US Ambassador to Nigeria, Mr Lyman (pronounced Lie-man) that Nigeria was becoming ‘worthless and irrelevant ‘to the outside world. Only after the moderator of that first panel, Professor Obiora Udechukwu, tried to prod the panel by asking if they could name any exemplary leader in present day Nigeria, did Professors Abiola Irele of Harvard and Richard Joseph of Northwestern suggest that Governor Tunde Fashola of Lagos State was their model leader.

I was surprised that no one mentioned Peter Obi, the governor whose state was the topic of the symposium, as an exemplary leader. So during question and comments, I told the colloquium that we should give credit to the people of Anambra state for producing some of the greatest achievers in Nigerian history. Without itemizing the giants that have emerged from that small geographical space called Anambra, I reminded the audience that the state has been offering a model of democratic leadership that the rest of the country should learn from.

Here was a state in which the mandate of the people was stolen and awarded to a medical doctor, Chris Ngige, mistaken for a stooge but who was later sabotaged when it turned out that he was out to satisfy such basic expectations as paying salaries on time and building roads rather than surrender the treasury to the self-styled godfather, Chris Ubah. He was kidnapped and the police withdrew security details from him but amazingly, he was not killed despite the destruction of government-owned properties valued at millions by those that Achebe called a clique formed for the destabilization of the state.

Meanwhile the actual winner of the 2003 election went to court rather than rent a crowd of thugs to kill and maim as is the practice in many parts of the country where elections are called do-or-die affairs and candidates are challenged to prove that they are ready to die for the positions that they seek. After one year of litigation, he won his mandate back through the rule of law and became the only minority party governor in the country with a State House of Assembly in which his party did not have a single member.

The question on many minds was how long he was going to last in office before the Peoples Democratic Party (PDP) dominated house would impeach him. And right on cue, they impeached him and also tried to impeach his deputy apparently to make way for the PDP Speaker of the House to become the governor. They miscalculated because the deputy was not automatically impeached when a governor is impeached and so they inadvertently gave Nigerians our first ever female state governor in the person of Obi‘s deputy, Dame Virginia Etiaba. Once again, the elected governor Obi went back to court and once again won back his mandate without a single life being lost!

I told the colloquium that it did not end there. The PDP Federal Government was bent on taking over the state and so a former personal assistant to President Olusegun Obasanjo was dispatched to contest the governorship of the state under the flag of the ruling PDP in 2007. The incumbent governor went to court to challenge the election because his term in office started when he won his first court battle to reclaim his mandate and so there was no vacancy at the time of the 2007 election. The Independent National Election Commission (INEC) ignored the injunctions and conducted a fake election in which the candidate of the ruling PDP, Andy Ubah, was declared winner despite complaints that no election took place. The declared winner was sworn in as governor but the legitimate governor avoided a campaign of violence and went back to court and again won back his mandate through the rule of law and without any loss of blood.

Before the February 2010 re-election of the highly achieving governor for a second term, the PDP candidate in the non-election of 2007 had gone to court to ask that he be declared governor in waiting and allowed to complete his term of office that was terminated when he was forced to hand over to the properly elected governor. The Supreme Court threw out the suit on the ground that governorship was not hereditary. By then he had lost the opportunity to contest the primaries of his party, PDP, for the 2010 election and true to character, PDP did not hold any primary elections but simply imposed a candidate on the party members. Two dozen other candidates who had bought primary elections nomination forms for millions of naira each but were denied an opportunity to contest the primaries went to court and won but a higher court over-ruled and said that the party had every right to select its candidate as it saw fit. Again, no one was killed even though the father of the imposed candidate was briefly kidnapped for ransom.

In the end, about two dozen candidates contested the 2010 governorship election with the PDP support split among the still relatively popular former governor (Ngige) who was rigged into office by godfathers but who chose to serve the people, the former governor who won a non-election (Andy Ubah) and the imposed party candidate (Soludo, a past governor of the Nigerian Central Bank) who won no primary election,  all representing three different parties, Action Congress, Labour Party and Peoples Democratic Party, respectively. I knew then that by splitting any support that PDP may have had that way, not to mention that the other two dozen candidates who had intended to contest the PDP primaries took their grievances into other parties and became their flag-bearers, the incumbent governor (Obi) was guaranteed a re-election on the platform of the APGA, despite a long-running split in the APGA party.

Once again, there was no loss of life, the election was said to have gone off peacefully, according to most observers. Some thugs were said to have snatched a few ballot boxes and many voters could not find their names on the inaccurate voters lists but the results reflected the wishes of the majority of the voters who cast votes. Governor Peter Obi gained over 90,000 votes for the APGA; Chris Ngige came second with over 60,000 votes for the AC and Charles Soludo came third with over 50,000 votes for the PDP. Andy Ubah, the Labour Party candidate, placed 4th with over 20,000 votes. If these three PDP candidates had combined their support, they could have defeated the incumbent governor but that is only a hypothetical if given that the PDP would probably not have received more votes no matter who their candidate was due to the scandals that have dogged the party at the national and the state levels.

Congratulations to the people of Anambra State for showing us a good example in which the votes of the people actually was made to count in an important election. Never mind that many of the over one million registered voters (with suspicious names like Nelson Mandela on some of the lists) did not get the chance to vote due to inaccurate voters lists. Those who did not win should do the honourable thing and congratulate the winner or go to court to challenge the results if they still want to waste the huge wealth that they were using to influence the results to no avail without accounting for the sources of the funds.

Dr. Ngige was later reported as intending to challenge the results in court due to failure to understand that when the constitution said that the winner must receive 25% of the votes cast in two-thirds of the local governments, the correct meaning is the valid votes since invalid votes are null and void and of no effects. But even if the invalid votes are included in the calculations, then all that was needed was to round up from 24.7% in one of the local governments to give Mr Obi the victory that he deserves.

For a people who are stereotyped as loving money more than anything, the people of Anambra state have demonstrated that as one of the best educated states in the country, democratic rights are not for sale to the highest bidder and that is good news for the whole of Africa - education, education, and more education! The embattled Chairman of the Independent National Electoral Commission, Professor Maurice Iwu, may have redeemed himself partially (after a court ruled that his organization was incompetent to run elections in a different state) with his innovation to announce the results at the polling stations to avoid the tendency for results to be inflated at the collation centers by electoral officers who may not be able to resist the inducement of large sums of money or just due to human error of the sort that reportedly gave Ngige additional 10,000 votes that he did not have which would place him third if deducted from his total.

All they needed to do was add the figure one in front of or a couple of zeroes behind the total votes for the rigging candidate to bring the total closer to the number of registered voters who may have been deliberately frustrated from voting to allow room for rigging. But such a plan, if that is what it was, failed this time partly due to the vigilance of the monitors and the people, the transparent service of National Youth Service Corps members as electoral officers, and the uneven efforts of the heavy police presence. The method of announcing results at source should be maintained while the voters lists should be cleaned and made more accurate as we wait for the big one next year. Meanwhile, all hands should be on deck to support Governor Peter Obi to consolidate his success during his well deserved second term.