Promoting effective and efficient use of Nigerian government oil and gas revenue for investments in human development.

CBI has been engaged in multi-stakeholder consensus building work in Nigeria for the past seven years. We’ve worked at the national level on development planning with the United Nations, government and civil society, and in the Niger Delta with international oil companies and communities affected by their operations. We have also advised government at the most senior levels on strategies for conflict resolution and peacebuilding in the Niger Delta. In all of this work, our role has been to offer strategies and build capacity for effective dialogue, negotiation and collaboration among very diverse stakeholders. 

In the course of our work, we’ve experienced the absolute centrality of the oil and gas sector in driving Nigeria’s political economy. Over the past 40 years, Nigeria’s political leaders have evolved a complex set of oil and gas sector institutions and bargains to maintain stability among states, ethnic groups and regions, and across the North-South divide. Oil revenue accounts for approximately 80% of federal government revenues, 70% of exports, and the majority of state and local government revenues (particularly in the oil-producing Niger Delta states).

Though oil revenue has enabled the federal system to survive, and has fueled economic growth, it has contributed little to the country’s overall development. We’ve seen this directly in the Delta, and in our work with the UN and government on national development planning. Human development indicators remain very low; social and regional inequality remain very high; rural and urban development outside the oil sector has been limited (though accelerating in the last decade); and, a substantial proportion of extractive sector revenues has been appropriated by political and regulatory actors for private use. Consequently, Federal, state and local governments have had fewer resources to invest in education, health, roads, infrastructure, utilities, and other public goods.

There is a long-running national conversation in Nigeria about how to make oil and gas sector policies and institutions more transparent, effective, and accountable. Currently, the debate is focused on the Petroleum Industry Bill. If passed, the Bill would increase the transparency and efficiency of revenue collection, but would not directly answer the broader question of how oil and gas revenues should be invested to advance national development priorities and address the country’s major social and economic divisions.

Recently, the Ford Foundation’s West Africa office approached us for a conversation about ways to promote a broader and deeper conversation on using oil revenue for development. We noted important factors that now make such a conversation more feasible. Nigeria has credible reformers in government, a lively free press, increasingly vocal civil society organizations, and some progressive business leaders. In addition, CBI has a credible and experienced Nigerian facilitation partner, the New Nigeria Foundation (NNF), with whom we’ve worked in the Niger Delta. Together, Ford Foundation, CBI and NNF decided that the time might be right to bring key stakeholders together to explore how to translate oil and gas revenue into greater developmental impact for Nigerians.

Our proposition is that a national, multi-stakeholder Forum on Oil and Gas Revenue for Development could be useful in changing the national conversation and influencing the course of policy reform. In this Forum, diverse, influential leaders would have the opportunity to collaboratively explore “revenue for development” issues, develop options, make joint and complementary commitments to action, and conduct outreach and engagement with government, business, civil society, and international stakeholders in Nigeria.

To test and refine that proposition, CBI and NNF are currently conducting a wide-ranging stakeholder assessment, interviewing over 100 leaders reflecting Nigeria’s regional, ethnic, religious, and gender diversity. Initial responses have been positive, and have also reinforced our sense that the Forum’s mandate, participants and engagement strategies will have to be very carefully designed to ensure that the Forum is constructive, credible, and influential. If the conclusion from the stakeholder assessment is that we should proceed to convene the Forum, we will begin with joint training for the participants on multi-stakeholder collaboration, and then convene a first meeting for the first quarter of 2014.