Court blow for southern Nigerian states

Ken Saro-Wiwa - executed after demanding oil money

By David Bamford in Lagos

The Supreme Court has ruled that the federal government could go ahead with legal moves to stop 12 of the country's 36 states from seeking to keep the lion's share of revenues derived from their oil reserves.

This issue goes to the very heart of a constitutional battle in Nigeria about whether power should remain in the hands of the central government.

The states argue they produce 90% of the country's wealth, yet their populations live in poverty and underdevelopment.

Under military rule, the oil producing states were obliged to hand over all of their revenue to the central government - a system which was frequently abused by corrupt military rulers.

Residents of oil producing states puncture pipelines leading to deadly explosions

With the return of civilian government two years ago, the oil states have been allowed to challenge the centralised system.

But the federal government has countered, saying that if the state governments have their way, the rest of Nigeria would suffer and national unity would be undermined.

Environmental damage

Currently, the southern oil states are allowed to keep 13% of the revenue as compensation for environmental damage.

Hundreds of oil workers have been taken hostage in disputes with local inhabitants

But now the coastal populations say this formula is under threat from the central government's insistence that oil produced offshore should in future come under federal jurisdiction.

Since the return of civilian rule, populations in both the north and the south of the country have become more militant in demanding their local rights.

The federal government is anxious to prevent Nigeria moving towards the kind of open split that has in the past led to civil war.