Terrorism and religious militancy have taken the world’s attention in what concerns to Nigeria. However, there is a more important factor that might dictate the country’s rise to supremacy, or decay into failure – the Niger Delta as the pillar for Nigeria’s stability.
Nigeria is the most populous country in Africa and, at the same time, probably the most endowed with natural resources in the continent. It is Africa’s top oil producer and it is expected that by 2014 Nigeria will become the African country with the highest GDP. As matter of fact, it is rumoured that, by 2012, Nigeria’s economy will be more important to Africa than South Africa’s. As a matter of fact, economic indicators point that way. Nevertheless, a pertinent question arises: is Nigeria developing its economy or simply fattening it?
Nigeria is heavily dependent on oil, which accounts for around 80% of State revenues and 90% of export earnings. Nigeria has a degraded social situation – 61% of Nigerians live in poverty and almost one million people live with less than 1$ a day. Moreover, Nigeria has seriously deep regional disparities: the North-West and North-East recorded 77.7 and 76.3 per cent of its people under poverty conditions, respectively. On the other hand, the South-West recorded the lowest rate, with 59 per cent. Although the South has indeed been faring better than the North its poverty rates have been also increasing.
A country which is highly dependent on oil export to finance country’s affairs means that the domestic economy will also work along the oil-producing activities, i.e., oil dependency has created a mono-economy. It was not always like this. Prior to the discovery of oil, up to 1956, Nigeria had an economy which relied on commodities such as production and exports of palm oil, palm kernels, coal and tin, among others. Most of the economic activities focused on such commodities, thus giving Nigeria some kind of diverse economy. The 1956 discovery of commercial quantities of oil by Western oil companies began changing the country’s outlook.
As of Nigerian independence in 1961, an oil boom took place in international markets. Suddenly, a massive source of revenue began pouring into the country’s finances. Nigeria was then a young country, recently freed from colonial domination. Nigeria’s prospects were indeed positive. However, Nigeria had inefficient democratic institutions, non-existent regulatory establishments and lack of accountability by the elite towards the population. Furthermore, oil multinationals – most of them wealthier than most African countries – had the power and finance to invest in the oil activity, thus starting to gain major influence in Nigerian affairs. Political elites looked at this scenario and realized that there was nothing in the way between them and massive amounts of riches.
Moreover, the constant power shifts between military and civilian heads of state contributed for a sense of lawlessness. Elites felt free to act behind the curtain of unstable and messy politics. A major move which illustrates this was a specific decree issued by the Nigerian government in the 1970’s regarding oil businesses. The decree was called Nigerian Enterprises Promotion Decree and demanded that twenty-two oil related businesses had to be handed to Nigerian Nationals by 1974. Since there were not many Nigerians with access to the necessary capital to acquire such businesses, nor were there companies with the necessary technology and know-how to proceed with oil prospection and extraction, the oil sector became centred in joint-ventures between oil multinationals and a few of Nigerian individuals. This confluence of interests caused a steep increase in corruption levels, as foreign multinationals used corruption in order to have access to the market.
Since those oil boom years that Nigerian elites have been kept on the “easy-money” path. In addition, a corruption culture still endures within government ranks and other elites, regional and local interests and tensions play a major role in national politics and economy, and as a result the country sees little of those massive amounts of money being applied into areas where it is really needed, hence the resulting huge poverty rates. Coupled with the unfair allocation of oil-revenues, and a sense of alienation within ethnic minorities across its territory, Nigeria’s chaotic economic and social situation serves to demonstrate the challenges it has in order to become a reliable contender to be Africa’s major power.
From independence onwards, politics in Nigeria have been about grabbing total power at any cost. When the oil factor became the most important element in Nigeria, political power became intertwined with power over oil. Nigerian politicians’ grip on oil activities became essential for their own survival and enrichment. Therefore, to safeguard crude oil production and its exportation into international markets, it is necessary, by all means, to keep the sector working.
It is under these circumstances that this paper will assess the role of oil in Nigeria’s conflictual recent history and its vital implications for the country’s future.
The politics of domination
Political tensions between the South and the North have been a traditional feature in Nigerian politics, even before independence. The unofficial 1993 election results named Chief Moshood Abiola, a Muslim Yoruba magnate and one of the wealthiest persons in Nigeria, as winner. However, since this result would symbolize the first southerner ever to be elected for the Nigerian highest office, the military regime in power by that time secured a court order that prevented the electoral results to be released.
Chief Abiola, despite being a Muslim, was a Yoruba – the majority ethnic group in South-West Nigeria. Due to being a southerner and a Muslim at the same time, Abiola managed to gather support across ethnic, religious and regional groups which traditionally divided Nigeria.
Lagos, and other parts of Yoruba-dominated land, soon descended into chaos and disorder. General Obasanjo, Nigerian President during that time, resigned and an interim regime, led by another Yoruba, was appointed. The then Minister of Defence, General Abacha, later extinguished the interim government, and implemented another military regime. Renewed uprisings took place, mostly among the Yoruba, who demanded Abiola to be instated President. Finally, mostly all-inclusive southern groups began demanding Abacha to resign, culminating in the arrest of Abiola. The tensions worsened, and a series of strikes took place. The one which had a major consequence was the infinite strike declared by oil-workers in the South, namely in the oil-rich area of the Niger Delta.
The relevance of such event is that to have any sort of strike in oil facilities would mean that oil production, and oil exports would be disrupted. Since Nigeria is almost totally dependent on oil exports, any sort of disruption would signify a considerably loss of state revenue. Therefore, the only way to guarantee the continuing flow of oil would be either to concede to the people’s demands or repress the rebellious movement. Under a military regime and a Northern domination scenario, repression makes more sense as it seems to be swifter, more efficient and safeguarded northern interests.
Such riots in the South were indeed motivated by northern domination and lack of respect and accountability for the South. However, one other factor may have been decisive: the low levels of development and rising poverty in areas from where the major source of wealth of Nigeria was extracted. As a matter of fact, the Niger Delta provides 75 % of Nigeria’s petroleum production and exports, making this region the fiscal base of federal and state economies, therefore giving it a major role in Nigerian and, as a result of its massive oil reserves, in international affairs.
Expropriation and alienation
Nonetheless, what ignited the fire for such demonstrations and tensions across the Niger Delta were the politics of expropriation and domination pursued by the Federal Government. Such policies served to appropriate resources within the for long centralized Nigerian Government and along its patronage system. As minorities became more and more alienated, it was not a surprise for many that claims for self-determination would arise.
The Niger Delta Region comprises nine states (Bayelsa, Rivers, Delta, Edo, Akwa Ibom and Ondo) and is a culturally diverse area, with over twenty different ethnic groups: Ijaw, Itsekiri, Urhobo, Bini, Ukwuani, Ibibio, Efik, Andoni, Anang, Ogoni, Igbo, Yoruba and Ogba. The Niger Delta Region is also where the oil fields of Nigeria are located. However, besides the oil factor, it is a rich and fertile land. In fact, before oil exploration, the region was mainly focused in Palm oil production. Furthermore, it is one of the highest densely populated regions in the world.
Delta activists had demanded fairness in the allocation of oil revenues, the likes of which were extracted from the oil located in the area but poorly applied in its development. The Delta region has, in fact, been one of the poorest and least developed regions of Nigeria.
1969 marked the year when Niger Delta populations saw their natural mineral wealth, namely oil, expropriated from them. The Petroleum Act instituted that all petroleum in Nigerian territory should be owned and controlled by the then highly centralized military Nigerian government. Thus, hopes that minorities would own and control their own resources, thus assimilating a relevant share of its revenues, simply faded.
Moreover, the derivation principle, which establishes that a Federal State would get the amount of revenue proportional to its contribution to the Federal Government’s pockets, was kept being revised, favouring the less productive states, something which contributed to a further alienation of the different ethnic groups across Nigeria, namely across the Niger Delta. As an example, in the 1960´s, the oil-revenue share allocated to oil-producing ethnic minority states was 50%. In the mid-nineties these same share was reduced to 3%, only to be increased to 13% as a way to calm the protests taking place and to legitimize the new democratic government that came to be in 1999. However, these 13% do not seem appealing enough for the Delta’s populations.
In 1979 land was officially placed under the control of the Federal State with the Land Use Act. The act established that the State can acquire any land ‘in the public interest’. In fact, the definition of ‘public interest’ can be quite broad and the government might use such pretext to take actions which, ultimately might harm its own population. And this was what happened in the Niger Delta, where inter-communal fights for resources have been a regular feature in the region. Being the Niger Delta one of the highest densely populated regions of the world, the appropriation of land by the state will remove power over resources from the different peoples who have been living there for centuries. Furthermore, these land appropriations were used by the state as a means to easily transfer territory into the hand of oil multinationals who then could initiate its oil extraction operations.
The struggle for accountability and self-determination
In the early 1990’s, Ken Saro-Wiwa, a Ogoni Nigerian journalist, founded the Movement for the Survival of the Ogoni People (MOSOP), a group who fought for the ethnic Ogonis’ homeland which was being affected by the pollution originated from oil extraction. The Ogoni population number, according to United Nations data, around 850,000. They are a people who have a close relationship to water and land, their only source of subsistence for centuries. The Ogoni are also a people who follow Christianity, however deeply influenced by animist religions, meaning that, apart from constituting a major source of food, the river symbolizes a god. All in all, for the Ogoni people, water and land mean subsistence, culture and religion. Therefore, any attack to their land would be an attack to their livelihoods, to their culture, and, ultimately, to their survival.
Taking this in consideration, Ken Saro-Wiwa, under the MOSOP, managed to mobilize thousands of Ogoni people to protest against federal policies towards oil wealth distribution, for political autonomy, local control of economic resources and protection from environmental degradation. At the same time the group created an Ogoni Bill of Rights, a document which demanded environmental justice and opposed the method of allocation of oil funds. In fact, apart from targeting the government, the group also focused on the Oil giant Royal Dutch Shell. The reason being that, since there was no feedback from the government on the group’s demands, the next in line to be targeted would be the co-responsible for the disastrous situation in the Delta – Shell was the major operator in the region -, at the same time working as a way to publicize the situation across international borders (namely to the West).
In January 1993 the group issued an ultimatum to Shell, Chevron and the Nigerian National Petroleum Company, ordering the military and para-military forces defending oil facilities in Ogoniland to abandon their land. The failure to abide by the ultimatum would result in a widespread popular resistance by the Ogoni people. According to the ultimatum, Shell’s refusal to pay compensation and royalties for the pollution, which destructed the livelihoods of many people, was the main reason behind this action. As a response, the Nigerian Government launched a military operation to repress the protests, while also attacking villages. Subsequently, the military regime announced a ban on public gatherings and demonstrations, while at the same time decreeing claims for self-determination and disruptive activities as acts of treason punishable by death. The outcome of such repression was the killing of 2,000 Ogonis and the forced exile of other 8,000.
Looking further deep into the military repression, a campaign of divide and conquer was used. The military supplied the Ogoni neighbours, the Andoni (another oil-producing community), with arms and expertise, worsening traditional divisions and exacerbating tensions between the two communities over land scarcity.
Despite the high levels of violence, MOSOP’s campaign was indeed successful in forcing Shell to abandon its activities in the region. However, despite the fact that Shell abandoned the region due to unstable politics and the bad press it achieved during the crisis, the multinational failed to assess the high levels of pollution, as the oil pumps and pipelines remained active. As a result of the inaction towards assessing the high levels of pollution, anti-government protests continued, originating violent clashes with security forces and also violence between different tribes in the region in a struggle for resources. The growing violence proved to be fatal for MOSOP. After four government officials were killed, the group’s main activists were arrested and nine of them, including Ken Saro-Wiwa, were finally executed in 1995.
According to a Human Rights Report, the 1993 elections annulment and the execution of nine activists, including Saro-Wiwa, coupled with the long-lasting frustration among the local populations, resulted in a spiral of violence across the Niger Delta which caused the military to intervene in virtually every community in the region. The frustration with the fact that peaceful demonstrations were not having the desired effect made violence to spiral: oil installations were attacked and foreign oil workers were kidnapped, under a strategy to draw attention from the international system into their cause.
A buffet of grievances
The supression of MOSOP did not mean that protests had ended. The continuing marginalization and structural underdevelopment of the region, despite the large oil revenues, adding to repressive militarizations, led to the emergence of armed youth organizations, mostly centralized around the village or tribal identity, aiming at fighting against the intimidation, oppression, and repression of the Niger Delta populations.
It is a fact that oil extraction led to environmental pollution, as it shows the 60,000 oil spills that occurred in the region between 1976 and 1996, contaminating and destroying underground water and farmlands. Bearing in mind that two-thirds of the people in the region live in rural areas and that fishing and farming are their main economic activities, the continuing pollution of lands, rivers and aquifers, is destroying the local economy and peoples’ way of living.
Adding to this, in a country where the majority historically holds a big share of political of economic power, being the Niger Delta peoples not part of a single ethnic group, but divided among several, they have been excluded from government affairs, thus not having a word on oil-revenues allocation and environmental issues. One other result from ethnic diversity in the region is the already pointed out struggle for land and resources that occurs between different groups. In other words, the destruction and dispossession of land leads to a scarcity of resources for every single different ethnic group, originating violent clashes between them.
Moreover, Nigeria’s government has for long been diverting funds derived from oil to other regions, instead of allocating a fair share of it to the region which contributes for such huge amount of wealth creation. One issue closely related with the allocation of oil revenues and the destruction of local economies is mass migration into cities from the countryside. The destruction of local economies due to pollution, expropriation and oil extraction causes youths to move into metropolitan centres in search of jobs. Since there are not enough job opportunities for such individuals, they become an easy target for “militant groups” and other “deviant organizations”. Adding to this, Nigeria became a democratic country in 1999, thus given rise to several political parties significantly divided along ethnic lines, who use the disgruntled, unemployed and impoverished youths, as tools to win political and economic power.
All in all, one can conclude that, since the region that provides Nigeria with around 75% of its hard currency earnings and 90% of total state revenues, cannot benefit from it, it will make some logic to mobilize against the system, i.e., the government authorities and multinational companies operating in the area.
The tipping point occurred in January 12th, 1998, when 40,000 barrels of crude leaked around Exxon Mobil operational area, in Akwa-Ibom State. The spill spread across other four states to the West: Rivers, Bayelsa, Delta and Lagos. As a result, youths began barricading all routes to the Mobil operational area demanding immediate clean-up and better employment opportunities for local people, leading to three hundred people arrested. Ijaw youths also occupied several Shell facilities in Delta State.
Grievances … and Greed
On December 11th, 1998, the fourth largest ethnic group in Nigeria – numbering 14 million people -, and the largest one in the Niger Delta region, the Ijaw, created the Ijaw Youth Council (IYC), a civic group based on its Kaiama Declaration – demanded justice and protection of Ijaw peoples’ rights. Similarly to the Ogonis, the Ijaws are culturally and economically attached to their lands and rivers, and also witnessed their kind being discriminated, and their land and rivers polluted and destroyed. Therefore, it was not much of a surprise that by the end of the twentieth century some ethnic militancy originated among one of the largest ethnic groups in Nigeria.
Nevertheless, it is worth noting that, despite having similar origins, there are striking differences between MOSOP and the other new but smaller, mostly ethnically centred militant groups. The MOSOP Modus Operandi was to undertake peaceful protests, aiming solely at improving Ogoni people’s lives and get their fair share of developmental benefits from the massive oil revenues. On the other hand, as the IYC slogan shows – “Resource control and self-determination by every means necessary” – violent actions seemed to be a primary resource for the Ijaw group.
As a warning, the IYC issued an ultimatum, within the Kaiama Declaration, to oil companies, demanding them to abandon Nigeria by the end of the same year, and affirmed that “all land and natural resources within the Ijaw territory belong to Ijaw communities and are the basis of our survival”. Moreover, the group also defied the Federal Government authority by declaring that it “ceases to recognize all undemocratic decrees that rob our peoples/communities of the right to ownership and control of our lives and resources, which were enacted without our participation and consent. These include the Land Use Decree and the Petroleum Decree etc”.
All of these also meant that militant leaders began considering the opportunities to enrich themselves by manipulating the local populations’ feelings and grievances in their favour. Criminal activities, such as illegal oil-bunkering became relatively common and turned out to be a major source of profit. In fact, local politics, struggle for resource control and communal fights created a spiral of violence that resulted in a military response by the Federal Government. In the same way as it happened with the Ogoni, brutal force was the solution found by Abuja to end such protests. Violence and unrest continued for the next years. The IYC founder, and at that time leader of a splinter group (Niger Delta People’s Volunteer Force) , Alhaji Mujahid Asari-Dokubo, know as Asari, was charged with treason and arrested one year after President Obasanjo offered amnesty and payments in exchange for the group’s disarmament.
The Umbrella Group
Militancy leadership was then largely undermined. Nonetheless, a new joint military alliance, comprising several groups, came to be: the Movement for the Emancipation of the Niger Delta (MEND). This new movement became the most prominent and had as its demands the immediate release of Asari, the appropriation of fifty percent of oil-revenues pumped out from the Delta, and the withdrawal of government troops from the region. In fact it seems that its broader aim seems to be resource control.
MEND is far more organized than any of the previous groups. However, apart from being a unified group, it is more of an umbrella that shelters several different small organizations from various ethnicities, therefore making it hard to show a single unified voice. Despite that, the combined operations by the several groups were largely effective in disrupting oil activities. Furthermore, the fact that has made the group to survive until this day is the support given to it by the different peoples from the Niger Delta. Indeed, the violent crackdowns by the military has only severed the image local populations have toward the Federal Government. Therefore, to support MEND turns out to be to support a just and common cause.
MEND’s Modus Operandi is to kidnap international oil and construction workers, fighting security forces which protect oil companies, and sabotaging oil facilities, in an attempt to paralyse oil activity in Nigeria and capture attention from the upper-echelons in the country, along with the international media. In addition, the group has also been making illegal oil-bunkering trade, a highly profitable activity which funds a major part of its activities. Due to these circumstances, oil companies such as Shell had to halt or reduce production as violence and kidnappings increased. In fact, oil production was disrupted to such an extent that by 2008 Nigeria lost its place as the continent’s biggest oil producer to Angola.
To buy or to build peace?
It was already said that the Nigerian Federal Government can not afford to see its oil activity undermined. In order to do so, the Government increased its military action in the region, making militant groups even more committed and providing them with a broader base of support. The failure to tackle the MEND insurgency and the inability to make oil production and exports to go back to pre-MEND levels, coupled with international pressure, constitutes the background to the 2008 Presidential amnesty granted to militants. The Nigerian President at the time, Umaru Yar’Adua, granted amnesty to militants who were willing to surrender weapons within a sixty-day period. In addition, the government offered to pay a monthly 65,000 Naira (around $430) to each former militant and provide vocational training. As part of the plan, a Disarmament, Demobilisation and Reintegration (DDR) programme, so important in any peace negotiations, was introduced.
President Yar’Adua died in 2010, however the amnesty program continued under his Vice-President, then anointed President of the Federal Republic of Nigeria, Goodluck Jonathan, himself an individual belonging to the Ijaw ethnic group. The fact that the new President was a southerner and a native from the Niger Delta, served to appease part of the tensions. Indeed, the programme proved to be successful: kidnappings, killings and protest decreased substantially, leading to a rise in oil production and renewed foreign investment.
In spite of these positive indicators, it seems that the amnesty programme is not sustainable. As a matter of fact, militants were simply bought-off. The underlying causes of the unrest that preceded the amnesty, such as environmental degradation, and economic and social precarious situation in the region, were not assessed – ‘ignored’ is the right word. Since the causes for the unrest are still present, one can conclude that the stability achieved with the program can only be sustained by a continued injection of funds into the hands of former militants. Therefore, two questions arise: What can happen when money stops pouring in? What can happen when the vocational training ends and the former militants are not able to get jobs?
Along this line, the alternative for such individuals seems to be a return to illegal, criminal, but highly profitable, activities such as illegal oil-bunkering and kidnappings. Ex-militants will not go back to such activities for the noble purpose of improving their people’s livelihoods and demand for development. Former militants know that re-taking such illegal activities would result in a renewed amnesty program, which in turn would provide more money into their pockets. As a matter of fact, such activities have been more present in recent times, namely the increase on illegal oil-bunkering, attacks on off-shore oil platforms and piracy.
One other issue worth taking into account is the type of individuals and groups who benefited from the programme. Only militants who incurred in violent actions benefited from such amnesty. As a result, these same excluded groups continue acting violently. Ogonis, for instance, were largely excluded from it, meaning that it is likely that they will mobilise again if their situation is not assessed. Despite their peaceful campaigns, Ogoni people might be motivated to carry guns this time, since the circumstances that led to the amnesty program show that by doing so is the only way to make the Federal government to sit at the table and negotiate.
The allocation of the money provided by the government to ex-militants is also an important issue. Reports have shown that former militants are not getting their agreed share. And why is that? First of all, only 20% of the funds available through the programme are allocated to them. The remaining 80% are used in consultancy and other ‘technicalities’. Second, the government has been using former militia commanders as channels to transfer the amnesty-related money into the former militants’ pockets. Therefore, it is quite logical for such individuals to seek self-aggrandizement by keeping a share of that money with them. And where does that money go? It most likely goes to their own consumption. Nevertheless, one should not abstract from the fact that part of it might be also allocated to fund the still existent Niger Delta Militias and organized criminal groups – the ones who have been continuing oil-theft activities and taking part in piracy attacks across the Gulf of Guinea.
Impoverished and hopeless youths are not the main causes of rising criminal activities and instability. In fact, it can be said that these youths are being used as tool to achieve higher ends. It is argued that ‘powerful’ Nigerians, such as politicians and business people, are behind oil theft in the region. These ‘powerful’ Nigerians lure impoverished youths into undertaking illegal oil-bunkering by providing a larger pay. Such source of income for these same youths would hardly be achieved through legal activities such as a regular job – the likes of which are scarce.
According to Reuters, piracy in the Gulf of Guinea has been on the rise. It is estimated that at least five attacks have occurred this month (February, 2013) across the coast of Nigeria. The Gulf of Guinea is an important passage point for oil-tankers and others. The pirates’ Modus Operandi is divided in three parts: first, they pump out part of the oil; second, the oil is sold in the black market,; third, ransoms are demanded for the vessel’s crew and remaining cargo. In pursuing piracy, Nigerian youths, who make up the largest part of the pirates, are taking a path which provides them better life prospects and fulfilment than if staying in Nigeria working in a regular job. Militants are indeed undertaking a highly profitable activity which also serves to fund the expansion of illegal operations.
The failure in assessing the causes of this instability is proving to be fatal for the Nigerian Government. The weight of oil theft on government finances is seriously damaging: as the Nigerian Finance Minister clearly points out, it is estimated that 400,000 barrels per day had been deviated by April 2012 – $1.2bn per month. On the other hand, the SPDC, Royal Dutch Shell’s Nigerian subsidiary, refers to a number of 150,000 to 180,000 barrels per day. Even if the real numbers are the ones presented by Shell, it means that the Nigeria Government has been losing large amounts of otherwise state-owned revenues, to the black-market – an estimated one-fifth of the country’s oil revenue has been lost.
Apart from oil-theft related losses, Nigeria still has an immense fuel subsidy burden. According to recent data, in 2012, 20% of the Federal Government’s budget was going spent on financing the fuel subsidy. One must wonder why such an oil-rich country has to provide subsidies for oil consumption. The reason behind it is that Nigeria is a crude-oil exporter, and lacks the facilities to refine the oil, therefore it needs to import already refined oil, making oil prices unaffordable for the normal Nigerian citizen. Last year’s cuts on the subsidy have worsened the social situation across Nigeria, further increasing resentment towards the Federal government.
Nigeria massive dependency on oil to finance its economy may bring about negative effects in case global oil prices decrease sharply. Nigeria has, in fact, been benefiting from high oil prices for the last decade. One of the consequences of the global financial crisis has been the reduction of global demand for oil, namely from the European Union and the United States. The EU has been a major Nigerian trade partner and as the crisis looms in Europe, demand for Nigeria oil will most likely decrease. In what concerns to the US and other major buyers, the recent crisis has made such countries to devise plans aimed at using their own oil reserves as a way to push oil prices down. Unless the emerging countries cover the gap created by European and American low demand, Nigeria might face low oil prices, hence seriously damaging its ability to finance government expenses – such expenses including government subsidies to fuel, the amnesty program and , also important, feeding the Nigerian population (an aspect which will be approached in the next chapter).
All in all, Nigeria is facing a gloom economic and social picture for its near future. The failure in assessing the environment, social and economic problems in the Niger Delta, and the incapacity to provide job prospects to former Niger Delta militants, may prove to be fatal for the region’s stability. Militant groups, under the MEND umbrella – but not only -, might find that violent and criminal actions bring more benefits and better future prospects than being complacent towards a government which looks at such people with disdain and carelessness. In case violence and criminal activities re-take pre-2009 levels, oil production will once again be disrupted and, coupled with the downward tendency of oil demand levels, then Nigerian dependency on oil to finance its economy might prove to be fatal.
Chaos and disorder might indeed prevail and undermine the one-decade-old fragile democracy. Uprisings in the South, along with religious militancy in the North and in the Middle Belt, will necessarily – Nigerian history since independence shows it – increase the investment on the Armed Forces, which is already considerable high at the moment. Bearing in mind the economic situation and the glooming picture for its future, such action would place a heavier burden in the country.
The other natural resources – land and water
Prior to the oil boom, agriculture was the main productive sector in Nigeria. In fact, Nigeria served as a major source of raw materials, namely palm oil, to its British overlords. Nevertheless, despite the oil factor, agriculture remains relevant as it represents 40% of the country’s GDP and over 70% of employment opportunities country-wide. Notwithstanding, according to government officials, the country spends $10 billion annually on food imports, ranging a variety of products such as fish, sugar, wheat and rice. Thus, Nigeria’s exponential population growth will cause government’s expenditure on food imports to increase as well. Therefore, unless the government takes measures in order to improve the country’s agricultural outlook, we might be seeing a major share of government’s GDP allocated to food imports.
Keeping on with the agricultural issue, a World Bank Report predicts that key food prices, with the exception of rice, have increased 8% since December 2011, up to March 2012, mainly due to adverse weather conditions and the European crisis. It further states that global food prices might reach higher levels if weather and economic conditions do not improve in a global scale. Making the picture even bleaker, a joint report by the Food and Agriculture Organization (FAO) and the Organization for Economic Co-operation and Development (OECD) points out that agricultural commodities, such as crops, livestock products, fats and meals are likely to see its prices rise by 10 to 30% over the next decade.
As a result, Nigeria might see the cost of feeding its growing population completely unsustainable, unless something changes. Making things worse, if the government does not manage to provide a steady flow of agricultural products capable of maintaining its population’s needs satisfied, prices for such products will rise. In doing so, social uprising will be the order of the day, something which can only be tackled by implementing a subsidy on basic food, which in turn will input a heavier burden on government finances.
What to do?
If one can take a lesson from what was said here about agriculture is that, in order for Nigeria to avoid an economic collapse it needs to invest in its agricultural sector. It needs to become a major source for domestic consumption and, at a later point as a major source of exports revenue. It will not be easy to achieve, since investment in agriculture does not provide the almost instantaneous and massive returns as the oil sector does. Moreover, oil politics are so entrenched in national and state level politics, that it will be hard to change the investment pattern in the short to medium-term. A change of mentalities and a sense of national interest must be achieved if one wants to see Nigeria stabilize and, maybe, becoming a major power in African and World affairs. Nevertheless, action will have to be taken in this direction since oil is a limited resource, and a country dependent on a limited resource is more likely to perish than others with more diverse economies.
Agriculture must therefore be a highly prioritized target of investment. In order to garner the necessary amount of investment, the government needs to inject the sector with available funds, the likes of which originate from the oil sector. Therefore, a reform in the way the government allocates oil revenues must be pursued. This is where the Niger Delta situation comes in. An unstable situation in the region would only damage the Federal Government’s potential to make the hypothetical investment in the agricultural sector, thus a post-amnesty understanding must be achieved between the sides involved. This means that the amnesty’s removal, or even its extension, would never be a satisfiable solution since those solutions do not target the root-causes of the situation and, as already shown, bring uncertainty to the future and post-pone the inevitable. A solution which targets the causes of the instability must be attained.
Such solutions were already considered and written in an official paper by the Niger Delta Technical Committee, sponsored by the Federal Government in 2008, which was later put aside by the Yar’Adua government.. The paper included a strategy for building trust and confidence between stakeholders in the region; a reform in the derivation principle – revenue allocation would increase to 25%, gradually increasing to 50%; independent and efficient regulation of oil pollution; supply of 5000MW of electrical power to the region by 2010; improvements on the east-west road; improvements in the health infrastructure; among others.
Therefore, to develop the Niger Delta communities is essential, not only for stability creation, but for the hypothetical agricultural development. It has already been referred that the Niger Delta region has immensely fertile and rich land, along with an extended system of rivers and acquires dominated by a vast eco-system. In fact, the Niger Delta could become a main agricultural hub for Nigeria, as it had been before the oil enterprise began. In becoming a ‘main agricultural hub’ jobs and wealth would be created, and the various peoples in the region would have a sense that the country’s wealth is being in fact allocated to their own turf.
As I am writing this piece, I am not expecting Nigeria to become a major developed country soon, nor it is some kind of utopic dream. Poverty, extreme inequality and underdevelopment will for sure prevail. Notwithstanding, it is of my belief that militancy and criminal activities would be reduced – however never extinguished – to a similar level to the one created by the early years of the Amnesty. I am sure that even if the government takes the path suggested here, at least a decade will follow of continuing militancy and criminal activities. Furthermore, political and economic pressure from Federal States, ‘powerful’ Nigerians and foreign actors, who benefit from – or prefer – the status quo, have indeed an ultimate say in such developments. It will not be easy to satisfy every side in such a multi-polar and diverse country. Alike many successful and productive solutions, this is a long-term one which might contribute to develop Nigeria’s potential to become the most important economy in the African continent, and of course improve the livelihoods of millions of Nigerians who currently live in impoverished and underdeveloped conditions, therefore tackling the motivations and reasons which lead people to incur in militancy and criminal activities.