Buhari’s Sticky Situation

13 February 2017

by Olivia Johnson

Over the course of the past year, the oil rich Niger River Delta saw a string of attacks on critical oil production infrastructure. These initiatives are targeted to undermine the extraction and transportation of crude oil and have been escalating. Most of them have been attributed to a group that calls themselves the “Niger Delta Avengers” (NDA).  After a period of relative peace since the last oil-driven clashes ended in 2009, the Niger Delta is once again the locus of conflict between militants, the state and oil companies.   

Oil was discovered in the Niger River Delta in the late 1950s. Since then, the oil sector has been developed by various multinational oil companies. It has become very lucrative and now represents approximately 50% of Nigeria’s national income. At times it has provided up to 75% of state revenue. However, Nigeria’s centralised fiscal and political federalism, has kept the economic benefits of Nigeria’s oil far from the Niger Delta region.  Although a constitutionalised principle guarantees the regional redistributions based on financial contributions, the government is the single decision-maker and, as of today, only 13% of the country’s revenue from oil production is redistributed to the respective producing state. [1] The state Governor is then responsible for distributing the funds in whatever manner seen fit. This percentage has changed over time, and has often been subject to criticism. Before the discovery of oil, it was 100%. Since then, it has been as high as 50% at the start of oil production, and as low as 3% at the end of the 20th century. Furthermore, most of the Nigerian profits from oil production in the Niger Delta are poached by the government and other interests before they can make it back to the delta community, which is the region most severely impacted by the costs of oil production.

Moreover, the Nigerian government has not required large oil companies to pay compensation or make any meaningful efforts to neutralise their environmental impacts. Oil production has imposed significant costs on the local populations. Extraction and exploration have taken an environmental toll on the region and significantly damaged the main local sources of income: fishing and agriculture. It has also displaced populations and extensively polluted the air and water supplies. This has certainly fostered resentment towards the multinationals. It has also compounded existing animosity towards the Nigerian Government. The failure of the State to intervene or regulate these effects has made them appear complicit. In effect, this has legitimised grievances of perceived marginalisation.

These problems have been ongoing, and have led to popular movements in the past. In the 1990s regional protesters asked for greater political influence and for compensation from oil companies for the environmental damage they had caused. These protests started out peacefully, but escalated when Nigerian State forces responded with force and the militarisation of oil security forces. The clashes were then exploited by profit-seeking criminal organisations or secessionist movements and lost their grounding in the pursuit for environmental restoration.  In the early 2000s, another movement, calling for the end of political oppression and more resource control and known as the Movement for the Emancipation of the Niger Delta (MEND) campaign, emerged. The MEND quickly became an insurgency group and declared war on the oil multinationals in 2006. This ended when MEND militants were offered an amnesty deal by the government. Many of them were also co-opted by oil companies and recruited as security agents in charge of protecting pipelines.

Between 2009 and 2015, the region remained largely peaceful. However, during this time, the Nigerian state failed to develop the region’s infrastructure and economy. The failure of the Nigerian government to address developmental challenges has now, once again, elicited regional backlash against them and the oil producers. This has been manifest in the emergence of the NDA.    

In early 2016, the NDA claimed responsibility for attacking the Bonny Soku Pipeline. This followed a number of similar, unclaimed, attacks on oil infrastructure in the Niger River Delta region throughout the second half of 2015. Since then, this group has continued to target critical infrastructure points for oil production and transport. Through various press releases, they claim they intend to strictly target infrastructure. For now, they will refrain from using violence, intimidation and kidnapping. This is a departure from the strategies of their predecessors, in an attempt to avoid exaggerated backlash. The NDA claim they want their campaign to remain bloodless. In past clashes in the Niger Delta, civilians have often been subject to aggression and violence by the military forces. These tactics often led to escalation that caused violent crackdown on the civilian population of the area. The NDA do not want to be responsible for initiating escalation. However, despite their intentions, the region has already seen surges in violence initiated by the Nigerian military.

So far, the campaign has caught the attention of the state and stakeholders in the international community. The infrastructure attacks brought oil production in the Niger River Delta to a 30-year low. Although the activity of the Niger Delta Avengers has been a financial burden on the Nigerian State, their success is hard to measure. The Niger Delta Avengers have stated that they do not want to drive out oil multinationals. Rather, they are trying to force the hand of the government to allocate adequate resources to the region and ensure compensation for environmental destruction. Ultimately, they want to force the government into negotiations to secure a path to a more equitable future. Their activities are commanding more attention as they continue to escalate. Yet this might not suffice, as all attempts at peace talks have failed thus far. Their activities have also seemed to stir up similar sentiments in neighboring communities. There has been an increase in peaceful protests against oil multinationals operating in the Niger Delta. Most recently, this has manifested itself in the Ijaw community protests over the supplying of electricity. A promise the company allegedly made 19 years ago.

The unrest also coincides with efforts by the Nigerian Government to enhance oil production capacity and expand investment in the Niger River Delta. Most of the funds will be allocated to building oil refineries, which would reduce the costs and increase the security of oil production. However, the operational costs imposed by the unrest and the and the government’s poor ability to handle the situation are deterring investments. Some international actors that have been operating in the region already have started to reconsider. In May, Chevron closed one of its platforms because of an attack by the Avengers. At the start of 2017 Shell also indicated they were reconsidering their operations. Until the situation changes, it will be difficult to persuade the current actors to stay, and even more difficult to convince new investors to get involved.

In order to alleviate some of the economic pressure, the Nigerian Government has entered into discussions with Niger to import crude. This will allow Nigerian refineries to continue to function, despite the diminished supply from domestic sources. The government has also reinstated its militant amnesty program. Both of these actions are short term solutions and will hardly do anything to address the root causes of the issues. Inevitably, the state will need to find a more holistic solution to the grievances raised in order to ensure stability. This will ultimately increase their attractiveness for investment and ensure more stability in their production.

However, this does not come without complications. If the government adheres too willingly to the demands of the NDA, and other frustrated groups in the Niger Delta, it could cause frustration in other parts of the country.  Changes to the allocation derivation mean funding cuts for other states. In a federal system such as Nigeria, that is not bound together by a single identity, or many interests other than oil profits, this could cause more political instability. Moreover, President Buhari has had health issues recently. At the end of January he left Nigeria for treatment and has not returned. Concerns about his ability to effectively lead have been called into question. If he is deemed unfit to continue, it is unclear who would take his place. At a time when conviction and leadership is needed in Nigeria, political direction is seriously lacking.

Ultimately, the current situation is very fragile. The Nigerian State must balance the interests of many, diverse, parties. This is taking place against the backdrop of a failing economy subject to the unpredictability of the international oil market. Moreover, Buhari’s aptitude to lead is controversial, so is the possibility of him stepping down. Despite this uncertainty, it is clear that unless the situation in the Niger Delta is addressed comprehensively, it risks escalating or repeating itself. However, this comes at a cost to other parties already affected by disruptions in income from the oil sector. On the other hand, not doing so endangers the development of the oil sector itself at a time the economy cannot afford more disruptions to production and income. President Buhari, or whoever steps into his place, is in a precarious situation and will need to tread carefully.

 

 

[1] Obi, Cyril and Siri Aas Rustard. “Introduction”. Oil and Insurgency in the Niger Delta: Managing the Complex Politics of Petro-Violence. Cyril Obi and Siri Aas Custard. 1st ed. New York: Palsgrave Macmillan, 2011. p. 7. Print.    

 

 

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