The Niger Delta Crisis: Beyond the Price of Crude Oil

High prices at gasoline stations have brought into focus the chronic uncertainty that characterizes oil producing areas in Nigeria, often blamed for sharp price hikes in global markets. In most reports, the activities of militant groups in the Niger Delta have been highlighted. These reports have provoked policy responses and proposals such as British Prime Minister Gordon Brown’s indicating his willingness to support military efforts to contain insurgent activity in the region. That pronouncement, at the G-8 meeting in Japan, took on a life of its own, triggering more attacks and the abandonment of a unilateral ceasefire. The British pronouncements and the response are indicative of the complexity of the problems in the Niger Delta, which are too often reduced to matters of criminality. To come to terms with meaningful resolution of the conflict in the region is to look beyond the price of crude oil.
To understand the challenges faced by the government of Nigeria’s President, Umaru Musa Yar’adua, in curbing the violence in the Niger Delta and the attendant disruption in crude oil supplies, it is necessary to identify the key issues fuelling the rage in Nigeria’s southern most region and the historical roots of conflict. Conflict resolution and a sustainable peace, that generates win-win benefits for all the stakeholders–consumers of fossil fuels around the world, residents of the region, the Nigerian taxpayer and citizen, and managers of conflict in the sub- region–will depend on a better understanding of the factors fuelling the Delta’s apparent irredentism.
There is a fair amount of consensus that the crisis in the Niger Delta is a cumulative consequence of six major factors. These are: the challenge of minority rights in a multi-ethnic country; a history of poor or bad governance; the allure of crude oil stealing; the challenge of principles-based nation-building with regard to fiscal federalism; and the ‘criminalization’ of politics. Then there is the enclave nature of the oil economy, which limits the trickle-down of benefits to the community.
For many who link the Niger Delta crisis to the ‘resource curse’ and the quest to control mineral resource regions, it is instructive that the crisis predates the discovery of oil in commercial quantities in the Delta. Long before Shell Oil made commercial finds in Oloibiri in 1956, many of the minority peoples who dominate the Niger Delta had petitioned the British Colonial administration with concerns that they were being marginalized by the ethnic majority groups. The petitions resulted in a commission of inquiry. One outcome of the work of the Willinks Commission was the setting up of a Niger Delta Basin Authority to drive economic development.
This initiative quickly fell into neglect and deprivation became the symbol of the region. The extraction of wealth from the earth beneath the Delta benefited the Nigerian government and the oil producing companies. At the same time, it despoiled the region’s environment and took away traditional means of livelihood from the region’s young people who were offered no employment alternatives. Their plight become a cause celebre in the quest for civil liberties and fundamental human rights.
As if that was not enough of a burden, bad governance at the state and federal levels meant the region lacked the most basic infrastructure, while communities needed only look across the fence to the ultramodern facilities enjoyed by mainly foreign employees of the oil companies. Widespread corruption in the institutions established in response to agitation for justice and fairness in the region rendered these efforts utterly ineffective. A central question has been determining who should be held accountable. The people of the region have usually held the operating companies to account, while the oil firms insist that they are victims and that the governments to whom they have paid taxes should be responsible for development. While the debate went on, the people of the oil-rich Delta remained among the poorest people in the world.
The anger of the region is further inflamed by the fact that the federal structure agreed upon at independence was an entrenchment of the principle of subsidiarity, with an understanding that resources belong to the federating states who then contribute 50 percent of revenues from mineral resources for maintenance of the central government. Under military rule this basic understanding of the essence of the Nigerian Federation was systematically turned on its head without consultation or debate. At one point, less than one percent of oil revenues, in real terms, accrued to the sub-national oil-producing units by the derivation principle. With greater freedoms and the advent of civilian, democratic rule, these inflamed passions and resentments were predictable and more forcefully expressed.
Large scale stealing of crude oil, in which powerful politicians and senior military officials were known to be implicated, further aggravated the sense of injury felt by the people in the Niger Delta. The dominant feeling was that while they dealt with the pains of poverty, actors from outside the region engaged in rapacious conspicuous consumption from resources of the Niger Delta.
Added to those sources of discontent is the enclave nature of the oil business, which means very limited possibility for jobs for the communities of the Delta and few service ventures that can profit from such capital-intensive operations.
Equally debilitating to the region has been the introduction of violence as an instrument of securing legitimate political power. Thugs and gangs of political enforcers have proliferated in the region. This phenomenon, which has been dubbed the “criminalization of the political process,” is currently on ‘exhibition’ at the Rivers State Truth and Reconciliation Commission. It has led to proliferation of arms in the region and the emergence of warlords, supported, at least initially, by the actions of politicians and government officials. Many of these actors, with no strong political convictions, add to the criminal elements compounding the activities of the political militants.
Failure to manage these complex factors through the years has dramatically reduced confidence and trust in the region that the central government intends to improve conditions in the Delta. The choice of a Delta native as Vice-President was designed to play to the region and calm nerves, but the legitimacy of the federal government was severely undermined by the disputed 2007 elections. That fact, and the scarce political capital available to Vice-President Goodluck Jonathan, who, in many people’s eyes has been systematically reduced to Vice-President for Delta Affairs, have resulted in widespread rejection of the first major initiative of the Yar’adua government to engage on the Niger Delta—a proposed summit.
The unraveling of the summit idea began with quibbles about the suitability of the proposed chairman UN Under Secretary Ibrahim Gambari, in terms of his location in Nigeria’s geopolitical arrangements. But his withdrawal has proved insufficient to save the conference. It now appears that the conference idea has been jettisoned.
In helping to find the conflict management tools that will reduce uncertainty in the Delta, care needs to be taken to see that justice is done for people of the region. Further, there must be greater effort to ensure that Western interventions are not simply driven by the quest for oil.
There are indications that a number of developments, if properly channeled, could reduce tensions considerably, especially if a vibrant and honest partnership is forged between government, civil society, and the private sector. The key is to build trust between the communities, the governments that have seldom kept their promises in the region, and the oil companies whose corporate social responsibility programs seem too often contrived and insincere.
The United Niger Delta Energy Development and Security Strategy (UNDEDSS), an initiative of which I am privileged to be president, has emphasized action that gets to the heart of alleviating the economic depression of the region as the starting point for the trust-building process.
On August 7, a Job Creation and Empowerment Summit initiated by the Rivers State Government will open in Port Harcourt with me as Chairman. The Governor of Rivers State has indicated the political will to implement suggestions, and plans to personally participate in the sessions. Key to the UNDEDSS position I will take to the forum is a monitor company-style value chain analysis of factor endowments of communities across the state, identifying capacity building interventions, microcredit programs and entrepreneurship and agricultural extension services to support rapid, commercially viable and sustainable targets. The goals must be tangible, measurable, and driven by passionate champions.
A major East-West highway through the region will not only open economic opportunity to the community but will also improve access to prospecting areas for oil companies who have shown an interest in co-funding such a project in the past but have seen the federal government renege on its part of the proposal. It is part of what will provide the thawing of the frost to allow meaningful dialogue to begin. This along with adequate funding and educated civil society monitoring of Niger Delta Development Commission, and an agreement in Abuja to return to the founding principles of the Nigerian federation will ensure that energy security and peace and development in the region is achieved. Local economic advancement and energy security are twins that should travel together for sustainable success.______________________________________________________________Dr. Pat Utomi is a fellow of the Institute of Management Consultants of Nigeria and a Senior Faculty of the Lagos Business School-Pan African University, where he is the director of the Centre for Applied Economics. He has served in senior positions in government, as an adviser to the president of Nigeria, in the private sector as chief operating officer for Volkswagen of Nigeria, and in academia.