Nigeria: 50 OIL-Years of Waste

Since the oil companies moved to the once peaceful and scenery creeks of the Niger-Delta, and Nigeria exported its first crude oil barrel 50 years ago, the region has become progressively less habitable and people poorer. And in the last two decades, the nation has consistently made news headlines…for the wrong reasons: recurrent oil spillages, round-the-clock-gas flaring, and most recently - militia violence.

Uprooted to make room for a liquefied natural gas plant, people in the village of Finima on Bonny Island complain that the facility has damaged fishing grounds, with few jobs offered in return. Credit: Ed Kashi / National Geographic.

Oloibiri hosted the first oil well

Nigeria has little to show for the humongous revenue accrued over the decades as an oil exporter: the oil largess simply wasted and stolen. The standard of living in the country has even regressed over time, particularly in the region that gave birth to the oil wealth. The Oloibiri community reflects all that is bad and ugly in the oil-rich Niger Delta, a region that has remained stuck in a perpetual state of backwardness and anguish.

Oloibiri hosted the first oil well in Nigeria, today it is more desolate that it was when Shell oil company drilled its first well in 1956. TELL magazine captures the bleakness in Oloibiri recently, excerpt:

“The only one road has just recently been “tarred” half way with concrete. It may never be completed as the contractor has quit the site. There are more collapsed or dilapidated buildings than those being built. Only about three green roofs suggest it is 21st Century here. There is only one functional borehole owned by a resident where the whole town fetches water for drinking. Yet, three times each day, water strolls into their living rooms and leaves at its convenience. And in rainy seasons, water naturally comes out from under their floors. For electricity, once in a while, there is a splutter from the Bayelsa State-owned gas turbine at nearby Kolo Creek where Big Oil is flaring excess gas with infernal venom.”

Crude Oil discordance: As oil revenue rose standard of living dropped

Nationally, the quality of education, public health care, and security have all taken a downward trend in the last three decades. The limited national infrastructure built in the seventies have all become deteriorated, if not totally crumbled; roads have become gullies, and power supply epileptic.

Perhaps the most depressing of the woes in the country is the inability of Nigeria - the seventh largest oil producer in the world - to work its three refineries to full capacity and supply enough fuel for domestic consumption. Today Nigerian motorists have to purchase imported fuel for their vehicles.

The emergence of ‘Guerrilla Entrepreneurs’ of the Niger-Delta creeks

As expected, the failure of government development policies in the Niger Delta (comprising the several oil producing communities spread across nine states) has led to violent uprising, with several resorting to armed banditry under the pretense of ‘fighting for liberation’.

One of the key players in the Niger Delta militancy is Henry Okah whom some have described as a “Guerrilla Entrepreneur”. He was intercepted and arrested in Angola where he has gone to purchase arms, he’s rumored to be the founder of MEND and the master strategist behind the militant operations that have cut Nigeria’s oil production by 25 percent. Late last week Okah was charged to court with several dozen counts of treason.

Government strategies have only moderated the crisis

Though the government has made several attempts to address the Niger-Delta crisis, none has proved to be effective. The oil state has clamored for more share of the oil revenue so they can devote more resources to the development of their states, even though each state received 13 percent from the federal government, making them the richest among the 36 states that constitute Nigerian federation.

The Petroleum Trust Fund (PRF) and Oil Mineral Producing Areas Commission (OMPADEC) were created by the military regimes of Abacha and Babangida, respectively, with the sole purpose of using oil revenue to fast-track local and national development. The most recent is the Niger Delta Development Commission (NDDC) created by the Obasanjo administration in 2000. While the PTF was able to achieve some tangible success, its successor, the OMPADEC, was a total failure.

A politicized and impotent Niger-Delta development plan

When OMPADEC was replaced by NDDC eight years ago,its mission was “to facilitate the rapid, even and sustainable development of the Niger Delta” To realize this, NDDC receives funds from three main sources, namely: the equivalent of 15 percent of the total monthly allocations due to member States of the Commission from the Federation Account; three (3) percent of the total annual budget of any oil and gas producing company in the Niger-Delta Area; and 50 percent of monies due to member States of NDDC from the Ecological Fund.

According to the NDDC Website (several of the pages were unavailable when accessed on April 3), 2,389 projects, spread across the nine oil-producing states, have been completed to date. And its ‘free’ health program has covered over 3,500 communities:

But information from other sources indicate that the responses of the NDDC have only moderated the crisis in the Niger Delta and have yet to translate to significant impact.

At a recent Niger-Delta stakeholders’ meeting, some wanted to know “whether NDDC awarded contracts for its projects as patronage to leading political gladiators in the region, or in response to the needs of the impoverished people of the Niger Delta.”

Even the Niger Delta Youth Movement, sued the federal government for starving the commission of funds

As The Tide, one of the widely-read newspaper in one of the oil-communities, disclosed in a recent publication:

[The NDDC] has served as a grand deception that the federal government was doing something for the Niger Delta, when it is not. From inception, the commission has never received the expected funding and no much can be expected. Scrapping the commission would tell the world the bare truth.

That is why the other demand for accounting for previous receipts becomes of utmost importance. Even when the commission may not have been given all its due, what it had done with the little needs to be seen.

Very often, some prominent voices from the north ask what the region had done with their huge receipts. In fact, it is said that the leaders of the region have not only embezzled those monies but that a bulk of it are paid to power brokers in the north as bribe.

While government initiatives applied to the Niger-Delta have been significantly rendered impotent by corruption and politics, even those directed at the oil companies to reduce environmental degradation have not worked either. The deadline to oil companies to stop gas flaring expired in January of 2008, but none of the oil companies complied, prompting the shifting of the deadline to December 2009. It is strange that none of the erring ‘gas-flarers’ have been sanctioned.

Top-down government policies plus bottom-top developmental strategies may work

The use of federal parastatals and top-down strategies in implementing local development projects is fraught with inefficiency and has been criticized by development experts. Nearly all the states and oil companies have complained that NDDC has “embarked on projects they were already working on”.

After 50 years of corruption-derailed top-down interventions and several flouted directives to oil companies, what will reverse the fate of the Niger Delta from bleak to promising is to empowered the people to be part of the project selection and implementation. One measure that can make institutional entities like NDDC more relevant in a local setting is for them to closely work with grassroots organizations and community-development associations.

Also, the provision of subsidized free social services - health and education in particular, will give the people some solace and claim frayed nerves. The combination of these measures, and the use of bottom-up community based strategies, in addition to federal government-formulated policies may start reversing the 50-year rot in the Niger Delta and greater Nigerian society.