Nigeria: Rich in oil, mired in poverty

from Mail and Guardian

Jacques Lhuillery | Lagos, Nigeria

Nigeria, which will on Thursday host its first-ever meeting of the Organisation of the Petroleum Exporting Countries (Opec), is a paradox: the country ranks sixth among the world's oil producers and yet remains mired in poverty.

Africa's most populous nation, with its 130-million inhabitants, produces 2,6-million barrels of oil per day, pumped from the expanse of swamps and creeks in the south of the country known as the Niger Delta, an area the size of the whole of Scotland where Shell discovered Nigeria's oil in 1956.

And yet, according to the United Nations Development Programme (UNDP), almost three-quarters of Nigerians live on less than $1 a day.

A finance official from one of the southern oil-producing states suggests that oil breeds corruption and greed on a massive scale and, in fact, hinders the development of Africa's oil producers.

For if the masses have not benefited from their country's oil, which accounts for 95% of its foreign-exchange earnings, a handful of the country's leaders certainly have.

An official report recently estimated that the country's leaders have stolen about $384-billion from the state's coffers since Nigeria gained independence from Britain in 1960. That is roughly the same sum as was spent on the Marshall Plan for Europe after World War II.

Several audits, the most recent an independent one dating from early 2006, have revealed "serious shortcomings" in the management of Nigeria's petro dollars. Colossal fortunes have been built on oil while the population of the Niger Delta has seen only the pollution of its land and its waters.

This has led to resentment and armed attacks on oil installations and oil workers. In the past six years about 600 people, among them two Americans and a British national, have been killed in the delta and 187 oil workers have been taken hostage by armed groups claiming to be fighting for a fairer share of oil revenues for the local population.

The militant groups in the delta have two enemies: the federal state, which, according to the Constitution, owns the country's petroleum riches; and the oil majors such as Shell, Chevron and Exxon-Mobil, whom they accuse of "conniving" with the government to "loot" the riches in question.

And while Edmund Daukoru, as Nigerian Oil Minister, might be the current Opec president, the man who really has the last word on oil in Nigeria is none other than President Olusegun Obasanjo.

Obasanjo, who will step down after two terms at the end of April 2007, is fond of saying he will not leave the country's oil El Dorado in the hands of "bandits".

All this means that this part of Nigeria, one of the biggest suppliers of petroleum to the United States, is a very sensitive zone for the world economy, with one oil executive likening Bonny oil field in the extreme south of the delta to the Strait of Hormuz.