Nigerian+Oil+Curse

=Nigerian Oil Curse=

Dagogo Joel's arm was burned by the Oshie gas flare when he was a child. The flare--lit since early 70s and adjacent to Joel's home village of Akaraolu -- occasionally spews out flaming liquids on the countryside, and burned Joel's arm while he was fishing with his father.

Although Nigeria is the largest oil producer in terms of barrels per day in production, a little over 2.0 million barrels per day, it doesn’t even rank in the top 5 in terms of GDP per capita in Africa. One would assume that having a large stock of a valuable resource like oil would provide ubiquitous wealth, it turns out this is not the case. For, a valuable resource can be an exploitive curse if managed by the wrong hands. This is the nature of the "resource curse," one which Nigeria understands well.



Nigeria should be a massively rich country. It's the most populous country in Africa, and is the world's sixth leading oil producer. Over a quarter trillion dollars in oil has been lifted from Nigerian soils and waters in the last 40 years. But after years of military rule and rampant corruption, fueled by these oil monies, the country is mired in billions of dollars in debt and is wracked with poverty. ([])

The world needs Africa’s oil, but the stuff has a habit of ruining the places that produce it. From the civil war battlefields of southern Sudan to the slums of Angola and the swamps of the Niger Delta, the discovery of crude has done little to improve local lives. Often, it has destroyed them. Yet a fisherman who makes his livelihood in Africa’s newest oil province – a deep-water field off Ghana’s Atlantic coast – can hardly wait for it to start flowing. “With God’s help, I’ll be a rich man,” says Joseph Cudjoe, one of a chain of young men hauling a net into a brightly painted longboat beached at the village of Axim. “If the oil is coming, we’ll get a lot of money, just like the Saudis.” For a lesson in how not to do it, Ghana need only peer a few hundred miles along the coast to Nigeria, the continent’s biggest oil exporter. The insurgency in the Niger Delta, where attacks on oil installations have helped spur oil prices to record highs, shows how the world economy can suffer when a big producer goes bad. Many of Nigeria’s problems can be traced to the advent of oil production half a century ago. The prize of capturing the flood of dollars accruing to the state turned politics into a no-holds-barred contest that fostered coups and secessionist civil war in the 1960s. Oil encouraged a culture of corruption where political connections rather than business acumen were the key to overnight riches. Fraud and violence at elections last year suggest the competition has become only slightly less raw. (Financial Times [])

Oil fouls everything in southern Nigeria. It spills from the pipelines, poisoning soil and water. It stains the hands of politicians and generals, who siphon off its profits. It taints the ambitions of the young, who will try anything to scoop up a share of the liquid riches—fire a gun, sabotage a pipeline, kidnap a foreigner. Isaac Asume Osuoka, director of Social Action, Nigeria, believes that callousness toward the people of the delta stems from their economic irrelevance. "With all the oil money coming in, the state doesn't need taxes from people. Rather than being a resource for the state, the people are impediments. There is no incentive anymore for the government to build schools or hospitals. "I can say this," Osuoka said firmly. "Nigeria was a much better place without oil." On paper, a mechanism does exist for distributing oil revenues somewhat fairly. The federal government retains roughly half and gives out the rest each month, on a sliding scale, to the 36 state governments. The core oil producers—Rivers, Delta, Bayelsa, and Akwa Ibom—receive the most. During the month I was in the delta, those four states divided up more than 650 million dollars. But there is no discernible trickle down. Newspaper articles and court cases document spectacular misuses of the money by military men and public office holders—such as the now imprisoned former Bayelsa governor Diepreye Alamieyeseigha—who stash hundreds of millions of dollars in foreign bank accounts to buy mansions in the U.S. and send their children to private schools in London. For the delta's 30 million people—most of whom struggle on less than a dollar a day—seeing this kind of money coming into their states with essentially none of it reaching them has created conditions for insurrection. (National Geographic [] )


 * Solution: **

There are many approaches to help alleviate the situation but none is perfect. Africa has been victim to strong corruption and weak democracies for the past century. It will take corporate service and governmental responsibility to change anything. Of course the idea of who will take initiative brings about the chicken vs. egg debate.

-Multi-National Corporations: MNCs that operate in Nigeria need to show greater appreciation for communities and limit externalities to ecosystems. MNCs need to partner with governments and work to ensure that money makes it down to local people. If a corporation decides not to sign a lease because the government is corrupt, that might leverage the government into evolving politically.

-Governments: States get money from federal governments but state leaders corruptly embezzle the people's money overseas. Governments need to actually stand for their people democratically. A strong people will make a strong country. Unfortunately the people are so poor that they have little power. Outside governments can boycott the purchase of oil from corrupt nations.

-Non-Governmental Organizations: NGOs can vouch for the people and fight for Nigerians from foreign shores. Donations and volunteers from first-world countries can be used locally to fight the corruption and support the local people.

=__ Further Reading, Books: __= by John Gahzvinian
 * //Untapped: The Scramble for Africa's Oil //**

by Nicholas Shaxson
 * //Poisoned Wells: The Dirty Politics of African Oil //**

By Adam Roberts
 * //The Wonga Coup: Guns, Thugs, and a Ruthless Determination to Create Mayhem in an Oil-Rich Corner of Africa //**