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Date: Tue, 9 Jul 2002 08:01:29 -0500
From: Africa Action <[log in to unmask]>
To: [log in to unmask]
Subject: Nigeria: Oil, Poverty, and Rights, 2
Nigeria: Oil, Poverty, and Rights, 2
Date distributed (ymd): 020709
Document reposted by Africa Action
Africa Policy Electronic Distribution List: an information service
provided by AFRICA ACTION (incorporating the Africa Policy
Information Center, The Africa Fund, and the American Committee on
Africa). Find more information for action for Africa at
http://www.africaaction.org
+++++++++++++++++++++Document Profile+++++++++++++++++++++
Region: West Africa
Issue Areas: +political/rights+ +economy/development+
+security/peace+
SUMMARY CONTENTS:
This posting contains several articles from the UN's Integrated
Regional Information Network (IRIN), with background on oil
production in Nigeria and recent disputes over the
distribution of revenues between states and the federal government.
Another posting sent out today reports on the May 2002 ruling of the
official African Commission on Human and People's Rights in favor
of compensation from the Nigerian government to the Ogoni people in
the Niger Delta for abuses against economic and social rights.
+++++++++++++++++end profile++++++++++++++++++++++++++++++
NIGERIA: IRIN Focus on shift towards offshore oil production
UN Office for the Coordination of Humanitarian Affairs (OCHA)
Integrated Regional Information Network (IRIN)
IRIN-WA Tel: +225 22-40-4440 Fax: +225 22-41-9339 Email:
[log in to unmask] This Item is Delivered to the "Africa-English"
Service of the UN's IRIN humanitarian information unit, but may not
necessarily reflect the views of the United Nations. For further
information, contact e-mail: [log in to unmask] or Web:
http://www.irinnews.org . If you re-print, copy, archive or re-post
this item, please retain this credit and disclaimer.
LAGOS, 4 Jul 2002 (IRIN) - Most of the oil that has earned Nigeria
close to US $340 billion since production began over four decades
ago has come from onshore sites. From the initial exploration
efforts by Royal/Dutch Shell in 1937 up until 1993, all oil
activity in the country was restricted to land and shallow waters
close to communities in the Niger Delta in the south.
As resentment built up among impoverished locals who felt neglected
by the government and oil companies despite the huge wealth pumped
from their backyards, oil facilities became easy targets for their
anger. From the early 1990s, the south was hit by a spate of
seizures of oil installations, abductions and other violent acts by
militant youths demanding more access to the oil wealth for their
people.
By the late 1990s, such violence had disrupted production to such
an extent that it sometimes reduced Nigeria's daily crude oil
output of about two million barrels by up to a third. For a
government that depends on crude oil exports for more than 95
percent of its export income, it was a hard blow. For the oil
multinationals, it meant increasing risk. Although onshore
production costs in Nigeria are reputed to be the lowest in the
world at under two dollars a barrel, this particular attraction was
steadily diminished by the increasing risk of operating in the
Niger Delta.
One major consequence of these developments has been a shift to
offshore oil production. The shift was initially slow, but it
recently became faster.
New oilfield spurs offshore drive
"A major spur for offshore oil exploration in Nigeria was the huge
discovery made by Shell in its deep offshore Bonga Field," an oil
industry expert, Emmanuel Effiong-Duke, told IRIN. "There were also
important discoveries by TotalFinaElf and Chevron-Texaco."
Effiong-Duke said Shell's Bonga Field alone was estimated to have
total oil reserves of up to two billion barrels and the belief in
the oil industry was that there were other, equally prodigious,
fields in Nigeria's deep offshore waters. Exxon-Mobil, Effion-Duke
said, always had the bulk all of its operations offshore, "and the
fact that it was the least affected by communal disturbances in the
oil region was a salutary lesson for all".
When President Olusegun Obasanjo announced a fresh round of oil
exploration licences early in 2000, barely one year after his
election, 11 of the 22 oil blocks on offer were in deep offshore
waters, seven were in shallow waters and only four were onshore.
While oil multinationals scrambled for the deep offshore licences,
there were no bids for the shallow-water and onshore concessions
located near the Niger Delta's restive communities.
Although the cost of offshore production, at over US $4 a barrel,
is double that of producing onshore, the oil multinationals appear
undeterred. With the help of latest oil exploration and production
technology, they appear to get more value in the deep waters than
in or near the Delta.
Closely tied to the 2000 oil-licensing round is an aggressive
programme by the government to increase Nigeria's oil reserves from
20 billion to 30 billion barrels by 2003, and to 50 billion barrels
by 2010. Nigeria also hopes to raise its production capacity, now
two million barrels per day (bd), to three million bd by 2003 and
five million bd by 2010.
Confirmed offshore oil deposits has increased from about 30 percent
of the country's total reserves in 1997 to about 50 percent today.
As Nigeria moves closer to the reserves and production targets set
by Obasanjo, this percentage is likely to increase to more than 70.
More for the federal government, less for the states
These developments are bound to benefit Nigeria's federal
government. In April, the Supreme Court ruled (in a suit brought by
the Obasanjo administration against states in the oil region) that
the federal government had exclusive control over all revenue from
offshore oil and gas operations. This was in the face of agitation
by states in the oil region for more control of revenue from
resources derived in their area.
Activists in the Niger Delta are alarmed by the current trend.
Their fear is that after decades of environmental degradation and
impoverishment due to oil activities, the federal government and
oil multinationals are now preparing not only to deny their states
potential revenue, but also to abandon them to their fate.
In a joint statement last week, two leading activist groups in the
volatile Niger Delta, the Ijaw National Congress (INC) and the
Movement for the Survival of Ogoni People (MOSOP), accused
Obasanjo's government of aggressively developing offshore oilfields
in order to abdicate its responsibilities to the poverty-stricken
region.
"The INC and MOSOP naturally view the proposed response to rely on
offshore oil as ill-conceived, unjust and at odds with the interest
of the Nigerian nation," INC and MOSOP said a joint statement.
"Apart from being an ignoble retreat from its responsibilities to
the people of the Niger Delta, we also see this as a proposal for
the economic strangulation of the Niger Delta until we are ready to
submit to the government and oil companies on their own terms,"
they added.
The two groups claimed that a presidential committee on security in
the oil region, comprising top military and security chiefs and
representatives of oil companies, had advised the government to
concentrate on offshore oil production as an effective way of
containing the disruptive effects of unrest in the region. They
argued that lasting solutions were likely to be found only by
addressing the "development and environmental problems" of the
Niger Delta.
Many analysts agree that the shift to offshore production will be
effective in curtailing the disruption of oil production by
militants that had become a regular occurrence in the last decade.
But most believe it will deepen the anger of the people in the
region and leave its longstanding political problems festering.
"In the short run it will strengthen the hand of the federal
government and give it access to more oil revenue," analyst Tunde
Balogun told IRIN. "But then, there is the danger that even state
governments in the region will join activist groups in pulling
Nigeria at the seams, further undermining the multiethnic country's
fragile unity."
************************************************************
NIGERIA: Focus on the scourge of poverty
[excerpts only, for full text of article visit
http://www.irinnews.org/report.asp?ReportID=28258]
LAGOS, 11 Jun 2002 (IRIN) - Nigeria is potentially Africa's
richest country. As the world's sixth largest producer of crude
oil, with huge reserves of mineral and agricultural riches and
manpower, it should be enjoying some of the highest global living
standards.
But available indicators point, ironically, to some of the lowest
living standards in Africa, for a large majority of Nigeria's 120
million people. And the latest signs are that the situation may
be getting worse.
Surveys conducted by Nigeria's Federal Office of Statistics show
that in a 16 year period that began in 1980 (the year the oil
boom years of the 1970s began to go burst), the percentage of
Nigerians living in poverty rose from 28 percent to 66 percent.
Numerically, while 17.7 million people lived in poverty in 1980,
the population living on less than US $1.40 a day, rose to 67.1
million by 1996. ...
Equally telling was the geographical distribution of poverty
within the country. While the percentage of the poor ranged
between 55-60 percent in the south, in the north they ranged
between 70-78 percent of the population. ...
Nigeria's pervasive poverty occurred in spite of the fact that
between 1970 and 1999, the country earned an estimated US $320
billion from the export of crude oil.
"Despite its oil wealth, Nigeria has performed worse, in terms of
basic social indicators, than sub-Saharan Africa as a whole and
much worse than other regions of the developing world, such as
Asia and Latin America," says a Situation Assessment Analysis
published in 2001 by Nigeria's National Planning Commission and
the United Nations Children's Fund (UNICEF).
"At the heart of the problem," the assessment adds, "has been a
crisis of governance and public management, which has its roots
in the competition among rival elites and their ethno-regional
constituencies for control of the huge rents that accrue to the
state from the operations of the petroleum industry."
With a population comprising more than 250 ethnic groups, of
mainly Christian and Islamic persuasions, Nigeria was beset with
ethno-religious rivalry right from the early days of independence
from Britain in 1960. This degenerated into three years of civil
war when the southeast attempted to secede as Biafra. The end of
the civil war in 1970 coincided with the oil boom years and the
country's emergence as a major oil exporter.
But in the following years dominated by military and civilian
rulers from the mainly Muslim north, the oil wealth was largely
mismanaged. Most of it was dispensed as political patronage
through fraudulent contracts awarded by those in government to
cronies. ...
Faced with severe balance of payments problems in the mid 1980s,
the then military ruler, General Ibrahim Babangida, adopted
International Monetary Fund- and World Bank- advised structural
adjustment programs (SAP). The key objective of SAP was to ensure
Nigeria serviced its external debt of US $28 billion and
maintained macro-economic stability, while cutting back on social
spending. ...
Starved of funds, social service institutions began to decay and
service delivery in schools and hospitals sharply declined. (The
World Bank estimates that public spending per capita on health is
less than $5 and as low as $2 in some parts of Nigeria, contrary
to $34 recommended for low-income countries by the World Health
Organization.) Infrastructure and utilities, under the weight of
mismanagement for years, also began to collapse. ...
"The vicious circle set in motion by widespread poverty accounts
for the bourgeoning rate of crime in Nigeria," said Alao. "Crime
was not only domiciled in the country, it was also exported as
thousands of desperate young Nigerians moved abroad, becoming
involved in various criminals rings engaged in fraud, drug and
human trafficking."
Among the economic migrants, he said, are also thousands of
professionals who left Nigeria to work in different parts of the
world. "Many of them were trained at government expense, but they
have been lost to other countries where some have distinguished
themselves in their professions," Alao added.
On his election to end more than 15 years of military rule in
1999, President Olusegun Obasanjo acknowledged that fighting
poverty was one of the most daunting tasks facing his government.
Nevertheless, he set a goal to reduce the population of Nigerians
in poverty by half by 2015.
Achieving such a target would require an economic growth rate of
7-8 percent a year for 15 years. In his first three years in
office, he has recorded an average growth rate of 2.8 percent
yearly. Perhaps, realising that no dent has been made on poverty,
Obasanjo's government has developed an Interim Poverty Reduction
Strategy.
Under this plan, he is seeking the assistance of donors to work
on four key areas, identified as youth empowerment, development
of rural infrastructure, social welfare services, as well as
natural resource development and conservation. Overseen by the
National Poverty Eradication Programme, chaired by the president
himself, it has set a target of ending absolute poverty in 10
years.
************************************************************
NIGERIA: Focus on dispute over offshore oil resources
LAGOS, 9 May 2002 (IRIN) - When Nigeria's Supreme Court ruled
last month that all of the country's offshore oil and gas
resources belonged to the federal government, it was an apparent
triumph for President Olusegun Obasanjo. Not quite, analysts
warn.
"While Obasanjo has won a significant legal battle at the Supreme
Court, an enormous political battle lies ahead of him," Ike
Onyekwere, a political analyst, told IRIN. "And how he goes
about it bodes a lot for Nigeria's political stability."
While Nigeria's 1999 Constitution provides that 13 percent of the
country's oil revenue be allocated to oil-bearing states,
Obasanjo on taking office limited the allocation to oil revenue
from onshore oil resources. This provoked strident protest from
the littoral oil-producing states.
As the controversy deepened, the federal government in 2001 filed
a suit against the country's 36 states, seeking the
interpretation of the highest court as to what constituted the
seaward boundaries of the states. On 5 April 2002, the Supreme
Court ruled that the seaward boundary of the country's eight
littoral states terminated at their low-water mark, effectively
giving the federal government control over the offshore oil and
gas resources.
While the ruling represented a key legal victory for Obasanjo, it
opened a political can of worms for him in the restive southern
oil region called the Niger Delta. During four decades of oil
activities, the region, populated by mainly ethnic minorities,
suffered severe neglect and environmental degradation, area
residents claim.
Over time the popular thinking that evolved in the oil region was
that successive governments dominated by the majority ethnic
groups, particularly Hausa-speaking Muslims from the north and
Yorubas from Obasanjo's southwest home region, were only
interested in evacuating the oil wealth to develop their areas.
The indignation borne of this perception fuelled the unrest that
has manifested in violent protests and disruption of oil
activities through sabotage and hostage-taking, in the Niger
Delta over the past decade .
For the oil region states the Supreme Court ruling implied a
sharp drop in revenue. Worst hit among them was Akwa Ibom State,
whose share of oil revenues derived from only offshore
production. Not only would it lose the revenue, it would now be
obliged to return to the treasury huge sums already allocated to
it.
Nigerian law professor, Itse Sagay, believes the ruling "is bound
to exacerbate the conflict" between the federal government and
the oil states. "Apart from the fact that the judgment is a
clear negation of the rules of international law, under which
the continental shelf is an inalienable and inherent part of the
coastal state, the domestic Nigerian laws applied are those
constituting a blatant expropriation of the natural resources of
the southern minorities," he wrote in the independent 'Thisday'
daily.
Signs have already emerged of deteriorating personal relations on
account of the ruling between Obasanjo and Akwa Ibom State
Governor Victor Attah, in spite of both men being members of the
same ruling People's Democratic Party.
On 2 May, Attah convened a meeting of what he called "the general
assembly of Akwa Ibom people" where he accused Obasanjo of
personally introducing the onshore/offshore distinction and of
dispensing the 13 percent of oil revenue set aside for the
oil-producing states.
He referred to Nigeria's constitution at independence in 1960
which specified that the continental shelf belonged to the
littoral regions, and pointed out that it was the 1979
constitution overseen by Obasanjo as military ruler that
deliberately omitted the provision and upheld the distinction.
After the onshore/offshore dichotomy was abolished in 1992 by
then military ruler, General Ibrahim Babangida, Attah said, it
was Obasanjo who restored it once more after he took office in
1999 and went to the Supreme Court in the face of protests.
Attah's speech was followed the same day by widespread
demonstrations in the state capital, Uyo, during which angry
youths denounced both Obasanjo and the Supreme Court and
threatened to resist what they regarded as expropriation of
their resources.
Indeed, since the ruling, incidents of violent protests and
disruption of oil activities by militant youths, which had
declined over the past year, appeared to be on the rise again.
Late last month militant youths boarded a rig working offshore
for oil giant ChevronTexaco and held hostage nearly 90 foreign
and Nigerian workers to back their demands for jobs and
amenities. The youths released them three days later.
ChevronTexaco has also been forced over the past month to shut
down several oil wells in Imo and Delta states, where a number
of communities have laid stringent conditions (including
provision of jobs and amenities), before they would allow the
company to operate in their area.
Youths of the Ijaw ethnic group, the most populous nationality in
the Niger Delta, on 3 May held a peaceful demonstration at the
premises of Italian Agip oil company against what they
considered the unfavourable employment policies of the company.
They were undeterred by the presence of armed policemen who
fired shots in the air as they approached.
"They saw that we would not be moved, stopped shooting at us and
invited the managers to speak with us," Kingsley Kuku, a
spokesman for the Ijaw Youths Council, which organised the
protest, told journalists. He said similar meetings had been
held with officials of Royal/Dutch Shell and German construction
company, Julius Berger, the previous week.
Popular opinion in the oil region goes back to the early years of
independence, when groundnuts produced in the north, cocoa
produced in the southwest and palm oil from the southeast, were
the main foreign exchange earners for the country. Produced
respectively in the lands of the Hausa, the Yoruba and Igbo, the
three biggest ethnic groups in the country, their regions had
absolute control over these resources. Regional control over
resources was reduced after the military took over government in
1966, first to 50 percent in 1970, and a few years later further
down to 45 percent. In 1977, Obasanjo as military ruler further
cut back regional control of resources to 25 percent. Under
subsequent military governments it dropped eventually to one
percent. With the agitation of minorities from the oil region,
it had since risen to three percent, and then 13 percent
approved by the 1999 constitution.
According to governor Attah: "There must be those who are upset
by our current efforts to improve our fortunes and change our
roles. There are those who want us to remain perpetually as
house boys and maids. There are those who cannot accept the fact
that now we are making bricks to build our own mansions, so they
must take away the straw. We say, give us back our straw."
************************************************************
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