Nigeria is Africa's largest oil producer and the world's sixth largest exporter, but, apart from an oil boom in the 1970s and once again benefiting from high prices on the world market today, any real progress has been undermined by corruption and mismanagement. Nigeria appears to be one of the many countries for which the blessing of natural resources is not so saintly. The main problems stem from the heart of the Nigerian oil industry in the Niger Delta region, where violence, kidnapping, bombings, and oil siphoning are part of every day life.
Besides the many casualties, the effect of the troubles in the region has now been translated into a tangible figure. At the recent Ministerial Budget Briefing, Nigerian Finance Minister, Mrs. Nenadi Usman, announced that in 2006, the nation lost an estimated 570 billion naira (approximately 4.4bn US dollars and 3.5bn euros) in revenue as a direct result of the protracted crisis in the Niger Delta region. Usman also stated that "the result was that crude oil sale fell by 3.2 percent below our projected target while petroleum profit tax fell by 10.9 percent. Since oil accounts for more than 95 percent of the foreign exchange earnings of Nigeria, any disruption is of major concern.
Concern is justified, given the recent warning by a spokesman for the Movement for the Emancipation of the Niger Delta (MEND) in an email message to AFP that "we are resuming with our attacks this month and may even take more hostages." This announcement comes at a time when MEND is holding one Lebanese and three Italian oil workers kidnapped on December 7 in the oil-rich southern Bayelsa State. MEND might have already been true to their word, as news just broke that militants took nine South Korean oil workers hostage at a Daewoo oil facility, also in Bayelsa. Five Chinese telecom workers have also been abducted in Rivers State, but MEND denies any involvement in their seizure. Perhaps China's increased involvement in the continent and the region has made the rebels unsure about what their policy should be toward the Chinese for now. Hopefully this is a sign that the Chinese might be able to play a role in bringing some form normalcy to the Nigerian oil business.
What MEND is seeking is a larger share for southern Nigerians in oil revenues, along with compensation for communities affected by oil pollution. More recent demands are that the Nigerian authorities release former Bayelsa State governor Diepreye Alamieyeseigha, jailed on corruption charges, as well as separatist leader Mujahid Dokubo-Asari (he used to be president of the influential Ijaw Youth Council - the ethnic group which makes up the bulk of the Delta's population) and other detainees from the region. MEND is a relatively new organization (emerging late 2005) of which little is known, but their calls for a larger share of oil wealth and environmental improvement echo the demands made by other groups such as Asari's Niger Delta People's Volunteer Force (NDPVF), the Niger Delta Vigilante (NDV), the Ijaw Youth Movement (IYM) and the Ogoni Movement for the Survival of the Ogoni People (MOSOP). The difference lies in the sophistication shown by MEND and the ease with which they are able to sabotage oil facilities and make good on threats.
Despite the creation in 2000 of the Niger Delta Development Commission, which has the sole mandate of developing the Niger Delta region, poverty and crime remain rife in the area. In 2005, Shell spent around $80m on projects and scholarships aimed at benefiting the local population, but these aid projects have failed for the most part. For some reason or other, the Delta boasts an unfinished hospital building, a fish processing factory that never went into production, and an abandoned artesian well which now flows with contaminated water. This would seem to insinuate that the majority of the militant movements aren't really seeking improved conditions for their people, but are rather criminal organizations active in oil and weapons trade on the black market. Oil is regularly siphoned illegally (though it is often claimed by the militants that they are merely taking what is rightfully theirs) from the pipelines, while kidnappings are becoming increasingly frequent as a means to attain capital.
While these problems have plagued the Delta for years, they intensified in 2006 and, with the Nigerian elections coming up in April, they seem likely to intensify. The wave of attacks on the oil industry in February 2006 led to the shutting down over 600,000 barrels per day in output, highlighting the immense power rebel groups such as MEND have on oil production. On a human scale, the more than 60 foreign oil workers that have been abducted over the past year and the 37 Nigerian troops and dozens of Nigerian workers (and one Briton) that have been killed tell the story. Besides all this, the local population has very valid grievances, as there is no doubting the deterioration in environmental living conditions and the lack of shared wealth. All in all, another pernicious example of a blessing gone sour.
Besides the many casualties, the effect of the troubles in the region has now been translated into a tangible figure. At the recent Ministerial Budget Briefing, Nigerian Finance Minister, Mrs. Nenadi Usman, announced that in 2006, the nation lost an estimated 570 billion naira (approximately 4.4bn US dollars and 3.5bn euros) in revenue as a direct result of the protracted crisis in the Niger Delta region. Usman also stated that "the result was that crude oil sale fell by 3.2 percent below our projected target while petroleum profit tax fell by 10.9 percent. Since oil accounts for more than 95 percent of the foreign exchange earnings of Nigeria, any disruption is of major concern.
Concern is justified, given the recent warning by a spokesman for the Movement for the Emancipation of the Niger Delta (MEND) in an email message to AFP that "we are resuming with our attacks this month and may even take more hostages." This announcement comes at a time when MEND is holding one Lebanese and three Italian oil workers kidnapped on December 7 in the oil-rich southern Bayelsa State. MEND might have already been true to their word, as news just broke that militants took nine South Korean oil workers hostage at a Daewoo oil facility, also in Bayelsa. Five Chinese telecom workers have also been abducted in Rivers State, but MEND denies any involvement in their seizure. Perhaps China's increased involvement in the continent and the region has made the rebels unsure about what their policy should be toward the Chinese for now. Hopefully this is a sign that the Chinese might be able to play a role in bringing some form normalcy to the Nigerian oil business.
What MEND is seeking is a larger share for southern Nigerians in oil revenues, along with compensation for communities affected by oil pollution. More recent demands are that the Nigerian authorities release former Bayelsa State governor Diepreye Alamieyeseigha, jailed on corruption charges, as well as separatist leader Mujahid Dokubo-Asari (he used to be president of the influential Ijaw Youth Council - the ethnic group which makes up the bulk of the Delta's population) and other detainees from the region. MEND is a relatively new organization (emerging late 2005) of which little is known, but their calls for a larger share of oil wealth and environmental improvement echo the demands made by other groups such as Asari's Niger Delta People's Volunteer Force (NDPVF), the Niger Delta Vigilante (NDV), the Ijaw Youth Movement (IYM) and the Ogoni Movement for the Survival of the Ogoni People (MOSOP). The difference lies in the sophistication shown by MEND and the ease with which they are able to sabotage oil facilities and make good on threats.
Despite the creation in 2000 of the Niger Delta Development Commission, which has the sole mandate of developing the Niger Delta region, poverty and crime remain rife in the area. In 2005, Shell spent around $80m on projects and scholarships aimed at benefiting the local population, but these aid projects have failed for the most part. For some reason or other, the Delta boasts an unfinished hospital building, a fish processing factory that never went into production, and an abandoned artesian well which now flows with contaminated water. This would seem to insinuate that the majority of the militant movements aren't really seeking improved conditions for their people, but are rather criminal organizations active in oil and weapons trade on the black market. Oil is regularly siphoned illegally (though it is often claimed by the militants that they are merely taking what is rightfully theirs) from the pipelines, while kidnappings are becoming increasingly frequent as a means to attain capital.
While these problems have plagued the Delta for years, they intensified in 2006 and, with the Nigerian elections coming up in April, they seem likely to intensify. The wave of attacks on the oil industry in February 2006 led to the shutting down over 600,000 barrels per day in output, highlighting the immense power rebel groups such as MEND have on oil production. On a human scale, the more than 60 foreign oil workers that have been abducted over the past year and the 37 Nigerian troops and dozens of Nigerian workers (and one Briton) that have been killed tell the story. Besides all this, the local population has very valid grievances, as there is no doubting the deterioration in environmental living conditions and the lack of shared wealth. All in all, another pernicious example of a blessing gone sour.
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