Oil: fount of riches and source of problems

LAGOS – Oil is both Nigeria’s major revenue earner and the source of many of its economic, social and political woes, observers said as the country heads for presidential and legislative elections this weekend.

“Oil is a good thing but all the problems come from the management of the oil funds,” chief GE Mabiaku, an elder from the southern oil town of Warri, told AFP. Nigeria, Africa’s largest petroleum producer and the world’s sixth exporter, pumps 2,6 million barrels of crude daily from the expanse of swamps and creeks that makes up the Niger Delta.Perversely it is this very abundance of oil that has hurt the rest of Nigeria’s economy.Successive governments, dazzled by money, have neglected both the manufacturing sector and agriculture.As oil production has risen, the rest of the economy has slumped and the country is increasingly dependent on imports, both of agricultural produce and manufactured goods.Not only has oil resulted in the collapse of other sectors of the economy, but its proceeds have been fought over and misspent.”The problem with Nigeria as a major oil exporter did not start today.It has been with us since 1956 when oil was discovered at Oloibiri,” environmental campaigner and Niger Delta native Oronto Douglas told AFP.”The advent of oil was a celebration.With it came petrodollars which have been squandered by successive governments at the expense of majority of the people,” he said.”Nigeria has made around US$400 billion from oil but what can it show for that in terms of development? Our common wealth has been looted.Go to the Niger Delta, there is mass poverty, anger and frustration,” he said.The delta, a swathe of creeks and swamps and the size of the whole of Scotland, is home to Nigeria’s multi-billion-dollar oil resources, but the vast majority of its inhabitants live on less than one dollar a day.Douglas said Nigeria made vast sums of money between May 1999 when Olusegun Obasanjo came to power, ending almost 16 years of military rule, and the present.Lagos lawyer and rights activist Gani Fawehinmi agreed.”The government has made so much, due to the rising price of crude in the international market, that it has saved about US$45 billion in foreign currency reserves,” he told AFP.Several audits, including an independent one of early 2006, have revealed serious shortcomings in the management of Nigeria’s petrodollars.Disputes over the distribution of the country’s oil wealth have led to waves of violence in the Niger Delta where local people say they are getting a poor deal – all the environmental pollution of the oil industry but no more revenue than the other non oil-producing states of the federation.Since the start of 2006 this violence has taken a turn that has jeopardised oil production in Nigeria, cutting crude output by as much as 25 per cent.Armed groups have stepped up their campaign of violence against the oil industry, kidnapping well over 100 foreign oil workers, sometimes to make their demands heard and sometimes just to make ransom money.Unrest in the Delta is not new.It is 12 years since activist Ken Saro-Wiwa was executed along with eight of his fellow Ogonis after their campaigns against environmental degradation infuriated the then military government.Labour leader Dele Dada sees the Niger delta problems extending into the post-Obasanjo era.The financial incentives to tackle the problem are powerful.Nigeria is estimated to have lost around US$4,4 billion in 2006 oil revenue alone because of disruptions to production.Nampa-AFPNigeria, Africa’s largest petroleum producer and the world’s sixth exporter, pumps 2,6 million barrels of crude daily from the expanse of swamps and creeks that makes up the Niger Delta.Perversely it is this very abundance of oil that has hurt the rest of Nigeria’s economy.Successive governments, dazzled by money, have neglected both the manufacturing sector and agriculture.As oil production has risen, the rest of the economy has slumped and the country is increasingly dependent on imports, both of agricultural produce and manufactured goods.Not only has oil resulted in the collapse of other sectors of the economy, but its proceeds have been fought over and misspent.”The problem with Nigeria as a major oil exporter did not start today.It has been with us since 1956 when oil was discovered at Oloibiri,” environmental campaigner and Niger Delta native Oronto Douglas told AFP.”The advent of oil was a celebration.With it came petrodollars which have been squandered by successive governments at the expense of majority of the people,” he said.”Nigeria has made around US$400 billion from oil but what can it show for that in terms of development? Our common wealth has been looted.Go to the Niger Delta, there is mass poverty, anger and frustration,” he said.The delta, a swathe of creeks and swamps and the size of the whole of Scotland, is home to Nigeria’s multi-billion-dollar oil resources, but the vast majority of its inhabitants live on less than one dollar a day.Douglas said Nigeria made vast sums of money between May 1999 when Olusegun Obasanjo came to power, ending almost 16 years of military rule, and the present.Lagos lawyer and rights activist Gani Fawehinmi agreed.”The government has made so much, due to the rising price of crude in the international market, that it has saved about US$45 billion in foreign currency reserves,” he told AFP.Several audits, including an independent one of early 2006, have revealed serious shortcomings in the management of Nigeria’s petrodollars.Disputes over the distribution of the country’s oil wealth have led to waves of violence in the Niger Delta where local people say they are getting a poor deal – all the environmental pollution of the oil industry but no more revenue than the other non oil-producing states of the federation.Since the start of 2006 this violence has taken a turn that has jeopardised oil production in Nigeria, cutting crude output by as much as 25 per cent.Armed groups have stepped up their campaign of violence against the oil industry, kidnapping well over 100 foreign oil workers, sometimes to make their demands heard and sometimes just to make ransom money.Unrest in the Delta is not new.It is 12 years since activist Ken Saro-Wiwa was executed along with eight of his fellow Ogonis after their campaigns against environmental degradation infuriated the then military government.Labour leader Dele Dada sees the Niger delta problems extending into the post-Obasanjo era.The financial incentives to tackle the problem are powerful.Nigeria is estimated to have lost around US$4,4 billion in 2006 oil revenue alone because of disruptions to production.Nampa-AFP