Nigeria, a country rich in oil yet mired in poverty

Dec 13, 2006 01:00 AM

by Jacques Lhuillery

Nigeria, which will host its first-ever meeting of the Organisation of 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 mm inhabitants, produces 2,6 mm 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 thus actually 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 some $ 384 bn from the state's coffers since Nigeria gained independence from Britain in 1960. 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 some 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.
For 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 ExxonMobil whom they accuse of "conniving" with the government to "loot" the riches in question.

And whilst 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 himself. 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 eldorado in the hands of "bandits".
All this means that this part of Nigeria, one of the biggest suppliers of petroleum to the US, 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.

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