THE COST OF NIGER DELTA CRISIS

President Buhari could do more to restore peace in the Niger Delta

The cost of the crisis in Niger Delta on the economy is steep and rising. Just recently, Mr. Shina Bankole, the vice-chairman of the security subcommittee of the Oil Producers Trade Section of the Lagos Chamber of Commerce and Industry, said that between January and November this year, the resurgence of militancy has cost the nation over 130 million barrels of oil (approximately $4 billion) even at the base price of $30 per barrel. During the period, some 58 incidents of sabotage on the facilities of the oil companies were also recorded.

Bankole, who is in charge of security at Chevron Nigeria Ltd, said there is now a proliferation of small arms and weapons as well as a dramatic increase in the number of militant groups in the Niger Delta. “As of today, no fewer than 32 of such groups have emerged–some with possible ethnic agenda, while others came with a criminal agenda,” he said. The danger is that the proliferation of arms could tip the region and indeed the country into a new bout of violence.

Ever since the current administration came to power in May 2015, the country has been experiencing increased militancy in the Niger Delta region with attacks on crude oil, products and gas pipelines. For instance, in the month of July alone, the Nigerian Petroleum Development Company (NPDC) lost a substantial portion of crude oil estimated to be in excess of N27 billion to pipeline vandalism. A total of 3,213 vandalised points were recorded between August 2015 and July 2016.

Perhaps one of the unkindest cut had to do with the 48-inch Trans-Forcados pipeline in the Escravos, the major pipeline that transports crude oil produced by Shell Petroleum Development Company (SDPC) and others in the Western Niger Delta to the export terminal. The oil giant had been forced severally to declare “force majeure” with hundreds of thousands of barrels lost to pipeline vandals and thieves.
Indeed, Vice-President Yemi Osinbajo hinted on the enormity of the problem recently when he blamed the country’s economic challenges partly on the effects of pipeline vandalism. “One of the key reasons why we are in recession is the fact that we lost about 60 per cent of our revenue due to the vandalism of the pipelines in the Niger Delta and we lost almost 40 per cent of the gas,” he said.

Unfortunately, there are other ruinous and devastating costs. Millions of barrels of oil had been and are still being spilled into the environment through pipelines’ vandalism, polluting the waters and the entire ecosystem of the region. The cost budgeted for the Ogoni clean-up is a reminder of the complexity of the problem. Besides, the disruptions of pipelines also affect electricity supply as power stations are most often shut down due to lack of gas. Yet oil and gas constitutes the mainstay of Nigeria’s economy, contributing about 90 per cent of the nation’s foreign exchange earnings and about 25 per cent of the Gross Domestic Products.

Therefore, we believe President Muhammadu Buhari and his administration can do more in the efforts to restore peace to the Niger Delta. “In the last couple of weeks, the Ministry of Petroleum has launched the seven Big Wins,” said Dr. Ibe Kachikwu, Minister of State for Petroleum, recently. “The first of the Big Wins is getting the Niger Delta stabilised through engagement, empowerment and enforcement. The other aspect of the Big Wins is righting the wrongs through remediation and education.”

To the extent that the problem of Niger Delta is not only that of law and order, force cannot be the only solution. Until Nigeria is able to engage the people and restore a measure of peace to the Niger Delta, the economy will continue to totter between paralysis and meltdown.