‘Man must chop’- Illegal oil refining in the Niger Delta

A recent report released by the Stakeholder Democracy Network (SDN), a non-governmental organisation based in Port Harcourt reveals issues around illegal oil refining in the Niger Delta (Bayelsa, Rivers and Delta). The report suggests that illegal oil refining is fast becoming the major livelihood for most local communities in the Niger Delta region.  It has become part of the local economy. Even those originally involved in farming have migrated to illegal oil refining as an occupation.

What is driving this?

• Failure of government to provide basic public services
• Poverty
• Unemployment
• Poor pipeline maintenance by the International Oil Companies (IOC)
• Loss of  local livelihoods such as fishing and farming due to oil pollution

 What are the effects?

• Environmental pollution
• Significant health and safety risks to the illegal refiners and communities in the area (many seem to have persistent cough and breathing problems according to the report)

     Why is it lucrative despite the dangers involved?

• The need to survive- people need to earn a living that affords them the opportunity to meet their basic needs.
• It attracts high returns- low cost to set up but high returns. Materials needed for the refining camp are affordable and easy to get. The average cost for setting it up is N750, 000 ($4700). An average sized camp earns about $7800 per month.

 Key recommendations from the report

• Intensify efforts to stop the supply of stolen crude oil
• Tackle the issue of high unemployment and poverty
• Provide public services and access to private goods and services
• Fill the local petroleum supply gap through renewable solar products

This report reveals key issues facing local communities in the Niger Delta region. It makes  good recommendations which the Nigerian government should pay attention to. Oil spill damage is one of the drivers of illegal oil refining as a result of the damage to traditional livelihoods. Yet oil theft, needed to supply the illegal oil refining, is also is one of the causes of the spillages, producing a vicious circle. Historically the government’s response to oil spills (whatever the cause) has been inadequate.  Addressing the concerns raised in this report requires a genuine transformation. 

Click here to access full report

Here we Mo again……. Nigeria and the Mo Ibrahim Index

The Mo Ibrahim Index assesses the quality of governance in Africa in relation to the provision of public goods and services as well as policy outcomes. It covers four broad areas of governance:

• Safety & Rule of Law (Rule of Law, Accountability, Personal Safety and National Security)
•  Participation and human right (Participation, Rights and Gender)
• Sustainable economic opportunity (Public Management, Business Environment, Infrastructure and the Rural Sector)
•  Human Development (Welfare, Education and Health)

How did Nigeria perform generally?

Nigeria performed poorly in the 2013 index. It ranked 41 out of 52 African countries with an overall score of 43.4 out of 100. Nigeria ranks the bottom four in West Africa and scored below average in three of the four broad areas. Not surprising, its lowest score was in the sub category area of infrastructure with a score of 14.9 out of 100. Nigeria also scored poorly in the sub category areas of personal safety, participation and accountability with scores of 15.8, 28.8 and 35.3 respectively. Interestingly, its highest scores are in the sub category areas of National Security and Health. It scores 58.3 in public management and ranks 14 in this area.

How did Nigeria perform compared to its West African counterparts?

Position	Country	Safety & Rule of Law	Participation and Human Rights	Sustainable Economic opportunity	Human Development	Overall Score
1	Cape Verde	80.1	81.7	64.5	80.7	76.7
2	Ghana	70.8	68.1	54.4	74	66.8
3	Senegal	59.2	67.6	54.8	62.3	61
4	Sao Tome & Principe	67.4	66.9	38.4	66.8	59.9
5	Benin	61.7	65.9	49.9	57.2	58.7
6	Gambia	53.6	35.7	58.4	66.5	53.6
7	Burkina Faso	56.4	53.4	54.2	47.8	53
8	Mali	48.2	53.4	50.6	50.6	50.7
9	Niger	54.3	57.4	43.1	47	50.4
10	Liberia	55.5	56	39.1	50.7	50.3
11	Sierra Leone	55	53.4	41.8	42	48
12	Togo	54.7	39.4	35.4	53.7	45.8
13	Nigeria	41	37.7	42.2	52.7	43.4
14	Guinea	46.8	45.9	33.5	46.7	43.2
15	Cote d’Ivoire	38.8	33.1	43	48.8	40.9
16	Guinea Bissau	34.7	38.5	28.3	46.7	37.1

It is obvious that the Nigerian government needs to step up governance and take action to address the weak areas identified in this assessment. It also needs to intensify efforts in curbing corruption as I stressed in my first blog post in 2011. Tackling corruption should be a major priority of the Nigerian government as it is a binding constraint to the efficient provision of public services (see policy brief).

Link to the 2013 Mo Ibrahim Index results