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How To Solve The Niger Delta Problem

September 11, 2010

Nigeria has been courting danger for the last 30-50 years. Like most nations, we've had our civil war, and we've survived it. We have reconciled our citizens. Yet there remains a danger pocket that can threaten the very existence of our country. The danger is the time bomb that is Niger Delta.

Nigeria has been courting danger for the last 30-50 years. Like most nations, we've had our civil war, and we've survived it. We have reconciled our citizens. Yet there remains a danger pocket that can threaten the very existence of our country. The danger is the time bomb that is Niger Delta.

It is unimaginable that our government could ignore this danger for so long.  95% of Nigeria's foreign exchange comes from the oil that is pumped from the Niger Delta. Why it that we have taken the people of Niger Delta for granted for so long?

The U.S. pumps 8 million barrels of oil daily and the oil and gas industry provides 9.6 million jobs for Americans. By proportion, since Nigeria pumps 2.8 million barrels of oil daily, our oil and Gas industry should provide Nigerians with a minimum of 2.8 million jobs. So, why is everyone living in poverty in the Niger Delta? Why is every creek, river, and farm polluted with oil spills? Why have the multinationals pumping the oil ignored the people for so long.? Why are successive Nigerian governments so impotent to protect the interests of the people whose land is responsible for 65% of government revenue?

One of the goals of the recently formed U.S-Nigeria Bi-National commission is for the two countries to get together and resolve the Niger Delta problem. While the U.S. may be extending a brotherly hand to Nigeria, it is important for Nigerians to realize that they are capable of resolving the Niger Delta problem with or without U.S help. All it takes is the desire to do the right thing and to stand up to the oil companies who are mostly responsible for the pollution.

In April, an oil well owned by British petroleum blew up in the Gulf of Mexico. From the day the  blow up occurred to the day the well was capped, the  U.S. government , the American people and the American media made  sure the whole world was kept awake because of the danger it posses to the economy of the region, wild life, and the livelihood of the citizens that make their living off the gulf coast.

There was so much noise, that the Obama administration was forced, by protest and persuasion to ask the culprit, BP to put aside $20 billion to settle claims of the people whose lives have been affected by the spill.

Thousands of citizens in and around the Gulf region were paid what they would have earned because of loss of income. Several thousand others were put to work to clean up the beaches. Another several hundred ships were deployed to deal with the disaster, and BP was on the airwaves everyday apologizing to the people of the Gulf coast and the whole world.

For 50 years, not a single oil company that operates in the polluted lands of the Nigerian Niger delta has ever apologized or created a sustained compensation plan for the people of Niger Delta.

Why is Niger Delta different from the Gulf of Mexico? Why have the people of Niger Delta been made to suffer for the last 50 years? How can we find a permanent solution to the problem of oil spills?

California has over 51,000 producing oil wells; some are pumping oil a few blocks from residential homes and businesses. In my 30 years of living in California I can't recall an oil spill of major proportions that threaten the livelihood of Californians. If you spill oil in California, you have one week to clean it up or face the consequences. But in the Niger Delta, the lives of most citizens that depend on fishing and farming have been destroyed for decades and yet the oil companies pass the buck back and forth between themselves and the Nigerian government. 

Even the U.S. Government, under the present administration of President Obama feels compelled to do something after 30 years of ignoring the problem.

While I applaud the U.S. Government in its effort, I hope President Obama will use the same vigor in addressing the solutions of Niger Delta just like he did for the gulf coast. Unless we find a permanent solution to the problem, clean up all the pollution, sooner or later, the people whose land we are polluting will feel compelled to revolt.

There can never be a solution to the Niger Delta problem unless we make the people whole first. The first objective in finding a permanent solution should be to clean up every inch of land and every drop of oil that has been spilled for the last 50 years.

A thorough and planned clean up will provide immediate employment for thousands of disaffected youths that are currently taking up arms, kidnapping and disrupting the lives of the people of Niger Delta.

Obviously this will cost a lot of money, but failure to clean up and find a permanent solution to the underdevelopment of Niger Delta will be even more costly in the long run.

If we start with the clean up, this will immediately create thousands of jobs for the inhabitants of the Niger Delta area.

Then we need new laws that have teeth. We should say to the oil companies, "if you spill, you clean." "If you fail to clean, you go to jail."
Immediately pass legislation that levies 25% of all oil revenue from the oil companies must be spent in the Nigeria Delta for development.

The Nigerian government must embark on immediate massive public works for road construction, clean up, and other infrastructure that can create immediate jobs for all the citizens and the restless youths of Niger Delta.

The American tax payers have spent almost $1 trillion in the last 9 years trying to contain Al Qaida, and other terrorists across the world, would it not make sense for us to help find a permanent solution to a potential time bomb that could disrupt our way of life if the current struggle escalated beyond our control. It is cheaper to clean up than to have to send American troops at some time in the future.

In fact, the American government should lead by putting pressure on both the oil companies and the Nigerian government to find a permanent solution.  This should include a marshal plan like loan guarantees for both clean up and redevelopment. After all we did the same for Europe and Korea.

The root cause of the unrest in Niger Delta is poverty and exploitation. Nigeria must formulate a policy that changes its oil and gas industry from extractive to domestication and local processing.

Nigeria burns $2 billion worth of gas per year, yet the Nigerian government, under pressure from the oil companies has been unable to do anything about this pollution and waste of resources for almost 50 years.
The reason is simple, it is not profitable for the oil companies to recover the propane burned off daily and convert it to domestic consumption for Nigerians to use. After all, if the Nigerian Government does not care about his people, why should Shell, Chevron, or Exxon Mobil care?

So we have to create a local processing of our oil and gas, along every value chain for our people to become engaged and benefit. Imagine how many Nigerians will be employed if 50 million Nigerians depend on propane to cook their food. That is a possible 50 million propane cylinders that may have to be filled monthly. This will in itself create an industry of cylinder makers, repairers, propane filling stations, propane tanker drivers, cylinder transportation companies and so on. Thousands and thousands of jobs will result from just one policy of ending flaring and diverting the gas to proper use domestically.

The U.S. oil industry pumps 8 million barrels of oil daily. There are 149 refineries, in the U.S. So by proportion, Nigeria that pumps 2.8 barrels of oil should have at least 52 refineries, but the four refineries that Nigeria has are either not functioning or operating at very low capacity.
Do you think the oil companies care if our refineries work or whether they should build refineries in Nigeria?  So another solution to the problem is to compel the oil companies to build refineries in Nigeria, thus creating jobs for the locals.

The New Nigerian Local content is a good example. If the people that owned the land from where the oil is pumped are not benefitting from the revenue generated, why should the people who live in distant lands benefit. Granted that these so called investor's may argue that, "without us, there will be no revenue from the Niger Delta," while that argument may hold some water, but these same companies have explorations in other parts of the world, and they make sure the owners of those lands benefit from their oil resources.
The people of the Gulf coast are not living from hand to mouth neither are the people of the North Sea. In fact the oil companies that operate in all western countries make sure that they invest and protect the interests of the community in which they explore. So why should it be different for the people of Niger Delta.

Nigeria is the fourth largest supplier of oil to the U.S., so continuous instability in the Niger Delta will ultimately affect the fragile economy of the United States. Just like the African proverb says, "when a member  of your house hold is eating bad insects, and you fail to warn him, soon or later he'll be so sick and will keep you up all night."
If the U.S. with all its influence fails to persuade the oil companies to develop Niger Delta, the poverty and neglect will eventually give way to armed revolution and disruption of the area and possible failure of the country known as Nigeria.

If the Nigeria government continues to shirk its duties by failing to force the oil Companies to do the right thing, sooner or later, the elites that run and control Nigeria will no longer have a country and the people to kick around and exploit. Therefore, a word is enough for the wise.

Toyin Dawodu is the Managing partner of Capital Investment Group, a California based Diversified Investment Company focused on Infrastructure development in Africa.    Email:  [email protected]



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