Nigeria: APrimeExampleoftheResourceCurse? RevisitingtheOil‐ViolenceLink in theNigerDelta
This paper studies theoil‐violencelink in theNigerDelta, systematically taking into con‐ sideration domestic and international contextual factors. The case study, which focuses on explaining the increase in violence since the second half ofthe 1990s, confirms the differ‐ entiated interplay ofresource‐specific and non‐resource‐specific causal factors. With re‐ gard to the key contextual conditions responsible for violence, the results underline the basic relevance of cultural cleavages and political‐institutional and socioeconomic weak‐ ness that existed even before the beginning ofthe “oil era.” Oil has indirectly boosted the risk of violent conflicts through a further distortion ofthe national economy. Moreover, the transition to democratic rule in 1999 decisively increased the opportunities for violent struggle, in a twofold manner: firstly, through the easing of political repression and, sec‐ ondly, through the spread of armed youth groups, which have been fostered by corrupt politicians. These incidents imply that violence in theNigerDelta is increasingly driven by the autonomous dynamics of an economy ofviolence: the involvement of security forces, politicians and (international) businessmen in illegal oil theft helps to explain the per‐ petuation ofthe violent conflicts at a low level of intensity.
Figure 4. Percentage distribution ofthe women’s willingness to be involved in farming Source: Authors’ calculation
The analysis of Figure 4 suggests that the interests of most rural women are in farming enterprises, but the 14% not willing to farm, probably were the riverine women occupied with helping their husbands in artisanal fisheries or petty trading of local gins (Kaikai). Hence, the key hindrance to agricultural development and broader growth in the region remains the wide and pervasive agenda gap in access to agricultural land asset and inputs in agricultural productivity. This finding tends to concur with Oseni et al (2015) in that women comprise nearly half ofthe labour force in Nigeria’s agricultural sector, but they produce less per hectare than men. Also Aguilar et al (2015) in Ethiopia agree that the numerous disadvantages that women in agriculture face include accessing the same resources, land assets, inputs, training, markets and opportunities as men. In Malawi, Karamba and Winters (2015) remarks that women also face ingrained norms and institutional barriers that further widen the gap. Therefore, tackling the barriers that hold back the participation of female farmers in the GMoUs could both enhance gender equality and usher in broader economic activities in theNigerDelta region.
TheNigerDelta region has been well-known for its crude oil, which provides over 80% of Nigeria’s annual income and since the 1990s, it has been known for armed conflicts and hostilities. The region is generally under-developed and the environment is being degraded as people try to secure their livelihoods. This thesis aims to identify the ecosystem benefits derived from theNigerDelta environment by local communities; appraise the methods of forest management and their effectiveness to provide a steady flow ofthe ecosystem benefits; identify stakeholders in the use and management of forest ecosystems, and suggest methods of collaborative forest resources management. The research adopted deductive and inductive social research methods to obtain primary data and was guided by three frameworks: livelihoods, ecosystems services, and the stakeholder participation and analysis. The result showed that the rural dwellers oftheNigerDelta depend almost entirely on ecosystem benefits for their survival; they have no access to crude oil but can access forest goods and services. The urban dwellers were aware ofthe range of provisioning, regulatory, cultural, and supporting services but rural dwellers were mainly only aware of provisioning services. The forest stakeholders were identified to comprise rural dwellers, local NGOs, academic and research institutions (classified as subjects); international agencies such as the UN (classified as key players); wood-based industries and urban dwellers (classified as crowd); and the government and oil exploration companies (classified as context setters). The existing forest management approaches included effective community traditional approaches (where they exist) and government laws and policies establishing forest reserves, which were mainly found to be ineffective. At present, the main forest management approach is top-down and initiated by government. The full cohorts of stakeholders are not working together to ensure the effective management of these resources. This thesis recommends a collaborative forest management approach, which involves identified key stakeholders.
Over the years, crude oil spillage through pipeline vandalism is considered one ofthe major prob- lems ofthe region. Rising cases of pipeline vandalism by militant groups have significantly affected sources of revenues of government and oil companies operating in the region. The militants claimed to be fighting for the emancipation ofthe region from environmental neglect. Statistics have shown that Nigeria is losing well over 300,000 barrels per day (bpd) as a result of crude oil pipeline vandal- ism, which runs into billions of dollars in losses (James, 2014 ; NNPC, 2013 ). This has resulted in sig- nificant negative socioeconomic and environmental problems in the region with serious effects on human lives and farm lands. Although factors such as institutional weakness, lack of effective imple- mentation of environmental laws were hypothesized as the causes of vandalism in the region, they are considered neither exhaustive nor confirmed as no available empirical evidences can be found confirming the asserted causes of vandalism in the area. Against this background, this study em- ployed confirmatory factor analysis (CFA) on 12 latent variables in determining the real factors that cause and influence frequent pipeline vandalism in theNigerdelta region, Nigeria.
As if the situation was not already bad enough, fresh scandals came to light revealing the ex- tent of Shell’s involvement in the Ogoni crisis, nay theNigerDelta crises. While on a visit to London the head ofthe Rivers State Internal Security Task Force (RSISTF), Major (Later Lt. Col.) Okuntimo, was reported to have told the London Times that Shell was providing regular field allowances to the RSISTF (Okonta and Douglas, 2001, Rowell et al, 2005 ; Peel, 2011), an allegation Shell strongly denied, although it reluctantly owned up to “paying field allowances to the Nigerian military on two separate occasions in 1993 when protesters were killed and wounded”(Human Rights Watch, 1999). What is clear is that theoil companies operating in theNigeria not sponsor military personnel in theNigerDelta, but also use their heft to manipulate the Nigerian state and its officials. This fact was contained in the secret cables from the US embassy in Abuja, released by Wikileaks, alluding to Shell’s “tight grip” on the Nigerian State. For instance, in August 2012, theoil industry watchdog Platform, based on leaked Shell docu- ments, revealed that nearly $383 million was doled out between 2007 and 2009 for the protec- tion of its corporate interests in theNigerDelta (Akpe, 2012:40). According to the report, about $65 million of this sum funded 1, 300 armed forces drawn from the Nigerian military and the mobile police, notoriously known as “Kill and Go”. In the parlance ofoil companies and the Nigerian government, these military personnel are designated as being on “special duties”.
Joseph I. Uduji, Elda N. Okolo-Obasi & Simplice A. Asongu
Handicrafts are key cultural products consumed in the Nigeria’s tourism industry. Owing to low entry barriers, as handicrafts require a low level of capital investment, there is potential to develop viable linkages between tourism and local handicrafts sectors that create economic opportunities for local artisans. Thus, we assess the impact ofa new corporate social responsibility (CSR) model of multinational oil companies on the development of rural young people (RYP) in cultural tourism in theNigerDeltaofNigeria. Six hundred RYP were sampled across the rural NigerDelta region. Using the logit model, results indicate that RYP have remained widely excluded from the General Memorandum of Understandings (GMoUs) interventions in cultural tourism projects due to the traditional beliefs that cultural affairs are prerogatives of elders, a caveat to the youths. This implies that if the traditions ofthe communities continue to hinder direct participation ofthe RYP from the GMoUs cultural tourism project interventions, achieving equality and cultural change would be limited in the region. The findings suggest that since handicrafts are key cultural products consumed in the tourism industry, GMoUs can play a role in helping to create an appropriate intervention structure that will be targeted towards youth empowerment in the area of traditional handicraft. This can be achieved if the Cluster Development Boards (CDBs) would focus on integrating rural young artisans into local tourism value chains and ensuring that they benefit economically from the sector. The CDBs should aim at creating space for the views of rural young indigenous people’s handicrafts; emphasizing the value of indigenous knowledge, particularly on arts and crafts for tourists and expatriate in multinational corporations in Nigeria.
The over arching importance of sustainable development is geared towards the improvement ofthe quality of life in all its ramifications, provided that environmentally sound policies are pursued vigorously, and adhered to by society. The question of whether it is possible to have both a high quality of life and, at the same time, a high quality ofthe environment, is a key issue which has generated much debate in the literature and at different fora. While Ferdinard E. Banks, a renowned Professor of Economics argues that "it is theoretically possible to have a material standard as high or even higher than that being enjoyed today, without tolerating a further deterioration ofthe environment", 19 but Griffiths and Young argue otherwise. They postulate that: Our task is not to devise new technologies, institutions, or policies designed to allow us to produce more with less. We must discover new and affirmative meanings in life without economic or material growth. The challenge before us is one of cultural and even spiritual revolution. This, in our view, is the proper meaning of sustainable development. It carries far beyond the often cited need for change in "lifestyles" and the like. 20
However, by emphasizing indignity and therefore a person’s ethnicity as the basis for appointment into offices, the principle in effect produces the antithesis to national unity in that it fosters ethnically salient candidates whose primary loyalty are to their respective ethnic groups (Bach, 1997). Also, the principle contradicts the liberal conception of citizenship as contained in the respective constitutions that emphasise the primacy of individuality and competition over consensus. Thus, implicit in the federal character principle are competitions for offices as well as the resources controlled by incumbents. Abubakar Momoh (2001) has identified three categories of citizenship in Nigeria, namely, constitutional citizenship, ethnic citizenship and diasporic citizenship. Constitutional citizenship is defined in terms ofthe provisions relating to citizenship as enshrined in the various Nigerian constitutions. This category of citizenship is based on the inherited liberal/bourgeois definition of citizenship. It clearly defines the rights and duties of every citizen and sup- posedly guarantees the equality of every citizen. Nevertheless, the bases for acquiring constitutional citizenship in Nigeria are by birth and naturalisation. As demonstrated by Mahmood Mamdani (1996) and P. P. Ekeh (1975), the colonial policy of indirect rule under the native authority system which bifurcated African societies into two, namely civic and native (ethnic), formed the basis for the creation ofthe ethnic citizen. The civic public, which formed the basis for the acquisition ofthe civic identity, was not open to Africans because as natives they were deemed to belong to their ancestral ethnic or primordial sphere and therefore ethnic citizens. This bifurcated nature of African societies created by the colonial policy of divide and rule, and the fact that ethnic identity formed the basis ofa person’s participation in the colonial society helped to create and sustain the phenomenon of ethnic citizenship (Ekeh 1972: 91). The reproduction of these colonial policies in post-colonial Nigeria has resulted in the continued presence and salience of ethnic citizen- ship.
16 health interventions to reduce the spread of HIV/AIDS among the young rural women, has led to these grievances being amplified and directed toward oil companies.
The analysis of Figure 2 shows that the six major patriarchal cultural challenges faced by rural young women are the preference in education of males over females, quest to travel abroad by the young women, early marriage, unwanted pregnancy, lack of funds and poor guidance and counselling. The study reveals these as the major push factors that have cost the female young adult quality education. The findings suggest that sweeping CSR policies in education are required to disproportionately favour women in theNigerDelta. Contingent on external forces like macroeconomic flows, government, and company ethics, higher education and lifelong learning CSR interventions could enable women and men in the region to participate equally in decent work, promoting economic growth, poverty reduction and well-being for rural people in the region. This finding contrasts with Klasen (2002) in that achieving gender parity in education, while important, does also translate into gender equality in economic activity and employment opportunities. Wekwete (2012) agrees that African countries which have experienced rapid growth in female education have also witnessed a commensurate increase in decent work.
from the geopolitical and socio-cultural structure ofNigeria, to practices that appear to be specific to theoil and gas industry.
Theoil and gas industry has always had strong lobbies and influence government policy and laws globally. Operation in the upstream petroleum sector is costly and capital intensive, and most ofthe companies involved have deep enough pockets to influence policies, laws and regulations through powerful lobbyist in the countries where they operate. Regularly, theoil and gas industries have been reported to fund political campaigns and bankroll politicians. It is instructive that in the United States of America, most wastes derived from the upstream oil and gas industry are exempt from USEPA regulation for hazardous wastes (U.S. EPA., 2002). In 1980, the US Congress gave a conditional exemption for exploratory and production wastes from theoil and gas industry from hazardous management under theResource Control and Conservation Act (RCRA), The Clean Water Act (CWA), and the Safe Drinking Water Act (SDWA). The wastes exempted include produced water, produced sand, drilling fluids and muds, tank bottoms, among several others (Puder and Veil, 2006). Nigeria was without any formal dedicated environmental regulations before 1988, when in a knee-jerk reflex to a toxic waste dump in some parts oftheNigerDelta, the Federal Environmental Protection Agency (FEPA) was created by the erstwhile military administration in the country, to enforce the Harmful and Toxic Waste Decree ofthe same year (Echefu and Akpofure, 2002). Prior to the formation of FEPA, the principal regulatory tool in the petroleum industry in Nigeria was the Petroleum Act of 1969, whose enforcement fell under the Department of Petroleum Resources ofthe Ministry of Petroleum Resources. Apparently, the major environmental policy thrust ofthe Petroleum Act 1969 was pollution abatement (Orubu et al., 2004).
The unproductive Nigeria political class whose primary source of wealth is the national treasury could not see how theNigerDelta area should be developed, despite the reports ofthe different commissions such as the Willink Commission, which stated the need to develop the area. Worse still, the federal predatory slogan ofthe “minority ethnic group” has not helped the situation. To them, “the emperor must dance naked”. The wealth ofthe region must be used to develop other regions while theNiger Delta’s privileged class and groups must share from the bounties. This partly explains the nature of protection which both the Nigerian State and theNigerDelta political class have given so far to the multinational oil corporations to the detriment of their Kinsmen and ancestral homeland. The relationship between the Nigerian State and theNigerDelta is that of clear disharmony. The politics of deprivation, despoliation and primitive accumulation ofa neo-colonial Nigerian State, the inimical activities ofthe multinational oil companies, the avarice oftheNigerDelta political class created violence which forces theNigerDelta nationalists to seek alternative and embrace the option of arms. The seed of rebellion has been sown and the struggle for alternative social order was becoming glaring with the political philosophy of Isaac Boro. His rejection ofthe existing order becomes clear when he says:
Subsurface geology, data and methodology
TheNigerDelta is one ofthe World’s largest Tertiary delta systems, located on the West African continental margin at the apex ofthe Gulf of Guinea (Fig. 3-2). Thedelta succession comprises a highly progradational, generally upward-coarsening association of Tertiary clastics up to 12 km thick (Doust and Omatsola, 1989). Thedelta stratigraphy and structure are intimately related, with the development of each being dependent on the interplay between sediment supply and subsidence (Doust, 1990). The geological analyses presented in this study are based on the interpretation ofa pre-stack time migrated 3D seismic-reflection volume ofa ca. 400 km² survey area in the coastal-marine transition ofthe western NigerDelta (Fig. 3-2). The study area is located in the extensional, gravity-driven structural domain ofthedelta (Doust and Omatsola, 1989; Damuth, 1994; Hooper et al., 2002), in which the progradation ofthe deltaic sedimentary wedge over basal marine shales caused the formation of numerous kilometre-scale, gravity- driven, syn-sedimentary growth faults (Fig. 3-3; also see Thorsen, 1963; Bruce, 1973; McCulloh, 1988; Lundin, 1992; Cartwright et al., 1998). The northwestern part ofthe study area is marked by three large-scale, arcuate-shaped, seaward-dipping normal faults (faults 1, 2 and 3) that extend laterally over several kilometers (Fig. 3-3) and displace sedimentary units of Pliocene to recent age by several hundreds of milliseconds TWT (Fig. 3-4 section A). In contrast, the central and southeastern parts ofthe study area exhibit a structurally complex zone of deltaic rollover (Fig. 3- 4 section B; Fig. 3-5 sections C and D) which is bound on its landward side by a series of large, subparallel, seaward-dipping, highly listric deltaic faults.
destruction of aquatic life, farms, flora and fauna; consequently human life and the environment are affected from damages which are also inadequately compensated for. They are thus deprived from participating actively in their traditional economic activity which is mainly farming on land or fishing in the waters. Their health is also affected as a result of polluted air and drinking water. In one sentence they are exploited, deprived, disempowered, marginalized and condemned to perpetual underdevelopment. Resource wealth has become resourcecurse to the people oftheNigerDelta particularly for Delta State ofNigeria. This is highly connected to the various conflicts that have bedevilled theoil producing communities in recent past. The people are not happy as their environment has gradually been degraded and violated. The economic boom ofNigeria has become the doom oftheoil bearing communities that sustain almost all socio-economic development in Nigeria. Finally, the environment cannot be devoid of human development. It is very important to sustainable human development. To give greater attention to preserving and using more wisely the environment and natural resources on which human development is hinged, oilresource, a very important aspect of development in Nigeria has to be managed responsibly.
exports in GDP) with a composite measure ofa particular dimension of institutional quality, we study to what extent we can add precision to their argument by decomposing the result with respect to (i) the types of resources, (ii) the measure of institutional quality used, and (iii) different time periods. We also discuss problems with the various econometric specifications that one could use to test the idea of an institutional reversal ofthecurse. In particular, it seems natural to consider using the panel structure ofthe data, especially to include country fixed effects. This, however, turns out to be problematic as there is not enough variation in the institutional measures over time and also because important level effects in institutional quality would be captured by the country fixed effect. The alternative that we instead explore is to use pooled OLS (and IV) regressions with time effects, including lagged values of both dependent and explanatory variables. This at least partly addresses some important concerns: First, time effects account for what previously was an omitted variable; second, including lagged values (ofthe variables of interest) reduces the endogeneity problems in the original specification; and, third, including the lagged value of growth itself accounts for the autoregressive properties ofthe growth process. 4 We use both 5-year averages and a yearly panel with different lag structures and discuss the relative merits of each.
Hence, this paper analyzes the economic impact ofoil price shocks in four ofthe largest oil-consuming Asian economies: Japan, Korea, India and Indonesia. 1
The main contribution of this paper is to examine Asian countries while distinguishing the effects ofoil shocks according to their type, compared to the previous studies on Asian countries (e.g., Abeysinghe (2001), Cunado and Perez de Gracia (2005), Ran and Voon (2012) and Le and Chang (2013)). More precisely, we estimate a structural vector autoregressive (SVAR) model while differentiating the effects ofoil shocks caused by 1) exogenous disruptions in theoil supply, 2) an increase in oil demand due to strong global economic activity, and 3) higher demand specifically for oil due to speculative or precautionary motives. In particular, to identify the underlying shocks, we introduce sign restrictions on variables representing the global oil market and examine their effects on economic activity and the price level of each country, as in Peersman and Van Robays (2009). We find that conditional on the type of shock, an unexpected increase in theoil price results in distinct responses of economic activity and consumer price indexes (CPIs), extending the findings in Kilian (2009) to Asian economies. In addition, the analyzed countries’ oil-importing or -exporting status in the world oil
5. Primary Product Exports, Fiscal Policy Volatility and Growth
In this section, we enter fiscal policy volatility together with primary product exports in our growth regression. If FPV fails to remain significant when primary product exports are added, and primary product exports are significant, that would suggest that FPV is significant in the growth regressions reported above only because of omitted variable bias. If however, FPV remains significant, the inference would be that FPV matters for growth but that it is one ofthe transmission mechanisms oftheresourcecurse (Acemoglu et al. (2003, pp. 80-1) argue along similar lines in relation to institutions and macroeconomic variables).
Norway embarked early in the 1970s on an ambitious combination of general policies. First, it used price subsidies, transfers, and tariffs to shield and support certain domestic industries thought to be crucial to a long-term comparative advantage. Second, it invested heavily in education and know-how. Third, it followed counter-cyclical polices to increase the share of employed laborers in the labor force, and did so probably much more enthusiastically than would have been feasible without oil resources. Fourth, labor market reforms were implemented to increase the labor force's share ofthe population. Fifth, wage control and income coordination programs were followed in nation-wide negotiations. The programs fell into an umbrella framework later named "The Solidarity Alternative" and helped establish the sense of social contract. Sixth, an expenditure-limitation policy of fiscal prudence directed to shield the economy from spending effects was institutionalized through the establishment ofthe Petroleum Fund and the so-called "Usage Rule" that limits exploitation ofthe fund to annual four percent returns ofthe Petroleum Fund. The last two were made possible by the fact that Norway has the most compressed wage-negotiating system of industrialized countries and wide public support for an equality of pay; see Wallerstein and Barth and Moene.
decline ofoil abundance, the specific resource‐management approach, and economic distor‐ tions have been at work; on the other hand, more recent conflicts have been intensified by the motive of control over resource revenues—regardless ofthe development oftheoil price. Of additional, but rather subordinate, importance appears to be the indirect impact ofoil through the long‐term degradation of political institutions due to clientelism and corruption. Clientelism and corruption initially had a politically stabilizing effect, but in the long run they have deepened the delegitimization ofthe traditional political elite and thereby trig‐ gered conflicts. Hence, the rentier state theory’s assumption that oil rents foster patronage networks, clientelism and assistentialist distribution policies clearly applies to the case of Venezuela. However, the consequences with reference to internal stability versus violent con‐ flictivity are not as unambiguous as predicted by these authors: the inherent dynamism ofthe impact of corruption—short‐term versus long‐term impact and variable social‐ psychological implications —has to be taken into consideration.
participating in the event. Furthermore, in this “trans-frontier” encounter we can recognise a moment which allows for an overcoming of hostility in the form of reconciliation. 78
Our remit to consider the concept of interruption as limited, is important if for no other reason than to prevent us from rejecting out-of-hand reasonable objections raised against this understanding. Thus, contemplating the issue from a slightly more sceptical viewpoint, one might ask whether the following proposition was not, in fact, the more noteworthy characterisation of ceasefires: the same soldiers who had connected with their enemies by making peace and forging friendships, only moments later shot at each other as if nothing had happened. The fact that the trench war – though not everywhere and not immediately, but in many places – continued with relentless ferocity, might, however, be interpreted differently: soldiers once again shooting at each other reveal in my opinion, the impact ofthe perfidious pressure that characterize war. In an industrialized war with its technological innovations 79 , an individual’s scopes of action are restricted. The fact that they do at times exist, is therefore all the more surprising and indeed significant in that they enable an individual to manifest and regain his self-respect.
Rajan and Zingales (henceforth: RZ, 1998) find that industries systematically differ in their need for external financing provided by the financial sector. It means that some industries rely more on the financial system than others. The communication- equipment sector, for example, is rather dependent on external finance since it has a limited ability to finance its investment need through own cash flow. Sectors’ different external dependence is assumed to be due to persistent technological characteristics such as the gestation and cash harvest period, properties ofthe production function and characteristics of input use (von Furstenberg and von Kalckreuth 2006). There- fore, the ranking of sectors according to their level of financial dependence appears to be relatively stable over time and across countries (e.g. Rajan and Zingales 1998, Hattendorff 2012). Rajan and Zingales (1998) measure external dependence by capital expenditures minus operative cash flow divided by capital expenditures. An alternative measure ofa firm’s liquidity need is proposed by Raddatz (2006): the ratio of invento- ries to sales. Since a high level of inventories ties up cash, this figure is considered to be suitable for capturing a firm’s external dependence. In contrast to the RZ-measure, it accounts for more short-term external finance need.