What is Happening in Nigeria? Blood and Oil (Subsidies)

In this article the author looks at the current wave of political and economic turmoil sweeping Nigeria.  With a potential oil shutdown sending waves of panic across Brent Crude prices and terrorism forcing the closure of the borders the state is facing its largest crisis since its return to civilian rule in 1999.

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by Jack Hamilton, 14 Jan, 2012

In 2010 the BBC released the controversial docudrama: ‘Blood and Oil’. It depicted a Nigeria crippled by corruption, protests and terrorism and was slammed for the tropes of endemic sleaze and violence. Executions, inhumane oil politics and the collusion of leading politicians in these atrocities were seen to reflect the Nigeria of the past. This is now the Nigeria of the present and it could be about to get a lot worse.

Occupy Nigeria

Naija Rising

This week the country closed its borders following counter-terrorism advice from the UN and a popular strike threatens to entirely shut down oil and gas production (accounting for over 90% of the export market) on Tuesday if demands are not met. There have been two crucial ultimatums:

1. Boko Haram has threatened to kill all Southerners (read: Christians) in the north if their demands of religious reform are not met. The attacks have already begun.

2. Occupy Nigeria has threatened to grind Nigeria’s export economy to a halt if their demands to maintain the fuel subsidy are not met. The deadline has been extended until Tuesday.

Facing a potential civil war and economic collapse, the Federal Government of Nigeria must act decisively.  There is no quick-fix.

There Might Be Blood – Subsidy Strikes

Who is Drinking Nigeria's Milkshake?

Nigerian oil and gas workers have threatened to shut down the Nigerian oil market, deepening the strikes against the withdrawal of petrol subsidies.  The government and unions are locked in talks which have been extended by two days as of today.  This leaves the government until Tuesday to find a solution or face economic meltdown.

The Petroleum and Natural Gas Senior Staff Association of Nigeria (Pengassan) have put all production platforms on red alert in anticipation of a shutdown. This demonstrates the lack of optimism in resolution being reached in time.

The crisis in Africa’s largest oil exporter has already had an international impact. Oil prices have already risen in anticipation of the shutdown and Nigeria’s export reserves would only last for six weeks.

Brent Crude prices have risen by $1 per barrel in a single day and in a global crude market already shaken by conflict in the Middle East and North Africa, a shutdown in Nigeria could have expansive ramifications. In an election year the last thing a US incumbent would like to see is a pinch at the pumps.

While the true international impact of the crisis is yet to be fully realised, it has already had a devastating impact domestically. The price of fuel has already more than doubled and the prices of other goods, including food, are skyrocketing. People are struggling to get to work, to put food on the table and to run their electricity generators. If the strike turns violent it is these people who will suffer.

Subsidies are seen to be the only benefit most Nigerians receive from the vast oil riches of the country. The argument for their removal is that they cost the state $8 billion per year in funds that could be better used on infrastructure and development. In a country in which government corruption is rife and the trust in the state is dangerously low it is clear that the people would like to see the money conferred through subsidies rather than pilfered by the ‘1%’.

The subsidy involved a huge amount of corruption but its removal does not equate to the removal of the corruption. It is merely a relocation.

Spreading Terror

The north of Nigeria is ‘sliding towards a full-blown guerrilla war’ according to The Economist. Boko Haram bombing campaigns have intensified since the Christmas Day attacks and acts of retribution have been carried out in the Christian south. The burning of a mosque in Benin City, southern Nigeria, demonstrates the dangerous roadmap the northern insurgency could instigate.

Fears abound over the potential links between Boko Haram, a small cult whose primary objective is the removal of secular education, and al Qaeda in the Islamic Maghreb.  Assertions of a broader terrorist network were originally purported by sources in the American military (AFRICOM) and the Algerian Government but on Tuesday this fear was also echoed by the United Nations.

Secretary-General Ban Ki-Moon has stated that ‘concerns will increase’ as the popularity of Boko Haram grows. The alleged sophistication of the attacks, especially the bombing of the UN in Abuja, has provided some substance for these assertions but the most recent activities reflect burgeoning brutality, not capability.

Goodluck Jonathan has responded to the fears of a vast terrorist network by closing the borders of the country. Nigeria’s international borders are now operating on high alert as the latest measures demonstrate the degree of force the Federal Government is willing to use to achieve peace and stability across the country.

Elevated force does not necessarily provide a solution for the state.  They are fighting a guerrilla organisation, galvanised by support from those who fear the encroachment of an over-zealous central government.  Memories of egregious state violence mean that heavy state mobilisation is likely to increase rather than diminish the allure of the Boko Haram message to those who feel alienated from the state.

Will Things Fall Apart?

The Occupy Nigeria protests and Boko Haram attacks are entirely separate movements with the common theme of opposing the Federal Government of the country. With opposition to government threatening the security and the economy of the nation questions abound over the future of Nigeria.

Jonathan has announced palliative measures the mass production of buses to ease the transport issues in the country as well as reducing government salaries by a quarter (although they remain obscenely high in such an impoverished nation).

The most recent response to Boko Haram has been a change in language. Jonathan has acknowledged that the support base may be more than purely criminal. In his speech on Monday he admitted that there may even be members of his government that identify with the organisation.

Talks with Occupy Nigeria have been extended by two days but there is a general lack of optimism for a rapid resolution. Boko Haram are intensifying their attacks and flickers of retribution have begun in the south. At present neither crisis shows signs of abating and the Federal Government is floundering.

Nigeria is being plunged into a future which looks ominously similar to its past. In this scenario ‘Blood and Oil’ appears rosy.

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For more on the recent crises in Nigeria and terrorism across West Africa see these articles on InPEC:

The State of Terrorism in Nigeria: The Rising Threat of Boko Haram

Photo Essay: 6 Reasons Terrorism is Gaining Momentum in Northern Nigeria

Securing Emptiness: The Sahara Desert and the Global War on Terror

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