1

‘ENERGY SECURITY AND THE RESOURCE CURSE

IN NIGERIA: A CASE STUDY OF OIL IN THE NIGER DELTA (1990-

2010)’

2

SUMMARY

Nigeria is a West African country that is referred to as “the giant of Africa”. The reason is

because it is Africa’s most populous country with more than 150 million people, and the

world’s eighth largest oil producer. Oil was discovered in commercial quantity in the 1950s

and generated so much wealth for the country in the 1970s. Since then, Nigeria has been

dependent on oil revenue which accounts for over 90 percent of its export earnings. Despite

these huge earnings, the country and its producing region (Niger Delta) suffers from poverty,

unemployment, insecurity, corruption, environmental degradation, and conflict over oil

resource as a result of bad leadership, poor economic management. The oil resource rather

than being a blessing has become a curse to the nation because; the excessive reliance on oil

revenue has resulted in economic stagnation and political instability.

The purpose of this paper is to examine the extent to which oil has been a curse to Nigeria’s

economy and political sector. The paper defines the nature of Nigeria’s oil curse; it also

identifies the causes and effects of the oil curse. Furthermore, the paper analyzes the reasons

why the country has not recovered from the oil curse.

3

TABLE OF CONTENT

TITLE PAGE

ABSTRACT

ABBREVIATION4

PREFACE5

CHAPTER 1 INTRODUCTION

CHAPTER 2 THEORETICAL FRAMEWORK/LITERATURE REVIEW

CHAPTER 3 DEFINITION AND DRIVERS OF THE OIL CURSE IN NIGERIA

3.1 DEFINITION OF THE OIL CURSE (THE NIGERIAN PERSPECTIVE)

3.2 DRIVERS OF THE OIL CURSE IN NIGERIA

CHAPTER 4 CONSEQUENCES OF THE OIL CURSE IN NIGERIA

4.1 CONFLICT

4.2 WEAK INSTITUTIONS

4.3 INTERNATIONAL PRESSURE31

CHAPTER 5 CRITICAL ANALYSIS ON THE PROPOSED SOLUTION FOR THE OIL CURSE IN NIGERIA33

5.1 TRANSPARENCY AND ACCOUNTABILITY

5.2 NATURAL RESOURCE FUND

5.3 DIRECT DISTRIBUTION

5.4 ECONOMIC DIVERSIFICATION

CONCLUSION

BIBLIOGRAPHY

4

ABBREVIATIONS

EITI Extractive Industries Transparency Initiative

EU European Union

GGESS Gulf of Guinea Energy Security Strategy

HDI Human Development Index

LDCs Less Developed Countries

N Naira (Nigeria’s Currency)

NDDC Niger Delta Development Commission

NEITI Nigerian Extractive Industries Transparency Initiative

NRF Natural Resource Fund

OMPADEC Oil Mineral Producing Area Development Commission

OPEC Organization of the Petroleum Exporting Countries

PWYP Publish What You Pay

SAP Structural Adjustment Program

TI Transparency International

UNDP United Nations Development Program

5

PREFACE

In October 2010, I started my Masters program worrying about what topic I was going to

write on for my dissertation. After attending some classes for the course New Security

Challenges, I found a topic which caught my attention ‘Resource Conflict and Energy

Security’. The lecture was delivered by Lisa Smirl who explained the key concepts around

energy security (the uninterrupted physical availability at a price which is affordable, while

respecting environmental concerns); natural resources (natural assets or raw materials which

can be used for economic production or consumption); and conflict (which can be classified

as inter -state and intra-state). She explained why resource scarcity can cause conflict

between states, and how resource abundance can cause conflict within a state.

To a large extent, I can say that the lecture inspired me in choosing my topic. After reading

the works of Paul Collier, Philippe Le Billon, Terry Lynn Karl, Robin M Mills, Michael

Ross, Jonathan Di John, their works inspired me to research on the theory of the resource

curse.

I held several meetings with my supervisor Prof Stefan Elbe, who guided me in constructing

a suitable title for this dissertation (Energy Security and the Resource curse in Nigeria: A case

study of oil in the Niger Delta 1990-2010).

There are several works that reflect on issues around the Niger Delta. Prominent writers such

as; Ike Okonta and Oronto Douglas, Cyril Obi and Siri Rustad, Akeem Akinwale, Aderoju

Oyefusi, Adekoya Adebanji, Ndubuisi Nwokolo, Bonnie Ayodele, have all argued that the

issues of the Niger Delta is centered around conflict over oil resources (between the people;

the Nigerian government and multinationals), environmental degradation, militancy,

corruption, lack of infrastructure, unemployment, and poverty. All their works are credible

and helpful. However this dissertation takes a different approach by looking at the extent to

which Nigeria suffers from the oil curse.

The resource curse theorists argue that the discovery of natural resource in developing

countries have been associated with devastating effects that leads to political conflict and

economic stagnation. The aim of this dissertation is to find out if these facts are true in the

Nigeria’s case.

6

From my perspective, I argue that the discovery of oil has contributed to the economic and

political setbacks in Nigeria and its producing region. To support this I provide the definition

of the oil curse in Nigeria, explaining the reasons why Nigeria is still economically stagnant.

In addition we look at the economic and political causes of the oil curse, as well its effects on

the oil producing region. To bring the dissertation to a close, I examine the reasons why some

of the solutions to help escape the oil curse have not really worked in Nigeria.

At this point I would like to acknowledge some people who made this dissertation possible.

First I want to say a big thank you to my supervisor Prof Stefan Elbe for guiding me through

the stages of this research. I extend my appreciation to my tutors in the school of Global

studies for preparing me for the big task of research. My appreciation also goes to my course

mates for the good suggestions and constructive criticisms. Also I want to appreciate Ayodeji

Oyarinu for his advice and support during the course of this research. To my friends who

checked up on me during the course of this research, thank you. And finally I want to extend

my sincere gratitude to my family for the support and words of encouragement. Thank you,

you have made my dreams possible.

7

CHAPTER 1

INTRODUCTION

Studies on the resource curse have shown that ‘the discovery of oil or other natural resources

often brings about dreams of wealth and prosperity for developing countries. In all too many

cases though, these discoveries have instead been associated with devastating political

conflict and last economic setbacks’ (Cited in Humphreys et al 2007).

In contrast, other studies have associated oil and other mineral resources with high levels of

economic growth, wealth generation, and political stability. But these relative wealth and

economic development from natural resources are visible in developed countries like the

Norway, United States, Australia, and Canada (Di John 2010).

The main issue for developing countries is the fact that they have been unable to use their

wealth from natural resources to sustain economic growth and political stability (Collier

2007). As far as this research is concerned that is the whole idea of the ‘resource curse

theory’. Given Nigeria’s position as Africa’s leading oil producer and exporter, what does the

country have to show for it? Instead of economic growth and development as part of its

achievement; it is ranked amongst the poorest countries in the world. Sources have shown us

that most of its population lives below $1 a day (BBC 2007). Where did Nigeria get it wrong?

That is one question this dissertation seeks to answer.

Reflecting on the idea of the resource curse theory, the main objective of this study is to

examine the extent to which the discovery of oil in Nigeria has contributed to the setbacks in

its economic and political ambitions. In other words, the extent to which oil has become a

curse to the nation’s economy and politics. In essence, my argument is that Nigeria suffers

from the oil curse because of the inability to convert its enormous wealth from oil to achieve

substantial growth and development. To achieve the objective of this study, I have broken

down the dissertation in four other sections (Chapter 2-5). Chapter 2 has two tasks which

includes; explaining the theoretical framework (resource curse), as well as reviewing some

literatures around the theory. Chapter 3 discusses the definition and drivers of the oil curse in

Nigeria. It also makes a distinction between the economic drivers and the political drivers of

Nigeria’s oil curse. Chapter 4 examines the consequences of the oil curse in Nigeria. It also

takes into consideration Nigeria’s oil producing region (Niger Delta) and the negative effects

of oil on the region. Finally, chapter 5 makes some remarks on some proposed solutions for

8

the oil curse in Nigeria and why these solutions have been ineffective. I conclude this study

by sustaining my argument that oil has done more harm than good to Nigeria’s economy and

politics.

In terms of scope, this research is limited to the study of issues around Nigeria and the Niger

Delta from 1990-2010. The reason for the selection of this timeframe is because there are

more evidences of Nigeria’s oil curse during this period. Furthermore limited time and the

word count for this dissertation won’t allow us explore issues outside this timeframe.

However historical contribution before 1990 and after 2010 would be considered, but not

thoroughly.

This dissertation has relied on qualitative research method. In writing this work, secondary

sources which include; newspapers, books, textbooks, academic journals, conference papers,

lecture notes, official reports, online articles/web pages, were used.

Interestingly, the selection of a particular state study which is Nigeria and Niger Delta gives

me an edge to avoid generalizing the idea specified by my theoretical framework (Resource

curse). Before now, I read books citing Nigeria as one cursed with oil, but the evidences

provided where either shallow or inadequate. The advantage of choosing this particular study

is that it has helped in broadening the knowledge of the resource curse theory in contrast to

what other writers have written. However, limited time for this research has been one

disadvantage of selecting a particular case study.

In a nutshell, the study would examine the extent to which the discovery of oil has been a

curse to Nigeria’s economy and politics.

9

CHAPTER 2

THEORETICAL FRAMEWORK

REVISTING THE LITERATURE ON THE RESOURCE CURSE

For the purpose of this dissertation, I have chosen the resource curse theory to serve as my

theoretical framework. The reason for this selection is because it helps in analyzing the extent

to which natural resources could be a disadvantage to a country’s economic and political

progress.

A wide range of scholars have written extensively in the area of the resource curse, each

bringing different perspectives and arguments to the table. Before we consider their

arguments, I believe we should consider the resource curse thesis to enable us understand

what exactly it has to say.

The idea behind the resource curse is this;

Countries with large endowments of natural resources, such as oil and gas, often perform worse in terms of economic development and good governance than do countries with fewer resources. Paradoxically, despite the prospects of wealth and opportunities that accompany the discovery and extraction of oil and other natural resources, such endowments all too often impede rather than further balanced and sustainable development (Humphrey et al 2007:1) see also (Ross 1999, Weinthal and Luong 2006, Soros 2011).

In other words, countries with abundant mineral resources are prone to have series of

negative economic and political outcomes. The question still remains, is this always the case

with all countries that have abundant natural resources? For example Norway has abundance

of natural resources, is it cursed? No! (Humphreys and Sandbu 2007).

In Collier’s book The Bottom Billion, he argues that many countries of the world are

genuinely developing (of the 5 billion, 80 percent) often at a fast pace, ‘the real challenge of

development is that there are countries at the bottom that are falling apart’. He continues by

saying that the singular problem with the countries in the bottom billion is one that’s has to

do with growth. In more simple words, the countries have failed to grow and therefore

remained stagnant and poor. Collier identifies countries of the bottom billion to be countries

from sub-Saharan Africa, and Central Asian nations. Altogether he identifies fifty eight

countries and highlights some typical features which includes; they are small compared to the

10

population of either India or China, and their per capita income is low. (Collier 2007:1-11,

Zukerman 2008)

Going back to the idea of the resource curse, should we agree with Collier’s argument of the

bottom billion, which argues that countries that 1) have failed to grow, 2) endowed with

natural resources would perform worse in terms of economic development and good

governance? Or should we stick to an elaborate definition by (Di John 2010) on the resource

curse which says;

The big idea behind the resource curse is that mineral and fuel abundance in less developed countries (LDCs) tends to generate negative developmental outcomes, including poor economic performance, growth collapse, high level of corruption, ineffective governance and greater political violence. Natural resources, for most poor countries, are deemed to be more of a curse than a blessing.

The reason for this analysis is to clearly bring to our knowledge two different definitions on

the idea of the resource curse. Humphreys et al (2007)’s definition seems to generalize the

idea of the resource curse by using words like (countries with large endowments…) which

signifies that all countries with abundance of natural resources tend to be cursed. Whereas Di

John (2010) and (Collier 2007), are more specific with their words (LDCs/Poor Countries)

tend to be cursed with abundance of natural resources.

The definitions are insightful, but it was important to get a clear understanding, so it doesn’t

lead the researcher into confusion. Having cleared the problems around the definition, I

proceed with the theories around the resource curse.

In an article by Ross (1999) titled The Political Economy of the Resource Curse shows us the

political and economical dimensions of the theory of the resources curse. He suggests that

there are four explanations for the economic dimension of the curse which includes; decline

in terms of trade for primary commodities, the instability of international commodity

markets, the poor economic linkages between resource and non resource sectors, and the

aliment of the Dutch Disease. On the other hand the political dimension includes three

categories; cognitive explanations, which argues that resource boom produces a form of short

sightedness among policy makers; the societal explanation contends that resource export

tends to empower some interest group that favor growth-impeding policies; and state-

centered explanation suggests that resource booms tend to weaken state institutions. He also

11

adds two other explanations for the curse; 1) states inability to enforce property rights, 2)

state owned enterprises, which supervises resource extraction in developing states. Both

according to Ross can lead to a resource curse.

Following Ross argument on resource boom weakening state institutions, Lynn Karl in her

work The Paradox of Plenty suggest that large revenue from natural resources can have

negative effects on state. She argues that;

Commodity-led growth induces changes in the prevailing notions of property rights, the relative power of interest groups and organizations, and the role and character of the state vis-à-vis the market. These institutional changes subsequently define the revenue basis of the state, especially its tax structure. How these state collect and distribute taxes, in turn, creates incentives that pervasively influence the organization of political and economic life and shapes government preferences with respect to public policies (Lynn Karl 1997:7)

Lynn Karl in her study takes into account the historical, structural, and political economy of

Venezuela, and also provides a comparative analysis of the political economy of petro-states

which includes Nigeria, Algeria, Iran and Indonesia. In her analysis, economically Indonesia,

fared considerably better than others because of the choices made by their government during

the boom years (1997:191)

Di John criticizes Lynn Karl’s study. In his article The Resource Curse: Theory and

Evidence, he argues that rentier state theorists such as Lynn Karl have ignored the

possibilities that mineral abundance can be central to the development of manufacturing

industries. He supports his argument by using the United States as an example. According to

him large scale investments in exploration, geological knowledge, transportation, refining and

utilization in natural resources have contributed to industrialization and economic growth in

the United States. (Di John 2009, 2010)

Similar to Di John’s work, Mills (2008) notes that the oil curse affecting countries like Iran

and Nigeria has progressed to the extent of severely hampering the oil industry itself. He

further argues that oil has both positive and negative effects on a nation’s economy. An

example of the positive effects can be seen in oil-cursed Iran and Iraq. In the two countries,

oil revenue facilitated the creation of a substantial, well-educated professional class (Mills

2008:193).

12

A study by Bannon and Collier (2003) notes that more than a billion people reside in low-

income countries that have failed to put in place institutions and policies that would elevate

them to join the group of more developed middle-income nations. As a result of their poor

and stagnant nature, they have been mired in economic decline and found to be dependent on

natural resources. Following the argument by Banon and Collier, Ibeanu and Luckham (2007)

have this to say about Nigeria.

Nigeria’s economic problems were exacerbated by gross neglect of the agricultural sector, ill-conceived structural adjustment policies and failure to regulate the oil industry properly. These were not simply policy errors. They were also outcome of money politics, cut-throat competition for power and resources, systemic corruption, all intensified by massive injections of oil money into a political and administrative system that lacked the capacity to absorb them. (cited in Kaldor et al 2007:56)

With this headline message, Collier (2007) argues that countries under this category may be

caught in four traps namely; the conflict trap, the natural resources trap, the trap of being

landlocked with bad neighbors, and the trap of bad governance in a small country. However,

Collier contends that it is possible for countries to escape these traps but some of the

countries that break clear are faced with stagnation as a result of external factors (2007:6)

For the purpose of this study, I would pick up the conflict trap, the natural resource trap and

the trap of bad governance. I have chosen these three because they are relevant to the

dissertation’s case study which is Nigeria.

Let’s start with the conflict trap. According to Collier, countries that experience low income,

economic stagnation and dependence upon primary commodity exports are prone to civil war.

He argues further that all countries that have all the features mentioned above are not

necessarily in the conflict trap, but they are prone to falling into it. Poor nations face a high

risk of falling into civil war than wealthy ones (Collier 2007:32-34, Bannon and Collier 2003,

Zukerman 2008, Collier and Hoeffler 2005).

Collier and Hoeffler also suggest that ‘conflict may be explained either by greed or by

grievances, such as feelings of ethnic or political marginalization’. They argue that greed and

grievances are more common with rebels who feel that have been marginalized in the trade of

natural resources (cited in Humphreys 2005)

13

Auty (2005) takes a similar approach and concludes that the risk of conflict is at its highest

when; 1) economic growth has collapsed 2) the resource generates point socio-economic

linkages 3) production occurs adjacent to porous national borders 4) the commodity has a

high value/weight ratio (e.g. diamonds and drugs) (cited in Le Billion 2005:30-46)

Ross (2004) suggest that not all natural resources are linked to conflict, and he shares his

findings by arguing that; oil dependence appears to be linked to initiating a conflict, but does

not sustain the conflict duration, also natural resources (e.g. opium, gemstones, and cannabis)

do not initiate conflict, but seems to lengthen pre-existing wars; he contends that there is no

evidence/case study that shows that agricultural commodities initiates or sustains conflict.

Corresponding to Collier’s argument on the conflict trap, a lot of scholars have tried to link

natural resources with conflict. Some have researched particular natural resources using case

studies. For example Selby (2005) has done a study contrasting Oil and water as a likelihood

to conflict. He takes his case study from the Middle East, and concludes that water is unlikely

to cause major conflict, but ‘local water conflicts are likely to become an ever-more feature

of life in the global south’ (Selby 2005:223-224). Le Billion (2001) studies the political

economy and geography of oil and diamonds in correlation with the conflict in Angola. From

his findings, oil and diamonds did not cause the Angolan conflict, but its availability

sustained the military capacities of the conflicting groups. Also Oyefusi (2007), Akinwale

(2008), Nwozor (2010), Adebanji (2010), Nwokolo (2009), Ayodele (2010), Nordic Africa

Institute (2009), Obi and Rustad (2011), Asuni (2008, 2009), Tuschi and Ejibunu (2007),

Omofonmwa and Odia (2009) have done a comprehensive study of oil in Nigeria’s Niger

Delta region in relation to conflict. They argue that the region have been cursed with conflict

as a result of rent seeking, unemployment, intercommunity rivalry for resource control,

poverty/poor infrastructure, environmental degradation, weak institutional arrangement, and

militancy. (for oil conflicts, see also Kaldor et al 2007)

The natural resource trap according to Collier (2007) contributes to the conflict trap, but a

common phenomenon to the natural resource trap is the ailment of the “Dutch disease,

already mentioned above by Ross (1999) and volatility in commodity price.

Barder (2006) in an article called A Policymakers’ Guide to Dutch Disease: What is Dutch

Disease, and is it a problem? He defines Dutch disease as a ‘term used by economists to

describe a reduction in a country’s export performance as a result of an appreciation of the

14

exchange rate after a natural resource such as oil has been discovered’ (see also Humphreys

et al 2007:5, Ross 1999, Lynn Karl 1997:5-6).

Collier (2007) cites Nigeria as an example of a country suffering from the Dutch disease,

according to him, in the 1970s ‘oil revenues built up, the country’s other exports such as

peanuts and cocoa became unprofitable, and production rapidly collapsed’ (2007:39). A

different study by Sala-i-Martin and Subramanian (2003) suggest that the problem with

Nigeria’s economic performance is not the aliment of the Dutch disease, but from waste and

corruption.

The second part of the natural resource trap which is volatility, Shaxson (2005)’s work New

Approaches to Volatility: Dealing with the Resource Curse in Sub-Saharan Africa argues that

volatility depresses economic growth. In his words;

Revenue volatility hampers planning, boosts deficits (it is easy to raise spending when prices are high, but hard to cut back when price fall, especially for governments whose legitimacy rests on allocating oil rents) and tends to raise debt (when oil prices are high countries are more creditworthy and tend to borrow more; when prices fall arrears build up on unpayable debts, increasing debt further)

Humphreys et al (2007:6) notes that countries like Chad and Nigeria fall into the risk of

volatility.

Moving to the bad governance trap, the idea is simply that bad policies and governance can

ruin the development of a country. The high level of corruption impedes development

opportunities. The governments of these countries have failed to put in place institutions that

will foster economic growth (Collier 2007, Bannon and Collier 2003). Collier argues that

corruption has made leaders of these poor countries wealthy and they hinder development in

their countries to maintain the status quo. It becomes profitable to keep their citizens ill-

informed and uneducated (Collier 2007:66). Oyefusi (2007) notes that one of the reasons for

conflict in the Niger Delta is because of corruption and weak institutional arrangements.

According to him, violence among individuals is as a result of the struggle for educational

attainment.

There are further arguments on the bad governance trap. For example; Ross (2001),

Humphrey et al (2007), Collier and Hoeffler (2005) Collier (2007) suggest that natural

resources (especially oil) tend to make states less democratic. In other words countries that

15

are rich in natural resources and have existing democracies tend not to follow the democratic

norms. In addition, non democratic oil states are less likely to become democratic. In oil

democratic states, leaders often practice the politics of patronage, while in non democratic

states; leaders to a large extent subdue their oppositions. Ross (2001) concludes that; 1)

natural resources (especially oil) hurts democracy, 2) oil has made democratization harder in

nations like Malaysia, Indonesia, Nigeria, Mexico, and most nations in the middle east, and 3)

non fuel mineral wealth also impedes democracy.

From my perspective, the existing literatures on the resource curse are centered around four

casual mechanisms, namely; the Dutch disease/volatility, rent seeking, corruption, and

conflict.

While some researchers have identified the casual mechanisms for the resource curse, some

have identified the solutions for it. For example; Soros (2011), Le billon (2006/2007),

Collier (2007a 2007b) suggest that transparency initiative will be key in solving the problem

of a resource curse. Soros (2011) notes that;

Citizens everywhere must be assured that oil and gas firms, as well as mining companies, publish all of their relevant financial information, broken down by country and by project, and including all payments made to host-country public budgets

Humphreys and Sandbu (2007), Salai-i-martin and Subramanian (2003) prescribe the creation

of a Natural Resource Fund (NRF). According to them the NRF should be created to ensure

accountability and prevent the misuse of resources. They both cite Norway as an example of

a country that has an effective NRF.

In an article by Weinthal and Jones Luong (2006) titled: Combating the Resource Curse: An

Alternative Solution to Managing Mineral Wealth, they did a critical survey on proposed

solution for the resource curse which includes; macroeconomic policies, economic

diversification, transparency and accountability, NPF, direct distribution to the general

population. However they added something new to the list, which is, domestic private

ownership. They argue that domestic private ownership is often ignored, but it is a viable way

to escape the resource curse.

After looking at some of the literatures that specify the problems and solutions of the resource

curse, it is important to visit the literature that has a critic to theory of the resource curse.

16

Critics of the resource curse (Calvalcanti et al 2011) argue that the methodologies used by

proponents of the theory failed to take into account cross-country differences and

dependencies arising from global shocks, such as changes in technology and the price of oil.

With their data analysis, they studied 53 countries over 27 years and ‘suggested that oil

abundance has short run growth enhancing impacts and positive level effects on real income.

Therefore oil abundance by itself does not seem to be a curse’ (see also Di John 2010)

Tierney (2008) also suggest that;

The resource curse vanishes when looking not at the relative importance of resource exports in the economy but rather at a different measure: the relative abundance of natural resources in the ground. Using that variable to compare countries, it reports that resource wealth in the ground correlates with slightly higher economic growth and slightly fewer armed conflict.

Although critics have voiced out a different view of the resource curse theory, it is important

to note that the theory explains my argument.

In summary, existing literatures mentioned above have revealed pertinent issues around the

theory of the resource curse including; the definitions, the problems, solutions and critics.

However there are some gaps that this dissertation seeks to fill up. For example some of the

definitions of the resource curse are too broad, so I propose to stick to a definition that is

more specific, one that best suits my case study. Secondly, the casual mechanisms of the

resource curse theory have been put together; this dissertation seeks to separate them in a

specific way, by identifying what I call the drivers and consequences. In other words one

could call it the causes (drivers) and effects (consequences) of the resource curse. Thirdly,

existing literatures have identified different natural resources and case studies. I have chosen

my case study to be Nigeria/Niger Delta, and the natural resource relevant to this study is oil.

17

CHAPTER 3

DEFINITION AND DRIVERS OF THE OIL CURSE IN NIGERIA

The aim of this chapter is to examine the definition of the resource curse that is appropriate to

our study. Apart from looking at the definition, we also look into the drivers. In a sense one

could switch drivers with the causes of the resource curse.

3.1 DEFINITION OF THE OIL CURSE (THE NIGERIAN PERSPECTIVE)

For the purpose of this dissertation, I have decided to re-echo the definition provided by

Collier (2007), Wenar (2008), Ross (1999), Di John (2010) which says that; ‘natural

resources (Oil) abundance in less developed/developing countries tends to generate negative

development outcomes, including growth collapse/poor economic performance, corruption

and ineffective governance’. In other words, Oil resource has become an obstacle to

prosperity in less developed countries.

One may ask, is this the situation in Nigeria? Is Oil really a curse to the country? Is Nigeria

less developed? These questions would be answered shortly.

One of the best answers comes from someone who you least expect, the current President of

Nigeria, Jonathan Goodluck. In 2008, when he was Vice President at the time, Jonathan

Goodluck argued that ‘the discovery of oil and the dependence of oil has caused Nigeria’s

economy and development to remain stagnant over the last several decades’… he goes on to

say that ‘the overdependence on oil has put an unpleasant bracket in our national economic

freedom’ (UPI Energy 2008)

Olayiwole (1987) answers the question on the issue of Nigeria’s development. According to

him;

The lack of development in Nigeria can be traced to a structural condition of underdevelopment. By underdevelopment, it means the persistence of stagnation, duality or lack of integration between agriculture and industry and between urban and rural spatial structures, inequality as the level of economic activity grows, and frequent political instability. (1987:8)

18

Looking at these two answers, it is important to examine why both commentators have come

out with such a strong conclusion about Nigeria and the resource curse.

Nigeria gained independence from British colonial rule on October 1st 1960, has a population

of about 158.2 million (BBC 2011) making it the most populous country in Africa. Nigeria

was initially known to be an agricultural nation and producer of export commodities such as

groundnut, cocoa, timber, cotton and palm oil, until the discovery of oil in Oloibiri village in

the Niger Delta region in 1958 (Rafiu 2011, Falola and Heaton 2008). It is important to note

that Nigeria is the 8th largest oil producer in the world, and the Niger Delta accounts for most

of the country’s oil wealth. Since the 1970s (which marks the genesis of the oil boom for the

country) Nigeria has made trillions of dollars from oil export (Obi and Rustad 2011, Rafiu

2011). With these earnings from oil revenue one will think that the country is doing well

economically and politically, but the assumption is false. Nigeria can be described as a rich

country with poor people. The so called ‘rich country’ suffers from corruption, poverty,

conflict, insecurity, environmental degradation, looting of oil resources, inadequate

infrastructures and bad governance (Oyefusi 2007; Nwokolo 2009; Ayodele 2010). For

example, more than 50% Nigeria’s population lives below the poverty line, which is less than

$1 a day (BBC 2007). It is more alarming to realize that the Niger Delta region which has an

estimated population of 29 million and accounts for over 90 percent of the nation’s oil

revenue live in abject poverty (Akinwale 2008, Oyefusi 2007). Furthermore, according to the

United Nations Development Program (UNDP) that releases reports on the Human

Development Index (HDI) which tracks national achievement in education, health and

income have ranked Nigeria amongst countries with the lowest human development. In fact

the 2010 report notes that Nigeria is ranked 142 (HDR 2010).

What makes it more fascinating is when you compare countries that started the race of

development with Nigeria in the 1960s, you find out that they have achieved and maintained

high growth rate, and left Nigeria behind wallowing in economic stagnation. Humphreys et al

(2007) and Adegbulu (2006) have brought to my attention the economic development of the

Asian Tigers. The Asian Tiger (Hong Kong, Singapore, South Korea and Taiwan) are noted

as nations that achieved high growth rates and rapid industrialization between the 1960s and

the 1990s. Furthermore, what makes the Asian Tigers unique is that they have pursued an

export-driven model of economic development, maintained political stability, invested in

high standards of education, built a skilled/disciplined workforce, and had a zero-tolerance

for corruption (Adegbulu 2006:281)

19

At this juncture, one begins to ask questions, what is the problem with Nigeria? Why is oil a

curse to the Nation? This leads us to the drivers of the resource curse. I have decided to

adopt Ross (1999) method by dividing the drivers into two dimensions, which are the

economic and political drivers of the resource curse.

3.2 DRIVERS OF THE OIL CURSE IN NIGERIA

3.2.1 THE ECONOMIC DRIVERS

Becoming a Rentier State/Rentier Economy: for us to get a clear understanding of the rentier

state and economy, we need to define what rent is. The word rent is an economic term that

describes the ‘excess revenues over all costs including normal profit margin’ (Collier 2007;

Smirl 2010). Rent can come from natural resources, (for example oil, diamonds, and timber)

and aid (Smirl 2010). Lynn Karl argues that in developing countries, resource rents are

received regularly by states from export earnings and are deposited into national treasuries

without being checked by domestic private actors. With these she concludes that a state like

Nigeria that have abundance of oil is a rentier /distributive state (1997:48-49).

What is a rentier state? A rentier state is one that receives on a ‘regular basis substantial

amount of external economic rent’ (Yates 1996, Onoja 2011). Rentier states are synonymous

with four characteristics, namely; the rental situation prevails (in a sense it’s a matter of

decision), the origin of the rent must be external to the economy (meaning all rents must be

paid by foreign actors), only a few are engaged in the generation of rent (while the majority

are involved in distribution and consumption), and the government must be the principal

recipient of the external rent (Yates 1996).

Let analyze if the argument above fits the situation in Nigeria. Nigeria is a rentier state

because between 1970 and 2006 oil exports accounted for 95% of the country’s total export

and 80% percent of government revenue. Also oil rents accounts for 40% of the country’s

gross domestic product (GDP) (Idemudia 2010). In addition, the country receives its rent

from multinational companies: Shell, Chevron, ExxonMobil, Agip, Texaco, and Total. These

multinational oil companies have a contract with the Nigerian government to extract oil and

share profits (Obi and Rustad 2011). It is worthy of note that not more than 2-3% of the

population is involved in the generation of oil revenue, while a majority of Nigerians are

20

involved in consumption and distribution (Idemudia 2010). The 1969 Petroleum Law makes

the Nigerian government the sole recipient of oil rent (Watts 2004, Idemudia 2010)

The decision of Nigeria to maintain a rentier economy can be drawn from what observers

have called ‘rentier mentality’ (Yates 1996). The idea is that the existence of large revenue

from oil rent makes elites in government assume that the revenue will increase in the coming

future. With these the government ignores the fact that they need to extract income from the

domestic economy through taxation. Therefore the state becomes a spending state instead of a

production state (Onoja 2011). This is what Humphreys et al (2007) calls “living off your

capital” and investing in irrelevant projects that doesn’t yield economic growth.

Obviously, Nigeria’s dependence on oil rent has led to economic loss and stagnation. Some

of have concluded that; “Nigeria is a rentier state dependent not on the production of goods

and services but on the proceeds of unprocessed crude oil delivered bountifully from a long

neglected and cruelly cheated Niger Delta” (Daily Independent 2011).

Dutch Disease

Over the years (1970s till date) the concept of the “Dutch disease” has been a trending topic

for economist, analyst, researchers and observers. Maass (2009), Lynn Karl (2007), Collier

(1988, 2007), Di John (2009), Barder (2006), Jazayeri (1986), Corden (1984), and

Humphreys et al (2007) have all made references to the aliment of the “Dutch Disease”.

What and why is it called the “Dutch disease”? “It is an economic term used to describe a

reduction in a country’s export performance as a result of an appreciation of the exchange

rate after a natural resource such as oil has been discovered” (Barder 2006). In other words,

oil exports cause the country’s currency to rise in value against other currencies thereby

making other export activities of the country uncompetitive (Collier 2007:39). It is called the

“Dutch Disease” because it was the title of an article in the Economist published in 1977,

used to describe the economic situation in the Netherlands. After the discovery of natural gas

in the North Sea, the Dutch started receiving large foreign exchange earnings from the

exports of gas, and with this their manufacturing sector started underperforming and suddenly

other exports became uncompetitive (Barder 2006, Humphreys et al 2007).

21

The Niger Delta region and Nigeria as a whole is an example of a country with the ailment of

the “Dutch disease”. The reason is this, the discovery of oil in the 1950s and its export in the

1970s made the country’s export earnings very high, thereby leaving other exports such as

cocoa and peanuts unprofitable, or expensive (Maass 2009) resulting to decline in the

agricultural sector (Collier 2007). To a large extent farming and agricultural sector dropped

from 71% in the 1960s to 54% in the 1980s (Lynn Karl 1997:208) hurting the activities of

farmers and major producers of cash crops (see also Edohasim 2010). Gradually the country

shifted from an agricultural exporter to a major importer of food. Rafiu (2011) notes;

Indeed Nigeria was once a world famous agricultural nation, acknowledged as the producer of such export commodities as cocoa, groundnut, cotton, timber, and palm oil. Today the nation is a world famous importer of everything from toothpick to toilet paper.

Funny as that may sound but that’s what happens when a country is over dependent on oil

revenue. Collier (1988) has made it more specific by calling it the “Nigerian disease”. He

supports his argument by saying that Nigeria has not only experienced the “Dutch disease,” it

has also experienced increase in the price of food and non-tradable goods together with a

decline in the production of food and non-tradable goods to the population.

According to Lynn Karl, the ailment of the “Dutch disease” doesn’t come by accident; it

comes as a result of deliberate decision making and wrong policies. (1997:5). The “Nigerian

disease” if I must say, is a result of maintaining a rentier economy.

Revenue Volatility

The idea behind revenue volatility is this. As a result of the huge amount of funds coming in

from oil rent due to the rise in oil price, government see it as an opportunity to increase their

spending. But when the price of oil falls, it becomes difficult for government to cut down

their spending. This is due to the government’s rentier mentality. Furthermore, when the price

of oil is high, countries tend to borrow more, but when the price falls it leads to

accumulations of unpayable debts (Shaxson 2005). This is what Collier (2007), Weinthal and

Jones Luong (2006) call the “boom and bust” circle.

22

Nigeria gained extensively from the oil boom (high oil price) in the early 1980s. The

government saw it as an opportunity to spend extensively to the extent that they embarked on

heavy borrowing. In 1986, there was a decline in oil price, by this time banks were not

willing to continue lending; they wanted to recover their loan from the government. Nigeria

had incurred so much debt that the government under the leadership of Major General

Ibrahim Badamasi Babaginda decided to embark on economic reform to reschedule the

countries debt. To this effect, the country instituted a Structural Adjustment Program (SAP),

which allowed the bulk of repayment of existing debts to be pushed back to 1991, and later

(Collier 2007, Falola and Heaton 2008). Thinking that the SAP was going to help the country

grow economically, by 2005 it was discovered that Nigeria owed $35bn. Although plans were

made to write off $18bn of its debt that year, the country’s economy is still struggling (see

BBC 2005).

3.2.2 THE POLITICAL DRIVERS

Corruption

The term corruption can be defined as the ‘misuse of public office for private gain for the

benefit of the holder of the office or some third party’ (see

http://www.moj.gov.jm/pdf/brochure.pdf).

Corruption can take the following forms including; bribery, looting, embezzlement, money

laundering, favoritism, extortion.

All this can happen as a result of personal greed and ambition by the public office holders.

Nigeria is a victim of corruption. According to corruption index by Transparency

International (TI), Nigeria is ranked amongst the most corrupt countries in the world. To be

precise it is ranked number 134 out of 178 countries in the corruption index (Transparency

International 2010). Aside greed, some observers have highlighted other factors which

includes; Bad leadership, poor remuneration, a weak reporting system, ineffective anti-

corruption laws, the centralization of authority and power, pervasive culture of gift giving

(Odinamadu 2005)

23

Falola and Heaton argue that Nigerians deal with corruption on a daily basis. A problem that

is associated with all works of life, from the government, to the police, and all sectors of the

country (2008:204).

Elites in government have used their offices as an avenue to enrich themselves at the expense

of others. They become rich in office, while the population suffers from poverty and lack of

basic amenities. For example, it is recorded that Nigeria has been ruled by both military and

civilian government, (Okonta and Douglas 2003) and since its independence till around 2007;

it has lost $380bn to corruption (Human Rights Watch 2007).

Cases of corruption include; General Ibrahim Babaginda and his government who looted

$12.2bn between the years 1988 and 1994; General Sani Abacha and his government looted

$10bn from oil revenue from the Niger Delta between 1993 and 1998; General Abubakar and

his government stole $2.7bn between 1998 and 1999 (Okonta and Douglas 2003); National

Identity Card fraud by Internal Affairs Minister (Chief Sunday Afolabi) estimated around

$214m in 2003; Inspector General of Police Tafa Balogun charged for money laundry of over

13bn naira (Nigerian Muse 2006); and currently charged for money laundry and fraud of

$290m is James Ibori, a former governor of Delta state (BBC 2010).

It is important to note that corruption has affected the mode of governance. The revenue from

oil has led to the unstable nature of Nigeria’s democracy. Ross (2001) concludes that oil has a

negative effect on democracy. The politics of patronage becomes the order of the day, as

political leaders would do anything to retain public offices because of the benefits from oil

revenue. For instance, the Nigerian constitution allows the president to serve for two terms.

The government of President Obasanjo was seeking for a third term (BBC 2006). Why

change the provision of the constitution just for selfish reasons? That’s one question a few

people asked. It shows the high level of personal greed and ambition.

Also, citizens are bribed with public funds to get their votes in forth coming elections. For

example Collier (2010) notes that the 2007 elections in Nigeria was attributed to vote-

buying, ballot fraud, vote-miscounting and political violence.

24

Wastage of oil revenue

After corruption comes wastage of oil revenue. One big question that comes up is, apart from

looting funds from oil, what exactly has the government done to improve or aid development

for the country? My response would be investing in wrong, irrelevant projects. Some people

have referred to it as white elephant project meaning failed projects (Oyedele 2008). Primary

needs such as water, health care, education, good roads, electricity, and employment are

abandoned for irrelevant projects. For example a project like the Ajaokuta steel complex

worth billions of dollars is yet to produce a slab of steel. This is an utter waste of government

fund (Maass 2009, Oyedele 2008). Again Dike (2006) brings to light another error of the

Federal Government. He argues that it is wrong for the government to support the initiative of

providing personal computers at affordable rates to a society that lacks electricity. In addition

to the list of wrong investments includes; the building of the 60,000 seater stadium in Abuja,

the nation’s capital (BBC 2003) at the expense of the undeveloped Niger Delta region.

From my view the government has not only wasted oil funds on irrelevant and unrealistic

projects, it has also misplaced its priorities on what to invest on to foster economic growth.

In this chapter, I have brought to the fore the economic and political drivers of the resource

curse in Nigeria. The next chapter takes into account the consequences of the resource curse.

In other words, I consider the effects of the oil curse in the country.

25

CHAPTER 4

THE CONSEQUENCES OF THE OIL CURSE IN NIGERIA

Having analyzed the drivers of the oil curse in the previous chapter, this chapter addresses the

effects of the oil curse on Nigeria as a whole, as well as the oil producing region (The Niger

Delta).

Some writers have argued that ‘the production of natural resources is liable to give rise to

various types of political frustrations within a country and especially in producing regions’

(Humphreys et al 2007:13). While others feel that it is not the production alone that matters,

it is the dependence upon these resources that can lead to both political and economic

frustration (Collier 2007). Let’s proceed with some of the effects of oil in Nigeria.

4.1 CONFLICT

According to Upreti, ‘conflict refers to disagreement, public complaints and protests

involving arguments, physical assault, and violence. Feelings of unfairness and injustice,

suspicion, anger, emotion, and mistrust can lead to conflict’… (Upreti 2004). So how is

conflict relevant in this case? It is relevant because natural resources tend to foster conflict

(Ross 2004, Bannon and Collier 2003). It leads us to the idea of the resource conflict.

Robinson (2008) notes that ‘a resource conflict is a war fought to gain or maintain control of

scarce national resources, such as oil, water, or diamond’. Our main focus is oil as we already

know, and it is important to note that the resources being discussed here is not scarce, rather it

is flowing in abundance. So what will be useful in this definition is the aspect of control of oil

resources.

The drive for the control of oil resources can happen as a result of grievances by oil

producing regions who feel that they are economically marginalized (Le Billion 2007). To

expand, it means the people are angered because they see their resource wealth leaving their

region and benefiting others (Humphreys et al 2007). In a sense, the people feel that resource

wealth is unjustly/unevenly distributed (Humphreys 2005)

Also there is a claim that national authorities have misused oil revenue, giving the chance for

embezzlement, looting and corruption (Collier and Hoeffler 2005). Again there are claims of

environmental depletion and degradation. This can occur as a result of pollution and oil

26

spillage by oil companies, depriving the people of freshwater, fishery, croplands, and

forestry. Most of the people in the oil producing region rely on these things for survival, and

when they are taken away from them, they decide to fight for them (David and Gagne 2007)

In addition, since there are huge funds coming in from oil, the uneducated/ unemployed see it

as an opportunity to enrich themselves. They form rebel groups bearing this in mind that

since the elites in power have enjoyed their own share of the oil revenue, it is their turn to do

so. These rebels decide to loot the nation’s oil resources (see Collier 2007, David and Gagne

2007). The act of stealing/looting oil is known as “bunkering”. This is a term invented by the

people leaving in the Niger Delta region (Asuni 2009). In all of these, rebels will do anything

to fight for oil resources.

In terms of the duration of conflict, Ross (2004) argues that oil dependence can be linked to

the initiation of conflict but cannot sustain conflict. In contrast to this Bannon and Collier

(2003) argue that oil dependence fuels and sustains conflict. According to them, it is easier to

sustain conflict even without the support from super powers. Rebels can now equip and

sustain themselves with alternative sources of revenue which includes the illegal trade in oil.

With a lot of issues been raised as regards oil and conflict, let’s examine Nigeria’s oil

producing region (the Niger Delta)

4.1.1 THE NIGER DELTA AND CONFLICT

Before we look at the issue of conflict within the region, it is important to get familiar with

the geographical location and activities of the Niger Delta.

The Niger Delta covers nine out of the thirty six states in Nigeria. These states are; Abia,

Akwa Ibom, Cross River, Rivers, Bayelsa, Delta, Imo, Ondo, and Edo. The region covers

about 75,000 square kilometers, making it the largest wetland in Africa (Obi and Rustad

2011). The population is estimated to be about 30 million people (Nordic African Institute

2009). Apart from oil, the region is rich in both renewable and non renewable natural

resources such as gas, timber forest products and non timber forest products, bitumen and

wildlife (Tuschl and Ejibunu 2007). In terms of Agriculture, the region is known for the

production of cocoa, cashew, rice, pineapple, and yam in large quantity (Omofonmwan and

27

Odia 2009). Also the region has a lot of fishermen because of the availability of marine

habitats.

All the Agricultural activities in the region came to a halt after the discovery of oil in

commercial quantity in 1958. From the 1960s till date, oil has become the most important

commodity in Nigeria’s export (Falola and Heaton 2008). One can relate this to the beginning

of the “Dutch disease” already highlighted in chapter 3.

When it comes to the production of oil, the region has over 5,200 oil wells and produces over

2 million barrels per day that passes through 275 flow stations (Ayodele 2010). With these it

is said that oil accounts for most of Nigeria’s foreign exchange earnings. In fact some argue

that it is 90% (Obi and Rustad 2011) while (Okonta and Douglas 2003) argue that is 95% of

the nation’s foreign exchange earnings. Whatever the case might be, the headline message is

that the country gains so much from oil produced in the Niger Delta region. Foreign

companies involved in oil exploration and extraction in the region include; Shell, Mobil,

Chevron, Elf, Agip, and Texaco. (Oyefusi 2007)

The region is blessed with the enormous amount of natural resources (especially oil) and still,

it is at the bottom of the civilization ladder. In clear words, the region still has majority of its

people living in abject poverty. They lack access to primary needs like; pipe-borne water,

proper health care, employment, good roads, electricity, telecommunication, and security

(Omofonmwan and Odia 2009, see also The Guardian, Jan 13 2010).

The people living in the region feel abandoned, neglected, marginalized and cheated. They

blame the cause of their misfortune on greed and corrupt practices by government and oil

companies (Oviasuyi and Uwadiae 2010, Agbu 2008). Furthermore, there are strong believes

that their oil wealth have been used to develop other parts of the country (e.g. the Nigeria’s

capital city Abuja) leaving the region in abject poverty (Champion Dec 17, 2003). Having

this at the back of their minds, they have decided to embark on conflict to express their

grievances.

The years between 1990 and 2010, the region has witnessed a series of armed conflict all

because of the drive to control the oil wealth of the region. This is what observers have called

“the paradox of doom in the midst of boom” (Agbu 2008). Now the big question is what are

the people in the Niger Delta fighting for?

28

Total control and ownership of resources have been the demands of the oil bearing

communities of the Niger Delta. The people and leaders of the region are not satisfied with

13% derivation principle set by the country’s constitution (Luqman 2011). The derivation

principle is the rent and royalties paid back to the oil producing states. The disagreement to

this principle has led to the formation of militants/rebels who seek to control the region’s oil

wealth (Ahonsi 2011). Militant activities include kidnapping for ransom of oil company

workers, sabotage on oil facilities, killings, illegal oil bunkering, armed robbery and piracy

(Asuni 2008). Violence has been dominant in the pursuit of their agitation for resource

control. For example Mills notes;

On January 24, 2006, thirty armed men with Ak47s drew up in speed boats by the offices of Agip Company in the oil city of Port Harcourt, in the Niger Delta. In the ensuing gunfight, nine people were killed, eight of them police, and the gunmen escaped with tens of thousands of dollars from a bank in the facility. In November, the Okono/Okpoho oil field was attacked by gunmen in boats, who took seven workers hostage. During a rescue attempt, one of the hostages, a British man, was shot dead and two others were injured… (Mill 2008:127-128)

With all the violence happening within the region, they are yet to gain total control of the oil

resources. The right of control still remains in the hands of the Federal Government. Some

observers argue that the drive for resource control is just a selfish ambition. They also argue

that oil should be for the benefit of the nation even though it is produced in the region (Sun,

Jan 9 2010, Nigerian Tribune Jun 5 2009). In 2009, because of the conflict within the region,

the country’s oil production reduced from 2 million barrel per day to 800,000. A great loss in

terms of revenue for the country (Vanguard July 8 2009).

Environmental degradation also serves as a reason for conflict. The people of the Niger Delta

have complained of environmental damages caused by oil exploration and production.

Marine life and crops have been destroyed by pollution from oil spills. The farmlands are

unusable, and the water unsuitable for fishing (Ibeanu and Luckham 2007).The people are

also exposed to health risks as a result of contaminated water (Maass 2009, Okonta and

Douglas 2003). Reported illnesses include; cancer, abdominal pain, cough, fever, and

diarrhea (Okoh 2005). Ahonsi (2011:30) notes that ‘1.5 million tons of oil has spilled into the

Niger Delta over the past 50 years, making the region one of the five most polluted locations

on earth’…

29

Oil spills according to Ayodele (2010) ‘devastate the environment and generates conflicts

between the host communities and oil multinationals’. On second thought oil multinationals

are not the only ones to blame for the environmental damages, oil theft by militants,

unemployed youths, and top politicians have also contributed to the environmental hazards

(Asuni 2009). The motive to get rich quickly has a negative effect on the region’s

environment. Let’s look at the issue from this perspective, if oil companies have the right

equipments to explore oil and they still cause environmental damages, how much more the

people who don’t have the right equipments. For example it was discovered that over 1000

illegal refineries were being operated by militants, unemployed youths and political elites

(Daily Sun July 19, 2010)

To show the complexity of crisis in the region, you also have inter-community conflicts

which are sparked up by unsettled boundary problems and disputes over oil bearing lands.

Some of the reported conflicts include; the Ogoni crisis 1994/1995, Odih 1998/1999,

Ijaw/Ilaje 1998-2000, Urhobo/Itsekiri 1997-2002, Ogbijaw/Itsekiri 1995-2004 (Okoh 2005).

These conflicts have led to the death of many people, rendered many homeless and also

contributed to the destruction of oil facilities in the region. It was recorded that between

2006- 2009, more than 1000 people were killed and over 5000 people were displaced from

their homes because of the conflict in the region (Newswatch May 4 2009, The Guardian

May 22 2009). In the space of 9 months in the year 2004, they were also 581 recorded cases

of oil pipeline vandalism (US Fed News April 18, 2005).

In a nutshell, the crisis in the region revolves around clashes between people and the

government for reasons of underdevelopment and resources control, clashes between the

people and oil multinational for environmental degradation, and finally intercommunity

clashes for unsettled boundaries and resource control.

4.2 WEAK INSTITUTIONS

Alayli (2005) argues that ‘oil revenue can weaken government institutions, making them less

likely to resolve social conflicts and provide public goods such as health care and education.

30

According to him, a state can have weak institutions because of its reliance on oil revenue,

instead of taxes. Furthermore, he suggests that the ‘much of government’s strength comes

from its capacity to extract taxes from the population. Without taxation, it is difficult to

establish an effective bureaucracy that can resolve social conflict and provide public goods’.

In Nigeria, the government has taken bold steps to create institutions for the purpose of

tackling the crisis in the Niger Delta region. These institutions includes; the Oil Mineral

Producing Area Development Commission (OMPADEC) established in 1993, the Niger

Delta Development Commission (NDDC) established in 2000, and the Ministry of the Niger

Delta established in 2008 (Idemudia 2010). Some of the roles of these institutions are; to

foster economic development, provide physical infrastructure and community needs, enhance

and sustain the natural environment (Omofonmwan and Odia 2009). We must commend the

efforts made by the government to promote development in the region. For example going

through NDDC website (http://www.nddc.gov.ng/?page=project&id=2) you would see its

progress on physical infrastructure/community needs which include; (water, electricity,

school, hospital, employment and road) projects (see also Daily Champion Sept 8, 2010).

Despite these progress reports, observers have branded these institutions as a total failure

(Daily Champion Oct 20, 2009). They argue that these institutions have suffered from poor

planning, limited capacity, corruption, poor government funding, and limited community

involvement (Idemudia 2010, Oviasuyi and Uwadiae 2010, Luqman 2010, Sun Jan 9, 2010).

For example OMPADEC collapsed as a result of inadequate planning (Oviasuyi and Uwadiae

2010) while the NDDC suffers from corruption, looting and mismanagement of public funds.

There is a reported case of an alleged N69bn scam involving the institution (see Adisa 2011).

The Ministry of the Niger Delta suffers from insufficient funding. It is sad to see a new

ministry established in 2008 already suffering from lack of funds, I called it in the previous

chapter ‘misplacement of priorities’ on the path of the Federal Government. The funds

allocated to the ministry in 2009 was N50 billion, whereas over N400bn was allocated for

security in the region (Newswatch May 4, 2009). At this point no one needs to tell you that

the policy implementation is wrong. In their minds security comes before development. Some

observers believe that the money spent on security in the region can be invested on providing

employments/education which would reduce cases of militancy and criminality (Newswatch

May 4, 2009)

31

Weak institutions will continue to be in existence if poor planning, mismanagement of public

funds, insufficient funding are not tackled adequately. Since Nigeria is a rentier state, it is

prone to establishing weak institutions and there is a high tendency for conflict escalation.

4.3 INTERNATIONAL PRESSURE

Resource rich countries are bound to be faced with pressure from the international arena to

make good use of their revenue for social investments and economic development (Bannon

and Collier 2003), But most especially to foster good economic relations since globalization

has opened up the door for economic interdependence.

The Nordic African Institute (2009) argues that ‘the Niger Delta is important to global energy

security’, the next question would be; what is energy security? This part explains energy

security in two perspectives.

The first explanation would be from Robinson (2008) who notes that ‘energy security implies

guaranteed access to a reliable supply of oil at a reasonable price’. He goes on to say that

energy security may be threatened by the destruction of oil facilities as a result of conflict or

sabotage.

After Nigeria joined the Organization of the Petroleum Exporting Countries (OPEC) in 1971,

its oil production has contributed to development of the global economy. Countries that are

key partners with Nigeria in the oil business includes; The United States, China, India, Britain

and the European Union (EU). For example Nigeria is the fifth supplier of oil to the United

State (Mu Li 2009), the EU imports 20 percents of Nigeria’s oil (BBC 2009), and in 2006

India imported 11percent of Nigeria’s petroleum products (The Statesman Oct 30, 2007). It

shows Nigeria’s importance in the international arena. That is why the crisis in the Niger

Delta is termed a global issue because every pipeline disrupted brings an increase in oil price

(African News Sept 28, 2008). In fact one observer notes that when the militants sneeze the

global oil market catches severe cold (Agbu 2008). Some American observers highlighted

that the escalating crisis in the Niger Delta threatens America’s energy security (Lubeck et al

2007).

The second explanation of energy security comes from Yergin (2006) who argues that

‘energy exporting countries like Nigeria will focus on maintaining the security of demand for

32

their export, which will after all generate the overwhelming share of government revenue’.

This explains the N400bn allocation on security highlighted in the previous section (see weak

institutions).

The interdependent nature of energy security (Security of “supply” and “demand”) has made

international stakeholders to continue mounting pressure on Nigeria to tackle the situation of

conflict and corruption in the oil producing region. Bearing in mind that there are

multinational companies operating in the region, there is a call for a peaceful environment to

aid continuous business transactions. On the other hand the Nigerian government wants to

receive its regular revenue from oil production. Part of the result of international pressure has

been the establishment of the Gulf of Guinea Energy Security Strategy (GGESS) in 2005 by

Nigeria and the United States (Vanguard Aug 31, 2006). Other members of the initiative

include; Britain, Equatorial Guinea, Cameroon, Gabon and Angola. The main objective of

GGESS is to ‘collaborate with stakeholders to ensure the security of supply of oil from the

Gulf of the Guinea, whilst promoting sustainable development of the region in a climate of

peace’ (Thisday Aug 31, 2006).

In as much as the main objective of GGESS has both security and development intentions.

The international stakeholders are more interested in the security aspect. For example the

United States and Britain are more concerned with crude oil theft and small arms trafficking

which they believe fuels violence in the Niger Delta (Thisday Aug 31, 2006). Meanwhile

there are more pressing needs like education and employment that the region lacks.

It is important to note that international pressure has not brought an end to the crisis in the

Niger Delta.

33

CHAPTER 5

CRITICAL ANALYSIS ON THE PROPOSED SOLUTIONS FOR THE OIL CURSE

IN NIGERIA

In the previous chapter, I highlighted the consequences of the oil curse in Nigeria, showing

the negative effects of oil in the producing region (Niger Delta). Moreover this dissertation

will be incomplete without making some remarks on some of the prescriptions for escaping

the oil curse in Nigeria. The aim of this chapter is to briefly examine some of the solutions

suggested by scholars, policy makers, commentators, in resolving the oil curse. Side by side

with the prescriptions, we also consider why some of these solutions have been ineffective in

Nigeria.

5.1 Transparency and Accountability

Bannon and Collier (2003); Le Billon (2006/2007); Kaldor et al (2007); Firger (2010) Soros

(2011); have suggested that transparency and accountability is a key motive in curing the oil

curse. In the words of Kaldor et al (2007) ‘transparency and accountability should apply to

private and public actors, domestic and international’. They argue that it can be used to curb

corrupt practices by host governments and other stakeholders. Two movements have been set

up to support the transparency/accountability initiatives; 1) Publish what you pay (PWYP)

campaign 2) Extractive Industries Transparency Initiative (EITI). They were established in

2002 by the British government and some NGOs (Le Billion 2006/2007). The aims of these

initiatives are; to urge a mandatory disclosure of all payments to host governments by oil, gas

and mining companies; ensure that the revenue from extractive industries contributes to

sustainable development and poverty reduction (Weinthal and Luong 2006; Firger 2010).

Nigeria decided to adopt the EITI initiative, becoming the first candidate country with a

statutory backing. It launched the Nigerian Extractive Transparent Initiative (NETI) in 2007

(Idemudia 2009, 2010). In as much as the NEITI mirrors some of the objectives of the EITI,

some observers have argued that the initiative is a failure because corrupt practices are still in

place (Firger 2010).

34

For example in 2010 there was a recorded case of fraud in the NEITI. The executive

secretary was accused of using the organization’s funds for his personal campaign funds in

running for governorship (ThisdayLive Aug 24, 2010).

In addition, Idemudia (2010) argues that the NEITI has done well by publishing the payments

made by oil companies to the Nigerian government but has failed to monitor the actual

expenditure of oil revenue.

5.2 Natural Resource Funds

The idea behind the NRF is to stabilize income and expenditure, and smooth out fluctuations

caused by oil price volatility, and also save some of the oil wealth for future generations

(Kaldor et al 2007, Wienthal and Luong 2006). The NRF has been successful in developed

countries like Norway, United States, and Canada. However it will be difficult, if not

impossible to work in a country like Nigeria. The NRF if created would only increase the

spending power of the government who loves engaging in white elephant projects.

Furthermore Nigeria doesn’t have the institutions to encourage savings for future generations.

The corrupt, selfish, and visionless political elite would rather sustain the oil wealth for

themselves and their families than think of future generations.

5.3 Direct Distribution

Tuschl and Ejibunu (2007), Sala-i-Martin and Subramanian (2003) suggest that oil revenue

should be distributed directly to the Nigerian population rather than being held by

government.

They argue further that citizens especially those in the Niger Delta should directly get the oil

revenue. By doing this, it will reduce the crisis in the region. In a sense the people will protect

oil facilities having at the back of their minds that it is a source of revenue for them and not

the government.

This suggestion is a good one but I would rather agree with Weinthal and Luong (2006) who

contends that there is a limitation to this solution. According to them, direct distribution will

35

‘reduce the incentives for citizens to engage in entrepreneurship, which will further stifle the

growth of small and medium enterprises in the Niger Delta region’

5.4 Economic Diversification

From the onset observers like Olayiwola (1987) have pleaded with the Nigerian government

to diversify its economy by not relying on oil but focus on other sectors like agriculture,

education, and tourism to aid development. The government has ignored this suggestion

(1987:175). A famous producer/exporter of cocoa and other agricultural products in the 1960s

has become a famous importer till date. The educational sector has its own drawbacks.

Recently it was reported that a large number of students in the country failed numeracy

(Mathematics) and literacy (English) examinations (Ovuakporie 2011). With this horrible

effect, parents would rather save up to send their children abroad to get quality education.

One big question is what happens to those who don’t have the funds to send their children

abroad? One answer would be; cope with the education system at home.

A beautiful country that is supposed to attract investors, and tourist has been denied this

opportunity because of the ongoing crisis in the Niger Delta. Sadly the economic

diversification approach won’t be successful until the country addresses the issue of

infrastructure, says the former minister of finance, Dr Olusegun Aganga (Abayomi 2011).

36

CONCLUSION

What this dissertation has established thus far is the fact that oil has been a curse to Nigeria’s

economy and politics. This study outlined the definition of Nigeria’s oil curse. Referring to

the country as one that is less developed. I also examined how Nigeria became a rentier state,

acquired the Dutch disease, and suffered from corruption/wastage of oil revenue. These

drivers have brought conflicts in the Niger Delta, led to the creation of weak institutions, and

welcomed unnecessary international pressures on the country. Again we looked at the extent

to which proposed solutions have been ineffective in the Nigerian situation. Can Nigeria

escape the oil curse? An honest answer would be I’m not sure. The solutions prescribed

above by observers and scholars to the Nigerian government have fallen short because

Nigeria doesn’t have the enabling environment to adopt the solutions. What the country has is

an enabling environment that condones corruption, wastage, conflict, crime, weak

institutions, poverty, and uneducated youths.

While we spent time identifying problems and some ineffective solutions, I recommend the

following ideas to the Nigerian government.

The government should review its domestic policies. It should focus more on developmental

policies rather than security policies. If good infrastructures are made available, one that

makes provisions for Agriculture, education, health care, employment and all. It would

reduce cases of conflict in the Niger Delta. What the region needs is sustainable growth and

development, something to break the paradox of producing wealth and living in poverty.

To a large extent I support the idea of transparency; it goes a long way in eradicating

corruption. So I do not only recommend the creation of credible transparent institutions, but

also suggest that citizens elect honest politicians who are ready to serve and remove Nigeria

from the mess previous politicians have put the country through.

Researchers, observers should constantly assess the progress been made by the Nigerian

government, if it would make efforts to escape the oil curse in the nearest future.

Supporting the first point, the Nigerian government should focus more on domestic policies.

This is because it serves as a reflection of our foreign policy. For example Nigeria should not

be fighting for a non permanent member seat in the United Nations Security Council (African

News Jun 24 2009) when we have several crises in the Niger Delta and religious crisis in

37

Plateau state. I believe the government should attend to situations in the country rather than

focusing on outside ones.

Finally, Oil is a good natural resource which has brought wealth in many ways to the country,

but it has also contributed to ruining the country’s political and economic ambitions. The

words are very clear in this statement; ‘crude oil has become like knives that either serve us

or cut us, as we grasp them by the blade or the handle’ (Ghanian Chronicle feb 28 2008). To a

large extent oil has done more harm than good in Nigeria.

38

BIBLIOGRAPHY

Abayomi.A, (2011) 7.85% economic growth due to global recovery

[online]. http://news2.onlinenigeria.com/business/87929-7-85-

economic-growth-due-to-global-recovery.html [Accessed Access

Date 20/8/2011].

Adebanji.A, (2010) Environmental and Resource Conflicts in the Niger

Delta: An Impediment to Nigeria's Transition to the Green Economy.

In: I.C. Proceedings', ed. 30th Annual Meeting of the International

Association for Impact Assessment, International Conference Centre

Geneva - Switzerland

Adegbulu.F (ed.) (2006) Topics and Issues in International Relations

Babcock University Press.

Adisa.T, (2011) Alleged N69bn scam: Niger Delta traditional rulers back

probe of NDDC [online]. Nigerian Tribute Available from:

http://tribune.com.ng/index.php/news/26143-alleged-n69bn-scam-

niger-delta-traditional-rulers-back-probe-of-nddc [Accessed Access

Date 9/8/2011].

AfricanNews. (2008) Nigeria; 'How to Stop Agitation in Niger Delta'

Thisday September 28.

AfricanNews. (2009) Nigeria Deserves Permanent Seat at UN, Mark

Reiterates Daily Independent, June 24.

AfricanNews. (2011) Nigeria; Tomorrow is D-Day Daily Independent, March

31.

Agbu.I. (2008) Non-Voilence Training in N'Delta Thisday, April 10.

Ahonsi.B, (2011) Capacity and Governance Deficits in the Response to the

Niger Delta Crisis. In O.C. Rustad.S ed. Oil and Insurgency in the

Niger Delta: Managing the Complex Politics of Petro-Violence Zed.

Akinbami.J, I.M. (2001) Biogas Energy Use in Nigeria: Current Status,

Future Prospects and Policy Implications. Renewable and

Sustainable Energy Reviews, Vol 5, , pp.97-112.

Akinwale.A, (2008) Circumscribing Conflicts in the Resources Endowed

Niger Delta Communities of Nigeria [online].

39

www.africanreview.org/events/paxafrica2008/aakinwale.pdf

[Accessed Access Date 10/5/2011].

Ako.R, (2011) The Struggle for Resource Control and Violence in the Niger

Deltta In O.C. Rustad.S. ed. Oil and Insurgency in the Niger Delta:

Managing the Complex Politics of Petro-Violence Zed

Alayli.M (2005) Resource Rich Countries and Weak Institutions: The

Resource Curse Effect. Cairo.

Alhajji.A (2007) What Is Energy Security? Definitions And Concepts (Part

3/5). Middle East Economic Survey, No 45.

Ali.S, (2006) VIEW: Curing the Resource Curse [online]. Daily Times.

Available from: http://www.dailytimes.com.pk/default.asp?

page=2006\08\12\story_12-8-2006_pg3_3 [Accessed Access Date

21/7/2011].

Aluko.M, (2005) 10 Top Corruption Cases – and A “Cutlass” to Cut the

Snake’s Head, Please ! [online].

http://www.dawodu.com/aluko116.htm [Accessed Access Date

3/8/2011].

Amodu.T. (2010) Resource Control won't solve Niger Delta Problems

Saturday Sun, January 9.

Asuni.J (2008) Militants of the Niger Delta: Who, What and Why? African

Studies, SAIS.

Asuni.J (2009) Blood Oil in the Niger Delta. United States Institute of

Peace(Special Report).

Auty.R, (2005) Natural Resources and Civil Strife: A Two-Stage Process. In

P. Le Billon ed. The Geopolitics of Resource Wars: Resource

Dependence, Governance and Violence. Routledge

Ayodele.B, Silence on Climate Change and the Natural Resources Conflict

in Nigeria: The Niger Delta Region Experience [online].

www.iss.co.za/pubs/Monographs/170/Mono170.pdf [Accessed Access

Date 15/5/2011].

Bannon.I, C.P. (ed.) (2003) Natural Resources and Violent Conflict: Options

and Actions: The World Bank.

40

Barder.O (2006) A Policymakers' Guide to Dutch Disease. Center for

Global Development Working Paper Number 91.

BBC, (2003) White elephant or wise investment? [online]. BBC NEWS.

Available from: http://news.bbc.co.uk/1/hi/world/africa/3181336.stm

[Accessed Access Date 8/8/2011].

BBC, (2005) Nigeria to get $18bn debt relief [online]. BBC NEWS. Available

from: http://news.bbc.co.uk/1/hi/business/4637395.stm [Accessed

Access Date 21/7/2011].

BBC, (2006) Boost for third term in Nigeria [online]. BBC NEWS. Available

from: http://news.bbc.co.uk/1/hi/world/africa/4665598.stm

[Accessed Access Date 3/8/2011].

BBC, (2007) Nigeria 'needs poverty billions' [online]. BBC NEWS. Available

from: http://news.bbc.co.uk/1/hi/world/africa/6292378.stm

[Accessed Access Date 21/7/2011].

BBC, (2010) Nigeria ex-governor James Ibori arrested in Dubai [online].

BBC NEWS. Available from:

http://news.bbc.co.uk/1/hi/world/africa/8680569.stm [Accessed

Access Date 3/8/2011].

BBC, (2011) Nigeria Profile [online]. BBC NEWS. Available from:

http://www.bbc.co.uk/news/world-africa-13949550 [Accessed Access

Date 1/8/2011].

Cavalcanti.D.V, T.V., (2011) Does oil Abundance Harm Growth? [online].

Routledge. Available from:

http://www.informaworld.com/10.1080/13504851.2010.528356

[Accessed Access Date 31/5/2011].

Collier.P (1988) OIl Shocks and Food Security in Nigeria. International

Labour Review Vol, 127, No 6, pp.761-782.

Collier.P (2007) The Bottom Billion: Why the Poor Countries are Falling and

what can be done about it. Oxford University Press.

Collier.P (2008) Laws and Codes for the Resource Curse Yale Human

Rights & Development Law Journal, Vol. 11, pp. 9-28.

Collier.P, H.A. (2005) Resource Rents, Governance, and Conflict. The

Journal of Conflict Resolution, Vol. 49, No. 4, , pp. 625-633.

41

Collier.P, V.P. (2010) Votes and Violence: Evidence from a Field

Experiment in Nigeria. Department of Economics Oxford University

pp. 1-60.

Corden.W (1984) Booming Sector and Dutch Disease Economics: Survey

and Consolidation. Oxford Economic Papers, Vol.36, No.3, pp. 359-

380.

DailyChampion. (2010) NDDC: Tackling Challenges in Niger Delta Daily

Champion, September 8.

DailyTrust. (2006) Illegal Weapons From International Dealers Our

Concern - Obasanjo Africa News.

David.C, G.J. (2006/2007) Natural Resources: A Source of Conflict?

International Journal, Vol. 62, No.1, pp. 5-17.

DiJohn, J. (2009) From Windfall to Curse? Oil and Industrialization in

Venezuela, 1920 to the Present The Pennsylvania State University

Press

DiJohn, J., (2010) The ‘Resource Curse’: Theory and Evidence [online].

Elcano Royal Institute of International and Strategic Studies.

Available from:

http://www.isn.ethz.ch/isn/Digital-Library/Publications/Detail/?

ots591=0c54e3b3-1e9c-be1e-2c24-

a6a8c7060233&lng=en&id=125773 [Accessed Access Date

15/7/2011].

DiJohn, J. (2011) Is There Really a Resource Curse? A Critical Survey of

Theory and Evidence. Global Governance: A Review of

Multilateralism and International Organizations, Vol. 17, No. 2, pp.

167-184.

Dike.V, (2006) Unreasoned Socioeconomic Policies and Nigeria’s

Underdevelopment [online]. Nigerian Village Square Available from:

http://www.nigeriavillagesquare.com/articles/victor-dike/unreasoned

-socioeconomic-policies-and-nigerias-underdevelopment.html

[Accessed Access Date 5/8/2011].

42

Dode.R (2011) The Political Economy of Resource Curse and the Niger

Delta Crisi in Nigeria: Matters Arising. Afro Asian Journal of Social

Sciences vol.2, No. 2.1, pp.1-15.

Ebeku.K (2008) Niger Delta Oil,Development of the Niger Delta and the

New Development Initiative: Some Reflections from a Socio-Legal

Perspective. Journal of Asian and African Studies, Vol 43, No 4, , pp.

399-435.

Ezigbo.O. (2006) Britain, US Offer Assistance on Niger Delta Thisday

August 31.

Falola.T, H.M. (2008) A History of Nigeria. Cambridge University Press.

Firger.D (2010) Transparency and the Natural Resource Curse: Examining

the New Extraterritorial Information Forcing Rules in the Dodd-Frank

Wall Street Reform Act of 2010 Georgetown Journal of International

Law, Vol. 41, pp. 1043.

Folaranmi.F. (2010) Aftermath of Militancy: JTF Battles Illegal Bunkers in

Niger Delta Daily Sun, July 19.

GhanaianChronicle. (2008) Crude Oil - Blessing Or Curse? Ghanaian

Chronicle, February 28.

HDI, (2010) Human Development Report 2010: U.N.D. Program.

HumanRightsWatch, (2007) A High Price [online]. The Guarduian (UK).

Available from: http://www.hrw.org/en/news/2007/03/08/high-price

[Accessed Access Date 21/7/2011].

Humphreys M, S.J. (2007) Escaping the Resource Curse. Columbia

University Press.

Humphreys.M (2005) Natural Resources, Conflict, and Conflict Resolution.

Journal of Conflict Resolution, Vol. 49, No.4, pp. 508-537.

Humphreys.M, S.M., (2007) The Political Economy of Natural Resource

Funds. In S.J. Humphreys.M ed. Escaping The Resource Curse

Columbia University Press.

Ibeanu.O, L.R., (2007) Nigeria: Political Violence, Governance and

Corporate Responsibility in a Petro-State. In L.K.T. Kaldor.M, Said.Y

ed. Oil Wars. Pluto Press.

43

Idemudia.U (2009) The Quest for the Effective Use of Natural Resource

Revenue in Africa: Beyond Transparency and the Need for

Compatible Cultural Democracy in Nigeria. Africa Today, Vol. 56,

No.2, pp. 2-24.

Idemudia.U (2010) Corporate Social Responsibility and the Rentier

Nigerian State: Rethinking the Role of Government and the

Possibility of Corporate Social Development in the Niger Delta.

Canadian Journal of Development Studies, Vol.30, Nos. 1-2, pp.131-

153.

Idemudia.U, (2010) The Extractive Industries Transparency Initiative in

Nigeria: Sifting Rhetoric from Reality [online].

http://www.boell.org.za/web/resource-governance-571.html

[Accessed Access Date 15/8/2011].

Jazayeri.A (1986) Prices and output in Two Oil-Based Economics: The

Dutch Disease in Iran and Nigeria. IDS Bulletin, Vol. 17 (Issue 4), pp.

1-8.

Kaldor.M, L.K.T., Said.Y (ed.) (2007) Oil Wars: Pluto Press.

Kuik.O, L.M. (2011) Energy Security in a Developing World. John Wiley &

Sons, Ltd.

Le Billon, P. (2001) Angola's Political Economy of War: The Role of Oil and

Diamonds, 1975-2000. African Affairs, Vol. 100, pp. 55-80.

Le Billon, P. (ed.) (2007) The Geopolitics of Resource Wars: Resource

Dependence, Governance and Violence Routledge.

Le Billon, P. ( Winter 2006-2007) Securing Transparency: Armed Conflicts

and the Management of Natural Resource Revenues. International

Journal, Vol. 62, No. 1, pp. 93-107.

Lubeck.P, W.M. (2007) Convergent Interests: U.S Energy Security and the

Securing of Nigeria Democracy. International Policy Report.

Luft G, K.A. (2009) Energy Security Challenges for the 21st Century: A

Reference Handbook. Praeger

Luqman.S (2011) Democratic Governance and the Management of Oil

Conflict in Nigeria's Niger Delta: Policy Options and Challenges

44

African Journal of Political Science and International Relations, Vol.

5, No.2, pp. 83-91.

Lynn Karl, T. (1997) The Paradox of Plenty: Oil Booms and Petro States

University of California Press

Maass.P (2009) Crude World: The Violent Twilight of Oil. Vintage Books

Mills, R. (2008) The Myth of the Oil Crisis: Overcoming the Challenges of

Depletion, Geopolitics, and Global Warming. Praeger.

Mu-Li. (2009) Foreign Affairs Committee Warns of Risk to Energy Security

from Unrest Abroad Inside Energy with Federal Lands, July 20.

NDDC, Infrastructure Development Projects [online]. Niger Delta

Development Commission. Available from: http://www.nddc.gov.ng/?

page=project&id=2 [Accessed Access Date 27/8/2011].

Newswatch. (2009) We' ve Lost More Than 1000 Lives Newswatch, May 4.

NigerianMuse, (2006) The Afolabi / Sagem File [online].

http://www.nigerianmuse.com/nigeriawatch/officialfraud/?

u=Afolabi_SAGEM_file.htm [Accessed Access Date 27/7/2011].

NigerianMuse, (2006) Tafa Balogun Arrested [online].

http://nigerianmuse.com/nigeriawatch/officialfraud/?

u=Tafa_Balogun_arrested.htm [Accessed Access Date 27/7/2011].

NigerianTribune. (2009) Clampdown on Niger Delta Nigerian Tribune June

5.

Nmezi.E. (2003) Plight of Niger Delta Region Champion December 17.

NordicAfricanInstitute, (2009) Causes and Cures of Oil-related Niger Delta

Conflicts [online]. www.nai.uu.se/policy_activities/ukiwo.pdf

[Accessed Access Date 25/7/2011].

Nwokolo.N, (2009) From Grievance to Greed: An Analysis of Violent

Conflicts in Oil Bearing Communities in Nigeria. . Financial Markets,

adverse shocks and policy responses in fragile countries, Accra.

Nwozor.A, (2010) A Delta of a Minefield: Oil Resource Conflict and the

Politics of Amnesty in Nigeria. In Gounden.V ed. Conflict Trends

Accord, pp.28-35.

Obi.C Rustad, S. (2011) Oil and Insurgency in the Niger Delta: Managing

the Complex Politics of Petro-Violence Zed.

45

Odinamadu.O, (2005) Battling Corruption in Nigeria and Obasanjo's lost

cause [online]. USAfrica Online. Available from:

http://www.usafricaonline.com/oyibo.nigeriacorrupt1.html [Accessed

Access Date 1/8/2011].

Ogwu.L, (2008) 48 Years Of Nigeria’s Underdevelopment: A Fruit Of Failed

And Recycled Policy! [online]. Nigerians In America. Available from:

http://www.nigeriansinamerica.com/articles/2909/1/48-Years-Of-

Nigerias-Underdevelopment-A-Fruit-Of-Failed-And-Recycled-Policy/

Page1.html [Accessed Access Date 21/7/2011].

Okoh.R (2005) Conflict Management in the Niger Delta Region of Nigeria:

A Participatory Aprroach. African Centre for the Constructive

Resolution of Disputes Vol. 5, No. 1, pp. 91-114.

Okonta.I, D.O. (2003) Where Vultures Feast: Shell, Human Right and Oil.

Verso

Olayiwola.P (1987) Petroleum and Structural Change in a Developing

Country: The Case of Nigeria Praeger Publishers

Omofonmwan.I, O.L. (2009) Oil Exploitation and Conflict in the Niger-Delta

Region of Nigeria. J Hum Ecol,, Vol 26(1), pp.25-30.

Omonobi.K. (2009) N-Delta: Oil Production has dropped to 80,000 barrels

Vanguard, July 8.

Onoja.A, (2011) Goodluck Jonathan, Jigawa Visit and the Alternative Way

Forward [online]. Newsdairy online. Available from:

http://newsdiaryonline.com/way_forward.htm [Accessed Access Date

27/7/2011].

Oviasuyi.P, U.J. (2010) The Dilemma of Niger-Delta Region as Oil

Producing States of Nigeria.

Journal of Peace, Conflict and Development, (Issue 16), pp.110-126.

Ovuakporie.E, (2011) Mass failure in WAEC: Rep calls for state of

emergency in education [online]. Vanguard. Available from:

http://www.vanguardngr.com/2011/08/mass-failure-in-waec-rep-

calls-for-state-of-emergency-in-education/ [Accessed Access Date

24/8/2011].

46

Oyedele.A, (2008) ‘Ajaokuta, other white elephant projects ruined

Nigeria’s economy’ [online]. Punch. Available from:

http://www.punchng.com/Articl.aspx?theartic=Art200808180463817

[Accessed Access Date 9/8/2011].

Oyefusi.A (2007) Oil-dependence and Civil conflict in Nigeria. Centre for

the Study of African Economies (CSAE).

PeaceBuildingInitiative, (2007-2008) Natural Resources: Key Debates &

Implementation Challenges [online].

http://www.peacebuildinginitiative.org/index.cfm?pageId=2102

[Accessed Access Date 20/7/2011].

Rafiu.B. (2011) The Problem with the Niger Delta: An XclusiveNigeria

Commentary XclusiveNigeria.com, May 24.

Roberts.P (2005) The End of Oil:The Decline of thr Petroleum Economy

and the Rise of a New Energy Order. Bloomsbury.

Robinson.P (2008) Dictionary of International Security Polity

Ross.M (1999) The Political Economy of the Resource Curse World Politics,

Vol 15, (pp. 297-322).

Ross.M (2001) Does Oil Hinder Democracy? World Politics, Vol. 53, No. 3,

pp. 325-361.

Ross.M (2004) What Do We Know about Natural Resources and Civil War?

Journal of Peace Research, Vol. 41, No. 3, pp. 337-356.

Sala-i-Martin.X, S.A. (2003) Addressing the Natural Resource Curse: An

Illustration from Nigeria. National Bureau of Economic Research

Working Paper No. 9804.

Selby.J (2005) Oil and Water: The Contrasting Anatomies of Resource

Conflict. Government and Opposition vol. 40, no. 2, pp. 200-224.

Shaxson.N (2005) New Approaches to Volatility: Dealing with the

'Resource Curse' in Sub-Saharan Africa. International Affairs (Royal

Institute of International Affairs, Vol. 81, No. 2, , pp. 311-324.

Smirl.L, (2010) Resource Conflict, Energy Security New Security

Challenges Lecture 4 ed.

Soros.G, (2011) A French Cure for the Resource [online]. Project Syndicate

Available from:

47

http://www.project-syndicate.org/commentary/soros67/English

[Accessed Access Date 15/7/2011].

TheGuardian. (2009) Refugees in their own land The Guardian May 22.

TheGuardian. (2010) Maritime Security Challenges in the Niger Delta The

Guardian, January 13.

TheStatesman. (2007) Energy Security Need for Advance The Statesman

(India), October 30.

Thisday, (2006) Gulf of Guinea initiative for Niger Delta [online].

http://www.gasandoil.com/news/africa/3124fab11217e01682334a41

44f53265 [Accessed Access Date 20/8/2011].

ThisdayLive, (2010) Crisis Rocks NEITI over Alleged Corruption [online].

http://www.thisdaylive.com/articles/crisis-rocks-neiti-over-alleged-

corruption/80327/ [Accessed Access Date 20/8/2011].

Tierney.J, (2008) Rethinking the Oil Curse [online]. The New York Times.

Available from:

http://tierneylab.blogs.nytimes.com/2008/05/05/rethinking-the-oil-

curse/ [Accessed Access Date 31/5/2011].

TransparencyInternational, (2010) Corruption Index 2010 [online].

https://docs.google.com/spreadsheet/ccc?

authkey=CIretNoB&key=0AonYZs4MzlZbdERaRzgxaUcwYXVRZFpaR

3ZrekREb2c&hl=en&authkey=CIretNoB#gid=0 [Accessed Access

Date 24/7/2011].

TransparencyInternational, (2011) What is Corruption? [online].

http://transparency.am/corruption.php [Accessed Access Date

27/7/2011].

Tuschl. R, E.H. (2007) Nigeria’s Niger Delta Crisis: Root Causes Of

Peacelessness EPU Research Papers, pp.1-41.

Ugwuanyi.E, (2010) NEITI has failed to achieve its objectives, says forum

[online]. The Nation. Available from:

http://thenationonlineng.net/web2/articles/31196/1/NEITI-has-failed-

to-achieve-its-objectives-says-forum/Page1.html [Accessed Access

Date 20/8/2011].

UPI. (2008) Nigeria's Resource Curse UPI Energy February 14.

48

Upreti.B (2004) Resource Conflict and Conflict Resolution in Nepal

Mountain Research and Development, Vol. 24, No.1, pp. 60-66.

USFed. (2005) Energy Information Administration Issues Country Analysis

Brief on Nigeria US Fed News, April 18.

Uwanu.O. (2009) True Federalism, key to Niger Delta Crisis Daily

Champion, October 20.

Uzokwe.A, (2002) Is Nigeria Cursed? [online]. Nigeria World Available

from: http://nigeriaworld.com/columnist/uzokwe/112402.html

[Accessed Access Date 21/7/2011].

Vanguard. (2006) Oil Workers Begin Strike Sept 13 as Abducted- Shell

Staff are Confirmed Dead Vanguard, August 31.

Watts.M (2004) Resource Curse? Governmentality, Oil and Power in the

Niger Delta, Nigeria. Geopolitics, Vol. 9, No. 1, pp. 50-80.

Weinthal.E, L.J. (2006) Combating the Resource Curse: An Alternative

Solution to Managing Mineral Wealth. Perspectives on Politics, Vol.

4, No. 1, pp. 35-53.

Wenar.L (2008) Property Rights and the Resource Curse Philosophy &

Public Affairs, Vol.36, (Issue 1), pp. 2-32.

Yates.D (1996) The rentier state in Africa: oil rent dependency and

neocolonialism in the Republic of Gabon. Africa World Press.

Yergin.D (2006) Ensuring Energy Security Foreign Affairs Vol 85, No 2,

pp.69-82.

Zuckerman.E, (2008) Book review: “The Bottom Billion” by Paul Collier

[online]. http://www.ethanzuckerman.com/blog/2008/03/13/book-

review-the-bottom-billion-by-paul-collier/ [Accessed Access Date

20/7/2011].

What is Corruption? [online]. http://www.moj.gov.jm/pdf/brochure.pdf

[Accessed Access Date 21/7/2011].

(2006) Fuelling the Niger Delta Crisis [online].

http://www.crisisgroup.org/en/regions/africa/west-africa/nigeria/118-

fuelling-the-niger-delta-crisis.aspx [Accessed Access Date

10/5/2011].

49

(2006) The Swamp of Insurgency: Nigeria's Delta Unrest [online].

http://www.crisisgroup.org/en/publication-type/media-releases/2006/

africa/the-swamps-of-insurgency-nigerias-delta-unrest.aspx

[Accessed Access Date 10/5/2011].