Global Insight Perspective | |
Significance | Nigeria's President Olusegun Obasanjo launched the government's Niger Delta Regional Development Master Plan under the supervision of the Niger Delta Development Commission (NDDC). |
Implications | The U.S. government is supportive of Nigeria's desire to end the crisis in the Delta region, but believes that change will have to come through democracy and anti-corruption measures. |
Outlook | A new president will take office in Nigeria in May and the new administration will need to implement a fresh approach to solve the Delta's problems. |
President Launches Niger Delta Master Plan
On 27 March, Nigeria's outgoing president Olusegun Obasanjo launched the Federal Government's Niger Delta Regional Development Master Plan under the supervision of the Niger Delta Development Commission (NDDC). The project is expected to cost about US$50 billion (6.4 trillion naira) over the next 15 years. Obasanjo said that the plan offered opportunities for short-, medium- and long-term development in the Delta, but that its effective implementation needed commitment from all stakeholders: the federal government, the states, local government, oil companies, international organisations, community-based groups, and non-governmental organisations.
It is vital for Nigeria that the Niger Delta, the country's oil producing region, is lifted out of the current dire situation in which the abject poverty breeds violence. The oil companies operating in the region have been forced to increase security because of the rise in militant and criminal activity in the past couple of years. This has seen over 100 expatriate workers kidnapped, oil companies’ facilities attacked, and pipelines sabotaged, leading to a significant amount of crude being shut-in. Nigeria is believed to have been shutting in a minimum of 477,000 barrels per day (b/d) since February 2006 and at times over the last 12 months this figure has reached approximately 800,000 b/d.
President Obasanjo reached out to the militants in his speech at the launch of the plan saying: "There will be genuine amnesty for those that turn a new leaf and hand over their weapons, but I will not give amnesty to somebody who will point a gun on the head of somebody. I dare say to you that if you are a militant, I am a militant too. If you do not want me to show you my militancy, then do not show me that you are one".
U.S. Support for Nigerian Initiative
The United States has said that it will help Nigeria to end the crisis in the Delta and believes that the way to do this is by implementing democracy and anti-corruption measures, according to Phil Carter, director of the U.S. State Department's Office of West Africa Affairs. Carter was speaking at a conference called "Future Reform and Strategies for External Support", sponsored by the Centre for Strategic and International Studies. He said that the initiative needed to be a Nigerian one, but that the United States would support the country that it sees as an anchor for Africa's security and prosperity. Carter applauded Nigeria for being committed to the Extractive Industries Transparency Initiative and hoped that the governors of the Delta states would use their huge financial resources (resulting from the persistently high oil prices) to embrace the region's plans for development. In January, the U.S. State Department updated its consular information sheet and warned its citizens about the deteriorating security situation in the Niger Delta (see Nigeria: 26 January 2007:U.S. Warns Citizens to Avoid Niger Delta as Kidnapping Chaos Escalates).
Outlook and Implications
Nigeria does need a new approach to the Niger Delta crisis, not least because of the 477,000 b/d of oil being shut-in, meaning that the country is losing US$1 billion a month in potential revenue. Nigeria is due to elect a new a new president in three weeks and the militants’ promise to disrupt oil company operations or to influence electioneering has so far not occurred. The Movement for the Emancipation of the Niger Delta (MEND) has been quiet and even released the hostages it had been holding since December. MEND's spokesman Jomo Gbomo previously told Global Insight that “oil companies in the Niger Delta are operating at their peril". He also warned oil companies operating in the Niger Delta that they should be prepared for “terrible times, which will come upon them very suddenly". Although over 50 foreigners have been kidnapped so far in 2007, they have all been abducted by criminal gangs looking to secure a quick cash ransom, rather than by politically motivated militant groups.
The United States is correct to support the bid to end the crisis in the Delta, but the solution does indeed need to be led by Nigeria. Nigeria is the largest oil producer in Africa and its light sweet crude is in high demand by U.S. refiners. Last year, the U.S. ambassador to Nigeria John Campbell said: “Nigeria is a friend of the United States. We can help. But we will help at the request of the Nigerians”.
The problem is that president Obasanjo is irrelevant now and his strategies over the last eight years to help improve the lives of the Delta indigenes have come to nothing. His use of violent rhetoric is a mistake and the practice of fighting fire with fire is counterproductive and damaging for the region and the federal government. Therefore, a new approach will be needed when Nigeria's next president takes office in May. It is hoped a new administration will implement far-reaching changes with renewed vigour to end militant activity and make the oil producing Delta a more secure place to operate. Nigeria's upstream sector continues to expand, especially its deep offshore projects, as the country aims to reach the 4 million b/d production mark by 2010.