Following President Goodluck Jonathan’s abrupt decision to abolish a consumer fuel subsidy, Nigeria entered a new period of civil unrest. The unrest began as a citizens’ protest but quickly transformed into a national strike in opposition to widespread corruption in general and increased oil prices in particular.
The strike has ended and the fuel subsidy has been partially reinstated, but the situation is not much better. In Nigeria, sub-Saharan Africa’s biggest oil producer of crude oil, the oil industry has consistently been more of a curse than a blessing.
Paradoxically, Nigeria remains a net importer of refined petroleum products because itlacks modern refineries. The country has a wealth of natural resources and fertile land, but poverty, unemployment, and crime remain serious problems in Africa’s most populous nation.
These problems can largely be attributed to two root causes. First, ethnic and religious tensions which have led to discrimination and violence; Nigeria has over 250 ethno-religious groups. This has led President Jonathan to declare that the situation is ’even worse than [during] the civil war’.
Second, the oil industry fuels systemic corruption. The oil boom of the 1970s, which transformed Nigeria into the sub-Sahara’s fastest growing economy, was also an opportunity for rent-seeking activities and corruption in both private and public sectors to grow as speculators sough preferential contracts.
The attempt by president Jonathan to tackle corruption by eliminating the fuel subsidy is seen by some as the only way forward because the biggest beneficiaries of the subsidy were the owners of fuel-importing companies - among the richest people in the country. The government estimates it will save 1 trillion naira ($6.2 billion) in 2012 by eliminating the subsidy.
Critics of the subsidy argue that fuel importers overcharge for fuel in corrupt accounting procedures. Critics note that fuel bought for local consumption is sold at a high profit by smugglers over the border in Cameroon and Benin.
Consequently, critics argue, it is illusionary to believe that getting rid of the fuel subsidy will solve the problem of corruption. Several NGOs and Human Rights defense groups have argued that the policy is a smokescreen to ’usher in a new era of impoverishment for Nigerians’ in a country where ‘pay and perks’ are among the world’s highest in a country, yet the vast majority of the population live on or less than 2$/day.
Analysts have criticized the timing and context of President Jonathan’s decision to remove the fuel subsidy, suggesting it was a political move to counteract low public opinion.
Further, continuing attacks by the Boko Haram, an Islamic sect that is fighting against Western style education, have not let up. The group is based on an "extreme interpretation of the Qu’ran, in which violence is an accepted means to deal with ’non believers’ or ’infidels.” Thus, a climate of uncertainty, violence and fear has been installed.
Boko Haram has been trying to create an insurgency styled on those in Afghanistan and Somalia, but it lacks the formal organisational structure and leadership of terrorist groups such as al Qaeda and al Shabaab.
The divide between Christians and Muslims has been amplified within Nigeria. The country’s Christian population is roughly located in the south for the most part, with Muslims in the North.
In a country where long-standing civilian divides have hampered development and remain a sensitive subject, groups such as Boko Haram have the potential to recruit marginalised youth in efforts to radicalise them.
The oil industry is also disastrous for the environment. Over 5 decades of repeated oil spills have dissolved biodiversity in some places, and have left many people without a means of basic income in others. Oil spills in the Niger Delta are literally a ’daily occurrence’. Experts estimate that in total some 13 million barrels of oil have been spilt in the Niger Delta since oil exploration began in 1958. This is the equivalent of one Exxon Valdez every year for 50 years. The set of pipes that have been constructed date back to the 70s and the vast majority of them have been poorly maintained.
To improve the situation stringent regulation is urgently required, and there is widespread support for a proposal by the EU commission to extend binding EU environmental and safety regulations to cover European oil companies operating overseas.
While the recent mass protest revealed Nigerian people’s anger, it also brought together Muslims and Christians political capital, something that would have been unthinkable a month ago.