John Campbell

Africa in Transition

Campbell tracks political and security developments across sub-Saharan Africa.

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Unstable Oil Markets Affect Nigerian Society

by Guest Blogger for John Campbell
March 5, 2013

Lagos, Nigeria A woman walks through Olusosun rubbish dump in Nigeria's commercial capital Lagos April 18, 2007.(Finbarr O'Reilly/Courtesy Reuters).


This is a guest post by Jim Sanders, a career, now retired, West Africa watcher for various federal agencies. The views expressed below are his personal views and do not reflect those of his former employers.

Times are changing and Nigeria’s ministers of finance and petroleum are worried. An energy boom in the U.S., competition from rival African oil producers, and Asian refiners’ increasing ability to handle “sour” crude, are conspiring to reduce demand for Nigeria’s traditionally desirable light sweet crude.

“For the last nine years,” the Energy Information Administration (EIA) says, “the U.S. has imported between 9 and 11 percent of its crude oil from Nigeria; however, U.S. import data for the first half of 2012 show that Nigerian crude is down to a 5 percent share of total U.S. crude imports.” EIA data also show that U.S. oil purchases from Nigeria are at their lowest in twenty years.

Looming declines in federal revenue augur ill for a country coping with domestic and regional insecurity. The government’s recently renewed interest in stemming oil theft may be seen in part as a reaction to fears about its straitened oil situation. There are also large military deployments in its north, and in its northern neighbor, Mali, to support.

All the while, violence proceeds apace in northern Nigeria with attacks on traditional elites, security personnel, and ordinary people. This weekend’s attack on a military barracks in the village of Monguno, 125 miles from Maiduguri, reportedly left twenty dead and confirms insurgent Boko Haram’s targeting of symbols of the federal government.

A central government under financial pressure facilitates the further emergence in Nigeria of a “new normal” a la Moises Naim, in that the hemorrhaging of Abuja’s power favors the growth of groups such as Boko Haram, that use the power they have acquired for “disruption and interference.”

But at society’s lowest levels, an “old normal” is likely to persist, or perhaps worsen. Bulldozers guarded by riot police demolished the homes of poor residents of Ijora-Badia in Lagos several days ago, in the latest effort at slum abatement.

Katherine Boo, author of Behind the Beautiful Forevers: Life, Death, and Hope in a Mumbai Undercity, argues that while the poor face difficulties common to all, they “experience them more starkly because their lives are so unstable, their margin for error so narrow.” The particularly horrific kinds of violence occurring in Nigeria are not unrelated to the intensity of suffering experienced by people living at the grassroots, long excluded from the nation’s oil patrimony.

Post a Comment 2 Comments

  • Posted by Chike Chukudebelu

    China emerged as the World’s top importer of crude, so it would be interesting to know how (China and/or India) pick the slack from US – as those two regions are set for major growth.

    Another point – how much economic growth is driven by the non-oil sectors? It might be more substantial than assumed (especially sectors like Telecommunications and Consumer Markets).

    It is unlikely that Boko Haram will grow strong enough to challenge the government in Abuja. It is unlikely to extend beyond the North & since Nigeria doesn’t make most of its money from the North, government will continue as usual.

    At worst, Boko Haram will be like Maoist rebels in Eastern India – an irritant, but not strong enough to challenge central government.

    Many analysts underestimate the fatigue of host communities, they are not stupid, they know Boko Haram accords them no benefits, so they ‘ll eventually organise to deal with them.

  • Posted by Adamu Abdullahi

    Nigeria needs the support of CFR to manage the oil revenue and the remarkable work of Ambassador Princeton Lyman is appreciated among enlightened citizens of the country.
    Again,CFR should help us to convince Nigerian government to opt-in the Global Partnership for Social Accountability anchored by the World Bank[

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