NIGERIA: Mapping Political, Economic
and Business Scenarios in the Post-
Obasanjo Era
By
Stephen Nairne, PhD
University of British Columbia
June 2007
Prepared for the Canadian Defence & Foreign Affairs Institute
th
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INTRODUCTION
As Africa’s most populous nation, home of the continent’s largest Muslim population, and
one of the world’s leading oil producers, Nigeria’s strategic import extends well beyond
its borders. National and state elections staged in April 2007 resulted in a landslide
victory for President Obasanjo’s hand-picked successor, Umaru Yar’Adua, and his
People’s Democratic Party (PDP). While voting occurred without major incidents of civil
unrest, widespread allegations of fraud and a litany of logistical failures mean that the
president-elect will inherit a poisoned chalice. Despite the polls’ obvious shortcomings,
neither international opprobrium nor domestic legal challenges will seriously test the
legitimacy of the incoming administration and a “coloured revolution” remains a distant
prospect.
Since 2003, an ambitious programme of structural reform aimed at accelerating Nigeria’s
economic growth, reducing poverty and achieving the Millennium Development Goals
(MDGs) has led to improved macroeconomic balances, consolidation of the financial
sector and improvements in the business environment. The benefits of reform have not,
however, been commuted into material welfare improvements for the majority of citizens.
Mr. Yar’Adua will therefore face myriad challenges upon his inauguration. Chief among
these are the country’s crumbling energy and transportation infrastructure, entrenched
corruption, high youth unemployment, fuel shortages, communal tensions, a worsening
HIV/AIDs pandemic, and spiralling violence in the oil-rich Niger Delta.
Coupled with widespread illegal oil bunkering1, escalating attacks against foreign-owned
installations, support vessels, and personnel in the Niger Delta is exacting a heavy toll
on Nigeria’s oil industry. Since February 2006, incursions perpetrated by the Movement
for the Emancipation of the Niger Delta (MEND) and loosely affiliated insurgent groups
have led to losses amounting to 20-25 percent of national production. There are well-
founded concerns that security services are unable to cope with an increasingly
sophisticated resistance. After decades of official neglect, the March 2007 promulgation
of the Niger Delta Regional Development Master Plan (NDRMP) is indicative of the
increasingly urgent development imperatives in the region and the government’s
willingness to initiate formal dialogue.
2007 ELECTIONS
In April 2007, more than 61.5 million Nigerians were eligible to vote in polls to elect a
new president, 469 parliamentarians, thirty-six state governors and members of each of
the state’s assemblies. Notably, the elections marked the first time in the country’s
history that power passed from one civilian administration to another. In the event,
President Olusegun Obasanjo’s handpicked successor, Umaru Yar’Adua, won in
landslide, with official results giving him 70% of the popular vote. His People’s
Democratic Party (PDP) also won a plurality of seats in Parliament2 and now controls 28
of the country’s 36 state governorships.
1
Oil bunkering refers to the process of siphoning oil from well-heads and pipelines to sell on the
black market.
2
The ruling party won 85 of the 108 announced results for the 109-seat Senate and 224 of the
announced seats for the 360-seat Legislature.
The campaign, conduct, and results of Nigeria’s 2007 elections were marred by serious
irregularities, highlighting both the politicization of, and serious deficiencies within, the
Independent National Electoral Commission (INEC). European observers indicated that
the elections "fell far short of basic international standards" and were not credible, while
the U.S. State Department concluded that the process was "seriously flawed". While
Nigerian civic and opposition groups3 have warned of an impending showdown with the
government, there is little public enthusiasm for a violent confrontation.4 Short of
registering legal challenges with the courts (the only institution that appears to operate
independent of the PDP) and organizing temporary work stoppages, it appears
increasingly unlikely that the opposition will prove capable of unifying around a common
strategy in the aftermath of the elections, just as it failed to do ahead of the polls.
More by design than accident, the results of the elections mark a further slide toward a
one-party state in Nigeria. In President Obasjano’s controversial 1989 book Constitution
for National Integration and Development, he argued that a one-party state “appears to
be the only procedural mechanism through which we can transcend the divisive and
centrifugal forces tearing us apart and diverting our attention from the monumental task
of integration and nation building.”5
While enmity and anger both within and against the PDP has clearly lightened Mr.
Yar’Adua’s yoke, his inauguration speech adopted an inclusive and conciliatory tone and
he has promised to respect the decisions of tribunal reviewing petitions of defeated
candidates and embark on an aggressive campaign of electoral reform. Both his pledge
to maintain the country’s program of economic reform and the over-arching imperative of
maintaining stability in Nigeria makes it highly unlikely that the international community
will take a firm stand over the polls. Nonetheless, President Yar’Adua will have to move
quickly to heal divisions within the People’s Democratic Party that emerged as a result of
his selection as its presidential candidate ahead of Vice President Atiku Abubakar. In
this respect, he will be helped greatly by his close relationship with the former president,
Olusegun Obasanjo, who will stay on as Chairman of the PDP, and who continues to
exert considerable control over senior ranks of the military and security apparatus. While
several key cabinet appointments has yet to be announced, it is widely expected that Mr.
Yar’Adua will holdover several key figures from the outgoing administration and attempt
to strike a difficult political balance among leading PDP and opposition figures.
The incoming president -- a bookish and shy former chemistry teacher noted principally
for his humility and ascetic qualities – will offer Nigerians a leader with a reputation for
honesty and little resemblance to most of his predecessors.6 Those in his home state of
3
The Coalition of Civil and Human Rights Groups has indicated it will use all legitimate means to
give the Yar’Adua presidency a difficult time, while the Campaign for Democracy, which
spearheaded campaigns to end military dictatorship in the 1990s, says it will challenge the
legitimacy of the government through all possible means.
4
Nigerians are well aware of the lessons resulting from the annulment of the 1993 elections,
where a prolonged period of uncertainty ultimately led to military intervention and the Sani
Abacha regime.
5
“Nigeria: Failed Elections, Failing State,” International Crisis Group (May 2007)
6
Mr. Yar’Adua’s health has been the subject of intense speculation, notably due to his
hospitalization in Germany during the election campaign and claims that he has only partially
recovered from a serious kidney ailment in 2000.
Katsina, where he has been governor for nearly eight years, say Yar'Adua's public
awkwardness masks a sharp mind and a resistance to manipulation that will serve him
well in a political culture legendary for “big man” politicians. His vice-president is Dr.
Goodluck Jonathan, formerly governor of oil-producing Bayelsa State in the Delta, and
the first person from the impoverished region to rise to such a high office. While it was
initially hoped that that Dr. Jonathan’s appointment would deliver a fillip to negotiations
aimed at stemming the tide of violence in the Delta, it has been met with mixed
reactions, and two separate attempts against his life in suggest he will have to tread
carefully.
CRUMBLING INFRASTRUCTURE
A combination of underdeveloped infrastructure, weak public management, and
corruption has led to poor output and service from state-based infrastructure providers.
The very low share of manufacturing as a percentage of Nigeria’s GDP reflects long-
standing problems of competitiveness related to frequent power shortages, poor road
and rail infrastructure, shortages of skilled labour, and high transaction costs.7
7
IFES, “What Nigerians Think – Nigerian Public Opinion in the Pre-Election Environment,” IFES
(April 2007)
The woefully inadequate electricity supply is generally judged by business to be the most
critical constraint, with more than 70 percent of manufacturers resorting to meeting their
own needs at a cost five times higher than the national average. President Obasanjo has
commissioned a number of new power stations in the closing months of his tenure, with
a view to boosting the national supply by 10,000 MW by the end of 2007. While it is
highly unlikely that this target will be met given union opposition to further privatization,
there is a clear recognition of the need to rapidly rebuild national infrastructure. Mr.
Yar’Adua’s ability to channel fiscal windfalls from the oil sector to targeted projects will
be an early bellwether of his administration’s effectiveness.
GOVERNANCE AND CORRUPTION
The history of corruption in Nigeria is strongly rooted. Successive military regimes
subjugated the rule of law, facilitated the wanton looting of public funds, and decapitated
public institutions. The result, not surprisingly, is that Nigeria consistently ranks as one of
the most corrupt countries in the world. The proliferation of economic and financial
crimes like Advance Fee Fraud (419) and money laundering has had severe negative
consequences on Nigeria, including decreased foreign direct investment in the country
and the tainting of Nigeria's national image. For the past four years, the fight against
corruption in Nigeria has been embodied in the Economic and Financial Crimes
Commission, (EFCC) and its Chairman Nuhu Ribadu - a 46-year-old senior police
officer. The Commission is empowered to investigate, prevent, and prosecute officials
engaging in, ““Money laundering, embezzlement, bribery, looting and any form of
corrupt practices, illegal arms deal, smuggling, human trafficking, and child labour, illegal
oil bunkering, illegal mining, tax evasion, foreign exchange malpractices including
counterfeiting of currency, theft of intellectual property and piracy, open market abuse,
dumping of toxic wastes, and prohibited goods”8
Despite the inherent difficulties of prosecuting senior government officials, the EFCC has
has recorded 150 convictions and has recovered several billion naira since its
establishment. Nigeria’s other official anti-graft agency, the Independent Corrupt
Practices and Other Related Offences Commission (ICPC) has similarly announced the
prosecution of 90 cases of corruption nationwide. One of the first political tests Mr.
Yar’Adua will face is his administration’s ability to satisfy growing civil society demands
for a more aggressive anti-corruption campaign and quell public perceptions that the
EFCC has become a political instrument aimed at sidelining political rivals.
The World Bank Governance Indicators dataset uncovers several interesting trends in
Nigeria’s governance. With a vibrant media, Nigeria’s voice and accountability rank has
improved dramatically during President Obasanjo’s tenure. Incremental improvements
are also discernible in the rule of law and control of corruption, and government
effectiveness. Both regulatory quality and political violence have, however worsened.
7
M. Salisu, “Determinants of Firm Performance in Nigeria: Evidence from Investment Climate
Survey Data
8
Section 46, EFCC Establishment Act, 2004
NIGERIA: Governance Indicators
Governance Indicator Year Percentile Rank
(0-100)
Voice and Accountability 2005 30.0
1998 9.2
Political Violence 2005 4.7
1998 13.2
Government Effectiveness 2005 20.1
1998 5.3
Regulatory Quality 2005 16.3
1998 25.6
Rule of Law 2005 5.8
1998 3.8
Control of Corruption 2005 6.4
9
1998 5.3
COMMUNAL AND SECTARIAN VIOLENCE
Nigeria is comprised of four principal ethnic groups – the Hausa (North), Fulani (North),
Yoruba (Southwest), Igbo (Southeast) – that collectively comprise 68 percent of the
national population. The country also boasts almost equal numbers of Muslims and
Christians. The prevalence of ethnic and religious divisions helps to explain why Nigeria
has evolved into a political federation, with 36 states enjoying a high degree of
independence from the central government.
One direct consequence of that independence has been the implementation, since 1999,
of sharia law in the north's 12 predominantly Muslim states. While the practices of
Northern states have moderated considerably in recent years, authorities were reminded
of the dangers of Islamic extremism in April 2007 when members of an armed Nigerian
Islamist Group, who dubbed themselves the Taleban, engaged in pitched battles with
security forces.
While Nigeria’s external borders remain unchallenged, at least 14,000 people have been
killed in sporadic outbursts of violence across the country and hundreds of thousands
have been displaced since military rule ended in 1999. While conflict often erupts
between different religious and ethnic groups, its structural roots lie more generally lie in
unequal access to power and resources, including land and oil wealth.10 One of the key
causes of communal conflicts in Nigeria lies in divisions between those who consider
themselves indigenous to an area and those regarded as settlers. Where resources are
scarce, this can (and often does) lead to a build-up of resentment among competing
groups, in some cases, spilling over into violence.
Importantly, and unlike in previous election crises, the current dispute has not taken on
an ethnic or religious dimension. Nonetheless, the administration will come under
pressure to boost spending in the Muslim-dominated north, where many see the election
9
World Bank Governance Indicators
10
Internal Displacement Monitoring Centre, “Internal Displacement in Nigeria: A Hidden Crisis,”
(February 2005).
of a Northerner as an opportunity for the region to recover some of the wealth and power
lost since power shifted in 1999. A further, but unlikely, fallout of the flawed elections is
the possibility that they will reinvigorate separatist agitation championed by the
Movement for the Association of the Sovereign State of Biafra.11
DEMOGRAPHIC AND ENVIRONMENTAL STRESS
The erosion, and personal appropriation, of state revenues and royalties from oil
explains Nigeria’s appalling ranking on every international official and unofficial
human development indicator. The 2006 Human Development Index (HDI) prepared by
the UNDP ranks Nigeria 159 of 177 countries, after Eritrea and Rwanda, and before
Guinea and Angola.12
HIV / AIDS, malaria, tuberculosis, and avian influenza, carry with them the potential to
overwhelm Nigeria’s capacity unless concerted efforts are mounted to limit the infection
rates and spread of these epidemics. Although its prevalence rate (at 6%) is lower than
many of its neighbours, after South Africa and India, Nigeria has the greatest number of
HIV sufferers in the world.13 Cumulatively, it is estimated that more than 1.7 million
people have died and 1.5 million children have been orphaned. For the 2007-2011
period, infection rate predictions vary widely: at the high end, it is estimated that the
adult prevalence rate could reach as high as 26 percent (up to 15 million inhabitants).14
In three countries of the world – Nigeria, Egypt, and Indonesia – the lethal H5N1 avian
influenza has been assessed by the World Health Organization, as “out of control.”
Evidence of this flu in birds has now been uncovered in nineteen of Nigeria’s thirty-six
states. Nigeria has recently received $65 million in support from the Word Bank to
improve preparedness and response.
ECONOMY
Following years of economic stagnation, Nigeria embarked on a comprehensive reform
program (the National Economic Empowerment and Development Strategy) during the
second term (2003-2007) of the Obasanjo administration. This program focused on four
pillars: improving macroeconomic stability; implementing structural reforms;
strengthening public expenditure management; and reforming public institutions. As
Table 1 indicates, this program has achieved notable successes in terms of sustained
GDP growth, a deceleration of inflation, and improved exchange rate stability.
Importantly, lower interest rates and financial sector consolidation have also produced
significant gains in the non-oil sector, which now accounts for more than 60% of GDP.
11
The Biafran War (1967-1970) was a political conflict caused by the attempted secession of the
southeastern provinces of Nigeria as the self-proclaimed Republic of Biafra. The war became
notorious for the starvation in some of the besieged war-bound regions, and the consequent
claims of genocide made by the largely Igbo people of those regions
12
HDI measures life expectancy, educational attainment and literacy, adjusted real income, and
standards of living.
13
Daniel Smith, “HIV/AIDS in Nigeria: The Challenges of a National Epidemic,” (2004).
14
Daniel J. Smith, “HIV/AIDS in Nigeria: the Challenges of a National Epidemic,” in Rotberg,
Nigeria, p.200
TABLE 1: NIGERIA: Economic Structure and Selected Indicators
Population: 143 million
Nominal GDP: US$116bn
Total Trade / GDP: 70%
Sovereign Rating: S&P: BB- / Fitch: BB-
Main Exports: Oil (86%); Gas (8%)
Export Partners: USA (54%); Brazil (10.4%); Spain (8.3%); France (3.2%)
Main Imports: Manufactured Goods, Chemicals, Machinery and Equipment, Foodstuffs
Import Partners: China (10.5%); USA (7.4%), UK (6.9%), Netherlands (6.2%)
Official Aid Receipts: $578mn (2004)
Remittances: US$4bn (2006)
1999- 2002 2003 2004 2005 2006 2007f 2008f15
2001
GDP Growth (%) 3.5 1.4 10.9 6.1 6.2 5.1 5.9 7.0
Inflation (%) 10.4 12.2 21.8 10.0 11.6 9.0 10.3 8.6
Exchange Rate (N:US$) 102.3 121.3 129.5 133.5 131.8 126.5 128.4 129.6
External Debt / GDP (%) 80.3 76.5 67.8 64.4 50.2 20.8 3.0 2.8
International Reserves 8.4 7.7 7.5 17.0 28.3 46.5 62.4 83.7
($bn)
Nigerian Oil Price ($bbl) 23.5 25.0 28.9 38.3 55.3 64.4 63.3 64.3
f=forecast
Sustained high oil prices have enabled the government to repay its remaining external
debt obligations, following the 60 percent debt relief (equivalent to US$18bn) offered to
Nigeria by the Paris Club. At the end of 2006, the Nigerian Parliament approved an
additional expenditure of US$1.4bn to liquidate balances owed to the London Club of
creditors. The fiscal space created by these debt relief exercises will be used to finance
increased investments in infrastructure and poverty reduction.16
During election campaigning, Mr. Yar’Adua listed six broad economic policy priorities:
improving the country’s electricity supply; boosting agricultural productivity; reducing
food insecurity; fighting corruption; downsizing the federal bureaucracy; and reforming
land ownership. It is also expected that his administration will maintain the Fiscal
Responsibility Act / Excess Crude Oil Account, which currently holds revenues estimated
at US$9.75bn.17
15
SOURCES: International Monetary Fund, Organization for Economic Development and
Cooperation, Economist Intelligence Unit
16
OECD, “Africa Outlook 2007: Nigeria” (May 2007)
17
Okonjo-Iweala, N., and P. Osafo-Kwaako, “Nigeria’s Economic Reforms: Progress and
Challenges,” Brookings Global Economy and Development (March 2007)
Mr. Yar'Adua has publicly committed himself to maintaining the current reform
programme, although progress may be slower than in recent years, since many of the
easier measures have now been completed. The next wave will be harder to implement
and will yield only long-term gains, such as resolving the electricity crisis, improving
insecure property rights, and reforming the weak judicial and education systems.
Moreover, progress will continue to be hampered by deeply entrenched vested interests,
pressure to adopt more nationalistic economic policies, the weak civil service, and
confusion caused by overlaps and contradictions between local, state and federal
government actions.
OIL / GAS SECTOR
Nigeria is the world’s eleventh largest oil producer and a member of the Organization of
Petroleum Exporting Countries (OPEC). In 2006, total Nigerian oil production, including
lease condensates, natural gas liquids and refinery gain, averaged 2.45 million bbl/d.18
The federal government owns the nation’s natural resources, including oil and natural
gas, and thus controls the granting of contracts to international partners. Under the
derivation formula inserted in the 1999 constitution, a minimum of 13 percent of oil
revenues must be returned directly to the states from which it was derived. This revenue
accrues in the Federation Account, where it is then allocated on a monthly basis by the
Revenue Moblization, Allocation and Fiscal Commission.19 Oil revenue allocation has
been the subject of much contention well before Nigeria gained its independence.
Allocations have varied from as much as 50%, owing to the First Republic's high degree
of regional autonomy, and as low as 10% during the military dictatorships. State
allocations are based on 5 criteria: equality (equal shares per state), population, social
development, land mass, and revenue generation. As Isaac Asume Osuoka, Director of
Social Action Nigeria asserts, “Callousness toward the people of the Delta stems from
their economic irrelevance. With all the oil money coming in, the state doesn't need
taxes from people. Rather than being a resource for the state, the people are
impediments. There is no incentive anymore for the government to build schools or
hospitals.”20
Nigeria’s oil accounts for 95 percent of foreign exchange earnings, 20 percent of GDP
and 65 percent of budgetary revenues. About 95% of the country’s crude production
takes place through joint ventures (JVs) between the state-owned Nigerian National
Petroleum Corporation (NNPC) and foreign oil companies. The NNPC takes a 50-60%
stake in such JVs, and is frequently criticized for a failure to fulfill its commitments in
these ventures. The NNPC has been earmarked for privatization amid strong opposition
from the unions. Nigeria has publicly stated its intention to grow its oil reserves to 40
billion bbl by 2010 and production capacity to 4.5 million b/d by 2010.21
18
Energy Information Adminstration, “Nigeria Country Analysis Brief,” April 2007
http://www.eia.doe.gov/emeu/cabs/Nigeria/Background.html
19
Stephanie Hanson, “Nigeria’s Creaky Political System,” Council of Foreign Relations (April
2007)
20
“Nigerian Oil: Curse of the Black Gold,” National Geographic (February 2007)
21
OTC, “Nigeria Seeks $60 Billion in Oil and Gas Investments,” Oil and Gas Journal (May 2007)
http://www.ogj.com/display_article/291570/7/ONART/none/GenIn/OTC:-Nigeria-to-invest-$60-
billion-in-oil,-gas-operations/
Nigeria’s oil industry has received significant attention from environmental groups,
human rights organizations and anti-corruption campaigners.22 Oil companies,
government officials and militants spend much time directing and deflecting criticism and
the lines of responsibility remain a subject of intense controversy. Nonetheless, the
reputational risks associated with doing business in Nigeria’s oil sector are clear: non-
governmental organizations (NGOs) monitor the social, environmental and economic
rights of communities in the oil-producing regions, and the execution of the
environmental activist Ken Saro-Wiwa in November 1995 has made the issue a focal
point for international campaigns.23 Recent reports by the United Nations Development
Program and the International Crisis Group identify some of the questionable strategies
employed by oil companies: paying off village chiefs for drilling rights; building a road or
dredging a canal without an adequate environmental impact study; tying up
compensation cases—for resource damages or land purchases—for years in court;
dispatching security forces to violently break up protests; patching up oil leaks without
cleaning up sites.
UNREST IN THE NIGER DELTA
The root causes of insurgency in the Niger Delta are well known. Violence,
underdevelopment, environmental degradation, and failure to establish credible and
transparent state and local government institutions have contributed to mounting public
frustration at the slow pace of change. While more than $200 billion of oil has been
removed from the Delta, most communities lack jobs, electricity, water, schools, and
basic health facilities. Ethnic, communal, and religious divisions add further complexity to
22
Much of the natural gas extracted in oil wells in the Delta is immediately burned, or flared, into
the air at a rate of approximately 2.5 billion cubic feet per day. This is equivalent to 40% of African
natural gas consumption, and forms the single largest source of greenhouse gas emissions on
the planet. The environmental devastation associated with the industry and the lack of distribution
of oil wealth have been the source and/or key aggravating factors of numerous environmental
movements and inter-ethnic conflicts in the region.
militancy and violence in the Delta---the region is home to more than 40 ethnicities, 250
dialects, and 3,000 communities.24
Illegal oil “bunkering” –theft – has accelerated the conflict and provided both militant and
criminal networks with substantial funding to purchase arms and transport.25 It is
estimated that between 100,000 and 200,000 barrels of oil per day are illegally
siphoned, moved to barges, and sold to refineries in Nigeria and beyond. Bunkering
directly finances the purchase of large caches of weapons for what has become a series
of armed insurgences across the oilfields. Since the late 1990s, there have been at least
ten major explosions and at least 2000 deaths associated with punctured and vandalized
pipelines. The government documented 6,817 oil spills between 1976 and 2001—
practically one a day for 25 years. While old and improperly maintained equipment
causes many of the leaks, sabotage and theft are also to blame. At the extreme, there
are reports that disaffected community members deliberately cause oil spills to collect
compensation money. Militancy and criminality also converge around another source of
revenue – the semi-illicit system of government and oil company payments to militants
frequently cloaked as community development or security allowances.
Since December 2005, Nigeria has experienced a significant increase in kidnapping, and
militant takeover of oil facilities. Taken together, it is estimated that these activities have
cost Nigeria roughly US$16 billion dollars over the past 16 months, with an estimated
20% of production currently shut-in. Militant attacks on oil infrastructure has also crippled
Nigeria’s domestic refining abilities. According to Control Risks’ figures, since the start of
2007, a total of 122 people have been kidnapped in 33 separate incidents in the Niger
Delta, compared with 104 victims in 25 incidents during all of 2006. Of those abducted in
2007, around 83% have been expatriate workers, the majority of whom were employed
in the oil and gas, and oil services sector. The figures underline that the main targets of
armed groups during such incidents have been expatriates and it is reasonable to
assume that foreign oil workers, both onshore and offshore, will remain the prime targets
of abductions by both politically driven and opportunistic armed groups.
The increasing pace and scope of attacks in the run-up to, and immediate aftermath of,
the 2007 elections is part of a broader MEND effort to position itself for negotiations with
the incoming administration. As a final legacy in his efforts to resolve the conflict in the
region, President Obasanjo unveiled the Niger Delta Regional Development Master Plan
under the supervision of the Niger Delta Development Commission. The project is
expected to cost about US$50 billion (6.4 trillion naira) over the next 15 years. While it is
a useful blueprint, its effective implementation will require the commitment from all
stakeholders: the federal government, the states, local government, oil companies,
international organisations, community-based groups, insurgents, and non-governmental
organisations. The one-month ceasefire declared in June 2007 suggests that at least
some of the militant groups are prepared to negotiate a settlement.
24
Niger Delta Development Commission – www.nddconline.org
25
International Crisis Group, “The Swamps of Insurgency: Nigeria’s Delta Unrest,” (August 2006)
The Movement for the Emancipation of the Niger Delta (MEND) is the most active and
best organized militant group in the delta region. Attacks in 2006 demonstrated the
group’s capabilities, with a growing use of rocket-propelled grenades (RPGs) reported,
as well as car-bombs. MEND’s highly disciplined swamp-based operations underline a
growing informal intelligence network, which may involve local employees in oil
companies. Their high degree of mobility allows them to attack targets in quick
succession, often undermining security forces and penetrating companies’ internal
security structures. MEND is thought to have developed out of the Ijaw militant Niger
Delta People's Volunteer Force (NDPVF) – popularly known as the 'Egbesu Boys'. Its
leader Alhaji Mujahid Dokubo Asari's considerable wealth brought access to high-calibre
weapons, ammunition, satellite phones and speedboats. Other notable groups include
the Ijaw Youth Council (IYC), which in September 2005 warned of attacks against British
oil interests in the delta following the arrest in London of Bayelsa state Governor
Diepreye Alamieyesiegha on suspicion of money-laundering. The NDPVF's main rival,
Ateke Tom's Niger Delta Volunteers (NDV), has been largely diluted.26
26
Control Risks Group, “Nigeria,” (May 2007)
NIGERIA: MEDIUM TERM SCENARIOS (2007 – 2011)
Despite the country’s manifold challenges, the central forecast for Nigeria is relatively
sanguine.
Assumptions
1. Oil prices remain above $40/bl throughout the forecast period
Wildcards
1. A major outbreak of Avian Flu
2. The sudden death or incapacitation of the President
SCENARIO 1: Things Fall Apart (15%)
President Yar’Adua is unable to heal divisions within the People’s Democratic Party or
forge alliances with influential opponents. Weak institutional support, ongoing court
challenges related to the 2007 election, and increasing public disaffection limit the scope
for initiatives aimed at addressing Nigeria’s principal development challenges. Unable to
resolve conflict in the Delta, escalating attacks against oil installations lead to increased
security expenditures and production shortfalls. With dwindling resources available to
fund infrastructure projects, private sector investment remains weak. While neither a
balkanization of Nigeria nor direct military intervention is likely, the President’s grip on
power becomes increasingly tenuous over the forecast period and the economy
continues to under-perform its potential.
SCENARIO 2: Half of a Yellow Sun (55%)
President Yar’Adua’s conciliatory and inclusive gestures salvage the government’s
domestic and international legitimacy. Constrained by a weak mandate, however,
progress is measured and efforts aimed at improving the electoral system, reducing
corruption and implementing structural reforms meet with only modest success.
Implementation of the Niger Delta Development Master Plan, and ongoing negotiations
with insurgent groups lead to ongoing dialogue and sporadic negotiations, but a formal
agreement remains elusive and security risks remain prevalent.
SCENARIO 3: Nigeria’s New Dawn (30%)
President Yar’Adua moves quickly to heal divisions within, and consolidates control over,
the PDP. While the country continues to move toward a single-party democratic
authoritarian political model, an overhaul of INEC and passage of electoral reforms early
in his mandate yields both domestic and international dividends. President Yar’Adua’s
tighter control of Nigeria’s fractious political environment provides him with a freer hand
to push through controversial structural reforms and initiate dialogue with insurgent
groups in the Niger Delta. While unrest in the Delta in the first half of 2007 temporarily
slows GDP growth, the government moves aggressively to reach an accommodation.
While sporadic attacks and bunkering persist, an improving security situation and
additional offshore capacity lead to improving external balances throughout the forecast
period. Increased fiscal revenues lead to targeted investments in electricity, roads,
health and education that reduce youth unemployment and boost non-oil GDP. A
strengthened public mandate allows the President to move more aggressively against
entrenched interests in the second half of this term.
Canadian Defence & Foreign Affairs Institute
CDFAI is the only think tank focused on Canada’s international engagement in all its
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engaged with action that is timely and credible.
CDFAI was created to address the ongoing discrepancy between what Canadians need
to know about Canadian international activities and what they do know. Historically,
Canadians tend to think of foreign policy – if they think of it at all – as a matter of trade
and markets. They are unaware of the importance of Canada engaging diplomatically,
militarily, and with international aid in the ongoing struggle to maintain a world that is
friendly to the free flow of goods, services, people and ideas across borders and the
spread of human rights. They are largely unaware of the connection between a
prosperous and free Canada and a world of globalization and liberal internationalism.
In all its activities CDFAI is a charitable, nonpartisan organization, supported financially
by the contributions of foundations, corporations and individuals. Conclusions or
opinions expressed in CDFAI publications and programs are those of the authors and
speakers and do not necessarily reflect the views of the Institute staff, fellows, directors,
advisors, or any individuals or organizations that provide financial support to CDFAI.
