Politics of Oil

Abstract

Nigeria produces a lot of petroleum oil that is mainly exploited by foreign companies. Thus, it is unclear whether the Nigerians benefit from the oil or it serves the interests of the foreign investors. Mining has a negative impact on the land and water resources as well as the general environment, therefore, it is important to weigh the arguments for and against the oil resources. Moreover, most of the oil mining countries in Asia and Africa experience civil wars and, to make matters worse, the intervention by the western powers depicts the possibility of their interests in the oil deposits. Accordingly, the researcher seeks to conduct a library study to unearth the adverse effects of oil in Nigeria. Among the disadvantages under the investigation, there are lowered agricultural production, its influence on poverty levels, environmental pollution, diminished freshwater resources, and social unrest.

Politics of Oil

Background

In 1956, oil was discovered at a village Oloibiri in Nigeria’s Niger Delta by shell-BP Company, but its production began only in 1958. Since then, the exploration of oil is increasing to an average about 12.8% yearly (Shell in Nigeria, 2009). Nigerian oil reserves are estimated to be of 35.3 billion in average, allowing for Nigeria to be the top oil producing country in Africa and rank 7th in the world. Oil contributes to 90% of the country’s gross economic income and 65% of the government’s revenue (Shell in Nigeria, 2009). However, despite the discovery of many oil reserves in the country, it faces constant social and ethnic unrest, high levels of poverty and corruption, and environmental degradation (Klieman, 2012). Economists have therefore argued that the country suffers from an oil curse or a natural resource curse, which seems plausible after 1000 people per year are said to be killed between 1999 and 2004, due to tension between ethnic-regional groups (Oeyfusi, 2007). The presence of oil in Nigeria has been harmful for the locals, thus, the statement that oil is more of a blessing than a curse can be hardly valid.

The Negative Impacts of Oil in Nigeria

Impacts on Agriculture

Exploration of oil in Nigeria has increased over the years, which has contributed highly to a serious decline in the country’s agricultural sector, since most people are shifting from agriculture to oil manufacturing (“History of the Nigerian petroleum industry,” 2015). The discovery and exploitation of oil in Nigeria have led to economic growth of the nation, but it is arguable if the benefits outweigh the negative effects that oil has caused socially, politically, economically and environmentally. For instance, farmlands and forests in Nigeria are covered in grease oil, which is forcing farmers to abandon farming as the soil is degraded and unable to support crops. This has led to the agricultural products import, whereas previously the country was able to support its population with the food produced by inland farmers (O’Neill, 2015). Consequently, despite all the environmental issues caused by oil exploration, the government of Nigeria did not set strict policies to protect the environment.

Impacts on Poverty

Apart from the most precious resource in the world, Nigeria also has one of the highest percentages of destitute people, with about 70% of its 150 million people living in relative poverty. The region’s infrastructure is undeveloped, since there are constant conflicts and the money received from selling the oil end up being misused (“Nigerian oil fuels Delta conflict,” 2006). Nigeria earns its main revenue from oil, but even with the high annual income the citizens do not benefit from oil funds, as most of this income is lost through corruption of government and oil bureaucrats.

Furthermore, there is no transparency from the oil companies on how much they export or their financial dealings (“A desperate need for reform,” 2012). Fraud and rampant cases of corruption are being reported as oil barrels are stolen, which in turn forces the country to import fuel. For example, in a fraud case, a report dated May 2012 exposed that close to 6.8 million dollars had been lost in subsidies for oil export. Subsequently, the stolen oil is either sold to syndicates in Russia and Eastern Europe or is refined in the overseas while the little that is left is sold to the community. The citizens are forced to buy petroleum products at a costly price, not enjoying having the resource, in spite of importing it to the country. Additionally, complicated tax rules, limited technical and institution’s capability to monitor oil revenues, restrain the oil industry (Oyefusi, 2007). Thus, though the country is rich in oil, the economic growth is slow while standards of living for the people are low.

Crime and Social Unrest

Armed youth and militia groups, as the Movement for the Emancipation of the Niger Delta, claim that the oil belongs to the community. Hence, they would hide in the river lines and swamps of the Delta, kidnap foreigners and oil workers for ransom, steal oil from pipelines that results in shutting down of companies. This has caused the nation millions of revenue and threatened the stability of the country. Social and ethnic unrest in the region has continued from the British colonial period, but recently some oil companies have been accused of funding the militia groups at the Delta (“Shell accused of fueling violence,” 2015). In 2005, about 60 people were reported killed and thousands displaced after the fight of two militia groups for dominance and control of oil money. During an interview, one of the residents commented that “Nigeria was a better place without oil” proving that citizens viewed oil as a burden and not as a benefit (O’Neill, 2015).

Impacts on Environment Resources

Oil extraction in the Niger Delta has led to environmental issues, including soil and water pollution, due to oil spills and leakages from old, rusty pipelines and wells. An evaluation released by oil companies showed an estimated 5 million liters of oil barrels spilled by the year 2014, though environmentalists claimed that this figure is below the actual value that had greatly contributed to environmental destruction in the Delta. There is, therefore, a need for oil companies to release the correct figures of oil spills to ensure that the communities are fully compensated for environmental pollution in these areas (O’Neill, 2015). An estimated 20,000 hectares of mangrove at the coast is said to have been cleared to pave the way for the oil and gas exploring canals. This loss of wetlands has resulted in the loss of fish and other aquatic animals, which has in turn forced fishermen to look for alternative sources of livelihood and the communities to buy frozen fish, which was rare in the 1970’s (Vidal, 2010).

Furthermore, the communities are affected by pollution of water, with an estimated 30% of the population being unable to access clean drinking water. Oil spills end up leaking into the wells and draining into the sea, making the water unfit for human consumption. People living close to the delta are forced to live with years and decades of pollution on a daily basis. In addition to this, the oil companies burn the natural gas reserves instead of storing or injecting it into the ground (O’Neill, 2015). These continuous burning flares release greenhouse gasses into the atmosphere, provoking acid rains that result in corroded roofs, crop failure and the high number of respiratory diseases in the neighboring communities. In 1988, the country established an environmental protection agency, even though by then the environmental devastation had already occurred. However, the lack of enforcement of the set laws poorly monitored the activities of the oil companies and produced great economical losses. The regulations concerning fuel have stagnated in debates for 15 years, and now they are suppressing the oil sector, thus costing millions of dollars for the country (Oyefusi, 2007).

Conclusion

The world’s oil nations are considered to be the most advanced, but this can only be so if the government implements effective measures to avoid conflicts. Countries like Saudi Arabia reap benefits of having such a resource while ensuring that it is used sustainably. In Africa, the black gold is already explored in some and is still being discovered in other countries, like Kenya and Uganda, but the production has not yet started. However, most of such oil countries are in constant civil conflict over the resource: for example, Angola, Sudan, and Nigeria. In Nigeria, oil revenue is the backbone of the economy, but oil wealth does not benefit its citizens since more than half of the population lives in poverty. In addition, exploration of the resource has led to tension and anxiety as a result of constant communities’s fights for control, environmental degradation around the delta and the sea, an increased corruption in the political administration and environmental agencies. Nigerian people thought with the finding of the oil their lives would improve, instead, the oil money did not benefit them, but contributed to the increase of their problems. It is, therefore, correct to say that oil is more of a curse than a blessing in Nigeria.

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