To put the scale of wealth into perspective and to emphasise the stakes for Nigeria, the US and more recently China, the World Bank reported that 80% of oil wealth is owned by 1% of the population; 70% of private wealth is abroad whilst 3/4 of the country live on about $1 a day – at least 15 million of those live in the Niger Delta.
Anyone looking at this situation should be able to see that it is not going to work, that it cannot be sustained. But the oil companies and the Nigerian government have avoided looking, or at least avoided seeing, for decades. The opportunity may be gone.
In many parts of the world, where liberation, or other political movements begin to support and finance themselves with criminal enterprises, the political ideology quickly gets left behind, and the movement becomes a criminal gang. Once the profit motive takes over, a gang does not have much incentive to negotiate seriously for its original goals. And it has very little motive to give up its “struggle” or to lay down arms. Gangs will usually continue to use whatever rhetoric of liberation they started with. It makes them sound a bit more legit, and helps recruiting and media relations. But they become criminal gangs in business for profit.
We’ve seen this in with the IRA and guns and drugs, we’ve seen it in West Africa with diamonds, in Central and South America with insurgencies and paramilitaries and cocaine, in southern and central Asia with opium, and plenty more. Now this is happening in Nigeria with the youth gangs in the delta and oil, and the implications are enormous, for Nigeria’s neighbors, and Ghana is a close neighbor, and for world energy supplies.
MEND, the Movement for the Emancipation of the Niger Delta, was the military branch of the Ijaw struggle. It was relatively easy for the government of Nigeria to reign in the violence in the Niger delta for two reasons: MEND had clearly defined political motivations, and a long-term interest in the viability of Nigeria as an oil exporting state. Further, as a coherent tribal society, the traditional system of tribal relations and leadership exerted effective control over the actions of MEND.
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Over the past year this relatively stable system has rapidly broken down, and the result is the likelihood of a runaway escalation in violence. MEND fractioned amidst infighting among Ijaw tribal alliances. Various factions, with various political agendas, neutralized the ability to push for peace through negotiations—there was no single party, nor accession to a single set of demands, that could defuse the motivation to violence. In addition, the ransom money that foreign oil companies now routinely paid for the return of western employees spawned a market for guerrilla entrepreneurs—actors who were less motivated by traditional Ijaw political goals than by a return on investment. The lure of easy money has led to a proliferation of militant groups (now perhaps best characterized as criminal gangs) and a dramatic increase in attacks. This infusion of easy money to youthful militants broke down the traditional tribal structure of respect for leadership by elders.
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Finally, because of the shift from a political motivation to a profit motivation, militants are no longer invested in preserving the long-term viability of Nigeria as an oil exporter. As a result, the targeting strategy has shifted from the temporary sabotage of infrastructure for political ends to threats of permanent destruction of key infrastructure nodes
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The escalating violence in Nigeria has two important ramifications:
First, the tip from stable violence to perpetual escalation of violence represents a sea change in the level of disruption to Nigeria’s oil exports. . . . The new entrepreneurial violence is comprised of multiple actors, each competing to extort money from a limited target list of oil installations, foreign workers, and foreign oil companies. Because the actors are now militant youths seeking short-term financial gain, rather than careful elders seeking long-term political concessions, there is a strong market incentive to fill the available market space—in other words, to escalate kidnappings and infrastructure attacks until all Nigerian production is shut in.
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Second, this transition from ideologically motivated violence to financially motivated violence portends problems for energy infrastructure throughout the world. . . . as long as marginal returns on investments in energy infrastructure attacks remain positive, there will be a strong incentive to escalate these attacks no matter how completely a region’s export capacity is destroyed.
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Finally, it is worth considering that energy infrastructure was designed to optimize economic performance, not security and defensibility. . . . If this analysis is correct, the increasing incentives to attack energy infrastructure will become yet another factor accelerating the rate of decline of global energy production.
With Ghana’s recent discovery of oil, I see two looming problems here. One is that the people, particularly in the neighborhood of the oil, need to see their lives and livelihoods improve for the sake of security of the whole country. And Ghana oil installations may be at risk from criminal gangs unrelated to Ghana. The oil, and these gangs the US calls terrorists, are the motivations for the US Africa Command. But the Africa Command is likely to make the situation much worse.