Oil Curse: More Tact than Emotion Required

Published on 23rd January 2007

People have been wondering why Nigerians vandalize oil pipelines. It is because when they ask the government and oil drilling companies: “Where are the good roads you promised us? Where are the hospitals and schools you promised us?” The government answers: “They are coming. They are in the pipeline.” The people therefore vandalize the pipes in search of these promises “in the pipeline.”

If you want to see a country whose resources have turned from a blessing to a curse, go to Nigeria. After Nigeria, go to Chad. From Chad, visit Sao Tome. Whenever oil is discovered in an African country, respective governments always term it is ‘victory for the people.’ In Uganda, a national prayer was held to celebrate the positive oil prospects. But alas, when the mining begins, you really wonder whether it is victory for the people or victory for a select few in the government.

Before oil was discovered in the Niger Delta in 1958, the Delta’s inhabitants were farmers. Others were fishermen. They lived in harmony. But when oil was discovered, hostility suddenly developed. There was mass displacement. People became poorer than what they were in the beginning.

Ken Saro Wiwa rose up to speak for the oppressed people. He focused on a non violence approach to hold dialogue with the government and multinationals. He told them that people surrounding the oil fields ought to benefit. But what happened? He was executed. The government and multinationals conspired to oppress the Ogonis, who number about 500 000.

Since 1958 and thereabout, SPDC and the Nigerian government have drilled about 900 million barrels of crude oil from Ogoniland. It is about $7 to10$ cheaper to drill oil in Ogoniland against other parts of the world, according to Ogoni Solidarity Forum, but the money accrued from the drilling never trickles down to the half million Ogonis. It finds its way to bank accounts in Europe.

In Sao Tome, as soon as oil was discovered, there is fighting. When the President of Sao Tome was overthrown while in Nigeria, oil money from Nigeria reinstated him.

Kenya is a classic example of what happened in Nigeria, when few leaders steal public money and keep in Swiss banks.

In West Africa, oil is a curse. Will it be the same in East Africa? Can East Africa learn anything from Nigeria? Tourism contributes a significant proportion to Kenya’s GDP, but I can assure you that with the discovery of oil, leaders start focusing on oil. The main industry that is a source of income will be forgotten. The industry that sustains the nation will eventually collapse. The current Managing Director of the Oil Corporation of Kenya will be redeployed or sacked. But why? The oil industry only employs few hands – few people. Its money goes to few hands too. When these things begin to happen, know that the Dutch disease has caught up with you. Agriculture was the main source of income for Nigeria but as soon as oil was discovered, it was forgotten.

Nigeria produces oil but you can’t believe it. The commodity is scarce. Go to Nigeria now, there are long queues of people – lining for oil. What a paradox! How smart are we? How smart is Africa? We produce a commodity, but experience scarcity of the same! Oil is drilled on our land-but is refined in Europe.  We have to import it at an exorbitant price. Why? Things don’t just add up. Africa must re-examine its resource policies. We can’t refine it. Oil will cease to be a curse if right institutions are put in place and our government became more responsible. Botswana and Norway have achieved this.

The civil society should be armed with the capacity to engage the oil industry. The oil industry is technical. You require knowledge to understand how it works so that you can ask the right questions. Many people in Nigeria don’t know whether the mining companies pay tax or not. The oil monitoring bodies have very weak capacities too. The government has to be flown in Shell company helicopters to inspect oil fields. In other words, Shell has more capacity than the government which should monitor it. If I have more capacity than you, who should keep an eye on me, you can imagine the state of affairs! 

European countries are subsidizing African leaders to oppress their people. Their institutions should be revisited. They have neat laws. OECD forbids European nations from engaging in corruption in Africa, but are these institutions enforced?

A Swiss MP told me, “Please help me to identify people who have stashed money in our bank accounts so that I follow up.”

What a ridiculous request! When terrorists hit the US in September 11, how did the US suddenly freeze “terrorist” accounts the world over? How did Switzerland identify these accounts? Are you telling me European systems don’t know where this money is kept? This is hypocrisy and double standards.

Do you know that the amount of money a Nigerian lawyer spends to follow up funds hidden in Swiss accounts is enough to run the government budget? When Mali tried to chase some money in Switzerland, which condition were they given? “Engage a Swiss lawyer to help get this money.” What is happening? Does Africa have to lose at both ends?

There is need for violence to solve the oil curse. Should thieves be made to feel comfortable while their victims suffer? Didn’t it take violence to do away with the one party regime in Kenya? Didn’t it take violence to refuse the government written constitution in Kenya? I am not talking about violence by use of guns and stones. Africa needs informed people. People who understand the status quo- to deal with the exploitative powers that be. This calls for intellectual violence. How do you deal with an enemy you do not understand? How do you deal with an enemy who is light-years ahead of you?

There is need for informed cooperation both locally and internationally, to solve the oil curse. The European institutions should put pressure on their organizations to be more accountable in the countries in which they operate, as we pressurize our governments to do the same. Oil ought not to be a curse – but our systems are making it a curse.

Compiled by Josephat Juma from David Ugolor’s Presentation in a public seminar on From Resource Curse to Resource Blessing, organized by the Heinrich Boll Foundation on the occasion of the World Social Forum, Nairobi. David Ugolor works with the African Network for Environment and Economic Justice, Benin-City, Nigeria.

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