Oil giant that runs on grease of politics
Nigeria is rich but almost none of it flows to the people
Gail Bensinger, Chronicle Foreign Editor
Sunday, March 11, 2007
(03-11) 04:00 PDT Abuja, Nigeria -- This may be Africa's most populous nation, playing a prominent role in regional politics and lining up with the West in the war on terrorism. But that is not what American business and government leaders mean when they refer to Nigeria as an "indispensable partner."
What they're talking about is one word: oil.
More than 1 of every 10 barrels of oil consumed in the United States each year comes from Nigeria, the only OPEC member in sub-Saharan Africa. A handful of giant multinational oil companies, including San Ramon's Chevron, are in partnership with the government to exploit the enormous reserves in the Niger Delta and, increasingly, offshore.
"There is oil in this country," Bala Mohammad, an aide to the governor of northern Kano state, told a group of visiting American journalists earlier this year, "but it doesn't come to us; it comes to you."
The huge haul of easy oil money has led to corruption and impunity on an astonishing scale. Nigeria gets a large proportion of its income from oil and gas, meaning that its annual budget is far more dependent on world oil prices than on national productivity. Politicians are assured of an income stream no matter how badly they disappoint their constituents, so they have little incentive to invest in the infrastructure that could ease everyday life and encourage development.
Petroleum riches have not helped lift the vast majority of Nigerians out of abject poverty. A country with reserves of 36 billion barrels of oil and 184 trillion cubic feet of natural gas cannot deliver electricity to its people. Factories cannot operate without reliable power, so industries are idle and unemployment is rampant. As irrigation schemes have faltered and farmland turns irreversibly into desert, Nigeria has morphed from a food exporter to a food importer. Other resources that could contribute to development languish, including coal, gold and industrial metals.
Crude oil is sent abroad for refining, then re-imported to supply gas stations where long lines of drivers wait under the baking sun. Travelers along the main north-south highway risk getting shaken down, or worse, at the impromptu roadblocks that spring up after dark. Everybody, rich and poor, buys water, and anyone who can afford it has a generator. In most cities, sewers are open ditches running alongside the streets. Garbage remains uncollected. Typhoid, malaria, HIV/AIDS and other preventable diseases are rampant.
Oil distorts the federal system of government in many ways. It interferes with a genuine census, for example, because oil revenues are distributed by a formula based on population so states try to pump up their figures to get a bigger piece of the pie. Industry practices -- notably burning natural gas, a process called flaring -- have befouled the air, water and land. In oil-producing regions, bunkering -- organized theft of crude by the tanker-ful -- is an illicit trade in which, the locals say, the military engages. Kidnapping for profit is on the upswing, helped along by the payment of ransoms.
Would Nigeria have been better off without oil? Outside of the government and the oil industry, a lot of people think so.
Patrick Utomi, director of the Centre of Applied Economics at Pan African University in Lagos, describes the state of the economy as "two steps forward, four steps back." He is a candidate for president from one of the numerous minor parties, running on a platform that calls for diversifying the economy. As things now stand, he said, "The economic players are taking off profits and not creating wealth."
M. T. Seigha, an activist from the delta region, says the Nigerians who live in the industry's shadows are left to endure its downside -- environmental degradation and lack of opportunity for work in the industry. "Our thinking is that Shell, Mobil and everybody should pack up their bags please and go back where they came from," he said, "because we are not benefiting from it."
Not everyone has suffered deprivation, of course. Holding national office has enriched politicians and the "Big Men" who back them. The country has endured numerous military dictatorships, including some led by officers who have re-entered politics as civilians. If -- and this is a big if -- the national elections take place as scheduled next month, it will represent the first hand-over of power from one elected president to another in the 47 years since Nigeria won its independence from the British in 1960.
There is a delicate political balance between the Christian south and the Muslim north. President Olusegun Obasanjo is a southerner and a former coup leader. He tried to have the constitution changed so he could seek a third term, and many politics-watchers say he's planning to remain the behind-the-throne power by hand-picking the candidate of his People's Democratic Party, Umaru Yar'Adua, who fell ill last week and remained in a German hospital.
Meanwhile, officials in the administration throw up obstacles to registering voters and preparing polling sites.
"These elections have been designed to fail," said Jibrin Ibrahim, a former political science professor who now heads the Centre for Democracy and Development, a nongovernmental political research organization.
"We've had enough of this president," Ibrahim added. "The issue before us now: Has he got the message?"
Obasanjo's successor was supposed to be Vice President Atiku Abubakar, a northerner. But the two men fell out and Atiku, as he is universally known, bolted to another faction, the Action Congress.
The Economic and Financial Crimes Commission recently cited Atiku as one of more than 130 national and state politicians unfit for office. Atiku denies the numerous allegations that he has enriched himself while in office, including his link with the mysterious frozen money found last year in the refrigerator of U.S. Rep. William Jefferson, D-La..
Atiku deftly sidestepped questions from the American journalists about his financial dealings, complaining that the president is "trying to fire me and I don't want to be fired."
Obasanjo considers establishment of the commission as one of his proudest achievements. He bragged with no apparent sense of irony that Transparency International, which rates countries on good or bad governance, has bumped Nigeria up a few notches from dead-last on his watch. "There are not many countries in the world that have achieved what we have done" to fight corruption, Obasanjo told us.
The 4-year-old commission is headed by Nuhu Ribadu, a boyish-looking crime-fighter with the intensity of a true believer. While he has been criticized for going too easy on Obasanjo and the ruling party, Ribadu has racked up an impressive list of fraud convictions, including some office-holders, and has succeeded in convincing the National Assembly to enact laws cracking down on money laundering.
Among his proudest achievements, Ribadu said, was virtually shutting down Nigeria's most notorious cottage industry -- the e-mail spam that dangles a huge payoff, providing the unwitting mark puts up a small amount to facilitate the deal. The commission's crackdowns have recovered $750 million that has been returned to victims all over the world, he noted.
While inboxes remain full of those too-good-to-be-true appeals, most of them now originate in other African countries or Eastern Europe, Ribadu said. But he ruefully conceded that it was easier to get rid of the scammers than the bad association that continues to link "Nigeria" with "scam."
Ribadu said he has received numerous death threats. "This is the most dangerous work in the world today -- it's more dangerous than walking the streets of Baghdad."
In the sun-bleached courtyard of the ornate palace, a dozen tall men in boldly patterned red-and-green robes and red turbans mill about, alert for the first sound of the siren.
Finally a police car, lights flashing, speeds through the archway and slams to a halt. Behind it, a black Rolls Royce eases to a stop. The waiting men gather by the car's rear door, holding out their arms to create a protective curtain as it opens. One holds an ornate umbrella large enough to shade a San Francisco patio as a white-shod foot emerges.
Then the men in red and green fall in line behind the passenger, chanting about what he is doing as he enters his desert-baroque palace.
The emir has arrived.
The emir is the traditional ruler of Kano, in Nigeria's Muslim north. The ceremonial trappings of his office, and his quiet advice to the politicians who run Kano state, provide a link to pre-colonial times before cell phones and air conditioning and traffic jams and Internet cafes. Before oil.
Not far away, an open plaza the size of Union Square is stippled with dozens of debris-filled concrete holes, each about a yard across. These dye pits are an open-air reminder that Nigeria used to have a successful textile industry, raising cotton and producing finished cloth for domestic use and export.
Once, every pit was in use, and ownership passed from father to son. Today, a solitary man wielding a stick slowly submerges a pair of pants into a hole filled with dark-blue dye, then slowly pulls it out, repeating the motion in a timeless rhythm. Hawkers crowd the few visitors, offering traditional tie-dyed indigo fabrics that once found ready markets at home and abroad.
If the emir is a link to Nigeria's past, the empty dye pits reflect the reality of the present. Some hand-weaving still exists in Kano and elsewhere, but the entire industry has fallen behind its African neighbors, unable to compete regionally in mass production of cotton textiles or in international markets where synthetic fabrics dominate the cheap-cloth market.
If laundry is one way to measure the state of an impoverished community, then the residents of the Jungle, the locals' name for the enormous Lagos slum of Ajegunle, are about as poor as they come. In the mile upon mile of tiny houses lining unpaved streets, there is almost no drying laundry to be seen. Many people don't have clothes to spare.
There is a vivid sense of vitality here. Residents treat the streets as open-air living rooms. Children surround visitors with cameras, and cheer loudly when someone takes their photos. The sound of Fela's Afrobeat blasts from boom boxes. But there is no running water, no electricity, no sewers, no garbage removal. Five, 10, even 20 people can live in a room that is maybe 10 feet square. The occasional dwelling bears a sign reading "THIS HOUSE IS NOT FOR SALE" -- evidence of another kind of Nigerian scam, selling houses you don't own.
When the rains come, the ditches that collect sewage overflow and the dirt streets turn to thick, viscous mud. Some years bring flooding, but residents say they stay put because there is no place to go.
Oil riches have not brought the people of the Jungle many things. Safety. Privacy. Opportunities. Peace and quiet. A government safety net.
There are some small signs Nigeria is getting to a better place, though at a pace that is unlikely to bring change soon enough for the people of Ajegunle.
Next month's election is one such signal, although the three main candidates -- Yar'Adua, Atiku and Muhammadu Buhari, another ex-military dictator running on the ticket of the All Nigerian Peoples Party -- are seen as flawed. All are from the north, in accordance with an agreed-upon transfer of power from the Christian south of Obasanjo to a leader from the Muslim north.
Festus Okoye, a human-rights lawyer in the northern city of Karbala, says much depends on whether the elections are peaceful, and whether the results appear legitimate to voters.
If the new government tackles the problems of poverty and the economy improves, people will be more comfortable with democracy, he predicted. "You cannot have democracy without democrats."
Chronicle Foreign Editor Gail Bensinger recently traveled to Nigeria on an editors fellowship from the International Reporting Project at the Johns Hopkins University School of Advanced International Studies. E-mail her at gbensinger@sfchronicle.com.
This article appeared on page E - 1 of the San Francisco Chronicle
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