Non-Transactional Crisis by Bryan Phan

Nigeria is one of Africa’s finest oil producers and Nigeria’s oil is the government's largest source of income. According to Izvorski, Practice Administrator within the Macroeconomics and Fiscal Management departments of the Global Practice of the World Bank, “Oil accounts for 43.5 percent of resource-rich Nigeria’s wealth, substantially less than in resource-rich comparators outside Nigeria” (Izvorski). But Nigeria’s economy and its people have been struggling, and the degree of poverty is on the rise. Appalling poverty, hopelessness, economic and political marginalization have pushed Nigerians to live in despair (Beyond). These conflicts located in Nigeria have led to a detrimental cost to its development and people.

Nigeria has been to have the second-largest proven oil reserves on the continent, and yet, the World Poverty Clock states 90 million people in Nigeria live in extreme poverty (Gathmann). With the abundant reserves of oils in Nigeria, why can’t Nigerians rely on their country's natural oil (Gathmann)?

One reason for this rate of poverty is due to international companies taking advantage of Nigeria’s refineries. Despite Nigeria having the resources to initiate development, the funds that would be used to provide necessary services are squandered or embezzled, which cripples the government’s capability to perform basic services such as education and healthcare (Natural). Corporate scandals aren’t new, in fact, one of the most infamous spanned from 1997 to 2002 and resulted in $4.2 billion dollars in oil being stolen from Nigeria without anyone knowing (Natural). All the money withdrawn by international corporations could have provided better infrastructure, more jobs, and health and education aids, which causes Nigeria to stay underdeveloped as a country. 

The government has yet to deal with their corrupted international affairs because there are also issues of sabotage, theft, tax evasion, and corruption (Gathmann). The absence of appropriate legal standards and safeguards, coupled with ineffective government oversight and poor implementation of existing laws, have left helpless rural communities unprotected and unaware (Natural). It goes as far as to say that the endowment of Nigeria's natural resources is stifled because there is a hesitation in Nigeria’s government on what action to take on tapping the oil resources.  

The oil industry is Nigeria’s greatest adversary, yet Nigeria intends to stop it. Nigeria’s government has released annual audit reports on its energy industry, demanded unpaid taxes and compensation from international companies, and implemented the Petroleum Industries Bill, which many Nigerians hope will clear up the oil sector by splitting the NNPC’s commercial business from its regulator (Gathmann). By intuiting these rules, Nigeria will have come one step closer to solving Nigeria’s national oil crisis that prevents it from growing wealthier.

Bibliography:

"Africa's Natural Resources - From Curse to a Blessing [analysis]." allAfrica.com, 25 Apr. 2017. Gale In Context: Global Issues, https://link.gale.com/apps/doc/A490536586/GIC?u=los42754&sid=GIC&xid=7e98fc1b. Accessed 12 Mar. 2020. 

"Beyond Mobilizing Financial Resources [editorial]." allAfrica.com, 20 July 2015. Gale In Context: Global Issues,https://link.gale.com/apps/doc/A422356509/GIC?u=los42754&sid=GIC&xid=dd6aa5de. Accessed 23 Mar. 2020.

Gathmann, Sandra. “Nigerian Oil and the Disappearing Money: Start Here.” Corruption | Al Jazeera, 8 Jan. 2020, 17:39 GMT, www.aljazeera.com/programmes/start-here/2020/01/nigerian-oil-disappearing-money-200105132143587.html. 

  Izvorski, Ivailo. “7 Surprising Findings about Resource-Rich Sub-Saharan Africa.” Brookings, Brookings, 2 Aug. 2018, www.brookings.edu/blog/future-development/2018/08/01/7-surprising-findings-about-resource-rich-sub-saharan-africa/.

National Geographic Society. “Africa: Resources.” National Geographic Society, 9 Oct. 2012, www.nationalgeographic.org/encyclopedia/africa-resources/.