Turmoil in Nigerian Oil. Africa Issue Research Project

Turmoil in Nigerian Oil 

“The Nigerian National Petroleum Corporation (NNPC) ‘failed to pay’ about $16 billion in revenue owed to the state’s treasury, according to an audit.” (Turkson) The missing money that was supposed to go to the states treasury would have greatly helped the Nigerian Citizens.  The money could’ve helped the 112 million Nigerian Citizens live below the poverty line. (Agbonile) The root of this issue is in the oil companies, and it is supported by the government as well. Due to the corruption in the NNPC and the Nigerian Government, much of the money that comes through taxes on Nigerian Oil doesn’t reach the people. But, how does corruption in the Oil Industry and Government in Nigeria affect the lives of the citizens? 

The NNPC is often blamed to be the root issue of much of the poverty inside of the country. Nigeria relies on oil as it’s main source of income, this is because 95% of its exports are oil. (Cocks) The NNPC is also ranked near the bottom of the Transparency International’s Corruption Perceptions Index. (Cocks) The Nigerian government is also partially to blame, the Finance Minister, Ngozi Okonjo-Iwaela said at a press conference, much of the money in the country’s oil savings were distributed to the 36 Nigerian governors, instead of being saved for later. (Cocks) Much of the infrastructure in Nigeria is so poor that the oil companies cannot even track how much oil they are producing accurately, which makes it easy to lie, and avoid certain amounts of taxes by subtracting a few barrels of oil than they are actually producing. Nshira Turkson, A writer for The Atlantic writes, “Poor infrastructure has resulted in people siphoning crude oil from decades-old, rusted pipes into drums. These drums are then transported on boats to illicit refineries, from where oil is sold on the black market. Even the U.S. Government recognizes the challenges that Nigeria faces in its country, detailing how they struggle with persistent structural weakness in their public buildings and infrastructure. (U.S. Department of State) Because of the corruption in the NNPC and the Nigerian Government, much of the ‘missing’ money which is owed to the state treasury never quite reached it, and if the extra money had made it to the state treasury, there could be better infrastructure, and better oil refineries. 

 The corruption in the NNPC also takes its toll on the citizens of Nigeria. All the ‘missing money’ could’ve been used to help the impoverished residents of Nigeria. More than 60% of the Nigerian population lives in poverty. (U.S. Department of State) In the country, three in five homes have access to fresh water, 48% of all homes have access to electricity, and seven in ten Nigerian Citizens live off of less than USD $1.25 per day. (InterNations) It is hard for the Nigerian Citizens to see any benefits of their booming oil economy while it is being controlled by an acknowledged corrupt organization. As of 2016, there were 112 million Nigerian Citizens living in poverty, which is up from 1990, when there were 51 million impoverished citizens. (Agbonile) It is evident that the people aren’t seeing the benefits of their oil industry. The state doesn’t have the proper funding to put up buildings such as medical schools, libraries, or even collages to help educate their citizens to perform specialty jobs, such as being a doctor. In Nigeria, there is a shortage of healthcare professionals, per 1,000 Nigerian Citizens, there are less than 2 healthcare professionals. (Agbonile) Although, they still have to tackle the corruption in the NNPC, and there are still 112 million Nigerian Citizens living in poverty. 

Missing tax money from the NNPC is one of the biggest contributors to Nigerian poverty, and it is rarely spoken of. With no money to fund schools, colleges, and proper housing, the people are stuck in an endless loop of poverty. The Nigerian Government has much work to do if it would like to tackle subjects such as poverty and corruption. Presidential Candidate, Goodluck Jonathan will, ‘solve the problem of corruption in this country.’ By using technology and strengthening institutions, he told a crowd in Ibadan in January. (Cocks)

Works Cited.

Agbonile, Adesuwa. “An Expanding Country: Four of the Main Causes of Poverty in Nigeria.” The Borgen Project, Borgen Project https://borgenproject.org/causes-of-poverty-in-nigeria/ Gives four of the main reasons why poverty is so pervasive in Nigeria. Bad healthcare, Government Corruption, Lack of Infrastructure, and lack of education are the main reasons. The rate of doctors to patients is 1.95/1000. Government corruption stops money from getting to the public fund. Which is the reasoning behind much of the lack of infrastructure. This source is credible, they remain rather neutral while just saying the facts of the situation. 

Cocks, Tim, and Joe Brock. “Special Report: Anatomy of Nigeria's $20 Billion ‘Leak.’” Reuters, Thomson Reuters, 6 Feb. 2015, www.reuters.com/article/us-nigeria-election-banker-specialreport/special-report-anatomy-of-nigerias-20-billion-leak-idUSKBN0LA0X820150206. The head central banker of the NNPC was fired for releasing that the company had not paid $20 billion dollars to the government. This sparked investigations but there was no solid evidence that this had occurred. Although, soon it came out that the company had actually not paid the money, but it was estimated to be somewhere around $16 billion dollars. On a separate occasion, the company failed to pay $1.64 billion dollars. The source is credible, and is often listed next to other sources such as BBC, and the New York Times. The bias seems to support Lamido Sanusi and his allegations. 

“Living in Nigeria.” Living in Nigeria | InterNations GO!, InterNationsGO, 13 Dec. 2017, www.internations.org/go/moving-to-nigeria/living. This source gives a lot of information on the lifestyle in Nigeria. It details how half of all houses have electricity and poor internet connection. It also details how 70% of all people live below the poverty line. These people live off of $1.25 U.S. Dollars per day. Two in five households live without clean water. This source is credible, the amount that they live off of should be checked. It is not biased because it’s purpose is to help people move to new countries. 

Turkson, Nshira. “The Nigerian Oil Company's Missing Billions.” The Atlantic, Atlantic Media Company, 18 Mar. 2016, www.theatlantic.com/international/archive/2016/03/nigeria-oil-corruption-buhari/473850/.

The Nigerian National Petroleum Corporation failed to pay $16 billion dollars to the Nigerian State Treasury, although, the corporation estimates this number to actually be as low as $1.64 billion. The corporation says the missing money is due to thieves and maintenance fees.  Thieves target the poor infrastructure and steal oil straight out of the pipes, then, they sell it on the black market. Although, the money loss is most commonly attributed to corruption in the government and the Nigerian oil industry. In 2014, the central bank governor, Lamido Sanusi, reported $20 billion dollars of ‘leaked’ oil. He was promptly fired from the company and replaced for speaking out against the corporation. This article is likely biased toward the side of Lamido Sanusi, and they think that the Nigerian National Petroleum Corporation has purposely not paid this debt to the state treasury. This source is credible because many other sources align with it, in it’s facts, and it’s figures. 

“U.S. Relations With Nigeria - United States Department of State.” U.S. Department of State, U.S. Department of State, 4 Dec. 2018, www.state.gov/u-s-relations-with-nigeria/. The source summarizes all of the interactions that Nigeria and the US have had. It is noted that Nigeria struggles with corruption, that it relies on oil exports as its main form of income. The US is also the largest foriegn investor in Nigeria. Most of this invested money is centered in the petroleum and mining industries. Found on the LAHS database. This is useful to me because it shows me how other countries view Nigeria and their oil and government corruption. Trump invited the president of Nigeria to the White House and they discussed how to fight government corruption and promote healthy trade.  I will use this to support many of my other sources.