Oil’s Romance with Poverty

All through my educational stay in the South West, whenever I introduced myself or I was introduced by another person, people’s reactions tended towards “oil money”. As a Rivers boy from the creeks of the Niger Delta, they assumed I had a trailer of money scented with crude oil. No matter my attempts to correct their mistaken belief, they would not believe that the oil wealth reaches a few, leaving many others in communion with poverty.

The Niger Delta sits on Nigeria’s treasure mine. Its lands, creeks and adjoining coastal waters provide a senseless majority of the country’s revenue. Oil and gas facilities and pipelines crisscross the region’s communities. In return, it gets 13% of the oil revenue. The fairness of that amount is an issue for another day. What has its 13% achieved for it?

The nine oil-producing states with their 13% derivation fund have some of the highest budgets in the country. Rivers State, for example, budgets almost half a trillion naira annually. This is about a tenth of the national budget. Trillions of petronaira have accrued to the oil states in the past decade. Yet, not much is felt in many communities in those states.

The oil money is felt mainly in the state capitals where gigantic projects (some are “white elephants”) jostle for attention. Parts of the state capitals see intense development that can deceive a visitor into assuming that the development sprawls across such states. A few governors execute some important projects in communities outside the capital. For example, the immediate past Rivers State governor built schools and health centres in each LGA. These projects notwithstanding, residents of those “outside communities” look at the developments in the state capitals with envy and sometimes, anger.

The state capitals rarely have any oil production facilities, yet, they enjoy the bulk of the wealth. Their development transforms them into urban population centres, further worsening rural-urban migration. The neglected areas are left with bad roads, poor water supply, poor (or no) health facilities, poor power supply, and other punishments commensurate with not being the capital territory. This entrenches poverty in those communities.

Those in the state capital are not left out of the poverty regime. Granted that the developments in state capitals attract more organisations that create employment, this benefit leads to another curse—the curse of oil. Since the presence of oil companies and other multinationals means a small percentage of the population have incomes far greater than the income of the average middle or lower income class group, laws of economics lead to a high cost of living. Whereas the high earners easily thrive in the midst of gargantuan costs, the low-income earner is doomed. Being in a state reputed for its oil wealth, the low-income earner struggles to meet obligations. Everything from food to transportation to housing is priced higher than what obtains in other states. This is similar to what obtains in Silicon Valley, California, where the presence of high-paying tech firms has succeeded in pricing many things above the reach of ordinary residents.

Corruption has not helped the oil producing states. Of course, corruption is not a Niger Delta thing—it is a national problem. For the Niger Delta, it’s a double tragedy. Environmental issues abound, the terrain commands higher contract sums, yet the derivation that comes is misused. After using a bit to embellish the state capitals, the rest miraculously vanishes, filling the pockets of a few, while the “real” host communities are abandoned to fend for themselves in degraded environments.

With good leadership that truly cares for the people, the oil producing states can achieve a somewhat equitable distribution of the oil wealth. Not everyone can be employed in the oil and gas industry, but everyone in these states should feel the percolation of the common wealth. Maybe someday, when people greet me with exclamations of “oil money”, I can put hands into a burgeoning pocket and pull out wads of high denomination petronaira. That’s a dream too dreamy (or maybe not).

PS: A classmate currently serving in Akwa Ibom witnessed the poverty in parts of that state, and pestered me to write on “Oil Producing States Romancing Poverty”.

Image Credit: Enemy of the State

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