Unstable Oil Markets Affect Nigerian Society

This is a guest post by Jim Sanders, a career, now retired, West Africa watcher for various federal agencies. The views expressed below are his personal views and do not reflect those of his former employers.

Times are changing and Nigeria’s ministers of finance and petroleum are worried. An energy boom in the U.S., competition from rival African oil producers, and Asian refiners’ increasing ability to handle “sour” crude, are conspiring to reduce demand for Nigeria’s traditionally desirable light sweet crude.

“For the last nine years," the Energy Information Administration (EIA) says, "the U.S. has imported between 9 and 11 percent of its crude oil from Nigeria; however, U.S. import data for the first half of 2012 show that Nigerian crude is down to a 5 percent share of total U.S. crude imports.” EIA data also show that U.S. oil purchases from Nigeria are at their lowest in twenty years.

Looming declines in federal revenue augur ill for a country coping with domestic and regional insecurity. The government’s recently renewed interest in stemming oil theft may be seen in part as a reaction to fears about its straitened oil situation. There are also large military deployments in its north, and in its northern neighbor, Mali, to support.

All the while, violence proceeds apace in northern Nigeria with attacks on traditional elites, security personnel, and ordinary people. This weekend’s attack on a military barracks in the village of Monguno, 125 miles from Maiduguri, reportedly left twenty dead and confirms insurgent Boko Haram’s targeting of symbols of the federal government.

A central government under financial pressure facilitates the further emergence in Nigeria of a "new normal" a la Moises Naim, in that the hemorrhaging of Abuja’s power favors the growth of groups such as Boko Haram, that use the power they have acquired for "disruption and interference."

But at society’s lowest levels, an "old normal" is likely to persist, or perhaps worsen. Bulldozers guarded by riot police demolished the homes of poor residents of Ijora-Badia in Lagos several days ago, in the latest effort at slum abatement.

Katherine Boo, author of Behind the Beautiful Forevers: Life, Death, and Hope in a Mumbai Undercity, argues that while the poor face difficulties common to all, they “experience them more starkly because their lives are so unstable, their margin for error so narrow.” The particularly horrific kinds of violence occurring in Nigeria are not unrelated to the intensity of suffering experienced by people living at the grassroots, long excluded from the nation’s oil patrimony.