Economic Performance Of Nigeria 's Poor Oil Management

Niger Delta region, placing the Nigerian oil output down to a third of its capacity” (Klare 3).

A prime issue with the oil industry is systematic issues within countries that have an abundance of oil however a low quality of government and economic

Much of the Delta’s violence stems from the decision of government officials to allocate most of the profits from the Deltas oil production to the few ethnic majorities in power. However, the difference between rich and poor in a society is not enough to generate violent conflict within a region. It takes something much more in-depth and personal to generate the level of violence the Niger Delta is experiencing. Therefore, looking at conflict from a vertical inequality perspective, meaning from the lowest socioeconomic groups to Nigeria as a whole, does not do justice for this scenario. Horizontal inequalities is what can be used to explain the degree and ferocity of violence that is generated from the unequal distribution of goods and bads associated with oil production among religion, race, or language (Ostby, G. 2008). This horizontal inequality means that

The "Curse of the Black Gold" is what they call it. The greasy money-making liquid can also cause the undoing of countries. Oil companies like Shell sometimes make as much money as the country they do business in. The hazards that come with extracting oil is understated while the rewards are often praised. To the companies, we are not important, it is the money we carry in our pockets that they care about. Shell, a billion-dollar making oil company, is slowly gaining a lot of recognition in countries as it is causing a lot of corruption due to several accidents as well as its influence on global warming. The company is most known for its fracking practices as well as its impact on Nigerian villages.

In 1994, Equatorial Guinea was one of the most impoverished countries in Africa. During that time, the country had an incredibly low life expectancy of just 46 years, and the inhabitants were forced to survive on only $1 a day. Then, in 1995, they discovered a natural resource that would have the potential to change their economic well-being and quality of life forever. In this year, Equatorial Guinea discovered an immense amount of oil right off the coast of the country. Just nine years after this finding, all major US oil companies, notably Exxon-Mobile, Marathon Oil, and Amerada Hess, were drilling for oil in this once poverty-stricken country. After this notable discovery, Equatorial Guinea was generating $4 billion in revenue per year solely from the oil drilling industry. However, the inexperienced leaders that governed the country entered into a contract where they agreed to give 80%

Peace and stability has been affected by resource wars in the world. Failed states which are well endowed with natural resources lack the proper resource management strategies, a factor that leads to insecurity ( Mittelman, 2010). Many criminal groups have used the advantage of weak economic and political policies in failed resources to exploit natural resources. The proceeds from this illegal trading are used to stage wars and arm rebel groups. In return, when the rebel groups are economically empowered by the failed states, they perpetrate crimes which have global significance. For example, the resource wars in Democratic Republic of Congo and Sudan have led to genocides. In addition, the diamonds in Sierra Leone and Angola have led to transnational bloodshed in the West African region as well as the Janjaweed group in Darfur used illegal oil proceeds to perpetrate civil wars that have claimed millions of life( Mittelman, 2010). Therefore, the lack of proper management of natural resources in failed states has compromised the traditional security concerns in the world.

A main factor in one of the most recent conflicts is Crude Petroleum. Petroleum is a natural resource and contributed greatly to Sudan’s GDP. However, the source of this oil was mainly found in South Sudan. Sudan economically suffered greatly due to the loss of three quarters of its oil power. It decreased by 20.3% from nine billion dollars in 2009, to three billion 2014 . But, despite this large decrease, 64% of Sudan’s exports in 2014 consisted of Crude Petroleum. But, this money did not go into the pockets of the people. Instead, an estimated sum of nine billion dollars, went into the pockets of the man who was meant to lead their country to peace and greatness, Omar

The Niger Delta is a region of Nigeria that is very rich in crude oil and gas. Crude oil and gas make up 70% of the country 's revenue and 95% of it 's export earnings (Ezekoli, 5608). Those percentages are incredibly high and represents large amounts of money that can be found in the region. However, the people of the Niger Delta never see the wealth that comes from their natural resources. The wealth instead goes to the oil companies set up in the area as well as the pockets of a few elite government officials. The disconnect between the people of Nigeria and the oil companies and governments is incredible (Ezekoli, 5609). The effects are slum turned neighborhoods, increased poverty, and job loss. In order to improve the conflict in the Niger Delta, the government and oil companies need to allow more involvement of women and people as voters and elected officials, and create or adhere a sustainable environmental regulations plan.

Michael Ross in his book The Oil Curse, analyzes in great detail the effects of oil on a country’s economic, political, and social environment. Ross argues that “resource curse” is not the appropriate terminology; “it is more accurately a mineral curse”, as countries are generally not affected by other types of resources. (Ross, p.1) In fact, oil and natural gas tend to be the most common villains of the resource curse. Humphreys, Sachs, and Stiglitz hypothesize that “countries with

Nigeria is an Agricultural and oil rich nation but characterised by Political instability, corruption, poor

     Nigeria has been a country in political turmoil for a long time. The country was created in 1914 under British colonial rule and at that time it was considered a protectorate. It was not until 1960 that Nigeria received independence from the United Kingdom. One of Nigeria's problems politically is that it has over three hundred different ethnic groups. The three largest of these are the Hausa-Fulani, Igbo, and Yoruba. At the time of the independence of Nigeria it was split up into three states with each state being under the control of one of the major ethnic groups. The natural resources of the other 297 ethnic groups were exploited for the major three groups,

Most children in the Niger delta have little or no education, due to lack of funds from their parents who have lost their lands and have no jobs because of limited opportunities. The Niger delta government and the oil companies have refused to look into the situation; instead they favor their close relations neglecting the masses. Corruption in the Niger delta has led some youths in taking drastic measure in order to put food on their table. For example, Ikechukwu Efe an indigene of the Niger delta said that some of his friends created their own “oil refinery”, which is made up of crude oil in metal barrels with controlled heat from fire woods. This is a dangerous process in refining crude oil but the degree of poverty in the state left his friends with no choice. If only the government of the Niger delta have created jobs with the wealth of the state Ikechukwu’s friend would not have to put their lives in danger. Until corruption is put to an abrupt the people of the Niger delta will continue to live in poverty.

"You produce the oil from our lands, but we get no benefit from it. Look around, does this look like an oil-producing community? Does this look like Saudi Arabia?" . This angry riposte, from Vinkaviks Ekariko at a meeting between chiefs of a local community in Nigeria 's now volatile Niger Delta region and officials of a Multinational Oil Corporation , reflects Amao’s view that, home jurisdictions in vulnerable areas are generally perceived to be powerless when it comes to the operations of large organisations particularly multinational corporations(MNCs) situated in their area . According to Mujih, MNCs operate on a large scale throughout the world producing both constructive and damaging consequences . He proffers the promotion of economic growth as a constructive consequence of their operations; while on the negative side, he accuses MNCs, particularly those in the extractive industries of colluding with the governments of their host countries, to inflict human rights abuses, damage the environment and consequently, destroying the way of life of local communities .

What has occurred in the Niger Delta is linked to its past struggles with military rule transitioning to democratic rule, which often ends in a military regime taking control nonetheless. From the start of its independence, Nigeria has slowly grown in its dependence on oil as it’s main economic revenue stream. Before the discovery of oil, the state had yam and cassava crops, palm oil, rubber, and lumbers that provided economic revenue, though modest (Jike, V.T. 2004). However once oil was found in 1956 and Independence in 1960, Nigeria has not only relinquished vast tracts of land to International Oil Companies (IOC) such as Royal Dutch Shell (later named Shell Petroleum Development Company), ExxonMobil, Chevron-Texaco, and ENI, but it has left the companies to conduct their extraction methods as they see fit (Imobighe, T. A. (n.d.); Kadafa, A.A. 2012). In 2006, the Oil Spill Intelligence Report stated, “Shell Nigeria is accused of using double standards”, referring to the outdated equipment and unethical methods Shell practices. The Niger Delta has experienced 50 years of oil spills since the beginning of oil production due to oil pipelines that are no longer in use leaking up to $10 million worth of oil a day as reported by Shell. Shell has thus been accused of using outdated and old equipment in the Delta they know they wouldn’t dare use in the other countries they operate in.

The Niger Delta produces the oil wealth which accounts for the bulk of Nigeria’s foreign earnings. Paradoxically however, these vast revenues from an international industry have barely touched the Niger Delta’s own pervasive local poverty (UNDP, 2006:1). The majority of the population in the rural areas in the Niger Delta region of Nigeria are living in extreme poverty in spite of