The Resource Curse: Oil Corruption in Nigeria

Resources can bring wealth and development to countries that use them effectively, but they can also be a curse to countries that fail to use them adequately. Adesuwa O. looks at how Nigeria’s oil impacts the country.

The Resource Curse describes a situation where a country with abundant natural resources such as oil, diamonds, or gold, is worse off economically and politically, compared to countries with fewer natural resources. Nigeria is rich in oil, but has failed to become more economically and politically advanced. The country’s oil wealth fuels corruption instead of advancing education and health care. Since the discovery of oil, Nigeria has been faced with greater inequalities in wealth, an ecological system devastated by major oil spills and immense corruption.

Nigeria has the largest economy in Africa, and this is mainly because of its oil resource. The first commercial quantities of oil in Nigeria, were discovered in 1956. In 2011, oil revenues totalled $50.3 billion and generated 70% of government revenues. Despite this, Nigerian citizens remain poor, with almost 100 million people living on less than $1 a day. Statistics like this call into question how a country so rich in oil can have more than 50% of its population living in dire poverty. The answer lies with the people in power.

Nigeria Oil Corruption | Democracy Chronicles

Nigeria has been cursed by the Sani Abacha dictatorship. Sani Abacha repeatedly used his greed to rob hard working Nigerians, of their share of the wealth. Ruling from 1993-1998 he is reported to have stolen $4.3 billion during his five years in office. It is difficult to know the exact source of this money, but it can be assumed much of it came from oil corruption. It is astonishing to think that a leader would steal billions of dollars from a country that they are sworn in to rule and protect. This extreme corruption and poor governance demonstrates that the problem starts at the top.

Oil has not only fuelled corruption in Nigeria, its extraction has had devastating effects on the environment. Oil spills have cursed communities and livelihoods. Shell and the Italian multinational oil giant ENI, claimed that more than 550 oil spills occurred in 2014, which equated to 5 million litres of oil spilt. A lack of reporting means that this figure is likely to be a significant underestimate. Amnesty International has accused Shell of “intentionally underestimating spills” as a way of minimising compensation pay-outs. Oil companies claim that they are rarely at fault, and that the spills are caused by thieves and militants. It is difficult to know the true extent of the damaged caused by spills, but what we do know is that oil extraction has destroyed farmland, contaminated water reserves and made certain areas inhabitable. The controversy over the impact of oil on the environment, has led to rebellion amongst Nigerians. Ken Saro-Wiwa was one of the leading figures in the fight against oil companies during the 1990s. He believed that oil brought poverty and disease not affluence.

Niger Delta Gas Flares | Wikimedia Commons

Is oil really to blame? Not all resource-rich countries have experienced the problems that Nigeria has, suggesting that the problem is beyond oil. Botswana is one country that has successfully overcome the Resource Curse. Its abundance of diamonds has contributed to its strong economy, and its annual GDP per capita has averaged at 12.3% for 20 of the 35 years, since the discovery of its diamonds. The population has also benefited from its natural resources through social investments. Botswana has the second highest public expenditure on education in the world, as a proportion of GNP.

As Nigeria currently stands, a large proportion of its people remain poor, the environment has been destroyed and it is still one of the most corrupt countries in the world. If Nigeria is going to develop in the future, it must free itself from the corrupting influences of oil companies. Nigeria has been blessed with oil; it is a resource that can aid the country in alleviating poverty, and helping it to become a leading power on the world stage. Until the Nigerian government overcomes its domestic issues, and improves external relationships with oil companies, the future remains uncertain.

Feature Image: Schwarzes-flimmern


The views expressed in this article are those of the author and do not necessarily represent the views of Development in Action.

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