After a Nigerian firm called Heirs Energies paid $1.1bn in 2021 to acquire an oil field in the Niger Delta, its boss found the company was losing no less than 97% of the field’s daily output to theft and vandalism. “What you put in the Trans Niger pipeline and what gets to the export terminal is not the same,” says Tony Elumelu, referring to one main conduit for Nigeria’s oil exports (see map).
Nigerians were reminded of the pipeline’s importance and vulnerability on March 17th, when an explosion put it out of service for several days. In response Bola Tinubu, Nigeria’s president, declared a state of emergency in Rivers, the oil-rich state in the Niger Delta where the explosion happened. He also suspended its governor, who belongs to an opposition party. The pipeline, which has the capacity to transport around 450,000 barrels of crude per day, resumed operations on March 25th. But the political crisis sparked by Mr Tinubu’s controversial decision is likely to linger for longer. It raises questions not only about stability in a region that is central to the Nigerian economy, but also about the strength of Nigerian democracy.
Despite recent moves towards economic diversification, oil is still the lifeblood of Nigeria’s economy. Oil sales account for half the national budget and 80% of export revenue. Though most production has moved offshore and global oil companies have recently sold most of their onshore assets, the Niger Delta region, and especially Rivers state, remains central to the industry. Mr Tinubu, whose government is keen to attract fresh capital to the sector to increase crude output, has been at pains to show that investors’ assets in the Niger Delta are safe.
The president argues that Siminalayi Fubara, the suspended governor of Rivers, has been getting in the way of that aim. When declaring the state of emergency on March 18th, Mr Tinubu claimed that Mr Fubara had allowed violence in the state to escalate. He said that solving the problem required “extraordinary measures to restore good governance, peace, order and security”. He appointed a former vice-admiral as interim administrator for the six-month state of emergency.
Recently there have been several other attacks on oil and gas facilities in Rivers. Yet Mr Fubara reckons claims of a security crisis are overblown. The Niger Delta has long been beset by militant activity, oil theft and pipeline sabotage, but security had lately been improving. Mr Elumelu says his firm’s transit losses are now only around 10% of production. In January Nigeria produced around 1.5m barrels of crude per day, the highest level since 2020.
That suggests that the real reason for Mr Tinubu’s move is political. Before he was suspended Mr Fubara had been feuding with Nyesom Wike, who preceded him as governor of Rivers and is now a powerful minister in Mr Tinubu’s cabinet. Ousting Mr Fubara, many suspect, is a way to give a leg-up to Mr Wike, thereby ensuring that an ally of the president continues to call the shots in the oil-rich state.
Whatever Mr Tinubu’s motives, the crisis raises questions about the rule of law in Nigeria. The president does not have the constitutional power to suspend governors. Yet the country’s legislature rushed to ratify Mr Fubara’s suspension. The decisive vote in the Senate was taken by voice, leaving the judgment of whether a majority had been reached to the Senate president, another close ally of Mr Tinubu. The new interim administrator of Rivers was immediately given access to federal funds that courts had been withholding from Mr Fubara. “No businessman can bring his money to invest in a country where the judiciary is compromised,” Goodluck Jonathan, a former president, said of the events.
There was a time when Mr Tinubu, who was a leading light in the campaign against Nigeria’s military dictatorship in the 1990s, would have condemned this kind of manoeuvring. “The struggle was meant to rescue democracy…[and] ensure enduring adherence to constitutionalism,” he later said of his political activism. Those days appear to be gone. “Tinubu is preparing for [elections in] 2027 and he doesn’t want any governor that will oppose him,” says Rotimi Amaechi, another former Rivers governor. Nigerian politicians will be taking note. So will international investors. ■
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