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Africa

Oil has failed to 'add value to the average Nigerian'

A Nigerian labor court has blocked a strike organized to protest against government plans to increase petrol prices. Political Analyst Aminu Umar says that this is not something that Nigeria can run away from.

Nigerian labor unions representing millions of workers planned the strike to protest against a government decision to raise petrol prices by up to 67 percent, as well as scrapping the country's costly fuel subsidy scheme. It's part of the government's efforts to tackle Nigeria's worst economic crisis in decades.

Ministers hoped the move would help to fund fuel imports, as Nigeria's own refinieries have been neglected for years. An earlier attempt to end the subsidies back in 2012 failed after a wave of protests.

Alongside the threat of a nationwide strike, militant attacks on oil installations are driving Nigeria's petroleum production and its naira currency to new lows. To find out more, DW spoke to Dr. Aminu Umar, a Nigerian political analyst based in Abuja.

DW: What does this mean for Nigeria's oil industry and production?

Aminu Umar: It means liberalizing the petroleum sector fully. Over the years, petroleum, which was expected to add value to the average Nigerian, has become a cost to the ordinary man. More than half of the revenue has been cut away by the people tasked with the responsibility of ensuring that government revenue is judiciously spent. The more the government tries to tighten up, the more loopholes are created and the more power goes into the oil sector - which makes it difficult for governments to achieve their objectives.

The first thing to do is to liberalize and open the market, which would also make way for foreign investment. A clear price is also needed to avoid smuggling - another negative side effect which has caused serious problems to the sector over the years.

After all this chaos and controversial policies within Nigeria's oil sector, Angola has now become Africa's biggest oil producer as Nigeria's output slumped to 1.4 million barrels a day.

It's not good news for Nigeria. But this is the first time in Nigeria's history that an incumbent government lost the elections and an opposition party won.

It's historic to the extent that it will start manifesting in the political arena and the political economy of the state. The activities of militants, which had died down over the years, are gradually resurging. This has affected the oil output and other African countries now have an edge over Nigeria when it comes to oil production.

I think the president's visits to powerful countries like India and China may improve the situation if and only if the militants stop their negative activities on oil-rich land in the Niger Delta region.

Militants in the Niger Delta have resumed attacks on oil installations, demanding a greater share of the oil. Do you see Buhari's administration bowing to their demands?

At the moment the militants are in a good position. A lot of programs have been put in place to address the plight of those living in the Niger Delta region worth more than any other program put in place to ensure public good in Nigeria. A Niger Delta Ministry was established, a Niger Delta government was commissioned and there is an amnesty program among other programs.

But what really infuriates most Nigerians is that no accountability has been demanded from these leaders. Now people are demanding accountability from the popularly-elected government.

There are a lot of cases of corruption in the Niger Delta region. Militants took a lot of money from the previous government but they have not attacked the current government this way. We are seeing a new president who has brought two or three refineries back into shape and pipes are starting to be dredged again.

President Muhammadu Buhari

President Muhammadu Buhari has vowed to crack down on corruption and boost Africa's largest economy

There are reports that the so-called Niger Delta Avengers are sponsored by southern politicians to sabotage Buhari. How credible are these reports?

One cannot run away from it, especially if you critically appraise the situation at the moment. You can see groups emerging without clear leadership and making accusations. And when they are veiled and you can't see who they are, their accusations against politicians can be accepted.

What should Buhari do to bring the oil sector back to the right footing in order for the revenue that comes out of it to benefit all Nigerians and not end up in the pockets of unscrupulous politicians?

The reality is that increasing the oil price is painful, but at times, you have to take a very painful decision in order to move things forward. The refineries are not working but even within the oil industry there are people who believe in the old order and are still making the work difficult for the government.

So tackling corruption both inside and outside the oil industry is important. Many businessmen are keen to explore Nigeria's potential. There are people from outside Nigeria who are also interested in the oil sector but prices and subsidies have made this difficult.

Efforts to ensure that programs for the public good reach the average Nigerian have failed over the years. I think it is time for the government to say that everyone can partake and let them go and make a profit from petrol so that the government can tackle other issues.

I think we are heading in the right direction but we need to prioritise poverty alleviation problems and social assistance that would uplift the vast majority of Nigerians, especially workers, who are the ones paying the price of the current inflation which has caused a surge in the price of commodities.

Dr. Aminu Umar is a political analyst based in Abuja, Nigeria.

Interviewer: Isaac Mugabi.

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