- Oil Weath and Insurgency in Nigeria by Omolade Adunbi
This is an excellent and timely book, which in addition to explaining the causes of insurgencies in the oil-producing regions of Nigeria, does a good job of clarifying what Northwestern University Professor Richard Joseph has called prebendalism, a “fundamental flaw in Nigerian politics, economy, and society.”1 Prebendalism is a sense of entitlement that enables government officials and appointees to lay claim to state revenue to benefit themselves, their kin, and their friends. In many developing countries based on the extraction of natural resources, it is present in one form or the other. Nigeria presents an extreme case.
In seven chapters, Omolade Adunbi lays out the reasons for the insurgencies (excluding Boko Haram) that have plagued Nigeria. The title of the book tells a lot: the thrust of the argument is that people in the oil-producing regions of Nigeria have come to believe, rightly or wrongly, that the natural resources in their region are inheritances from their ancestors, which are therefore by right theirs and nobody else’s. Unfortunately, extracting the oil requires expertise and capital intensity, which the federal and local governments do not have and which the natives, unlike the planting of palm trees for palm oil, do not have either; hence the multinational oil companies, such as Chevron, that have both the expertise and the capital for exploration. Agreements to explore and extract the oil are primarily between the Federal Government of Nigeria (FGN) and the oil companies; local people are mostly uninvolved in any meaningful way in exploiting and sharing the oil [End Page 72] wealth. What externality flows from the oil extraction is often detrimental: pollution of the rivers and the land from oil spills, the outright prohibition of fishing in traditionally fished lakes and rivers, and the appropriation of land for oil exploration using the doctrine of eminent domain, leading to the disenfranchisement and general impoverishment of the local population.
With the FGN headquartered in Abuja, far away from the oil-producing regions, whatever revenue accrues to the local people must first pass through the state governments. In theory, the local people are represented by all the government structures, but in practice, they rely on their traditional leaders, who do not often speak the language of the government and are therefore seen as ineffective or coopted by the government and the oil companies. The closer one gets to the FGN or the state government, the better off one is. Individuals with no close connection to the FGN and the state and local governments fall through the cracks.
It is therefore unsurprising that the youth in particular would feel alienated from all structures of governance, given the way the oil royalties are shared. The royalties flow directly to the federal government from the multinational oil companies. According to an article in an influential Nigerian newspaper, the current formula used for allocating the oil revenue by the Federal Accounts Allocation Committee, uses a formula under which the federal government receives 56 percent of the revenue, the states 24 percent, and the localities 20 percent. This is seen as archaic and needs to be reviewed.2
The growth in revenues from oil extraction and associated sources contrasts sharply with the decline in what used to be the traditional exports of Nigeria: cocoa, palm kernels, palm oil, and groundnuts. By 1991, the production of groundnuts, which used to be major cash crop in the north, had fallen from 502,000 metric tons to just about 60 metric tons—a near-total collapse of the industry. As of 2011, production was still low, at 76 metric tons. The production of cocoa remains strong, but the production of palm oil and palm kernels has collapsed. Oil revenue went from 9.1 percent of total government revenue in 1965 to 82.1 percent in 1974; it still accounts for the bulk of governmental revenue.
This change in the structure of the economy spells disaster. The government, instead of deriving revenue from products made by thousands of local people, has now...