Tackling covert poverty drivers: criminal elite bargains and oil in Nigeria

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The project explores the serious implications of the misappropriation of oil revenues for (a) Nigeria's political institutions; and (b) their capacity to both redistribute resources for poverty reduction and to deliver security in regions of the country affected by violence. Given the importance of understanding how development outcomes are shaped by political settlements and organized crime dynamics it specifically examines why and how Nigerian elite bargains have promoted the emergence of large-scale oil theft (locally known as bunkering). We use bunkering as a diagnostic tool because by all available estimates it is of huge magnitude and raises a number of key issues for halting and reversing the criminalization of Nigerian political institutions and reducing large pockets of poverty in the Niger delta and the north. While not immediately comparable to other, even poorer African countries with large mineral/oil sectors like Angola and Mozambique, this project also examines what lessons could be drawn from the case of Nigeria to prevent the rise of oil-centred criminal dynamics in these countries. The hypotheses to be explored are that (a) the emergence of massive oil theft reflects the evolution of Nigeria's post-1999 political settlement and changes in the country's 'political marketplace'; and (b) the 'criminalization' of the country's political settlement through bunkering seriously undercuts the chances for poverty reduction and violence mitigation, in both the oil-bearing Niger delta and the far north. We recognize that rampant corruption in Nigeria in the sense of 'misuse of public office for private gain' has for a long time played a pivotal role in facilitating the misappropriation of oil rents by political elites, thereby driving poverty and inequality. Yet we posit that bunkering presents a qualitatively different scenario and raises a number of new, highly problematic issues for Nigeria's political-institutional stability, the quality of its governance and the prospects for pro-poor development. Large-scale bunkering seems to have emerged through bargains struck between regional Niger delta elites and militant groups, which initially challenged federal political authority by non-violent means but then turned to violent and criminal action to force political accommodations with elites in Abuja who controlled the access to, and distribution of, oil rents. The relationships between powerful groups in the Niger delta (including militants) and at the federal level have become increasingly mediated by their respective participation in oil theft as a means to access a lucrative complement to legally-sanctioned ways of appropriating oil revenues (e.g. through the derivation formula in the 1999 constitution); and, indeed, to long-standing forms of illicit oil revenue appropriation by Nigerian officials and businesspeople through fraudulent oil deals and other scams (which have occasionally also involved transnational oil majors). The implications of this process are likely highly problematic for pro-poor development in the Niger delta and other, even poorer northern regions, where violence and crime have been increasing in the past years. Boko Haram's stepped up violence might indicate that northern elites are using the Islamist sect to press their claims for inclusion in the political settlement and gain access to more oil revenues, including to those that result from bunkering. We examine four mechanisms through which criminal elite bargains around bunkering drive poverty and promote socio-economic exclusion, (spatial) inequality and risk-laden economic informality by: (a) reducing public revenues available for pro-poor development, (b) spreading criminal networks across Nigeria's political institutions and governance structures, (c) spurring violence, and (d) driving other criminal activities, particularly in the north. Pertinent policy lessons will be drawn for Nigeria and also for Angola and Mozambique.

The project deals with the politically sensitive issue of the criminalisation of Nigeria's political institutions and settlement through massive oil theft (bunkering), the negative effects of these processes on poverty-reducing development in the Niger delta and the far north, and the lessons that might be drawn from the Nigeria case for other, even poorer energy-rich African countries like Angola and Mozambique. Despite the sensitivities involved, the research is designed to be of high impact. It targets national/international actors and stakeholders in Nigeria (i.e. federal, regional and local government officials and politicians, representatives of the oil sector, civil society organizations and think tanks, multilateral organizations and donors) and energy sector experts and researchers in Angola and Mozambique. A three-pronged uptake strategy will support getting our work into policy and practice: (a) our high-calibre analysis of the identified problem will be written in highly accessible style; (b) key research findings and policy prescription will be disseminated through targeted media work at various stages of the project, including in response to relevant events on the ground; and (c) policy responses will be developed in a high-level 2-day workshop in Abuja convening key Nigerian, Angolan, Mozambican, UK and international decision-makers and stakeholders. High-calibre analysis The conceptual/empirical solidity of the work is crucial for achieving impact. It depends on fluid collaboration between the PI and the Co-I, and regular engagement with key Nigerian, other African and international actors and stakeholders throughout the project (i.e. Nigerian government agencies, the Nigerian National Petroleum Corporation (NNPC), the security forces, political parties, financial institutions, demobilised Niger delta militant leaders, multilateral organizations, multinational oil majors, NGOs and think tanks). Relationships of trust will be built and deepened with the help of a facilitated net-mapping exercise and an initial stakeholder seminar in Abuja. All generated data and information will be cross-checked and triangulated with a broad range of written (online) sources to allow for the production of a very well informed analysis underpinning our policy prescription. 2 IDS research reports, 2 articles in respected academic journals and 1 edited volume will ensure long-term, open access availability of the research. The reports will be available through IDS's research distribution channels, including its website and social media; they will also be submitted to Eldis, a respected IDS-based research information-sharing service. Through IDS's OpenDocs repository, project data and materials will be made freely available. Targeted media work Contacts with newspapers in Nigeria and the UK will facilitate the targeted dissemination of the research findings and policy prescription. The team have proven track records of publishing high-quality op-eds and IDS Communications will support our media work. IDS has a close working relationship with the Guardian Global Development website; the pan-African AllAfrica.com news service; and IRIN News. The team will also publish blog posts and podcasts on IDS's blogs and with the Huffington Post. High-level policy workshop in Abuja At project close we will engage a select group of thirty key Nigerian, African and UK/international stakeholders and researchers (with whom we already have or will have established relationships of trust) in a high-level 2-day workshop under Chatham House rules in Abuja. The workshop will develop practical policy approaches to addressing bunkering and the associated challenges for pro-poor development and violence mitigation/prevention in the Niger delta and the far north. It will also inform Angolan and Mozambican delegates about these challenges and how they could be prevented or mitigated in their countries. 2 policy briefings will guide discussions.

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Grant Category: 
Research Grant
Lead Organisation Department: 
Research Department
Fund Start Date: 
June 1st, 2015
Fund End Date: 
May 31st, 2017
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