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Host Nation–Oil Transnational Corporation Partnerships for Poverty
Reduction in the Niger Delta, Nigeria – Diagnosis and Recommendations
a report by
Idemudia Uwafiokun
HSE – Social Impact
Assistant Professor, Division of Social Science, York University, Toronto
Crude oil extraction in Nigeria is undertaken mainly in the Niger delta Partnerships in the Nigerian oil industry take different forms, but of
region. The Niger delta is home to a range of ethnic groups that tend particular interest here is the partnership between oil TNCs and
to share various cultural and linguistic affinities. The region has an the Nigerian state. A good example of this kind of partnership is the
estimated population of about 27 million people, comprising over 40 Niger Delta Development Commission (NDDC). The NDDC was
different ethnic groups that speak about 250 different dialects and established in 2000, charged with catalysing the socioeconomic
languages across 3,000 communities. There are over 606 oil fields in development of the Niger delta region. The NDDC is organised into
the Niger delta, of which 60% are onshore and 40% are offshore. The 11 functional departments and a Board that consists of
revenue derived from the oil produced in the region accounts for 40% representatives of the Niger delta states, non-oil-producing states,
of Nigeria’s gross domestic product (GDP), 95% of the country’s total oil companies and selected federal and state government agencies.
exports and 80% of government revenue from 1970 to 2006. The Commission is managed by a Chief Executive Officer appointed
However, despite the region’s major contribution to national wealth, by the federal government.
poverty and unemployment levels in the Niger delta are higher than
the national average of 4.7%, and 70% of its people live in rural areas The NDDC Act requires the federal government to contribute 15%
with no access to basic social amenities such as tap water, good roads, of oil revenue to the Commission, while oil TNCs are expected to
electricity and healthcare facilities. This paradox of poverty amid plenty contribute 3% of their annual budget to the Commission. In
has been a subject of various theoretical conjectures. The situation in addition, member states are expected to contribute to the
the Niger delta has been described by some as a classic case of the Commission 50% of the ecological fund allocated to them by the
‘resource curse’, while others have attributed it to a predatory federal government. The activities of the NDDC range from social
Nigerian state that maintains a host of patron–client networks to infrastructure provision, healthcare delivery and support for
guarantee its reproduction at the expense of the common man. agriculture to skill acquisitions and youth empowerment. For
However, some see the incidence of poverty in the region as a example, there is an agreement between the NDDC and Shell
consequence of rapacious corporate capitalism driven by a process of Petroleum Development Corporation (SPDC) to construct the
accumulation by dispossession. Ogbia–Nembe road in Bayelsa State. Previous efforts by the federal
government to build this road in the 1970s ended in failure, as the
Regardless of which position one takes, the failure of a series of road was never built. While SPDC plans to complete the first phase
unilateral governmental efforts to address poverty in the region – such of the project – a 38km road from Imiringi to Ogbia station at a cost
as the Niger Delta Development Board (NDDB) in the 1960s and the Oil of US$36 million – the SPDC–NDDC partnership will complete the
Mineral Producing Area Development Commission (OMPADEC) in the second phase of the road – from Ogbia to Nembe at a cost of US$50
1990s – brought about a change in the conception of how best to million.
1
When completed, the road will help connect 13 major
address poverty in the region. Today, there appears to be an emerging communities in Bayelsa State to the capital in Yenegoa.
consensus that if poverty reduction is to be an achievable objective in
the Niger delta, there is a need for constructive input from government, Similarly, the lack of co-ordination and synergy in the efforts of the
business and civil society. This turn to partnership as a strategy to deal different agents of development in the region is one of the major
with poverty in the Niger delta is therefore both a reaction to decades challenges facing efforts to reduce poverty in the Niger delta. For
of governmental failure and a renewed emphasis on co-operation as example, Dr Emmanuel Uduaghan, Governor of Delta State, stated
key to addressing such problems. Besides, partnership strategy not only in a local newspaper that: “Evidence had shown that some projects
allows oil transnational corporations (TNCs) to address changing local which the state may have decided to undertake were sometimes on
expectations cost-effectively, but also offers them the opportunity to the to-do list of NDDC and the oil companies. This has created
secure their social licences to operate in an often volatile environment. problems in the past, as such projects may end up being abandoned
or the community end up with just one project instead of three if
the organisation involved co-ordinated their activities.” To address
Idemudia Uwafiokun is an Assistant Professor in the Division of Social Science at York
University in Toronto, teaching in the International Development, African Studies and
this problem, in December 2001 SPDC facilitated institutional and
Business and Society programmes. His research focuses on corporate social responsibility
technical capacity building of the NDDC that was instrumental for
and development nexuses, political economy and ecology of resource extraction and conflict.
the development of a Niger delta development master plan launched
His most recent publications have appeared in scholarly journals such as the Journal of
Corporate Citizenship, the Journal of Business Ethics and Resource Policy. Dr Idemudia is by the Commission.
undertaking a comparative analysis of the most effective corporate–community involvement
strategy for community relations and violence reduction in the Nigerian oil industry.
The master plan not only offers an opportunity for the participation
E:
idemudia@yorku.ca
of various stakeholders, but also provides a time-sequenced
framework for the development of the region over the next 15 years.
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© TOUCH BRIEFINGS 2009
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