Niger Delta Human Development Report - UNDP Nigeria - United ...

CHAPTER
ONE
Introduction
AMAZING PARADOXES
Some amazing paradoxes have come from
the development of the Niger Delta region.
Ordinarily, the Niger Delta should be a
gigantic economic reservoir of national and
ignored by contemporary policies and
actions (Jonathan 2004: 20-21). With local
inhabitants subjected to abject poverty and
suffering in the midst of plenty, some view
the oil and gas endowments as a curse and
a double-edged sword (see box 1.1).
Social and economic
deterioration, ignored by
policy makers, undercuts
enormous possibilities
international importance. Its rich
endowments of oil and gas resources feed
methodically into the international
economic system, in exchange for massive
revenues that carry the promise of rapid
socio-economic transformation within the
delta itself. In reality, the Niger Delta is a
region suffering from administrative
neglect, crumbling social infrastructure and
services, high unemployment, social
deprivation, abject poverty, filth and
squalor, and endemic conflict.
Enormous possibilities for industrial
development abound in terms of the
abundance of raw materials in the region,
but these remain unrealized. Beyond vast
oil and gas deposits, the delta is blessed with
good agricultural land, extensive forests,
excellent fisheries, and a large labour force.
But juxtaposed against the potential for
economic growth and sustainable
development are deteriorating economic
and social conditions that have been largely
The data presented in this report reveal some
troubling findings and deep ironies. Life
expectancy is falling in an age of blockbuster
oil prices. Energy availability is poor in a
region that provides one-fifth of the energy
needs of the United States. The delta needs
to import fuel despite producing over two
million barrels of crude oil per day. There
is an almost total lack of roads in a region
whose wealth is funding gigantic
infrastructural development in other parts
of Nigeria and expensive peacekeeping
activities in other parts of Africa. The delta
accounts for upwards of 80 per cent of
Nigeria’s foreign exchange earnings and
about 70 per cent of government revenues.
This report analyses the various dimensions
of the dismal human development situation
in the Niger Delta, with a view to fostering
a people-centred development agenda that
can unleash the region’s enormous natural
and human capacities.
for development.
The Niger Delta is a
region suffering from
administrative neglect,
crumbling social
infrastructure and
services, high
unemployment, social
deprivation, abject
poverty, filth and
squalor, and endemic
conflict.
Box 1.1: Oil—A Double-Edged Sword
The positive blessings of oil derive mainly from the huge financial resources it generates for producing countries. As an internationally
traded commodity that attracts foreign exchange, oil is a quick source of capital accumulation or foreign direct investment for
developing countries faced with capital constraints. Countries without oil face a struggle to overcome capital shortages, a major
developmental inhibition.
Huge revenues are realized from the wide differential between unit production costs and economic rents, royalties, petroleum taxes,
oil exports, etc. Between 2000 and 2002, total oil revenues to members of the Organization of the Petroleum Exporting Countries
(OPEC) were US $606 billion (OPEC Revenues Fact Sheet, June 2003). If management of oil-related revenues could be based on
transparency, accountability and fairness, oil revenues will become a source of substantial benefit for the populations of these
countries (Gary and Karl 2003).
Negative development trends are similarly associated with oil and mineral production in general. There tends to be an inverse
relationship between economic growth and natural resource abundance, and sustained poor performance on such social indicators as
education and health. These outcomes have been dubbed the oil resource curse.
NIGER DELTA HUMAN DEVELOPMENT REPORT
9