International Network for Economics and Conflict

Violence in Nigeria's oil-rich Delta region has soared in 2011 and during the first half of 2012, despite a government-administered amnesty program with an annual budget of $450 million and lucrative security contracts worth an estimated $36 million awarded to former militia leaders.  Following revelations of the contracts in a 12 August 2012 article in the Wall Street Journal, the Nigerian government has acknowledged retaining the services of militia leaders like Alhaji Dokubo-Asari and Ateke Tom to secure oil installations they once attacked and prevent oil theft.  Questions have been raised about the wisdom and effectiveness of this strategy. 

The Nigerian government has two explanations.  First, they point out that the multi-million dollar security contracts are worth the investment, given the importance of the petroleum sector to the economy.  Current output averages around 2.5 million barrels per day (bpd).  If security improves, output is expected to increase to 2.9 million bpd by end 2012.  Since international oil companies operating in Nigeria estimate annual losses due to theft and insecurity at over $4.5 billion, the government argues that the security contracts will have a positive fiscal impact over the long run.  Second, the government contends that the contracts provide employment for the militia members who were demobilized during the 2009 amnesty program.  In their view, failure to provide jobs for them could undermine the amnesty efforts and lead to even more violence.

Critics assert that efforts to buy peace in the Niger Delta are misguided, opaque and potentially counter-productive.  In their view, even if the strategy proved successful in reducing both attacks and theft, it would not address the myriad of social, economic, legal and enviornmental factors that combine to foment unrest in this region.  A well-resourced, multi-pronged strategy that enjoys unwavering support from federal, state and local governments is clearly needed.  While the contracts may have contributed to a lull in attacks in 2009 and 2010, insecurity has worsened significantly in recent years.  Many see this as confirmation that this attempt to buy peace in the Niger Delta has not succeeded.  There are reports that many militia members were never committed to promoting peace and considered the payments as nothing more than their "share of the national cake."  Some militia leaders have disclosed that contract payments were used to buy more sophisticated weapons that were used to foment unrest.  Another side-effect is the moral hazard that may have been created. Some groups in the Niger Delta (and possibly elsewhere in Nigeria) now see violence as a route to similar arrangements with the government.  In addition, many of the former foot-soldiers are now forming their own groups in order to secure their own contracts.

In an attempt to gain the upper hand in the Delta region, the Nigerian government has unveiled a new multi-stakeholder Niger Delta Collaborative Development Framework that would coordinate its development plan for the region.  However, to be effective, this strategy must adequately address the modalities and motivations of non-state actors (like the growing number of militia groups).  A detailed mapping of the characteristics and evolution of armed groups, combined with a thorough analysis of linkages with political and economic power structures, will enable the Nigerian government and stakeholders to design  programs that would effectively dismantle (or significantly weaken) the labyrinth of corruption in the Niger Delta.  USIP's Center for Sustainable Economies (CSE) is currently analyzing the vulnerability of energy infrastructure in fragile, resource-rich countries.  This ongoing work on the vulnerability of energy infrastructure could use statistical and qualitative evidence to shed light on the motivations, nature and frequency of attacks by non-state actors in this region.  However, resolute leadership and unwavering long-term commitment are critical for success.