ELIMINATING NIGERIA'S ILLICIT ECONOMY

Oct 28th 2013

ELIMINATING NIGERIA'S ILLICIT ECONOMY

Lessons need to be learned about how violence became rooted in Afghanistan and how it can be different in Nigeria

What does Nigeria have to do with Afghanistan? Four time zones and 4,100 miles separate Helmand Province and the Niger Delta. At first glance, the problems that plague the two developing, poverty-stricken and ethnically diverse nations appear to be worlds apart. But the lessons learned from 12 years of counterinsurgency operations in Afghanistan can be applied to a long-term plan to solve the violence and assortment of illicit activities that have taken root in southern Nigeria.

A quick history lesson: Between 2004 and 2008, the United States and the International Security Assistance Force (ISAF) launched a massive operation in Afghanistan to eradicate the lucrative and centuries-old poppy harvest. The strategy had three objectives; first was to halt the flow of poppy and opium revenue that funded the Taliban war effort; second was to reduce incentives for corruption at the local, provincial and federal levels; and third was the added bonus of stemming the primary source of the heroin epidemics in Europe, Russia and South Asia.

By the time the eradication effort was abandoned in 2009, poppy production in Afghanistan had actually increased, support for the Taliban had grown stronger and corruption at all levels of government was flourishing. So, what happened?

First, there was no viable economic alternative for Afghanistan’s poppy farmers. The plan to entice poppy farmers to abandon their ancient cash crop for wheat fell flat. Second, the burning of fields failed to win hearts and minds and drove many Afghan farmers into the arms of the Taliban. Third, the Afghan government that was supposed to be committed to poppy eradication was committed to its preservation. The black market opium trade made up nearly 50% of the nation’s GDP and many of the top officials in Karzai’s government also happen to be the country’s top drug traffickers.

In its effort to eliminate an illicit economy, ISAF underestimated the importance of incentives and viable economic alternatives. Decision makers neglected the fundamental needs of the most important element in a counterinsurgency operation: the populace.

Now, shift continents and fast-forward several years to the Niger Delta. The 70,000 km2 of swamp is home to Africa’s largest oil reserves and the world’s second largest reserves behind Saudi Arabia. West Africa – and Nigeria in particular – is considered the world’s last frontier for a host of natural resources. The light, sweet crude and natural gas deposits that lie beneath the maze of jungle and winding creek beds have potential to brand Nigeria as the most developed and prosperous democracy on the African continent.

Instead, Nigeria lands a top-twenty spot along side Afghanistan each year on Foreign Policy’s Failed State Index. This unsavory title generally points to a varying degree of social, political and economic dysfunction that frequently offers fertile grounds for terrorists and other nefarious groups. This is not to suggest that Nigeria is a foreign-aid-dependent, heroin-producing haven for international terrorism. However, since the mid-1990’s, Nigeria’s Delta region in particular has experienced a marked absence of stability, civility and good governance. While Nigerian politicians have lined their own pockets with the more than $800 billion (US) in oil revenues since 1958, trickle-down investment to provide staples like clean water, health services, a functioning education system, and basic infrastructure to Delta citizens has been virtually non-existent. Marginalized and with no prospects for the future, the Niger Delta’s youth has increasingly relied on an illicit economy for their survival.

Like Helmand Province, the Delta State’s cash crop is at the heart of its thriving black market economy. An estimated $6 billion dollars (US) are lost in oil revenues each year due to oil theft or bunkering – the practice of lifting oil from exposed, buried or submerged pipelines, and selling the pirated commodity for profit.

Bunkering may appear to be an understandable, and even acceptable form of social justice for the Delta’s poor and downtrodden. But the practice has a series of lasting and unattractive consequences.

First and foremost, bunkering results in a direct and substantial loss in government revenues that would otherwise (in theory) be reinvested in civil and social services like health and education. Second, the practice provides a steady source of black market revenue for violent criminal groups that further destabilize the region. Bunkering profits have allowed groups like the Movement for the Emancipation of the Niger Delta (MEND) to evolve and take on more lucrative and violent criminal operations to include; sabotage; the targeting of political figures and ethnic rivals; kidnapping foreign oil company employees for ransom; and off shore piracy. Third, the environmental effects of bunkering are devastating. The thousands of oil spills from ruptured pipelines have created an ecological disaster, contaminating ground water and destroying the local fishing industry.

The Delta may not have an insurgency per se. But like the Afghan poppy farmer and the Taliban financier that preys on him, Nigeria’s impoverished and unemployed youths, separatists, jaded ethnic groups and criminal organizations alike depend on the region’s thriving black market for their survival. If leaders in the Delta State and Abuja are serious about long-term stability, they too cannot underestimate importance of incentives, viable economic alternatives and the fundamental needs of the populace.

Like the ISAF response, the attrition strategy employed by Nigerian security forces that seeks to eliminate one oil thief and bunkering operation at a time has failed to curb the practice. Although amnesty programs for Delta militants have been partially effective at containing the expansion of violent groups, the clear absence of alternative means of employment has limited the program’s efficacy.

Rather than premature eradication, selective interdiction and the construction of a legal economy would be Nigeria’s best chance at achieving substantial and lasting progress. A viable recovery plan for the Delta calls for a combination of short-term solutions and enduring tasks:

  • Smart targeting. Immediate interdiction efforts should target the violent criminals, not the poor who rely on the illicit economy for their survival. If crime and violence are the ailments, then poverty is the diagnosis. Leaders should consider pursuing other vital objectives outside of immediately shutting down the black market, in order to ease poverty and promote stability.
  • Outbidding. A divide and conquer strategy should be aimed at driving a wedge between competing or even cooperating criminal networks. Buying the loyalty of one faction to eradicate violent and dangerous competitors will allow the Nigerian government to gain a foothold in the Delta and sieze control of the chaos.
  • Staples and services. Delta citizen need access to clean water, food subsidies, basic health services and a functioning education system. Such provisions would be money well spent by Abuja and the Delta State to alleviate grievances and restore credibility.
  • Infrastructure. A functioning infrastructure provides a framework for micro development and the emergence of a licit economy. Electricity, roads and upgrades to pipelines to reduce spills and the contamination of water sources are starting points. Upgrading railways and ports to further incorporate the Delta in Nigeria’s trade regime will hasten the growth of legal markets.
  • Crackdown on corruption. Central to Nigeria’s bureaucratic ineptitude is its pervasive culture of corruption. The Delta cannot maintain any substantial long-term economic growth until leaders get serious about cleaning up governance and policing their own.

Hopelessly corrupt governance, lasting instability and an economy dependent on foreign aid and opium paint a bleak picture for Afghanistan’s future following ISAF’s departure in the summer of 2014. Nigeria may not necessarily be doomed to become West Africa’s Afghanistan, but eradicating illicit markets, creating stability and restoring faith in governance cannot be accomplished without an enduring commitment to reforms.

While Afghanistan prepares to be left to its own devices, Nigeria too must overcome the social, political and economic hardships associated with the arduous task of nation building. To salvage its burgeoning democracy, it may be incumbent upon Nigerians to look to Afghanistan’s missteps to find pragmatism and direction.

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