Environmental Engineering Reference
In-Depth Information
complete Nigerian government reliance on oil revenues to sustain the
public treasury; a lack of effective environmental regulation as a result
of a continuing dearth of government capacity and political will at
national, state, and local levels; unfettered corporate power and accom-
panying arrogance; intranational tensions over distribution of petroleum
production-related receipts; and continued public corruption. We discuss
each of these concerns briefl y.
The Consequences of Oil as the Dominant Source of Public Revenue
The federal, or national, government in Nigeria has exclusive rights to
the resources generated by oil within its territory. The nation collects all
royalties and taxes in the country. This arrangement arose during a period
of largely military rule from 1966 to 1999. During those roughly three
decades the national government negotiated agreements with the multi-
national corporations that produce, refi ne, and export oil from the Delta,
including Shell, Chevron, and British Petroleum, among others. The
central government does not itself operate or own exploration, produc-
tion, transport, or refi ning facilities. Instead, it has contracted with these
and other corporations to bring its petroleum to the global market.
That arrangement makes Nigeria a rentier state, because oil accounts
for an average of more than 90 percent of its exports by value and more
than 70 percent of its revenues overall. The nation has not experienced
much confl ict over the contours of its agreements with the major oil fi rms
operating in the Delta or offshore near it, although their negotiation has
not always been easy. The nation's oil agreements have benefi ted Nigeria
in the sense of providing growing revenues to the nation. In the 1970s,
for example, the value of Nigerian oil production rose from $250 million
to $11.2 billion in four years. The nation's petroleum revenues topped
$45 billion in 2005. When the price of oil skyrocketed in 2008, the
nation received a fresh revenue bonanza.
Recognizing the value of the revenues is not to argue that those assets
have been well managed or used appropriately. Indeed, the reverse has
often been true. While Nigeria's gross national product has risen to $86.9
billion, real per capita income now stands at one-third its 1980 level.
Similarly, between 50 and 90 million Nigerians out of a national popula-
tion of approximately140 million live in absolute poverty, surviving on
average incomes of less than $1 per day. Nigeria now ranks 159th among
177 nations listed in the United Nations Development Program Human
Development Index.
