Oil boom in Nigeria and its consequences For Host Communities 

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Maybe if Nigeria did not have oil, we would have thought differently for revenue. The harsh reality is that despite the country’s oil richness, most Nigerians are not rich.

Some weeks ago, President Muhammadu Buhari flagged off crude oil exploration in Nasarawa State by the Nigeria National Petroleum Company Limited.

The feat in Nasarawa is just one out of many this administration has recorded. 

But this new era despite being a glad tidding for the Nigerian government not the same for Nigerian people particularly the host communities.

Over the years, the relationship between oil and gas host communities in Nigeria has historically been very poor.

After the civil war came the oil boom of the 1970s. Prior to this time, the economy had been solely powered by agriculture but as oil revenue rose, the government became increasingly dependent on it for budgetary and economic needs.

It neglected other sources of the economy required for stability. The loudest concern then was the possibility of the oil well drying up. No one knew that some day, not faraway, the global price of oil would fall.

The Oil boom largely contributed to making the Federal Government and the oil producing states the centre of political struggle they are today. This energized the desperation of military juntas and politicians to hold on to power.

At the wake of the second republic in 1979 when Gen. Obasanjo transferred power to the civilian regime of Shehu Shagari, corruption had taken a new dimension.

The military coup of Muhammadu Buhari that followed the regime’s fraudulent re-election in 1984 was welcomed with open arms. However, Nigeria would require a more notorious military leadership to plunge her into an abysmal fall.

Fondly called Maradona, Ibrahim Badamosi Babaginda (IBB), and his successor Sani Abacha’s tenures between 1985-1998 were considered the most corrupt, and largely responsible for the culture of corruption in Nigeria.

Abacha’s regime for instance ended in 1998 after a mysterious death while in office. But it would take the Swiss government ten years to refund 723 million dollars to Nigeria as part of his loot excluding the 321 million dollars expected this year.

Though the news of his death was received with wild jubilation by many, little did they know it was only the foundation laying phase for corruption in the country. Years later, Abacha would reincarnate through democratically elected politicians to re-loot his bounty!

The host communities shiver in fear of not enjoying their fertile lands.

They can neither farm nor drink potable water while investors and the government fuel their pockets with cool cash.

The Petroleum Industrial Act aims to address this problem by creating the Host Community Development Trust Fund (HCDTF) whose purpose will be to, among others, foster sustainable prosperity, provide direct social and economic benefits from petroleum to host communities, and enhance peaceful and harmonious coexistence between licensees or lessees and host communities. 

Specifically, the law stipulates that existing host community projects must be transferred to the HCDTF, and each settlor (or oil license holder) must make an annual contribution of an amount equal to three per cent of its operating expenditure for the relevant operations from the previous year.

The management committee of the trust must include one member of the host community.

In addition, the act stipulates a penalty for failure to comply with host community obligations, including revocation of license.

Still, host communities are still living with apprehension and fear because they are not sure that the law won’t be boycotted.

In recent years, the Niger Delta Development Commission (NDDC) which oversees the affairs of the Niger Deltans where oil was our mainstay has been overly corrupt.

Despite the establishment of the commission, operatives and officials have chosen to enrich their pockets than the people.

Interestingly, the PIA also imposes the duty and responsibility to protect oil and gas assets on host communities.

More specifically, clause 257 stipulates that any host community that fails to protect oil assets in its community from vandalism will be held accountable for the repair.

But at a time like this, when environmental inaction is in its prime, the continued degradation of the host community’s environment continues to pose a great challenge. 

Nasarawa State will be the new home of suffering with zero environmental remediation and relief 

When evaluating oil discovery in Nigeria, it is safe to say that it does not provide a leveller for host communities.

The initiatives successive governments have put in place have yield minimal success.

But the country continues to grow in riches and attract investors.

To remedy this, the PIA should not be seen as just a document but should be allowed to unleash its wrath on any settlor or explorer that does not want to comply with the provisions of the act.

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