Fighting for Resources on Two Fronts

Twin conflicts in Nigeria’s north and south are hurting the country’s oil and food production.
Blog Post
OSAP ND/Flickr
July 19, 2016

Nigeria, the biggest economy in Africa and a country of 182 million people, is embroiled in a pair of conflicts that strike right at the heart of its two most important resources: agriculture and oil.

First is the country’s agricultural production. In the north, the conflict with Boko Haram - the terrorist group promoting a hardline Islamist agenda - has decimated agricultural production and exacerbated food insecurity, particularly in the northeastern region of Borno. The conflict is part of longstanding tensions between the predominantly Muslim north and predominantly Christian south, as well as the uneven distribution of economic and political power between the two communities. Boko Haram began to advocate for the violent overthrow of the Nigerian government in 2009 and has since morphed into one of the deadliest terrorist groups on the planet, even pledging allegiance to the Islamic State in 2015.

Boko Haram’s main area of operations are in Nigeria’s northeastern states with a majority of their attacks in Borno, which produces a range of vital crops for the country. Before the conflict, an estimated 50% of foodstuffs and 47% of livestock consumed in southern Nigeria were grown in northern states such as Borno. As a result of the ongoing violence, crop production in Borno has declined dramatically. According to a 2014 Brookings study, maize, cowpea, sorghum, and millet yields have all declined by 70% or more since the beginning of the conflict. This will be Borno’s third straight year without a harvest according to a recent Guardian report.

The conflict with Boko Haram has harmed Nigerian food production in three primary ways. First, the conflict has displaced more than 2 million people, including many farmers and farm workers, preventing the proper sowing, cultivation, and reaping of crops in the region’s farmland. Second, the conflict has disrupted roads and markets, making it more difficult for farmers to distribute food or turn a profit. Finally, to prevent Boko Haram members from escaping into neighboring countries, the Nigerian government has closed several border crossings, which has hurt cross-border food and fertilizer trade.

In addition to its agricultural production, conflict also threatens Nigeria’s oil production. This separate conflict in the country’s Niger River Delta in the south has cut oil production by 36% - an 800,000 barrel per day drop. The Niger Delta Avengers, a militant group that opposes oil production in the region, has crippled the country’s energy sector through a series of attacks on oil pipelines and infrastructure this year.

The NDA cites the environmental damage caused by oil production in the delta as one of the primary motivations for their attacks, though the bigger grievance likely has more to do with the uneven distribution of oil profits. The group is the most recent manifestation of the region's frustration with the failure of oil production by multinational corporations in the Niger Delta to improve economic prospects for nearby residents. Some analysts tie the rise of the NDA to Nigerian President Muhammadu Buhari’s proposal to phase out funding for a seven-year old amnesty and economic incentive program to appease anti-oil militants in the region.

The damage to Nigeria’s oil production is a major threat to the country’s economy. Oil accounts for 35% of the country’s GDP and more than 90% its exports, making it the single most important industry the country. Nigeria’s economy was already in a precarious position as a result of the decline of oil prices; the Economist estimated Nigeria needed oil prices at $118 per barrel to balance its budget, more than double current prices. The recent attacks on oil infrastructure in the river delta have the dual effect of both limiting production in the near-term, as well as scaring off much needed investment to maintain high levels of production in the long-term.

Nigeria’s twin resource conflict is creating a vicious cycle. As agricultural production decreases, food prices and insecurity will increase, making the ongoing food crisis in northeastern Nigeria even worse. As oil production decreases, Nigeria will lose a crucial source of foreign currency to import food and other goods.

Though the result may not be as dramatic as Venezuela, the general dynamic is similar and is likely to make existing public frustrations over socioeconomic inequality and political corruption even worse. The critical difference between Nigeria and Venezuela’s fate will be whether Abuja can avoid the intense economic mismanagement currently taking place in Caracas, which so far it has. Though Nigeria's GDP growth slowed to just 3% in 2015, Venezuela’s economy shrank by 10%, hampered by long-standing government debt, price controls, and uneven currency restrictions.

But even if Nigeria manages to avoid becoming Africa’s Venezuela, the negative impact of conflict on Nigeria’s resource production will continue sows the seeds for potential future conflict. This is a cycle likely to be repeated until the Nigerian government is able to either defeat these militant groups or ameliorate its political and institutional vulnerabilities. Nigeria has been making progress on both fronts over the past year, but the two-front conflict is putting enormous pressure on two of the economy’s lifebloods in terms of GDP, foreign currency, and employment: agriculture and oil. Whether Nigeria can make enough progress on both fronts to get out of the vicious cycle before the drag on its resource production pushes the country further backwards remains an open question.