(HOST) This coming Saturday and the next, Nigeria will hold national legislative and presidential elections. Commentator Scott Baker says the outcome could affect us right here in Vermont – at the gas pump.
(BAKER) Nigerians are hopefully about to experience their first successful transition of power from one democratically elected president to another – an important milestone for Nigeria’s fledgling democracy and its one hundred and thirty million citizens. The US government has a keen interest in these elections, since Nigeria is a vital ally on multiple fronts – and Nigeria has oil.
Presently more than eleven percent of US oil imports come from Nigeria, and the US would like to double that number to reduce dependency on the Middle East. But Nigeria’s oil is more precious than most. It’s known as “sweet” crude; it’s easily, and more profitably, transformed into gasoline.
And although oil comes from several countries, any interruption in Nigeria’s output of sweet crude impacts production and therefore prices. Bloomberg estimates that sixty percent of OPEC’s reduction in output last month was due to sabotaged oil facilities in Nigeria. Nationally, gasoline prices are up twenty percent since January, and here in Vermont they’re up almost ten percent in the last thirty days.
Nigeria is the world’s sixth largest oil producer, so instability there translates into nervousness about oil prices on the world market.
And things have been especially unstable in Nigeria recently for two reasons.
First, despite Nigeria’s vast oil wealth, the majority of the population lives in poverty. The Nigerian government earns roughly thirty-three million dollars a day in oil revenue, yet the average Nigerian earns less than two dollars a day and struggles to find a job in a country with sixty percent unemployment. This leads some to resort to violence, siphoning and sabotaging oil pipelines, and kidnapping oil workers. Much of this violence is in the Niger Delta, where most of Nigeria’s oil comes from.
Secondly, although the upcoming elections hold potential for Nigeria’s nascent democracy, the interim leading up to them has been a veritable power vacuum. And since politicians there enjoy power and access to the spoils of a very corrupt government, political rivals at all levels often employ armed gangs of disenfranchised youth to rig results and influence votes through terror and killing. This holds especially true for offices in the oil-rich Delta.
Imagine how tourism and many other aspects of our own economy would suffer if here in Vermont, prior to Town Meeting Day or last November’s election, incumbents and candidates tried to violently dissuade you from voting for their opponents.
Data from Senator Leahy’s website or the Vermont Fuel Price Report illustrate how instabilities in Nigeria do affect the price of gasoline here in Vermont; but more importantly, a stable Nigeria means the survival of hope for Africa’s most populous country and a crucial US ally and trade partner.
Nigeria is a diverse country with generous and genuine people in more than two hundred and fifty ethnic groups, who remain pessimistically hopeful that they will be able to achieve a better government and a better life. It remains to be seen how their hopes will be met by this month’s elections and their aftermath, but they won’t be the only ones who are affected.
Scott Baker teaches International Business and History at Champlain College and is an expert on Nigeria.