Jul

10

More about Stolen Oil

Filed Under Idea, News | 1 Comment

Umaru Yar'Adua, President-Elect of NigeriaImage via Wikipedia

It is probably obvious, by now, that I like BusinessDay. This is their editorial today:

In what seems to be a major policy thrust in international economic relations and in resolving the festering Niger Delta crisis, President Umaru Yar’Adua on Monday, at the meeting of G8 leaders holding in Japan called for global clampdown on trade in stolen crude oil.
The president emphasised that stolen crude oil deserved the same global treatment as that of stolen diamonds.

Yar’Adua said measures must be taken to “dismantle the criminal dmension” of the problem in the Niger Delta. And for good measure, he said the problem in the region was being aggravated by international cartels.

The Nigerian leader drew attention to another aspect of the Niger Delta challenge, the criminal aspect, in this case “those who use the cover of militancy to steal our crude oil and engage in all forms of violence.”

We commend the president for drawing attention of the international community to this ugly trend. This is an issue that hitherto had been discussed in hushed tones and privately, too. It is an open secret that Nigeria’s crude is stolen daily, that beyond the official production figures given to meet OPEC quota and local consumption, a lot more is produced through illegal bunkering and from offshore rigs.

According to Freedom House, a US-based oil industry analyst, out of the 1.9 million barrels of crude oil Nigeria produces per day, she loses 10 per cent to oil thieves, part of the proceeds of which are spent on criminal activities in the Niger Delta.

We can draw a parallel with the role diamonds played in the civil wars that took place in Liberia and Sierra Leone in the 1990s. The rebels that waged war in Liberia were able to sustain their rebel activities, which ultimately escalated to become a civil war on account of the money they made from illegal mining and sale of diamonds.

A number of questions, naturally, arise from President Yar’Adua’s submission. Who are those involved? Apart from the militants, who hide under the cover of agitation, are there international thieves helping to fuel the theft of Nigeria’s crude oil?

If they exist, is there a nexus between the objective they pursue and the criminalisation of the Niger Delta struggle?

In all of this, what is the role of the multinational oil companies engaged in oil exploration in the country especially in the Niger Delta region?

There is talk about the use of satellite to monitor offshore oil drilling. Is it effective and if yes, are those in charge giving the Nigerian government the true picture of the situatiion? If they are doing that, has the government taken any steps to address it?

More importantly, does Nigeria have the capacity to monitor offshore exploration activities of the oil companies and enforce compliance to production limits?

Answers to these questions are important as they will point the way to dealing with the issue.

President Yar’Adua chose the right platform to raise the issue. The international oil companies are all from the G8 countries. Their governments will need to do internal checks to ascertain the culpability or otherwise of their companies in this criminal behaviour.

We urge him to quickly take the matter to the United Nations as he has promised. Only concerted efforts at the global level can arrest the situation.

The president’s pledge that the much talked about Niger Delta Summit would hold is reassuring. Resolution of the crisis in that region of the country holds the key to Nigeria’s economic and social transformation.

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Jan

13

E-Waste, Toxins and Cancer in Africa, any Clue?

Filed Under Idea, Opinion | 3 Comments

Early this morning I listened to a technology podcast from PRI’s The World. Chris Carrol, a National Geographic writer, had been travelling around the world, looking at the way e-waste is managed. He wrote an article about it, an interview with him took a portion of the podcast. He first talked about how most e-waste is disposed in the US: A random recycler in the USA sell used computers to brokers who have connections in developing countries. These brokers load them in containers and send them to developing countries. He then went on to describe what he saw in Accra. He describes how he saw children smash up old computers and pull them apart in order to reveal the wirings. These wires are piled on top of old tires, set on fire and left to burn for about 15 or 20 minutes, with the boys standing close by the fire, in the smoke, making sure that all the covering on the wire is burned off. At the end of the burning session they pick up about 50 cents worth of copper wire from the burnt off wires. These are sold to metal buyers.

Headaches and Nausea
Those who grew up in Nigeria can probably remember the nauseous smell that comes off burning things this way. Chris said he had a headache and a general feeling of mild nausea for weeks after watching the children do this for only a couple of days. He also said that the kids said that when they first started they got sick everyday, vomited, had headaches, but after a few weeks or months their bodies got used to this. He said that a large percentage of the e-waste also end up in China. When asked whether there are reports that say whether people who are exposed to this kind of toxicity are facing health problems he replies that in a town in China, a test of the air and soil revealed that there are persistent toxins in the soil and the plants. They refused to comment on the effects on humans.

And Maybe Cancer Too
Listening to this story made me think about a discussion I recently had with Professor Francis Egbokhare of the Distance Learning Centre, University of Ibadan. We were talking about the rise in reported cases of cancer. He wondered about health problems in Nigeria, and about the possibility that this might be linked to the time of the World Bank/IMF sponsored Structural Adjustment Programme. During that period, people werenmaking their own soaps by mixing all sorts of chemicals together. Other household items were made locally and under unmonitored circumstances. He wondered about the possibility that there were carcinogenous agents in some of the chemicals used to make say toothpastes during the period. We also talked about the sachets of Pure Water and the problem that most of the ones on the streets today are not even approved by the National Foods and Drugs Administration and Control, NAFDAC. 

The point of the Pure Water comes home closer when one considers Lagos. There was a time I used to joke that I would easily know that I am in Lagos by the horrible stench that meets me when the window of the car is wound down. Those who stay close to Ojota/Ketu must be very familiar with the smell that comes from the refuse dump along the road. The open incinerator burns everything, from decomposing food items to electronics. These kinds of garbage are also always burnt on almost every street in Lagos. If it can be found that soil and plant contain toxins it would be safe to assume that water from wells in these places also contain toxins. That is the kind of water that we often buy as Pure Water on the streets.

The Issues
There is a serious increase in cases of cancer diagnosed in China, and it is increasingly pressed to pay attention to it. At least tests are being carried out to find out the level of toxins in soils, plants and persons, even if the reports of the tests are never publicly available. I wonder whether our governments in Africa are paying attention to these issues. If anyone knows about any organisation or government agency – in any African country – that work on this they should please leave the name and address of such agency in a comment. And if there is nothing happening I wonder when we will, and how we can, start making the government pay attention to the issues. I am also interested in the position of African countries on e-waste management. I think it is time we started talking about things that may not appear now, but that might end up complicating our future and that of later generations.

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Nov

18

Help Needed… What is the Comparative Advantage of Africa?

Filed Under Idea | 14 Comments

Over the weekend I met a Jamaican guy with whom I struck an almost instant friendship. We had long and intense discussions about matters relating to the economies of developing countries. Of course, there is hardly any discussion about developing countries that would not touch on China and India, and the advantages the countries have.

Size and cost
The Economist did a special report on technology in India and China in their November 10th - 16th edition. Part of the report says that China’s biggest advantage - while discussing technological innovations - is the shere size of its market. That statement was made in relation to the role of “venturesome and resourceful customers” in steering technological innovation. The principle is simple: a company does not need to wait till it has perfected its products before presenting it to the public. Because China has a huge population that is gradually becoming more and more economically empowered, you can throw what is not yet perfect to the market, and then let the feedback determine areas that need attention. It is best captured by this statement, “You can afford to waste some customers with imperfect product, because there are always another 100m out there to whom you can sell version 2.0.” If we translate that to other parts of the economy, one would realise that shere population is strength for both China and India. There is a large chance for a country that is growing to expand inside itself as more and more citizens gain economic strength. In other words, simply empowering the citizens provides a space for economic growth. Also, there is a tendency for the country to attract FDI, based simply on the size of its market.

Another advantage that one keeps hearing about is the price of labour in China. With an increasing population of members of the middle class, and a large army of cheap labour to boot, China seems not only to be ready for growth based on the strength of an increasing middle class, but also because of its large army of cheap labour. With this large army, it can produce at a very cheap rate for exportation. And it has been doing this. One major point that is sometimes missing in the moral debate on China’s business in Africa is that there is a large amount of made-in-China products in African markets, and these goods are so cheap that they sell more cheaply than locally produced ones. The price of labour is also an important attraction for FDI.

Please, help!
What exactly do I need help with? The problem is this: what is the comparative advantage that African countries have? Why would African countries be attractive for production and not just servicing? I think of shere size of population in the case of China and India, and I think of cheap labour, especially in the case of China. Are African countries doomed to simply supplying developed and emerging economies with raw materials to which value is added and then brought back to be sold in African countries? I am asking for help because it seems that my rudimentary knowledge of economics cannot fully appreciate the situation.

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