Nigeria’s present security woes appear to be worsening due to sporadic attacks by armed bandits on Nigeria’s energy infrastructure, a development marring the country’s investment climate similar to Mozambique.
This week, French energy giant Total suspended its $20 billion liquefied natural gas project in Mozambique indefinitely due to an escalation of violence in the area, including a March attack by Islamic State-linked militants.
That message has not caught on in Abuja who is also struggling with rising kidnapping, insecurity, killing and social disorder defacing the country’s investment climate as Africa’s biggest economy attracts a misery Foreign Direct Investment (FDI) inflow of $2.6 billion in 2020, the lowest since 2005.
The continuous cost of insecurity on Nigeria’s energy sector has exposed the sorry state of the industry, the main revenue earner of the country, and worsened the growth prospects of an economy wallowing in its second recession in five years, where 40 percent of the people live below the poverty line.
For instance, a one-year review of Federation Accounts Allocation Committee (FAAC) by Nigerian National Petroleum Corporation (NNPC) shows disruption in crude oil production reached 36.3 million (36,262,664) barrels last year, out of which 3.6 million (3,636,400) were lost to alleged attacks by members of host communities over issues ranging from salaries, environment and appointments.
The loss means Nigeria threw away a big opportunity of injecting about N74.6 billion into its ailing economy, using the average price of the international Brent crude, the benchmark for Nigerian crude oil, which sold for an average price of $50 in 2020.
“Insecurity is a disincentive to oil and gas investment because it hampers the future of business operations, while infrastructure decay increases cost of production, affects competition, and erodes companies’ profitability,” Luqman Agboola, head of energy and infrastructure at Sofidam Capital, said.
According to Agboola, Nigeria has not only suffered a colossal loss in terms of infrastructure, properties, and viable human lives but also economic sabotage, which leads to the displacement of FDI.
Other experts say the 614-kilometre Ajaokuta-Kaduna-Kano (AKK) Gas Pipeline project flagged off last year by President Muhammadu Buhari, 12 years after its conception, may remain a game-changer on paper unless glaring challenges concerning insecurity are urgently addressed.
The pipeline, which starts from Ajaokuta in Kogi State running through Abuja, Niger, Kaduna, and ending in Kano State, has been taken over by rampaging bandits who kidnap for ransom and kill victims who cannot pay for their freedom.
Abductors have historically targeted expatriates or senior oil workers, demanding ransoms of between $1,000 and $150,000, depending on their victim’s net worth and capacity to pay, according to a statement from Nigeria’s police.
Beyond the Niger Delta, another major security concern facing Nigeria’s energy sector is the continuous sabotage of power towers supplying electricity to Maiduguri by armed insurgents, a development that has persisted for too long.
Three weeks ago, the terrorists blew up two of the towers along the Damaturu-Maidugiri 330kV transmission line, the fourth attack in less than a month on supply lines, plunging many towns and communities in Borno State into darkness barely three days after electricity was restored.
With motorised boreholes relying on electric power to operate, business and daily life have been severely disrupted in Maiduguri.
“Although insecurity is a global phenomenon, other advanced climes have learnt to repose confidence and strengthen their institutions rather than individuals,” Niyi Awodeyi, CEO at Subterra Energy Resources Limited, said.
Following incessant vandalism of old transmission lines from Biu-Damboa-Maiduguri, the Federal Government opted for the installation of a new transmission line along Damaturu-Maiduguri Road, which was also vandalised immediately after completion.
Before its destruction, the Damaturu-Maidugiri 330kV transmission line was supplying power to the Borno State capital and some parts of nearby Niger Republic.
“The situation is getting worse with each passing year, especially in the Northern region,” Awodeyi said.
Since December 2020, gangs of bandits seeking lucrative ransom have kidnapped a total of 769 students from their boarding schools and other educational facilities across Northern Nigeria in at least five separate incidents.
The region has long been afflicted by violence fuelled by disputes over access to land and resources, among other factors. Criminal gangs have taken advantage of the lack of effective policing to launch attacks, pillaging villages, stealing cattle and spreading fear.
The Nigeria Security Tracker (NST), a project of the Council on Foreign Relations Africa programme, also paints a gloomy picture.
‘’Different groups in Nigeria resort to violence. The militant Islamist movement Boko Haram is active in Northern Nigeria. Violence among ethnic groups, farmers, and herdsmen sometimes acquire religious overtones. A new generation of Niger Delta militants threatens war against the state. Government soldiers kill civilians indiscriminately. Police are notorious for extrajudicial murder,’’ according to experts.
At present, Nigeria is regarded as one of the most dangerous places to live in. The 2020 Global Terrorism Index identified it specifically as the third most affected by terrorism.
Also, the Nigeria Security Tracker documented 2,769 violent deaths recorded between February 2020 and February 2021 in just one Northern state.
Kidnappings carried out by various armed groups have also increased in the past five years. A recent report by SBM Intelligence notes that over $18 million was paid as ransoms for victims abducted between 2011 and 2020.
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