Wednesday, July 23, 2008

The vast majority of oil rich Nigeria's 140 million people live in no better conditions than their neighbors in West Africa

With oil prices at record highs, government coffers in Nigeria, one of the leading oil exporters, are swollen to unprecedented levels. Yet the vast majority of Nigeria's 140 million people live in no better conditions than their neighbors in West Africa, which is the least developed region of what is already the poorest continent on earth. The same is true of many of the major oil producers in Africa, including Angola, Sudan, Equatorial Guinea and Chad, but the sheer size of Nigeria and its daily output of two million barrels make the poverty-wealth contrasts more striking. Nigeria has earned the equivalent of nearly $1.2 trillion from oil production over the past four decades, the sort of money that enabled oil-producing Gulf states like Qatar to develop some of the strongest economies in the Arab world. But its four state-owned refineries are not fully operational, its distribution network is chaotic, and it relies heavily on fuel imports, which cost around $4 billion each year. In Lagos, a mega-city of more than 10 million people, the elite sip champagne on exclusive islands - albeit to the incessant drone of diesel generators -- while the masses live in mainland slums without water or electricity. Ask an average Nigerian on the streets of Lagos how he is and he will likely tell you "things dey hard, but we dey manage" - it's tough but we're getting by. Health care is virtually non-existent, the roads are potholed, unemployment and crime are on the rise, and Nigeria is suffering from spiralling food prices. "Nigeria is making more money from oil now, but look at the street we are living on," said Efe Oyingbo, pointing to a dirt road where passers-by waddle through muddy waters and motorists try to navigate cavernous, submerged potholes. A mother of two, her frozen food business in the suburb of Okota has virtually collapsed because she cannot afford the high cost of gasoline. The government has frozen the price of fuel but retailers have taken advantage of short supplies to more than double the price of diesel in some parts of Nigeria in the last few months. The number one complaint is a stop-start power supply. Exasperated residents of Lagos call the National Electric Power Authority (NEPA) "Never Expect Power Always". Nigeria's generation capacity has plunged to less than 1,000 megawatts from 3,000 MW a year ago, largely due to lack of maintenance at power stations. South Africa, with a third of Nigeria's population, has over 10 times that capacity. Much of Nigeria goes without power for weeks at a time. The crisis has closed hundreds of factories and slashed millions of jobs.

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