Counter-Terrorism: How Cash Kills

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February 14, 2014: The Nigerian government suffers greatly from corruption, which is a form of terrorism the way it is practiced in many parts of Africa. That’s because local politicians will, in effect, sponsor local criminal gangs. This arrangement provides the gangsters some protection from the police (who are usually also quite corrupt) and the courts (who are less corrupt but still a threat). In return the gangsters help ensure that their patron gets elected, or reelected. It’s usually a political party, dominated by one (or a few) talented politician that steals as much as he can and distributes it to as many people as necessary to perpetuate the system for generations. Most of the population gets screwed, or worse if they make too much noise about the corruption. This form of corruption is found everywhere, even in the West. But nowhere is it as pervasive and dominant as in Africa. 

The politicians will try to deflect criticism from themselves in any way they can. In Nigeria, for example, much is being made about the growing amount of oil being stolen by organized gangs in the Niger River Delta. In the last ten years the losses (in oil and cash needed to repair the damage) has amounted to over a billion dollars a year. But on closer examination you find that many of the oil thieves have political sponsors. In other words, the oil thieves thrive because of the political system, not in spite of it.

Oil theft related arrests in the Niger Delta (where nearly all the oil fields are) usually involve shutting down thieves who do not have a politician sponsor (who takes a cut of the profits for providing protection). The foreign oil companies that run the drilling and pipeline operations are threatening to leave if something is not done about the oil theft gangs. The stealing has become so extensive that daily production fell from 2.3 million barrels a day to about two million in 2013. This was despite efforts to increase production. The government hoped to increase production to 3.7 million barrels a day. The previous peak was 2.6 million barrels a day in 2006, before the Niger Delta rebels got going and oil theft became a much larger problem. It proved impossible to get back to 2.6 million but production might get back to 2.4 million barrels a day. That will be difficult because oil theft is now all the rage in the Niger Delta and the popular enthusiasm for it is not slowing down, nor is the support of corrupt politicians.

In addition to the oil thieves investigators have documented decades of theft from oil profits once they are in government bank accounts. The thefts from pipelines and government bank accounts has amounted to over $10 billion a year in the last decade. The annual GDP of Nigeria is $238 billion, for a population of 165 million ($1,440 per capita). Oil accounts for about 14 percent of GDP and unemployment is currently about 25 percent. These revelations document what a lot a lot of Nigerians had known for a long time. The theft is so pervasive (40 percent of refined petroleum products are stolen) that the activity is hard to miss. Eliminating the stealing has been difficult because most politicians and political parties are financed by stolen oil money. The well-funded thieves are organized and determined to hang on to their wealth. Judges and police can be bought and many oil thieves have already been prosecuted and escaped via bribes. But there is progress. The oil thieves are under attack, some do lose, but the war will go on for years and there will be a lot of obstacles.

Nigeria is also seen by international crime experts as the center for organized crime in Africa. The culture of corruption makes it easier for major criminal enterprises to survive in Nigeria. Even without all the oil wealth to steal, the Moslem north also suffered from this culture of corruption, which is the main reason for the appearance of Islamic terrorist group Boko Haram. While these Islamic radicals blame the corruption on Western influences, the north was corrupt long before European colonialists showed up two centuries ago. The corruption is worse now because there’s more to steal and the participation of so many senior government and commercial officials makes it easier to launder money and get it out of the country.

 

 


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