Source:
Boiling Frogs Post
F. William Engdahl
Nigeria,
Africa’s most populous nation and its largest oil producer, is from all
evidence being systematically thrown into chaos and a state of civil
war. The recent surprise decision by the government of Goodluck Jonathan
to abruptly lift subsidies on imported gasoline and other fuel has a
far more sinister background than mere corruption and the
Washington-based International Monetary Fund (IMF) is playing a key
role. China appears to be the likely loser along with Nigeria’s
population.
The recent strikes protesting the government’s abrupt elimination of
gasoline and other fuel subsidies, that brought Nigeria briefly to a
standstill, came as a surprise to most in the country. Months earlier
President Jonathan had promised the major trade union organizations that
he would conduct a gradual four-stage lifting of the subsidy to ease
the economic burden. Instead, without warning he announced an immediate
full removal of subsidies effective January 1, 2012. It was “shock
therapy” to put it mildly.
Nigeria today is one of the world’s most important producers of
light, sweet crude oil—the same high quality crude oil that Libya and
the British North Sea produce. The country is showing every indication
of spiraling downward into deep disorder. Nigeria is the fifth largest
supplier of oil to the United States and twelfth largest oil producer in
the world on a par with Kuwait and just behind Venezuela with
production exceeding two million barrels a day. [1]
The curious timing of IMF subsidy demand
Despite
its oil riches, Nigeria remains one of Africa’s poorest countries. The
known oilfields are concentrated around the vast Niger Delta roughly
between Port Harcourt and extending in the direction of the capital
Lagos, with large new finds being developed all along the oil-rich Gulf
of Guinea. Nigeria’s oil is exploited and largely exported by the
Anglo-American giants—Shell, Mobil, Chevron, Texaco. Italy’s Agip also
has a presence and most recently, to no one’s surprise, the Chinese
state oil companies began seeking major exploration and oil
infrastructure agreements with the Lagos government.
Ironically, despite the fact that Nigeria has abundant oil to earn
dollar export revenue to build its domestic infrastructure, government
policy has deliberately let its domestic oil refining capacity fall into
ruin. The consequence has been that most of the gasoline and other
refined petroleum products used to drive transportation and industry,
has to be imported, despite the country’s abundant oil. In order to
shield the population from the high import costs of gasoline and other
refined fuels, the central government has subsidized prices.