Complaint Revised

I present these excerpts from two articles about the burning of a Chevron drilling rig offshore Nigeria without comment.

The first:

“Crude oil” has reportedly washed ashore and been spotted around a partially submerged rig which suffered a gas explosion and continues to burn off Nigeria, a country official has claimed.

Some community leaders in the state of Bayelsa have complained of pollution reaching the coast following a blowout on the Chevron-chartered jack-up KS Endeavor early on Monday morning, Peter Idabor, director general of Nigeria’s National Oil Spill Detection & Response Agency (Nosdra) told Upstream.

“This is a very serious explosion. You have drilling fluids and oil seen around the rig itself.”

Idabor said his department has received complaints from government officials in some parts of Bayelsa state about pollution washing ashore.

“There are several communities already impacted,” he claimed. “The first one is Koloma towns 1 and 2, the second one is Fishtown and the third is Frupa.”

When it was put to him that the KS Endeavor was drilling a gas exploration well, Idabor replied: “Yes, it is, but maybe some oily substances are coming out. I think the fire is actually on the water too. That’s why I was saying there must be some oily substance. They are also talking about drilling fluids. But no volume estimates have been completed at this time.”

On Tuesday Chevron had said that “a small sheen [was] visible in close proximity to the well” with the sheen estimated at 13 barrels.

The second:

A local official also backtracked over claims last week that oil was visible at the drill site on the Funiwa field in Block 86 and some had reached shore, but also aired new claims of complaints from locals of toxic fumes from the blowout incident on 16 January.

“Contrary to some erroneous media reports, at this time there is no oil spilled as a result of this incident,” Chevron continued.

“We reiterate that this is a natural gas well. With the gas flow, fine silt and mud on the seabed floor is disturbed and rises to the surface. Discolouration of the water is visible near the well site.”

On Monday Idabor told Upstream: “The issue I told you about oil touching the coastline appears not to be true, because it was independently verified by [a Nosdra representative].

“Primarily it is not oil…I think [the main problem is] gas, the problem of gas affecting the atmosphere.

“People from the communities say that their problem is the gas – noxious gas – coming from the area. So I have got to link them with the director of petroleum resources to see what can be done.”

Troubling Reports

As Nigeria’s General Strike enters its second week, there are reports coming in of troops being deployed on the streets of Lagos.  It appears little progress was made over the weekend (when the strikes were called off and we all managed to do some grocery shopping).  Equally worrying are the reports that President Goodluck Jonathan has ordered the arrest of those believed to be behind the protests.

Firstly, that a politician can order the arrest of anyone speaks volumes about how Nigeria is run.  Secondly, arresting those behind a protest is hardly compatible with granting people the right to protest (and they’ve hardly been violent, not by local standards anyway).  And finally, when did sending soldiers to break up protests ever have a happy ending, especially in Africa?

I thought over the weekend that these protests would have a day or two left to run until a deal was reached.  Back in the office on Wednesday, I thought.  But if the leaders have been arrested and troops deployed, this could turn ugly very fast.


Strikes have been called off.


Back to work tomorrow.  That’s ugly enough.

The Protests in Nigeria: How I am Affected

By being bored to death, that’s how.

We are now into our third day of being confined to the residences, or in “lockdown” if we want to dramatise things to folk overseas who may have an influence over next year’s hardship uplift factor.  This has involved us mooching about our apartments, occasionally logging on to the work laptop to see if anyone else is “working from home” (which is about as clever a business idea as the daily report), watching umpteen episodes of whatever TV show we have downloaded purchased at full price recently, and surfing the ‘net.  For an hour or two in the afternoon a handful of us slink down to the pool (it is a nice pool) and hope none of the big bosses who live in the overlooking towers are on their balconies with binoculars and a notepad.

We are completely cut off out here, plonked out of harms way at the end of an access-controlled artificial island (kind of) far from any part of the Nigerian way of life.  The only people who live out here are the expatriate employees of multinationals and, allegedly, hideously corrupt policemen and officials, and multi-millionaire pastors.  And the family of between 12 and 20 who occupy the shack under my window.

We receive an SMS instruction at 7:30pm each evening not to come to work the next day, and aside from that we are pretty much in the dark as to what is going on.  We heard there were large-scale protests on Monday during which one person was killed in Lagos (grisly pictures of the victim’s semi-naked body were circulated), and yesterday there were rumours that there were protests along our normal route to work where several senior politicians live, but that’s about it.  We can get local news on the TV which shows various protests around the country and interviews with various figures who are not short on bluster, but we have no idea as to the extent of the protests or their nature (i.e. violent or not).  There have been rumours that some unions are talking of upping the ante including shutting down upstream crude production (so far we have kept producing), and unless they are all talking shite the protestors appear to be in for the long haul.

Whatever the case, I don’t think this will end this week.  Nigeria’s president Goodluck Jonathan is in South Africa joining in the ANC’s anniversary celebrations, so he’s not even around to reverse the policy or even engage in dialogue.  Personally I have enough food and drink to last another week, two at a push, but there are families with kids who probably cannot last as long without going to the supermarket.  But other than that, it’s all very unexciting for us.  Which I suppose is a good thing.

British Aid to Nigeria

Following this post immediately below, I decided to find out how much money the UK pisses up the wall on aid to Nigeria: £141m per year, increasing 116% over 5 years to £305m.

Put simply, the British government taxes single mothers working minimum wage so Nigerian senators can enjoy a $44k per year “wardrobe allowance”.  But there’s no room to cut the government budget, apparently.

Nigeria isn’t the only place where the population should be outraged.

The Salary and Allowances of a Nigerian Senator

Blogger Peter Okali has a post up detailing the salary of a Nigerian Senator.  I’m going to quote most of it, so large hat-tip is due him. (1m Naira is about US$6,100)

Basic Salary (BS) – N2,484,245.50

Hardship Allowance @ 50% of Basic Salary – N1,242,122.70 (I love this kind of hardship)

Constituency allowance @ 200% of BS  –  N4,968,509.00

Furniture Allowance @ 300% of BS – N7,452,736.50

Newspaper allowance @ 50% – N1,242,122.70 (Which kind newspaper be this, abi na online or hard copy?)

Wardrobe allowance @ 25%  – N621,061.37

Recess Allowance @ 10% – N248,424.55

Accommodation @ 200%  – N4,968,509.00

Utilities @ 30%  – N828,081.83

Domestic Staff @ 35%  – N863,184.12

Entertainment @ 30% – N828,081.83

Personal Assistance @ 25%   – N621,061.37

Vehicle Maintenance Allowance @ 75%  – N1,863,184.12

Leave Allowance @ 10% – N248,424.55

One off payments (Severance gratuity) @ 300%  – N7,452,736.50  (Once they get fired.)

Motor Vehicle Allowance @ 400% of BS – N9,936,982.00 – Every Four Years

Senator’s Salary per month – N2,456,647.70
Total  = N29,479,749.00 Per Year
Allowance of Nigerian Senator: $1,500,000/year

To clarify, Nigerian senators get paid about $180,000 per year as a salary.  On top of this, they get about $1.5m in allowances, as detailed above.  And that’s what they receive officially.  You can multiply that by a factor of 3-5 to account for the graft, backhanders, and additional income streams they enjoy whilst in office (and often thereafter).  According to Peter, the senators – of which there are 109 – have been asking for an increase in their allowances to $183,000 per month, or $2.2m per year.  By contrast, the US president gets paid $400,000 per year.

As Peter says:

Little wonder why everyone in Nigeria has political ambitions and will do whatever it takes to get there.

Indeed.  And little wonder why most Nigerians are hopelessly poor and there is a General Strike kicking off tomorrow.

Nigeria Prepares for a General Strike

Other than this report from a few days ago (H/T commenter Hopper), little has been said about the reaction to Nigeria’s removal of the fuel subsidies on New Year’s Day.  Therefore, most of you probably don’t know that a General Strike has been called for tomorrow, involving pretty much all organised labour across the country, in a protest which is scheduled to go on indefinitely.  Quite how much of the country’s operations will be closed nobody knows, but it is quite possible that roads will be blocked, airspace closed, and access to our offices denied.  Which will be nothing short of a disaster for us expats who are either stuck in France (accommodated in a Paris hotel) or confined to the compound (with its swimming pool) as we ride out the storm.  Each of us to a man is devastated if we cannot go into the office for any reason, such is our dedication.

Last week, instead of holding my usual morning engineering meeting, I decided to canvas the opinion of my lads on the subject.  I also discussed it with my driver, who – like all drivers in Lagos – has his finger on the pulse.  You want to know how many votes Goodluck Jonathan really got in the last general election?  Ask a driver.  Want to know the price of a cow as it crosses the border from Chad?  Ask a driver.  Anyway, from what I understand, most Nigerians agree (now there’s a phrase you rarely hear!) that the fuel subsidies did need to be phased out, but scrapping them entirely overnight was monumentally stupid and is hitting the poorest Nigerians the hardest.  Unusually, most expats agree with them.

Since New Year’s Day, the prices of pretty much everything have increased significantly.  Obviously petrol, which has jumped 100%-150% at the pump, assuming the stations know enough to actually open for business, which some did not for the first couple of days.  Anything related to petrol consumption has gone up, usually by 100%.  In Lagos, this not only includes transport but also things as unlikely as haircuts: the barbers’ clippers run off small generators.  Food prices are fluctuating wildly.  At the moment everything is very unstable, with people telling stories of bus conductors (or what passes for them) making up fares on the spot.  Of course, there are also a lot of people taking advantage of the uncertainty to raise prices arbitrarily and gouge customers.  The management of the bus company which doubled its fares, citing the doubling of fuel costs as the reason, are probably not stupid enough to think fuel is their only operating cost, but as they found out, nor were its passengers.  Until things settle down, nobody really knows what even the short term price of anything will be.

It is those who rely on transport who will be most affected, which is everyone.  There is practically no public transport system in Lagos, and everyone either has their own car, piles into a bus filled to three times its rated capacity, or jumps on the back of an okada and hopes his life insurer doesn’t find out.  In short, everyone relies on the internal combustion engine to get around.  This state of affairs seems to have been a deliberate policy implemented some time back in order to win votes (dishing out free motorbikes and pandering to the powerful transport unions do help you get elected), hence no alternative has ever been realistically considered (leaving aside the obvious problem of any money earmarked for infrastructure development being pilfered).

So even though the Nigerians probably agree that the fuel subsidy system was abused beyond belief, costing the government billions, and clogging the streets of every major city, phasing it out over a period was an absolute must.  But the government never made this case, and although there was talk of the subsidy being removed, I think everyone was taken by surprise when it actually happened.  And it is the anger over this, rather than the actual removal of the subsidy, which has got everyone so angry and out on the streets tomorrow.  And funny though it may seem, most expats kind of agree with them (well, we’re being hit too).

So how will this pan out?  I have no idea, and nor does anybody.  One point to consider is that elections have only recently taken place and thus another chance to boot out the government is a long way off.  Are the Nigerians content to wait that long if things continue as they are?  History doesn’t look kindly on that subject.  And there has been little more than silence on the issue from the government, few attempts to explain or justify why the decision was made and what steps will be taken to address the concerns of the people affected.  This is a serious shortcoming, putting it mildly.

I guess we’ll find out this week.  For may part, I have enough supplies, knowledge of student recipes, and Stolichnaya vodka to survive for a few weeks at least.  How the French will cope when they’re down to their last slice of fois gras and penultimate crate of Dom Perignon is anyone’s guess!

This, on the other hand, may prove to be a shrewd prediction.

Expect Trouble Over Nigeria’s Removal Of Fuel Subsidies

Fortunately Boko Haram never made good on their threat to bomb Lagos, which had the authorities send hoardes of security personnel onto the streets and our security department sending telling us to stay out of nightclubs on New Year’s Eve.

This, however, is expected to affect us severely:

The Nigerian authorities have announced the start of a controversial plan to scrap fuel subsidies – which is expected to push up petrol prices.

The government has spent more than $8bn (£5.2bn) on the subsidies in the past year and says it will use some of the money to improve infrastructure.

Labour unions have called for “mass protests”.

Many Nigerians regard cheap fuel as the only benefit they get from the nation’s oil wealth.

Now most people would stop here and derive a formula by which plenty of crude equals cheap petrol, as is the case in Kuwait, for example.  But they’d be wrong, for reasons the BBC points out:

Nigeria is Africa’s biggest oil producer but most of the available 2 million barrels per day are exported in an unrefined state.

The country lacks refineries and infrastructure so has to import refined products such as petrol, which is expensive.

What the BBC hasn’t pointed out is that successive Nigerian governments, or at least the individuals that comprise them, have deliberately let the country’s refineries slip into disrepair and failed to upgrade them because the importation of fuel provides a vehicle by which money from the state coffers can be transferred to individuals.  These scams can be complex, but often they are no more sophisticated than mis-stating the cargo on a bill of lading.  An importer exaggerates what he has brought in on the paperwork, collects the subsidy from the government, and that paid on the fictional volume is pure profit.  Nice work if you can get it, and sadly for Nigeria’s finances it looks as though an awful lot of people can.  It isn’t just one or two individuals getting in on the action here, it is likely to be hundreds of departments, authorities, or plain criminal gangs and thousands of individuals benefit.  At a cost to 170m Nigerians, of course.

But that’s not all.

Nigerians are heavy users of fuel, not just for cars but to power generators that many households and businesses use to cope with the country’s erratic electricity supply.

The other thing the BBC does not tell us is that successive Nigerian governments, or at least the individuals that comprise them, have deliberately let the country’s power stations slip into disrepair and failed to upgrade them (do you see a pattern here?) because forcing the entire population to buy an (imported) generator run on imported fuel from which a hefty profit is drawn makes those same individuals very rich.  Okay, 170m ordinary Nigerians suffer as a consequence, but who are they to deny functionaries with handy family connections the opportunity to cruise the streets of Lagos in a Porsche Cayenne?

Nigeria’s two main labour organisations, the Trades Union Congress and the Nigerian Labour Congress, issued a joint statement condemning the move.

“We alert the populace to begin immediate mobilisation towards the D-Day for the commencement of strikes, street demonstrations and mass protests across the country,” the statement said.

“This promises to be a long drawn battle; we know it is beginning, but we do not know its end or when it will end.”

“We are confident the Nigerian people will triumph,” it said.

No, I am quite confident that whatever happens the Nigerian people will get shafted, as usual.  Now subsidising a staple product to keep a population happy is a stupid policy, be it for petrol, bread, rice, domestic gas, or anything else.  It distorts the market, generates perverse incentives, is inefficient, and costs the government an increasing amount each year which eventually becomes unaffordable.  Then when they try to remove the subsidy, they’re faced with a revolution.  It was the removal of bread subsidies in Egypt and elsewhere that was partly responsible for the Arab Spring in 2011.  What starts off as a bung to keep a population content soon becomes a permanent entitlement, and too few of the recipients are comfortable enough around the pages of an economics textbook to understand that it was a rotten idea from the beginning.

But I can see the Unions’ point here, even though I believe their concern for the common Nigerian is about as sincere as that professed by Nigeria’s politicians, or politicians of any nationality for that matter.  Far too many of Nigeria’s multiple layers of government are run for the benefit of the individuals which comprise them, and as a result – or perhaps as part of the same disease? – the rest of the country expects their share of the loot as well.  Thus any policy, initiative, project, or scam which transfers government resources into the pockets of individuals is seen as fair game by all, and the objective is to maximise the stream of revenues or benefits which flows in your direction.  The idea that government revenues are a limited resource to be divided carefully amongst competing interests and spent wisely for the good of the whole country is as alien to Nigeria as okadas are to Oslo.

The truth is that the ordinary Nigerian is going to be clobbered by the inevitable jump in fuel prices, whilst the myriad other scams and fraudulent schemes perpertuated by those in power continue unabated.  Even though the Nigerian government is doing the right thing in removing the subsidy, it needs to come as part of a package of far more serious reforms.  Otherwise, the people, fired up and driven on by the Unions, are not going to be a happy bunch.

This could well get serious.