Militant groups strain Nigeria's emasculated debt finance

by Trust Matsilele 0

Nigeria’s Niger Delta State troubles are far from over with new militant groups erupting almost on a monthly basis with new demands.

Speaking to CNBC Africa, Dolapo Oni, Head, Energy Research, Ecobank, said there was still no end in sight to the oil production shut-ins in Nigeria as militants continue to disrupt activities at major oil terminals in the Niger Delta.

“The most recent attack is the Mobil platform where we saw them trying to ramp up production but militants last Thursday blocked access to the operation,” he said. Oni added production was taking place at a very minimal level.

He said the only way to deal with insurgency was hiring international security personnel, an expensive exercise most companies could not afford.

“The costs for security are very unbearable so the companies are relying on the government. [Due to the disruptions], we have lost about 830 million barrels of oil a day as of mid-May, which means there will be a revenue impact on forex and government revenue,” he said.

“It’s almost impossible for the Nigerian government to cover with surveillance the entire Niger Delta area as attacks came from anywhere.”

Analysts warn that this will affect the country’s deficit financing as Africa’s largest economy battles to meet budgetary needs.

Analysts say the attacks are also difficult to deal with because there is a resurgence of militant groups in the Niger Delta and this is being spurred partly due to youth unemployment.

Some of the groups that have been operating in the region include; Niger Delta People’s Volunteer Force, Niger Delta Vigilante, Movement for the Emancipation of the Niger Delta, Niger Delta Liberation Front and Niger Delta Avengers.

Niger Delta is an oil-rich region in southern Nigeria inhabited by more than 31 million people.