There are increasing signs of emerging unease in Nigeria’s oil producing Niger Delta region which could impact production and peace. On 14 November the traditional Nembe Kingdom chiefs from Bayelsa State’s Nembe Local Government Area (LGA) demanded the revocation of the operating license of the indigenous Aiteo Group. They accuse Aiteo of neglecting the needs of the community since it took over the wells from Shell Petroleum Development Corporation (SPDEC) five years ago. 

Meanwhile artisanal gold mining in the northwest’s Zamfara State is another issue increasing tensions in the Niger Delta. The Pan Niger Delta Forum (PANDEF) — which claims to represent the interest of the region — has accused the Federal Government of double standards for allowing the Zamfara State government to sell gold bars mined in the state but not allowing the Niger Delta people to sell crude oil produced in their region. PANDEF called on the government to practice fiscal federalism and allow states to mine solid and other minerals in their region while they pay taxes to the Federal Government. It said that allowing Zamfara to mine gold is a breach of the constitution under which only the Federal Government can control mineral resources.

Gold and oil – local control over local resources

Under a scheme introduced early this year the state government has set up buying points at which artisanal miners — most of whom were previously mining gold illegally — are now allowed to sell the gold to government buyers who then refine it and sell it to the Central Bank of Nigeria (CBN). Last month the government sold ₦5,000 million (US$13.14 million) worth of gold bars to the CBN which has raised questions about the legality of the sale. 

Critics questioned the sale and noted that all minerals already belong to the federation and that any sale should not accrue to the state but should be paid into the Federation Account and then shared equally in the same way that oil revenues are shared across the country. Some from the Niger Delta have also argued that the illegal crude refiners in the region should get the same treatment as Zamfara’s artisanal miners.

The Federal Government thought that formalising illegal artisanal gold mining was a good idea, but it has raised serious constitutional questions that need to be urgently answered or it will increase the tensions in the Niger Delta. Many see it as another illustration of the perception that, while the Niger Delta’s oil is shared nationally, every other region keeps its own resources. The government has argued that, like private sector firms, the Niger Delta states can bid for licenses to produce and sell the oil. 

This excerpt is taken from Nigeria Politics & Security, our weekly intelligence report on Nigeria. Click here to receive a free sample copy.