AID or TRADE – a shush case of the Netherlands and Nigeria
With economic growth as possibly the strongest instrument against underdevelopment, economic theory tells us that trade should contribute directly towards the reduction of poverty, especially in developing countries. Furthermore, apart from contributing to growth and providing opportunities, trade increases the returns to the most abundant factor of production, which in most developing countries inclines to be low-skilled labour.
However, the ability of the poor to participate in the gains from trade depends on several factors, including looking at how well the poor are equipped (in terms of human, economic and financial assets) to take advantage of the new job opportunities resulting from trade or aid.
This is evident in many low-income countries like Nigeria which is still confronted by major obstacles in expanding and diversifying their trade, and trade reform and liberalisation have not always delivered the expected benefits in terms of trade expansion, growth, and poverty reduction to mention the least.
It’s against this backdrop that I bring this consciousness among the Dutch and Nigerian partner countries of the potential re-positioning of their current unilateral trade imbalances. As such, revisiting the challenges of the past three decades, working towards addressing those challenges and developing fresh ways for a “more and better” bilateral trade and or aid for trade (AfT).
With regard to inter-continental trade relations, Nigeria is the Netherlands’ chief trading partner in Africa. And the Netherlands’ is the largest European investor in Nigeria. No doubt, both countries have endured major trading relations for nearly half a century.
Some major economic ties include Dutch Oil and Gas companies led by koninklijke SHELL are the foremost Oil and Gas extraction company in Nigeria since 1956 when the company discovered oil reserves in Nigeria’s Niger-Delta region. Other Dutch companies include HEINEKEN who owns and operates the Nigerian national beer market and breweries, UNILEVER (Lever Brothers) a conglomerate manufacturer of consumer and cosmetic products and koninklijke KLM are also very successful in Nigeria.
More so, some medium sized specialised Dutch firms are also active in the energy, agricultural trade, and service sectors.
The Netherlands’ main import from Nigeria is crude Oil and natural Gas.
With over 170 million inhabitants, the Nigerian economy, though Africa’s biggest, is highly dependent on oil and lately agriculture. Lagos state, the business capital is home to West Africa’s biggest port. More so, the Nigeria’s economy is dependent on sectors that are either climate sensitive or contribute to climate change such as agriculture, forestry, fisheries and oil and gas which together employ up to 70% of the formal sector workforce, and additionally a huge informal sector. The unemployment rate has climbed steadily from 21% in 2010 to 24% in 2011 and 37% in 2013. Presently public finances and balance of payments remain vulnerable to a fall in oil prices.
Nigeria’s environment is under increasing threat from natural disasters, such as drought and floods, which in recent years have ravaged the livelihoods of farmers and threatened food security, and air and water pollution, and low adaptive capacity to climate change impacts.
Steady pollution from oil exploration activities and gas flaring in the Niger Delta remain concerns to the region and country.
As such this national worry dates back to the exploration activities of SHELL Petroleum Development Company (SPDC) and its joint-venture partners particularly the Nigerian National Petroleum Corporation in the 90’s which have earned them billions of dollars from the oil extracted from the lands in the Niger Delta.
One of the worst polluted communities is the Ogoni land. The Ogoni however complained that they have not seen adequate benefits; rather the oil has cost them dearly in terms of a deteriorating environment and underdevelopment. The Ogoni’s then and mobilized a successful national and international campaign against the Nigerian government and Shell. Despite the non-violent nature of the campaign, military repression resulted in thousands of Ogoni killed, raped, beaten, detained and exiled and the main leaders executed. Under pressure from the Ogoni, Shell was forced to pull out from Ogoniland in 1993.
This period witnessed a robust co-operation between the oil companies and the then military dictatorship of which was an issue that the Ogoni felt strongly about. From their point of view, two harmful forces were combining to pursue their own interests. Since the Nigerian military dictatorship also depended for survival on the availability of oil money, its violence is directed at oil-producing areas such as Ogoni. The military dictatorship holds down oil-producing communities such as Ogoni by military decrees and the use of physical violence so that SHELL can wage its ecological war without hindrance and so produce the oil and petrodollars as well as the international and diplomatic support upon which the military dictatorship depends. This international diplomatic support was serviced by the Dutch Labour Party (Partij van de Arbeid (PvdA)) under the safe hands of old minister president Wim Kok who is presently serving on the Board of Shell.
Quoted as some of the best crude oil in the world by experts, Shell produces half of Nigeria’s total daily production and Shell considers their Nigeria operations to be ‘arguably Shell’s largest and most complex exploration and production venture’ outside North America.
Despite these experiences, the company believes its ‘most effective contribution to Nigeria is through the taxes and royalties they pay to the federal government of Nigeria.
But the public thought otherwise, as the oil giant Shell has agreed to pay different compensations arising from various settlements, some out of courts and some from local and international courts. Such settlement of legal actions includes €56m for excessive oil spills from the company’s failed facilities, which had caused a damaging effect on the Ogoni environment and its people and $15.5m in settlement of a legal action in which it was accused of having collaborated in the execution of the writer Ken Saro-Wiwa and eight other leaders of the Ogoni tribe of southern Nigeria.
These settlements though marked as one of the largest payouts agreed by a multinational corporation charged with human rights violations is an attestation of the true nature of exploration activities by Shell
Shells’ poor environmental behaviour in the Niger Delta are criminal with no respect for humanity or common sense operational guidelines, which is why they must be made to comply with the international best practice.
Today, it is no secret that Shells’ continuous activities with gas flaring in Nigeria have contributed to the global climate change.
Compensation aside, what is most disturbing now is the clean-up of the Ogoni environment as stipulated in the United Nations Environmental Programme (UNEP) report; It could take 25-30 years to bring contaminated drinking water, land, creeks and important ecosystems such as mangroves “to full, productive health”. Furthermore, UNEP estimated that the first five year period of the clean-up alone would require $1 billion. As it is, if the region is to be genuinely cleaned up, Shell also needs to act. As at of late, the company’s’ publicity machine has been claiming to have improved its response to spills as well as doing a massive clean-up in the wake of criticism by UNEP’s scientists. However, in 2016, Amnesty International and the Centre for the Environment, Human Rights and Development, which is based in local in Port Harcourt, discovered that the company had made false claims about its clean-up of spills in four locations in Ogoniland.
History repeating? … maybe or maybe not!… the current Nigerian and the Netherlands trade and aid or aid for trade agenda is again in a safe pair of PvdA hands of minister L. Ploumen van Buitenlandse Handel en Ontwikkelingssamenwerking . Ploumen is an advocate of Aid for trade (Aft), she is in the forefront of operationalisation of the Aid for Trade Initiative and believes that trade and development landscape has evolved considerably. And Aft has been designed as a tool to interlock aid and trade policies in pursuit of raising living standards and reducing poverty.
Although trade-related assistance has been present in the last decade, With regard to Development relationship the Netherlands does not have a structural development cooperation relationship with Nigeria only unilateral and explicit trade objectives around Oil and Gas extraction.
Not even basic aid programmes with respect to the poor whom have been displaced by the pollution or even AfT programmes like fish farming that are aimed at engaging the poor directly in trade-related activities.
In 2014, Lilianne Ploumen on a three-day business visit to Nigeria with a trade delegation made up of 35 Dutch companies suggested that though Nigerian economy is Africa’s biggest the Nigerian government look programmes to diversify into manufacturing and agriculture. In her words..
‘Other industries need to be built up to create growth that benefits everyone. The companies in our trade delegation can contribute to this in the fields of agri-food, health care, and maritime logistics. We’ve been able to open doors and make promising contacts here. This means opportunities for Dutch companies in Africa’s biggest economy.’
This statement denotes the insensitiveness to the current socio-economic situation on the trade and development minister, all she saw was an oil-rich Nigeria hobbled by an inadequate power supply, lack of infrastructure, inefficient administrative systems, insecurity and pervasive corruption; ‘a visionless nation’ to sum it up.
For the minister, this was the perfect environment for Dutch Businesses to plug into the ruins and make a profit. If I guess correct, her underlying rationale must have been to replicate the successes of Dutch companies in Nigeria in the 80’s and 90’s in this news age era since the prevailing underdevelopment factors are roughly the same.
Her declaration is neo-colonialist and selfish. It will only serve primarily a one-sided export-trade interest.
The strange reality is that; in the last three decades when it amounts to trade or aid policies with Nigeria and the Netherlands the PvdA has the final pronouncement on both sides. In other words the strategies are predominantly designed by Koninklijke SHELL.
In retrospect, Nigeria is a British colony, the Dutch collective business gains from Nigeria far exceed the British. In the same vein, Nigeria and the Netherlands’ trade activities far exceed, the Dutch old colonies like Indonesia, Aruba, Surinam and St, Martin even all put together.
As someone whom is caught in the middle and has lived through these changes, I expected the development minister be more constructive and to look closely at previous PvdA /SHELL activities in the Niger Delta region and pedal softly by introducing the Aid for Trade (AfT) initiatives with proven Dutch successes.
A good example of these initiatives is the Indonesische en Nederlandse LOGO South program in Water management and Governance perpetuated by Vereniging Nederlandse Gemeenten (VNG) International.
With these open facts at our finger tips and no constructive changes expected in the short term, to say the least; I am leading a call on all Nigerians, their descendants and well-wishers of the Nigerian cause living in the Netherlands whom are eligible to vote in the March 2017 Dutch general elections…’’Do NOT’ vote for the Dutch Labour Party (Partij van de Arbeid (PvdA)).
Dr. Paul Oviawe firstname.lastname@example.org 31.650492753
Paul Oviawe is born in Warri, Niger-Delta region of Nigeria, he lives in the Netherlands and the proprietor of the International College of Commerce –ICC www.icc-edu.nl based in Amsterdam, the Netherlands