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Nigeria risk: Security risk
[June 14, 2006]

Nigeria risk: Security risk


(RiskWire Via Thomson Dialog NewsEdge) COUNTRY BRIEFING

FROM THE ECONOMIST INTELLIGENCE UNIT

RISK RATINGSCurrentCurrentPreviousPreviousRatingScoreRatingScoreOverall assessmentD68D68Security riskD75D75Note: E=most risky; 100=most risky.SUMMARY

Nigeria is an insecure environment for commercial operations. Security risk arises on three levels. The first comes from the high level of violent crime. This can be simple armed robbery (especially of mobile phones), but can also involve car jacking and violent attacks. The risk is especially common when travelling between major cities. Second, companies can be subjected to direct attack or blackmail. This occurs overwhelmingly in the oil producing states and is directed at multinational oil companies, where facilities can be vandalised and staff kidnapped. Third, incidences of inter-communal violence have risen since the return to civilian rule. While foreigners are not usually the direct object of attack in such cases, incidents can quickly spiral out of control and engulf bystanders. In a recent government survey, 80% of companies cited the lack of security for their staff and property as a serious constraint on business.

SCENARIOS

Oil firms suffer kidnapping of staff and vandalism against premises (High Risk)


Kidnapping of staff and vandalism against premises and oil producing infrastructure is commonplace in Delta, Rivers and Bayelsa states (the heart of so-called Delta region), which are the centre of Nigerias onshore oil industry. Shell estimates that around 50-70 members of staff are kidnapped every year. Although most are usually released unharmed once a ransom is paid or concessions agreed with the local community, the experience may be traumatic and employers should consider training staff on how best to cope with being abducted. Although expatriates in Nigeria have traditionally only been the target of kidnappings in the Niger Delta, and to date have been released without harm, the shooting dead of two US citizens working for ChevronTexaco in an ambush in the Delta in April 2004 was a worrying development. Since then, the incident has not been repeated (bar what seems to be an isolated shooting of an expatriate worker in Port Harcourt in May 2006 which seems to have been a personal vendetta), and it seems increasingly likely that it was just a one-off, but if tensions were to rise markedly a repeat cannot be ruled out. Vandalism of company equipment and infrastructure is also common which can have important safety implications.

Unrest in the Delta region persists (High Risk)

There has been a major upsurge in clashes between various gangs and ethnic groups in the crucial oil producing Delta region following the disputed April 2003 elections and this now seems set to increase sharply in the run up to the April 2007 elections. Although many gangs claim to be fighting for the rights of the poor and indigenous inhabitants in the region, many are little more than criminal groups. Inter-gang fighting has led to an increase in violent clashes, which often spill over into wider violence. The situation has been compounded by the high global oil price which has made stealing oil more lucrative and because the government has increased its battle against corruption in the Delta region which has raised the political stakes. The situation has also become more worrying in the last year with the recent emergence of a new group, the Movement for the Emancipation of the Niger Delta (MEND). This seems to be more organised than many previous groups, as shown by its ability to detonate a number of car bombs and the kidnapping of larger groups of expatriate workers. Shell, one of the leading oil companies working in the region, has already announced plans to significantly step up security provision to its workers in the region for the coming year and any company operating in the region, or in Port Harcourt would be well advised to think carefully about security issues. Another side of the growing lawlessness is the problem of piracy in Nigerian waters. Most attacks on vessels are in the area around the mouth of the Niger river and are related to the illegal trade in oil. Any firm working in the region, or just offshore, is strongly advised to ensure that its security policy assumes the worst if a boat is missing for a prolonged period.

Firms see premises and equipment stolen or vandalised (High Risk)

Vandalism of company equipment and infrastructure is common throughout the country and will continue to have an adverse impact on the cost of operations. Most business premises are heavily fenced (with considerable barbed wire at a minimum on high fences) and most companies either employ a security company to guard premises, or directly employ their own security guards. They also carry high stock levels of equipment to ensure that damaged equipment can be quickly repaired and operations re-started (this is especially the case if the goods need to be imported, with all the associated delays at the ports).

Individuals are victims of armed robbery (High Risk)

Although the government has increased spending on the police in recent years, the police force is still very poorly paid, inefficient and highly corrupt. Meanwhile, armed robbery is a problem, especially on most major roads in the country (some roads are more notorious than others). Cars are either stopped by measures which cause a tyre puncture (nails in orange skins left in the road, for example) or by roadblocks (criminal groups often wear official police or army uniforms to dupe drivers into stopping). Employing an experienced driver able to spot suspicious roadblocks and able to tell whether a puncture is likely to have been caused by sabotage is advisable. Mobile phone theft is widespread and you are advised to simply give over the phone if confronted. Being caught in the police crossfire at an incident is also a concern. A recent Human Rights Watch report estimated that 3,100 people where killed in gunfights with the police in 2003. As if to emphasise the potential dangers, a dispute between a police and army officer in Lagos in October 2005, led to a running gunfight and three civilian deaths.

BACKGROUND

(Background material is updated twice yearly. Last update: June 12th, 2006)

Armed conflict

It is estimated that at least 50,000 people have been killed in various incidents of ethnic, religious and communal violence since the return to civilian rule in May 1999. This gives Nigeria a casualty rate from internal conflict that is one of the highest in the world--and the country is not fighting a civil war. Although most of the conflicts have been between civilians, there have also been some serious clashes between security forces and civilians and militants.

Unrest and kidnapping

Probably the most serious challenge to the governments authority has come from rebellious groups in the oil-producing Niger Delta. Since the mid-1990s a number of militant groups, angry at their peoples political alienation and economic exploitation, have waged an increasingly violent struggle against the state and multinational oil companies operating in the area. The most high profile of these is probably the Niger Delta Peoples Volunteer Force. Fighting between the various groups and with the Nigerian military has led to the deaths of thousands of people. In 2004, with the fighting between various gangs escalating, the government substantially increased its military presence in the region. In addition, it has sought to agree ceasefires between the various groups and with the government itself. Whether these will hold for a prolonged period remains unclear, given the complex nature of conflict in the region and the lack of progress with promoting economic development. To date, none of the groups organising the protests have coalesced into a coherent political force.

In addition to the fighting between groups, oil facilities and their personnel have been targeted by militant youths from disgruntled communities trying to squeeze money, jobs and social amenities from wealthy, though vulnerable, oil multi-nationals. An increasing number of oil workers have been kidnapped, including foreigners who work in isolated areas in the difficult-to-police swampy terrain of the Niger Delta. Oil workers are usually seized in large groups from isolated locations, held for short periods and freed unharmed. In the case of Shell, the number of community-related disruptions (which include the closure of production facilities, seizure of assets, blockade of access and disruption of drilling activities) increased by 10% to 176 in 2004, compared with 2003. Armed gangs also stole crude oil from the company, although the number of such incidents fell by 20%, to 71, in 2004.

In other parts of the south, ethnic nationalist groups have sprung up in recent years, reflecting a growing feeling of frustration with central government and the political domination of the numerically superior north. The authorities have been unable to contain militant nationalist groups, such as the Yoruba separatist movement, the Oodua Peoples Congress, the Ijaw Egbesu in the Niger Delta, the Bakassi Boys in the south-east and the Arewa Peoples Congress in the north, all of whom are linked to ethnic disturbances and anti-government activities. Many of these groups are well armed. Although the aggression of Nigerias militant groups is usually directed at the failures of post-independence nation-building, outbreaks of ethnic-religious fighting, particularly in cities, could increase the sense of insecurity for foreign residents.

The worst fighting of ethno-religious origin, that between mainly Christian local farmers and predominantly Muslim settler herdsmen, has taken place in the middle-belt Plateau State, where, according to an official report, nearly 54,000 people died in sectarian clashes between September 2001 and May 2004. Acts of violence involving Christians and Muslims also followed the introduction of Sharia (Islamic law) in 12 predominantly Muslim states in the north. In February and May 2000 more than 2,000 people were reported killed in clashes in Kaduna over plans to introduce Sharia in a state with a large Christian minority. This was the worst incident of religious violence since more than 4,000 people were killed in the uprising of the Maitatsine cult in Kano in 1980. In November 2002 more than 200 people died in religious riots in Kaduna sparked by the aborted Miss World contest in the capital, Abuja. In May 2004, a state of emergency was imposed in Plateau State to quell ethnic-religious fighting that had caused the deaths of at least 1,000 people. In December 2003 and September 2004 security forces clashed with self-styled Taliban Islamic militants who attacked police stations in the northern states of Borno and Yobe; these groups have sought to exploit local grassroots discontent with the perceived failings of the secular federal government.

Violent crime

Violent robbery has been a major problem in Nigeria since the emerging oil boom of the 1970s raised expectations of quick wealth among different classes of the population. Over the years the criminals have become increasingly brutal, better armed, audacious and contemptuous of Nigerias ill-equipped police force, which has been ineffective in stemming the crime wave. Rich and poor communities in urban areas have been terrorised by armed robbers, and households and companies have had to install elaborate security systems to protect themselves against attacks. The police have intensified their campaign against violent crime. According to the crime statistics of the Lagos State Police Command, 287 armed robbers were killed in 2002 in Nigerias commercial capital, compared with 257 in 2001. The statistics showed that 34 civilians were killed in 2002 compared with 70 in 2001, whereas 45policemen died in shoot-outs with armed bandits, up from 16 in 2001. There is roughly one policeman to every 1,300 citizens in Nigeria, compared with the UN-recommended ratio of 1:400. However, the shortage of resources has not been the only constraint on the fight against crime: some police and soldiers have participated in crime themselves, including setting up illegal roadblocks.

Organised crime

Nigeria has in recent years become synonymous with organised drug-trafficking groups, international prostitution networks, money-laundering and 419 scams. (419 scams involve unsolicited letters being sent to individuals to ask for the use of a bank account and for money to be sent to Nigeria to help to release funds, of which a percentage will then be paid to the person who has helped to release the funds. The person receives nothing. The swindle is named after the relevant section of the Nigerian penal code.) Although each is a problem in its own right, together they do not pose a specific threat to conducting business in Nigeria. The civilian government is committed to tackling all these problems--in November 2003 the president, Olusegun Obasanjo, inaugurated a committee headed by his national security adviser to fight 419 internet fraud--but it is constrained by lack of resources and other more pressing problems. Progress is likely to be slow.

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