1) 'Bunkering' refers to the illegal practice in Nigeria of tapping into oil pipelines to steal oil, with estimates that 10% of Nigeria's annual oil production is lost this way. 2) Nigeria underwent economic reforms between 2007-2015 focused on fiscal discipline, privatization, reducing fuel subsidies, and anti-corruption efforts. 3) Key drivers of reform included Obasanjo's election, years of growth, high oil prices, and business interests of political elites wanting to dismantle state enterprises. However, challenges remain in strengthening accountability and generating wider benefits from reforms.

1. Image: VOA News
‘BUNKERING’ SOCIAL & ECONOMIC CHANGE
Political Economy of Nigeria’s Reform

2. ‘Bunkering’ is a local practice in Nigeria employed to steal oil from established pipelines by
tapping it along its course in Niger delta. Chatham House estimates that about 10% of
Nigeria’s annual oil production is lost to bunkering.
The information here is based on Nigeria The Political Economy of Reform: Strengthening the
incentives for economic growth by Pat Utomi, Alex Duncan and Gareth Williams, The Policy
Practice, UK

4. 170 Million people
50% Urban
7.2% growth (2012)

5. Giant of Africa
Capital: Abuja ; Largest City: Lagos
Former British colony
Independence – 1960
Oil discovered – 1956
Federal structure
36 States
746 LGAs

6. Nigeria today
- civil war for oil revenues
- environmental degradation by
- oil industry
- political assertion by ethnic
groups
- completely oil dependent (with no
refining capacity)
- all other sectors of economy in
crisis – fall out effects like piracy &
financial fraud

7. Resource curse?
Indonesia vs Nigera – both strike oil around the same time but
stand wide apart today – Policy choices & Institutional performance

8. Nigeria’s dependence on trade (oil?)
Nigera vs India – on Trade as a % of GDP

9. REFORMS
Analyze factors
that drove reform
How to sustain
these reforms and
improve
1. Greater fiscal discipline and transparency
FRA (2007); NEITI (2007)
2. Privatization
3. Lower fuel subsidies
4. Banking consolidation
5. Anticorruption
EFCC; ICP Commissions
1.
2.
3.
4.
Obasanjo’s election
7 years of continuous growth
High oil prices
Business interests of political elite – dismantled
public enterprises & patronage networks
5. External factors – OECD, Multilateral agencies
1.
2.
3.
4.
5.
Accelerated speed in passing legislations
Strengthening accountability systems
Generating wider benefits from reforms
Extending reforms from Fed to State & LGA
Strengthening technical capabilities

10. Political Economy Context
Ethnic groups – Oil dominated industry – Nollywood 2nd largest
employer

11. Akintunde Akinleye/REUTERS
A man carries refined oil in buckets at an illegal oil refinery site near river Nun in Nigeria's oil
state of Bayelsa.

12. Features of Nigerian Political Economy
INCENTIVES
WEAK STATE – SOCIETY
RELATIONSHIP
VALUE SYSTEM
EASY EXIT OPTIONS
(for businesses & elites)
PERSONALIZED POLICY PROCESS
Striking feature –
“recursive” nature of Nigeria’s political economy

13. Discussion