The decision by the Nigerian military to increase the military presence in the Niger Delta is symptomatic consequence that the region is still unsafe for oil production.
Last month, the Niger Delta Avengers, a front line militant group had announced the cessation of hostilities in order for it to pursue negotiation with the government.
Its decision has not tapered attacks on oil installations which is hurting Nigeria’s oil production, the 70% source of government revenue.
The the Nigerian National Petroleum Corporation, NNPC has already confirmed our worst fear that “If the current situation remains unchecked, it could lead to the crippling of the corporation and the nation’s oil and gas sector, the mainstay of the Nigerian economy,”
Falling oil prices aside, the disruption of oil production has already shattered government revenue. In July 2016, the Federation Account Allocation Committee, FAAC shared NGN630,7 billion to all states, however, in July of the year, revenue shared to states was just NGN145,3 billion. This is a 78% drop in revenue year on year.
Many states are also tied to local and international debt repayment agreements that has further depleted their spending power.
The government must think beyond the military approach to solving the Niger Delta problem. Until Nigeria’s economy is properly diversified, oil would still play a major role in government revenue.