Political Economy of Informal Oil-Economy in Niger Delta Region of Nigeria: The Case of Artisanal Refineries

Abstract

Militancy in the oil-rich Niger Delta has hindered Nigeria's socio-economic development and political stability and created conditions for the emergence of an informal oil economy which altered the existing social order in the area. This has increased instability, environmental devastation and disrupted social hierarchy in the area. The study objective was to establish the nexus between informal oil economy and the growth of artisanal refinery and provide evidence of social class formation. The political economy approach was utilized to explain capitalist relations, resource extraction and class conflict in the area. It identified the background of the informal oil economy and its metamorphosis from agitation for socio-economic justice to political economy construct. The study used the historical/descriptive research method with a sample population of 450 individuals drawn from the study population comprising the three states in the Niger Delta. The study relied on primary and secondary data derived from questionnaires and text documents which were analyzed using qualitative and quantitative data analysis methods. The study revealed the relationship between artisanal oil refining driven by the wealth accumulated through informal oil economy activities. The study concluded that there is a nexus between the artisanal oil refining and environmental devastation in Niger Delta. It also identified artisanal oil refining and crude oil theft as the main driving forces of this economy. The study recommended the need to engage oil-bearing communities directly in the formal oil economy and design a bottom-top development blueprint for the area.