LAGOS, Nigeria – Militant attacks on oil installations and the threat of a nationwide strike drove Nigeria’s petroleum production and its naira currency to new lows Tuesday.
The naira fell to 350 to the dollar on the parallel market, against an official rate of 199, amid reports and denials that President Muhammadu Buhari’s government plans an imminent devaluation, bowing to demands of the International Monetary Fund in exchange for soft loans.
Nigeria’s oil output dropped to 1.4 million barrels a day, Oil Minister Ibe Kachikwu said Monday, endangering a budget based on production of 2.2 million barrels. The slump means Angola is now Africa’s biggest oil producer, with a steady production of nearly 1.8 million barrels daily, according to the Organization of Petroleum Exporting Countries.
Nigeria’s National Labour Congress and the Trade Union Congress, which say they represent 6.5 million workers, and some civic organizations called for a strike Wednesday to protest a 70 per cent increase in gasoline prices, prompted by the removal of a government subsidy on gas and shortages of foreign currency. Nigeria is dependent on imports with oil accounting for 70 per cent of government revenue.
The crisis is dividing labour leaders on religious and ethnic lines. Those from the mainly Muslim north, like Buhari, are against the strike while Christians who dominate the oil-producing south are urging citizens to “Occupy Nigeria!”
Unions representing oil and electricity workers, as well as pilots, rejected the strike call even before the National Industrial Court issued a restraining order Tuesday pending a hearing on the justice minister’s request for the court to rule whether the strike is legal.
“I don’t want people to be subjected to hardship,” Judge Babatunde Adejumo said. “There will be scarcity of food, people may die, students will engage in all sorts of activities.”
Massive protests forced the previous government to shelve plans to do away with a fuel subsidy in 2012, when oil cost more than $100 a barrel. Today it is around $40, a price raised in part by Nigerian cuts in output.
Prices of food and electrical goods have doubled while tens of thousands of workers have not been paid in months. Many angry Nigerians say the government could not have chosen a worse time to drop the fuel subsidy, though shortages forced people to pay double the fixed price anyway.
Despite the country’s wealth, some 70 per cent of Nigerians live below the poverty line, according to the United Nations.
Buhari took over a year ago from President Goodluck Jonathan, whose government is accused of looting billions of dollars from state coffers.
Militants in the Niger Delta have resumed attacks and forced oil majors to evacuate some workers. There are reports that the new group Niger Delta Avengers is sponsored by politicians in the south, where Jonathan is from, to sabotage Buhari. The president has deployed thousands of troops to the area, where the Avengers are demanding a greater share of oil wealth and protesting cuts to a 2009 amnesty program that paid 30,000 militants to guard installations they once attacked.