SUSTAINABLE ENVIRONMENT AND ECONOMIC GROWTH IN NIGERIA

CHAPTER ONE

1.1    INTRODUCTION

Natural resources are an important material basis for a stable national economy and social development. They can be divided into two categories: the exhaustible, such as minerals, and the inexhaustible, such as forests and grasslands. With industrialization and urbanization, mankind's great demand for natural resources and their large-scale exploitation and consumption has resulted in the weakening, deterioration and exhaustion of these resources. One difficult task faced by all countries is to guarantee the lasting utilization of natural resources at the lowest possible environmental cost while still assuring economic and social development.

The term sustainable development has become the buzzword of the 90s. It has been broadly adopted by national and international leaders, industry groups, academics, NGOs, the media, environmental consultants among others as the guiding principle of development. However, there is a huge gap when translating sustainable development from an abstract goal into how it can be implemented and realized in the complex arena of real­-world problems and situations, especially in a developing country like Nigeria. Sustainable development involvesmeeting the needs of the present without compromising the ability of future generations to meet their needs. In short, sustainable development is a road map that guides us on our journey to become a meaningful part of the solution to environmental challenges we face.

The growth of oil operations has no doubt resulted in an unprecedented rate of economic growth and development in most countries of the world. The industry has produced tile needed oil to power factories, run vehicles, ships, aircrafts and railways, to heat and light homes and offices, to lubricate machinery and to provide bitumen to surface roads, it also provides hundreds of chemicals that are useful in agricultural production, industrial activities and the production of a large number of foods that needed on daily basis.

Not only is oil essential to modern life but it is also deeply rooted in tile very hearth of politics and the special interests of a few powerful people. As tile Organization of Petroleum Exporting Countries (OPEC) recently stated, oil is not an ordinary product but "a strategic asset." Oil has been used between nations for political leverage, through embargoes and sanctions. In addition, oil wells, refineries, and tankers have been the target of terrorist attacks often causing terrible damage to the environment.

Historical records tell of the fact the Plundering of African natural resources fuelled the industrial revolution of Europe. Energy demands in the 20th century brought on the search for crude oil wells worldwide and Nigeria was not left out. From 1956, when the first oil well %Vas successfully drilled in Nigeria, scrambling for Nigeria's resources by the Europeans took on a new dimension.

The oil boom era of the 1970s saw the downward plunge of the agricultural sector. There was a complete paradigm shift from the nation's then agrarian culture to oil driven culture, moving ultimately from renewable natural resources to un­-renewable resource trade. From the 70s through to the early 80s we witnessed a drastic drop in local food production. Importation rates of foods and finished products increased dramatically and our foreign debt escalated rapidly, bringing the economy to a crisis. During this period, from 1958 to 1983, we have recorded $101 billion in estimated oil revenue earnings.

In a country where agricultural accounts for about 40% of GDP and oil production and exports (exporting over 2 million barrels/day) ranks 6 worldwide, government's management structure and environmental action plan is essential to maintain balance and reduce abuse. The question here is what has been the role of the Nigerian government in the management of its natural resources? To attempt an answer, one can say that even though the legal framework and institutional structure for natural resources management is firmly established, it still lacks the strength and drive which natural resource management deserves. Management structure at best is fragmentary, and there exists similar government agencies carrying out the same functions, often times leading to conflict between government agencies and stakeholders. Oil was discovered in Nigeria in 1956 at Olobiri in the Niger Delta after half a century of exploration. The discovery was made by Shell-BP, at the time sole concessionaire. Nigeria joined the ranks of oil producers in 1958 when its first oil field came on stream producing 5,100 bpd. After 1960, exploration rights in onshore and offshore areas adjoining the Niger Delta were extended to other foreign companies. In 1965, the EA field as discovered by Shell in shallow water Southeast of Warri.

In 1970, the end of the Biafran war coincided with the rise in the world oil price, and Nigeria was able to reap instant riches from its oil production. Nigeria joined the Organization of Petroleum Exporting Companies (OPEC) in 1971 and established the Nigerian National' Petroleum Companies (NNPC) in 1977; a state owned and controlled company, which is a major player in both the upstream and downstream sectors.

The role of the Nigerian Government in the oil industry has, over time, evolved from regulatory and supervisory nature to direct involvement in oil exploration and development. Government's initial interest was mainly in the collection, of royalties and other dues from the oil companies, and in the making of statutory laws that regulated the activities of the oil industry. The lack of direct involvement in the early days can be attributed to the relatively insignificant contribution of oil revenues played within the overall economy before the late sixties. The absence of the locally trained personnel and expertise was another factor preventing the government's direct participation oil industry activities.

By 1971, however, oil revenues had become very important to the economy. To strength and establish government control In the industry, the Nigerian National Oil Corporation (NNOC) was established" by decree in 1971 as an integrated oil company. It was also in that year that Nigeria joined the Organization of Petroleum Exporting Countries (OPEC) as the 1 1 member. It was believed that if government had snore say in running of tile oil industry, it could achieve its goals of rapid industrial and commercial development. Today, government participation stands at 55% in Shell and 60% in Chevron Texaco, Exxon Mobil, Agip, Elf and Pan Ocean.

Nigeria's latest experiment with democracy has not scientifically assuaged the grievances among ethnic communities of the Niger Delta. The democratic system inaugurated in 1999 has allowed for the election of representatives at the local, state; and national levels, and the constitution increases the share of oil revenues allotted to the communities of the Delta. President Obasanjo's government also created a Niger Delta Development Commission (NNDC) to oversee economic development in the region. Yet the restiveness of the oil producing communities has not abated, as evident in continual hostage taking of oil company employees, sabotage of petroleum facilities, and periodic clashes with government security forces.

1.2    STATEMENT OF PROBLEM

The low capacity utilization of Nigeria's state-owned refineries and petrochemicals plants in Kaduna, Port Harcourt and Warri, the sorry state of despair, neglect, and repeated vandalisation of the state-ran petroleum product pipelines and oil movement infrastructure nationwide, the collateral damage of institutionalized corruption, with the frightening emergence of a local nouveau riche oil mafia that controls, and coordinates crude oil, and refined petroleum products pipelines sabotage, and theft ("illegal bunking") nationwide, the insatiably corrupt military Task Force operatives that assist diversions of both crude oil and petroleum products, and large-scale crossborder smuggling of petroleum products, all of which are the root causes of the protracted, and seemingly intractable severe fuel crises that have bedeviled the country relentlessly, for close to a decade now, are all predictable outcomes of government involvement in the downstream sector of the Nigerian Petroleum industry, over the past quarter of a country.

The oil companies make up the largest industry in the Niger Delta region. Despite this, unemployment levels are still high, especially in the rural areas where oil and gas reserves exist. In this region exist oil well reserves (17.9 barrels) and gas wells (3.4 trillion m3),contributing about 80% of federal government revenue.

Despite this vast coastal wealth, GNI per capita is below the national average of US$280. Pollution of coastal corridor and wetlands is a recurrent disaster. Gas flaring has become a notorious pollutant of the local communities of the Delta. Oil spills and gas flaring has destroyed whole fishing communities, reducing needed fishery resources, terrestrial vegetations and compromising the health of local people in and around oil installations.

Nigeria's resources base includes a vast network of rivers, floodplains and a rich rainforest network, with vast deposits of minerals. However, about 95% of natural forest cover has been last lost to deforestation, leaving 5% contained in the Southeast region. While dams upstream are a constant headache and threat to the rich coastal biodiversity, deforestation ravages the teeming rainforest ecosystem.

1.3    THE AIM AND OBJECTIVES OF THE STUDY

The aim of this study is to examine the impact of environmental resources on sustainableeconomic development in Nigeria with particular reference to Nigeria National Petroleum Corporation (NNPC). Specifically the study will seeks to:

(a)     Find out the extent to which the activities of oil exploitation have affected the Nigeria society.

(b)    Examine the various government acts, decrees, policies and regulations on environmental protection and their participating interest in the operations of the company in the event or a successful exploration effort.

(c)     To analyze the contribution of NNPC toward the development of the Niger-Delta vis-a-vis infrastructure, education, health etc and the way and manner the wealth and resources from the region IS being distributed.

(d)    Finally, the Study aims at making suggestions and recommendations that will help in providing lasting solution to the Delta's renewable natural resources that are being exploited in unsustainable ways and also to stop hostage-taking and conflict in Niger Delta.

1.4    RESEARCH QUESTIONS

Therefore, the statement of problems is stated below by finding answers to the following questions:

a.      What are the impacts of environmental resources on sustainable economic growth in Nigeria?

b.      What are the various government acts, decrees, policies and regulations on environmental protection and their participating interest in the operations of the company in the event of a successful exploration effort?

c.      What are the contributions of NNPC toward the development of the Niger-Delta vis-a-vis infrastructure, education, health etc and the way and manner the wealth and resources from the region is being distributed.

d.      What are the suggestions and recommendations that will help in providing lasting solution to the Delta's renewable natural resources that are being exploited in unsustainable ways and also to stop hostage-taking and conflict in Niger Delta?

1.5    STATEMENT OF RESEARCH HYPOTHESES

The following are the research hypothesis for the study:

Hypothesis 1

Ho:    There is no significant relationship between environmental resources and sustainable economic growth.

H1:     There is significant relationship between environmental resources and sustainable economic growth.

Hypothesis II

Ho:     There is no significant relationship between government acts, decrees, policies and regulations on environmental protection and their participating interest in the operations of the company in the event of a successful exploration effort.

H1:     There is significant relationship between government acts, decrees, policies and regulations on environmental protection and their participating interest in the operations of the company in the event of a successful exploration effort.

Hypothesis III

Ho:     There is no significant relationship between sustainable environment and contributions of NNPC toward the development of the Niger-Delta.

H1:     There is significant relationship between sustainable environment and contributions of NNPC toward the development of the Niger-Delta.

1.6    RESEARCH METHODOLOGY

The method of data analysis that will be adopted in this study is mainly regression analysis, which shows the relationship between environmental resources/community developments strategies include; industrial development, energy development and health care services delivery.

1.7    SIGNIFICANCE OF THE STUDY

Profitability of business at the tailed end of the downstream sector would be dictated mainly by economies of scales only the big players in the petroleum product marketing sub­sector would survive. Looking at the continuing contribution of tile petroleum sector on the economy in term of output, employment generation, self-sufficient and so on, there is no doubt that effective policies or providing enabling environment for downstream sector will be strong factor determining their performance in terms of stability, profitability and satisfaction on the consumer.  This study therefore serves as an avenue for analyzing the sustainable use of petroleum sector for enhanced growth in the Nigeria economy.

1.8    SCOPE AND LIMITATION OF THE STUDY

The study examined the sustainable use of environmental resources with the particular reference to Nigeria National Petroleum Corporation. A glaring limitation of the company.

Nevertheless, the situation is brought under control by relying heavily on data collected from the website of the NNPC and petroleum companies in Nigeria. Tile researcher faced with some problem while caring out this research work such as time constrain, non availability of data, finance, logistic problems and etc.

1.9    DEFINITION OF TERMS

Natural Resources: A supply of something that a country and organization or a person has and can use especially to increase wealth.

Industrialization: The people and the activities involved in producing a particular thing, or in providing a particular service.

Urbanization: Having a lot of towns, streets, factories etc rather than countryside.

Sustainable: Involving the use of natural products and enough in a way that does not harm the environment

Economic: Is the process by which national income of output is increased Economic development: Is the process of increasing real per capita income and engineering substantial positive transformation in the various sectors of the economy.

Hostage: Act of captured person and held prisoner by a person or group, who may be injured or killed if people do not do what the group is asking. Refineries: Factory where a substance such as oil is Refined (made pure).

Oil: A form of petroleum that is used as fuel and to make parts of machines more smoothly.

Unemployment: The number of people without a job

Deforestation: The act of cutting down or burning the trees in all area.

Ecosystem: All the plants and living creatures in a particular area considered in relation to their physical environment.

Oil Exploitation: searching for oil in the ground

Infrastructure: The basic system and services that is necessary for a country or an organization to run smoothly

Education: A process of teaching, training and learning, especially in schools on colleges to improve knowledge and develop skills

Health Care: The service of providing medical care

Energy: - Ability to put effort and enthusiasm into an activity, work etc.

1.10 ORGANIZATION OF THE STUDY

This research work will be divided into five different chapters.

Chapter One: Consists of historical background of the study, introduction of the research work, statement of the problem, aims and objectives of the study, research questions, research hypothesis, research methodology, significance of the study, scope of the study, limitation of the study, definition of terms, plan of the study.

Chapter Two: Is always the literature review.

Chapter Three: Itconsists of the structural composition of the study.

Chapter four: Itconsists of research methodology, data analysis, presentation and interpretation of the results.

Chapter Five: Italso consists of summary, conclusion and recommendations, then the references.

REFERENCES

Agu,and Ewa Udu (2000) Petroleum and the Nigeria Economy New System Economic for Secondary Course. Agu, G.A. and Ewa Udu (1989) Petroleum and the Nigeria Economy 1st ed. Jonad Publisher Limited.

Ag and Iva Udu (1995) Petroleum and the Nigeria Economy 1st Ed. Tonad Publisher Limited.

Alexander Gas and Oil Connection (2003) "Deregulation Contentious Issues" In an article Presented of Deregulation from Internet.

Akinyemi (2000) Research Report Writing Made Easy (2nd ed). Lagos: International Printing Industries.

Anwana E.D. (2005) Taking control of Africa's Resources Oil in the Niger Delta.

Braide (2003) "Guaranteeing Petroleum Product Self Sufficiency" in Annual Dinner Guest Lecture of the Nigeria Society of Chemical Engineers.

Canter (1975) Environmental Impact Assessment. New York, McGraw-Hill.