- How Niger-Benin dispute mar $400 Million oil exports deal with China
- Tensions between neighbouring West African nations Benin and Niger are escalating amid a deepening dispute over oil exports.
- Further, Niger accused Benin of kidnapping five of its nationals.
Niger-Benin dispute
Peace in West Africa is becoming scarce as Niger and Benin dispute takes a different shift forcing Niger to consider routing its crude oil pipeline (1,930 kilometer) stretching from Agadem oil field to the port of Cotonous in Benin.
Niger’s ambition to become an oil exporting nation is threatened by internal security crisis and a diplomatic dispute with neighbor Benin. The conflict is a product of last year’s coup that toppled the West African nation’s democratic government.
According to information from Africa News, It was designed to help the oil-rich but landlocked Niger achieve an almost fivefold increase in oil production through a $400 million deal signed in April with China’s state-run national petroleum company.
Further, the report indicated that – there pipeline has been stalled by several challenges, including the diplomatic disagreement with Benin that led to the pipeline’s closure last week. There also has been an attack this week by the local Patriotic Liberation Front rebel group, which claimed to have disabled a part of the pipeline and is threatening more attacks if the $400 million deal with China isn’t canceled.
To find a solution, the Niger junta is considering routing the oil through neighboring Chad and Cameroon. This option, as well as that of Nigeria, had already been considered at the start of the project, before the elected Nigerien authorities opted for the pipeline to Benin.
According to Seidik Abba, researcher and president of the International Centre for Studies and Reflections on the Sahel (CIRES), the Chad option is not a simple one, and it’s not certain that the Chinese will reinvest.
“The Chad option is not a simple solution, as it involves building a new (oil) pipeline. We need to find an investor. Will the Chinese, who have already invested in the pipeline to Benin, invest again in the pipeline to Chad? I don’t think all these questions have been answered yet. (The Chad pipeline) is a possible option, but it raises many challenges. It’s not an easy option to implement”, he said.
One major concern is how the stalled pipeline operation might impact Niger’s overall economic growth. The World Bank had projected that the West African nation’s economy would rebound and grow the fastest in Africa this year at a rate of 6.9 per cent, with oil exports as a key boost.
The diplomatic tensions with Benin date back to July when Niger’s president, Mohamed Bazoum, was deposed in a coup, resulting in West African neighbors closing their borders with Niger, and in the formation of the so-called local liberation group now threatening more attacks on the oil project.
Both countries are losing out economically, with Benin also being deprived of millions of dollars in transit fees.
READ:Africa in defiance: Can Niger bully its way to growth?
Niger economy
The World Bank report indicated that extreme poverty rate is expected to reach 52.0 per cent in 2023 due to negative per capita growth and rising inflation, which, compared to 2022, will increase the extremely poor population by nearly 1.1 million bringing the total to 14.1 million people in 2023.
In 2023, UNOCHA reported 4.3 million people, or 17 per cent of the population, requiring humanitarian assistance in Niger, compared to 3.7 million in 2022. By January 2024, according to UNHCR, Niger hosted almost 690,000 refugees, asylum-seekers and internally displaced people (IDPs), a majority of which are hosted in Tillaberi, Tahoua, and Diffa regions.
However, growth in 2023 is expected to be only 1.2 per cent due to the combined effects of political, security, and climate crises. ECOWAS trade sanctions and border closures have reduced exports, including delaying crude oil exports through the new pipeline, which has now been completed and commissioned
Read Also: Africa: What if oil disappeared tomorrow?
Tit for Tat
According to a May report by the BBC, Benin prevented Niger from using its port to export its first crude oil as the dispute intensified.
Benin’s President Patrice Talon’s demanded Niger (which is landlocked) to reopen its side of the border if it wants to use the nation’s ports.
President Talon accused Niger of treating its neighbour like an “enemy”. Meanwhile, Benin and other West African nations imposed sanctions on Niger, including border closures, in a bid to force the military to hand back power to the elected government.
On the other hand, Niger refused to open its land border for goods coming from Benin. President Talon has accused Niger of not co-operating to restore ties. “If you want to load your oil in our waters, you must consider that Benin is not an enemy country and that [its] territory cannot be the subject of illicit trafficking or informal exchange,” he said on Wednesday.
“If tomorrow the Nigerien authorities decide to collaborate with Benin in a formal manner, the boats will be loaded,” he added.
On the same note, the BBC report noted that, Benin’s move puts at risk Niger’s plan to begin exporting oil – the landlocked country has been producing about 20,000 barrels per day primarily for domestic consumption due to the lack of an export route.
Following the completion of a 2,000km-long Chinese-built pipeline through Benin, production was set to rise significantly to 110,000 barrels. Benin and Niger dispute is seen as undermining the project and affecting relations between two countries that were close trade partners before the coup in Niger.
Herve Akinocho, the director of the Centre for Research and Opinion Polls in Benin, said the country would lose about $7m daily from oil transit fees that Niger would have paid.
Tension rising
To make matters worse and tensions raging Benin accused Niger of spying. Benin said it arrested the Nigeriens after they illegally entered the port, where the storage tanks for the cross-border pipeline are located. Benin authorities alleged the Nigerien team claimed to be Wapco employees and used fake badges to enter the facility.
According to DW report, the incident came just weeks after Benin agreed on May 15 to provisionally let the first shipload of Nigerien oil at the Seme terminal.
But the nations haven’t yet agreed on a long-term solution. And the loading of Chinese ships with Niger’s oil at Seme port reportedly remains at a standstill after Niger’s junta said it would block oil flowing through the pipeline in retaliation for the arrest of its citizens.
“We are no longer going to send our oil through the pipeline until the Beninese decide to honor their commitment and until the Chinese partner gets them to honor their commitment because, apparently, that is the only party they are listening to,” Niger’s petroleum minister Mahamane Moustapha Barke said following the arrests.
According to African Energy, stopping the oil flow would deprive Benin of oil transit fees worth $31 million (€28.9 million) a year.
