Micro-Econometric Analyses of Some Welfare Effects of Oil-Availability in the Niger Delta Region of Nigeria

  •  Aderoju Oyefusi    


This article raises some fundamental issues in the resource-development literature, such as the effect of resource-availability and resource-related conflicts on personal and community-wide welfare, the interaction between resource-abundance and hopelessness, and the role of government presence and location of communities, using the Niger Delta region of Nigeria as a case study. Employing survey data from two sources, it shows that oil-availability has mixed effects for individuals and communities. It raises educational attainments and socio-economic access among individuals and infrastructural development in communities but also tends to generate higher episodes of violent conflicts, higher inequality, and greater feeling of despondency among individuals. It also fails to significantly affect earning levels or reduce unemployment. Government presence is beneficial as it tends to impact positively on earnings and socio-economic access among residents and reduces the likelihood of being unemployed or experiencing a longer spell of unemployment, but it is also likely to be associated with higher inequalities, higher incidences of conflict, and greater hopelessness. Individuals in more distant communities tend to have lower educational attainments and socio-economic access but they are also more likely to enjoy lower levels of inequality, greater hope, and lower incidences of unemployment. Youths tend to suffer the most from the negative effects of resource-abundance as they appear to be worse off on all measures of personal welfare employed, while geographical characteristics seem important for welfare just the same way as policy and initiatives at the local level. The paper concludes that natural resources, such as oil, can be significantly welfare-improving if its tendency to encourage violent conflict outbreaks can be addressed, but this may not be achieved by merely providing greater infrastructure or expanding educational opportunities but by matching these with significantly-expanded economic space.


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