(3 Minutes Read)
The root cause for distrust between the two neighboring countries is last year’s coup that toppled the West African nation’s democratic government
There is a big question before Niger and its effort to export oil to China. China has invested in building an oil pipeline through Benin to help the landlocked Niger to find an outlet for the export of its oil to Chinese shores. But the pipeline has come as a major worry for the Sahel country because of its diplomatic dispute with Benin. The root cause for distrust between the two neighboring countries is last year’s coup that toppled the West African nation’s democratic government.
The 1,930-kilometer (1,200-mile) pipeline runs from Niger’s Chinese-built Agadem oil field to the port of Cotonou in Benin. It was designed to help the oil-rich but landlocked Niger achieve an almost fivefold increase in oil production through a US$400 million deal signed in April with China’s state-run national petroleum company.
But it has been stalled by several challenges. 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. This has disabled a part of the pipeline and is threatening more attacks if the USD 400 million deal with China is not cancelled.
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 Nigerian 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. It involves building a new (oil) pipeline. For that a new investor has to come forward.
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%, with oil exports as a key boost.
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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.
