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A Chinese-backed pipeline that would have made Niger an oil-exporting country is threatened by an internal security crisis and a diplomatic row with neighboring Benin, both the result of a coup last year that overthrew the West African nation’s democratic government.
The 1,930-kilometer (1,200-mile) pipeline runs from Niger’s Chinese-made Agadem oil field to the port of Cotonou in Benin. It is designed to help oil-rich but landlocked Niger increase its oil production nearly fivefold through a $400 million deal signed in April with China’s state-run national oil company.
But it has faced several challenges, including a diplomatic disagreement with Benin that led to the closure of the pipeline last week. There were also attacks this week by the local Patriotic Liberation Front rebel group, which claimed to have killed part of the pipeline and threatened another attack if the $400 million deal with China is not canceled.
The group, led by Salah Mahmoud, a former rebel leader, took up arms after Niger’s junta came to power, posing a further security threat to the country, which has been struggling with a deadly security crisis.
Analysts say the crisis could hit Niger, one of the world’s poorest countries that finances most of its budget with external support that is now on hold after the coup.
Niger currently has a local refining capacity of only 20,000 barrels per day (bpd) for local demand while the pipeline will export up to 90,000 barrels per day – officials and analysts say it will help the country increase revenue and emerge from the coup sanctions that have isolated it from its regional neighbors and harm the economy and people.
“This is a messy situation and the only way to solve it is for both administrations to get involved and solve the problem,” said Ryan Cummings, director of Africa-focused security consulting firm Signal Risk.
One of the main concerns is how the stalled pipeline operation could affect Niger’s overall economic growth. The World Bank estimates that the West African country’s economy will recover and grow the fastest in Africa this year at a rate of 6.9%, with oil exports a major boost.
Diplomatic tensions with Benin began in July when Niger’s president, Mohamed Bazoum, was ousted in a coup, prompting the West African neighbor to close its border with Niger, and the formation of local liberation groups that now threaten more attacks. oil project.
Benin, along with other neighbors, has reopened its border with Niger, but Niger officials have refused to open it, accusing Benin of hosting French troops who pose a threat to the country after Niger cut military ties with France. That led Benin’s president, Patrice Talon, to make oil exports through the port conditional on reopening the border.
Both countries lost economically, with Benin also missing out on millions of dollars in transit costs. Observers said the landings exacerbated regional tensions since the coup, which followed several other military takeovers. This pits Niger against the Economic Community of West African States, or ECOWAS, which normally mediates on the issue.
With Niger tilting towards Russia in a diplomatic shift and Benin aligned with France and the West African bloc, China has tried to step in and resolve the impasse and benefit from investment in projects.
But even Beijing’s efforts, which produced the first oil from the Agadem field in May, have collapsed as diplomatic disputes have escalated.
Benin this week convicted and jailed three of five Nigerien oil workers who were recently arrested at a Beninese port after crossing the border and accused of “using false computer data.” The arrest prompted Niger to shut down the pipeline last week, with a senior government official saying the oil was “stolen by someone else.”
The big concern for Niger’s military government at this stage is “whether they have the necessary fiscal capacity to continue paying for public services” after the coup, which has left them unable to meet some of their financial obligations such as debt repayment and infrastructure funding. Cummings said.
The junta in Niger “must be more careful in handling the country’s financial position” amid the ongoing crisis, he said.
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Virgile Ahissou contributed to this report from Cotonou, Benin.
