Niger's ambitious project to transform itself into an oil-exporting nation through a China-backed pipeline is facing severe challenges due to an internal security crisis and a diplomatic dispute with neighboring Benin. These issues stem from the fallout of a coup last year that toppled Niger's democratic government, leaving the West African country grappling with multiple crises.
The 1,930-kilometer (1,200-mile) pipeline, which runs from Niger's Chinese-built Agadem oil field to the port of Cotonou in Benin, was intended to significantly boost Niger's oil production. The $400 million deal with China’s state-run national petroleum company aimed to increase Niger's oil production nearly fivefold. This pipeline was crucial for Niger, a landlocked country with limited refining capacity, to export up to 90,000 barrels of oil per day, compared to its current local refining capacity of only 20,000 barrels per day.
However, the project has encountered numerous setbacks. The most recent and severe issue is the diplomatic rift with Benin, which resulted in the pipeline's closure last week. This dispute arose after Niger's President Mohamed Bazoum was deposed in a coup in July, leading to border closures by West African neighbors and subsequent formation of the local Patriotic Liberation Front rebel group.
The rebel group, led by former rebel leader Salah Mahmoud, has attacked the pipeline and threatened further assaults if the deal with China is not canceled. This group took up arms following the coup, exacerbating the already dire security situation in Niger. The country's military government, struggling with these internal threats, now faces additional pressure to resolve the diplomatic tensions with Benin.
The diplomatic tensions with Benin are deeply rooted in the geopolitical shifts following the coup. Benin, which has reopened its border with Niger, demands that Niger reciprocates. However, Nigerien officials have accused Benin of hosting French troops, perceived as a threat after Niger severed military ties with France. Benin's President Patrice Talon has made oil exportation through Cotonou conditional on the reopening of the border, a move that further complicates the situation.
Both countries are suffering economically due to this impasse. Benin is losing millions in transit fees, while Niger's economy, already strained by coup-related sanctions, faces additional pressure. Observers note that the diplomatic standoff is worsening regional tensions and undermining efforts by the Economic Community of West African States (ECOWAS) to mediate the crisis.
China has attempted to mediate and resolve the dispute to protect its investment in the pipeline project. Despite initial success, with the first lifting of oil from the Agadem field occurring in May, the situation deteriorated as the diplomatic spat escalated. This week, Benin convicted and imprisoned three of five Nigerien oil workers arrested at the Beninese port on charges of "use of falsified computer data," prompting Niger to shut the pipeline last week and accuse others of stealing its oil.
The suspension of the pipeline project poses a significant threat to Niger's economic growth. The World Bank had projected that Niger's economy would grow the fastest in Africa this year at a rate of 6.9%, largely driven by anticipated oil exports. However, the ongoing crises jeopardize this optimistic outlook. Analysts warn that the Nigerien military government must carefully manage the country's finances amid these challenges, as it struggles to meet financial obligations such as debt repayment and infrastructure funding.
Ryan Cummings, director of the Africa-focused security consulting company Signal Risk, emphasized the complexity of the situation, stating, "It is a completely messy situation, and the only way for a resolution is if both administrations directly engage and resolve issues."
Niger's China-backed oil pipeline project, once seen as a lifeline for the country’s economy, is now mired in a web of security threats and diplomatic conflicts. The resolution of these issues is critical not only for the success of the pipeline but also for the stability and economic future of Niger. As the country navigates these turbulent times, the international community watches closely, hopeful for a peaceful and prosperous outcome.
