Internal security crisis, diplomatic tussle threaten to stop Niger’s push to become an oil-exporting country

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A China-backed pipeline that would make Niger an oil-exporting country is being threatened by an internal security crisis and a diplomatic dispute with neighbouring Benin, both as a result of last year's coup that toppled the West African nation’s democratic government.

The group, led by Salah Mahmoud, a former rebel leader, took up arms after  Nigers's junta came to power, posing further security threats to the country, which is already struggling with a deadly security crisis.

Analysts say the crises could further hurt Niger, one of the world’s poorest countries which funds most of its budget with now-withheld external support in the aftermath of the coup.

Niger currently has a local refining capacity of only 20,000 barrels per day (bpd) for local demands while the pipeline is to export up to 90,000 barrels daily — a feat officials and analysts have said would help the country shore up its revenue and emerge from the coup sanctions that had isolated it from regional neighbours and hurt its economy and people.

“It is a completely messy situation and the only way for a resolution is if both administrations directly engage and resolve issues,” said Ryan Cummings, director of Africa-focused security consulting company Signal Risk.

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.

Diplomatic impasse

The diplomatic tensions with Benin date back to July when Niger’s president, Mohamed Bazoum, was deposed in a coup, resulting in West African neighbours closing their borders with Niger, and in the formation of the so-called local liberation group now threatening more attacks on the oil project.

Benin, alongside other neighbours, has reopened its border with Niger, but Nigerien officials have refused to open theirs, accusing Benin of hosting French troops that pose a threat to the country after Niger severed military ties with France. That led Benin’s president, Patrice Talon, to make oil exportation through its port conditional on the reopening of the border.

Both countries are losing out economically, with Benin also being deprived of millions of dollars in transit fees. Observers say the impasse is increasing regional tensions since the coup, which came after a string of other military takeovers. It has pitched iger against the Economic Community of West African States, or ECOWAS, which usually mediates on such issues.

With Niger tilting towards Russia in its 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 its investment in the project. But even Beijing’s efforts, which resulted in the first lifting of oil from the Agadem field in May, collapsed as the diplomatic spat escalated further.

Benin this week convicted and imprisoned three of five Nigerien oil workers it recently arrested at the Beninise port after they crossed from the border and were accused of “use of falsified computer data.” Their arrests prompted Niger to shut the pipeline last week, with a senior government official alleging that their oil is being “stolen by other people.”

A big concern for Niger’s military government at this stage is “whether they have the requisite fiscal capacity to keep paying for public services” following the coup, which has made it unable to meet some of its financial obligations such as debt repayment and infrastructural funding, Mr. Cummings said. The junta in Niger "definitely have to be more cautious in handling the financial position of the country” amid the ongoing crises, he said.