Illegal Oil Bunkering In Nigeria; Implication On Economic Growth And Development

Introduction

1.1 Background of the Study

Illegal oil bunkering involves the theft of crude oil and its by products through diverse mechanisms which results in serious economic implications. The huge revenue which comes from the Oil sector resulted in the neglect of the agricultural sector of the Nigerian economy. The oil sector now accounts for over 85% of national revenue and 90% of foreign exchange earnings (Garuba, 2006 and 2010). The issue illegal oil bunkering started attracting public knowledge in1993 when oil company workers started conniving with foreign crude oil buyers. They operated in oil wellheads and had access to them. The bunkerers tap directly into pipelines away from oil company facilities and connect from the pipelines to barges that are hidden in small creeks with mangrove forest cover. According to Asuni (2009) oil theft were carried out from different channells which include direct hacking into pipelines and forged bills of lading. The menace has resulted in grave economic, social, environmental, governance and security implications and has significantly led to poverty and degradation in the Niger Delta region of Nigeria. The study seeks to appraise illegal oil bunkering in Nigeria; Implication on economic growth and development.

1.2 Statement of the Problem

The issue of oil theft in the Niger Delta has constituted a major challenge to the Nigerian government in recent times. Illegal oil bunkering involves the theft of crude oil and its by products through diverse mechanisms which results in serious economic implications. Oil theft has led to grave economic, social, environmental, and security implications. The problem confronting the study is to appraise illegal oil bunkering in Nigeria; Implication on economic growth and development.

1.3 Objectives of the Study

The main study objective is to appraise illegal oil bunkering in Nigeria; Implication on economic growth and development; while the specific objectives include:

To find out the prevalence of illegal oil bunkering in Nigeria.

To investigate the effects of illegal oil bunkering on economic growth in Nigeria.

To identify the possible solutions to the problem illegal bunkering in Nigeria.

1.3 Research Questions

What is the prevalence of illegal oil bunkering in Nigeria?

What are the effects of illegal oil bunkering on economic growth in Nigeria?

What are the possible solutions to the problem of illegal bunkering in Nigeria?

1.4 Statement of Hypothesis

Ho1: There is no significant solution to the problem of illegal oil bunkering in Nigeria.

1.5 Significance of the Study

The study seeks to provide an evaluative appraisal of illegal oil bunkering in Nigeria. The study shall therefore serve as a veritable source of information to stakeholders to proffer interventions which will address the problem.

1.6 Scope of the Study

The study focuses on the investigation into illegal oil bunkering in Nigeria; Implication on economic growth and development.

1.7 Limitation of the Study

The study was confronted with logistic and geographical constraint.

1.8 Definition of Terms

Oil Bunkering Defined

Illegal oil bunkering involves the theft of crude oil and its by products through diverse mechanisms which results in serious economic implications. Oil theft has led to grave economic, social, environmental, and security implications.

Misappropriation Defined

Misappropriation constitute a deliberate act of the misuse of money. It is the channeling of money and other assets allocated for a specific official purpose for either personal use or for what it is not meant for. Such action constitutes an unauthorized spending of money or other assets for personal gain.

Internal Control Defined

Internal controls consist of all procedures and methods which the firm applies to protect its assets and conduct a successful operation. The essence is to prevent fraud and losses arising out of fraudulent activities.

Fraud Defined

The falsification and misrepresentation of financial record of the firm.

Operations Management Defined

Operations management is the management of business activities to create high efficiency. It is concerned with converting materials and labor into goods and services as efficiently as possible to maximize the profit of an organization.