02 March 2014, Niamey – “We’re seeing a real awakening of people’s consciousness on this issue; something is happening” says Boubacar Soumane, communications manager for EITI (Extractive Industries Transparency Initiative) Niger.
As yet another deadline looms for an agreement between Areva and the Nigerien state on the contract for the French nuclear giant’s uranium operations at Arlit (on February 28th), the issue is clearly capturing the public imagination.
Almost every week there have been demonstrations on the streets of the country’s main cities – particularly Niamey and Agadez.
The protestors, although their numbers are generally small, call for a better deal for Niger citing the now well-known figure that Areva’s annual turnover is four times the size of Niger’s entire national budget – some 9 billion Euros against 2 billion Euros (Oxfam report).
In January a number of marches organised by the civil society transparency organisation ROTAB (Network of Organisations for Transparency and Budgetary Analysis) in Niamey and Agadez were prevented from taking place by the local authorities on public safety grounds.
Still the newspapers and local radio stations are full of editorials, discussing the terms of Niger’s 2006 mining code which demands royalties of at least 12% on resource extraction.
Although Areva has never disclosed its contracts which were signed at the beginning of production in the early 1970s, sources at the Nigerien Mines Ministry say they pay around 5.5% and enjoy a number of tax breaks. Areva have said in the past that increasing the royalty rate would make the Niger operation unprofitable.
Of interest in the global debate on resource nationalism and transparency is the evolution of this issue into such a hot topic in Niger.
As ROTAB’s publicity posters attest, the country has been producing uranium for over 40 years and Areva, heavily reliant on Niger as its second-biggest supplier, has quietly continued despite numerous security incidents including four coup d’états and the kidnapping of seven of its workers by Al-Qaeda in the Islamic Maghreb-linked groups in 2010.
“People are looking around themselves and asking why there is such poverty” says Solli Ramatou, co-ordinator of the civil society network GREN (Research Group on Extractives in Niger). “They’re starting to question why another country’s electricity generation is reliant upon us, yet most people here don’t even have electricity!”
It seems that an increase in transparency awareness campaigning has hit a rich vein of public resentment as more foreign companies have arrived in recent years to exploit Niger’s resources; the connection has been made in people’s minds about the promise of wealth from production of oil, coal, gold, tin and uranium, and the obvious lack of development they see in their everyday lives.
Niger’s small oil producing industry is a case in point. At the end of 2012 the Chinese CNPC started exploiting the Agadem oil block in the country’s remote Saharan east.
The company currently produces about 20,000bpd, all of which is sent to the Soraz refinery at Zinder where it is made into petroleum products for local sale.
But for many people in Zinder, the only potential benefit they envisaged – cheaper fuel for their cars – has not materialised. “Resource sovereignty for us is about our security of fuel” says Sadat Ilya from the NGO Movement for the Promotion of Responsible Citizenship in Zinder.
The arguments over the price of fuel are complex and increasingly bitter, but essentially revolve around the fact that the Soraz refinery was built with a loan from the Chinese EXIM Bank and the price of fuel at the pump reflects the fact that it needs to be paid back. Prior to Niger’s arrival in the oil producer’s club, the state was subsidising fuel prices and many people in Zinder got used to that and believe it should continue.
Further muddying the issue is rampant smuggling, where refined fuel from Soraz is bought ‘for export’, sent tax-free over the border into Nigeria, and then re-imported and sold by street hawkers at about 150CFA (30c US) per litre cheaper than the official fuel sold at filling stations. “How can we start to be an oil producing country and then actually see the price of fuel go up?” says Sadat, reflecting a common frustration in Zinder at the arrival of the oil-production facility on their doorstep.
In reality despite all the frustration about ‘unfair’ deals in the extractive industries, the sector is unlikely to make a significant contribution by itself towards tackling Niger’s pervasive poverty and lack of development.
According to the EITI report for 2011, the country’s entire natural resource production including oil and uranium only accounts for about 5% of the annual budget, while support from foreign donors and agriculture together make up about 95%.
There is still optimism that the Areva deal will come out in the government’s favour. The negotiations have now been going on for over four months, and Niger’s tough stance has outlived Areva shutting down production (although this was officially for maintenance purposes).
Areva is unlikely to walk away from Niger after years of investment in developing what will become one of the world’s biggest uranium mines, Imouraren, which is expected to come into production in 2015. This mine will make Niger the world’s second-largest producer.
For Mahaman Laouan Gaya, Secretary General at the Nigerien Mines Ministry, the genie is out of the bottle; “What’s happening with the uranium negotiations promotes transparency in all future dealings with extractive companies. We were clear when we laid down the petroleum contracts and now everyone is watching to see whether we can get a better deal on uranium”.
Celeste Hicks, Africa Arguments
Hicks is a freelance journalist with a focus on African issues. She has a particular interest in the Sahel. @chadceleste