SOCIO-ECONOMIC EFFECTS OF OIL AND GAS ACTIVITIES ON OGONILAND, RIVERS STATE, NIGERIA

ABSTRACT

Crude oil is one of the major natural resources that have contributed to the development of the Nigerian economy. It, however, poses great environmental and socio-economic challenges. As a result, the effects of oil exploration activities on the socio-economic wellbeing of host communities, like Ogoniland, have been of concern to the Nigerian government. Measurement of such socio-economic effects is an essential requirement for policy formulation and strategic planning for sustainability. This research, therefore, measures the effects of oil exploration on the socio-economic wellbeing of Ogoni community in the Niger Delta Region of Nigeria. Primary data used in this study were collected through a survey of 400 households using a multistage sampling technique. The survey was conducted in December, 2013 and January, 2014. The collected data were presented using descriptive analyses approach. Ordinal logistic models were estimated to test the hypotheses. The descriptive results reveal that about 65% of the households were within the average monthly income of N50,000 and below. In addition, about 75% of the surveyed households were involved in agricultural production; out of which only 37% indicated that they lost their produce due to oil spillage within the last two years. The ordinal logistic regression models reveal that oil spill and air pollution do not have significant effect on the health status of Ogoni community. Rather, household income was established as the major determinant of their health status. The result further suggests that households with higher income would suffer little or no environmental-related diseases. It also indicates that oil spill does not significantly influence agricultural productivity in the community. Nevertheless, land degradation and air pollution cause significant reduction in agricultural productivity in the community. In addition, oil spill and land degradation have no significant effect on household income in the community. However, government interventions, in terms of employment creation, have positive effect on household income. On the other hand, willingness to accept pay or not to accept pay from oil companies to tolerate further oil spill, land degradation and air pollution in the community is determined by three key factors namely household income, social capital and perceived level of environmental damages. Likewise, three key socio-economic factors determine Ogoni people’s marginal willingness to pay or not to pay for government intervention programmes in the community. These are nationality, household income and social capital.  Thus, this study concludes that Ogoni people would be willing to allow further and full-scale exploration of oil in their community if only their socio-economic wellbeing is ensured.