Nigeria's complex socioeconomic challenges are as diverse as its coastal plains, tropical forests and rugged highlands. Chevron has been operating in Africa's most populous country for 50 years. During this time, we have forged successful partnerships and given support to address the problems of social instability, poverty and disease that have gripped the Niger Delta region, where we conduct the bulk of our operations in the country.
One of our longstanding social investments in the Niger Delta is our Global Memorandum of Understanding (GMOU) program with local communities. The GMOUs were initiated in 2005 to give communities greater roles in the management of their own development through the collective setting of priorities, identification of employment and contracting opportunities, and management of conflict.
Since their inception, the GMOUs we signed with eight Regional Development Committees (RDCs) in the Niger Delta have delivered more than 200 projects in 425 communities, villages and chiefdoms, and have benefited some 850,000 people. Partnering with local nongovernmental organizations has been essential in providing technical assistance and helping resolve conflicts in the communities. Through these participatory partnerships, Chevron has sponsored workshops on financial management, government budgeting, lobbying processes and community relations to improve the RDCs' effectiveness.
Raphael Nomiye, a leader of the Ilaje RDC, in a coastal area where many energy companies operate, said the GMOU process helped community leaders complete 30 projects in 2011, which was "in line with our cardinal objective to stimulate sustainable development in the Ilaje land." He pointed to microcredit lending as key for local business opportunities. "Many of those who could not meet the requirements for loans from commercial banks have benefited to improve their business or start up new ones," he said. The RDCs have provided loans to 2,000 individuals in the Niger Delta region.
Along Nigeria's southwestern coast, our Escravos Gas-to-Liquids (EGTL) plant under construction is designed to produce cleaner-burning diesel fuel, liquefied petroleum gas and naphtha from natural gas. With a high rate of unemployment in the Delta, the EGTL project provides an opportunity for economic progress and job growth.
"We approached our GMOU communities to seek capable local suppliers and provide training," said Mick Kraly, EGTL project manager. "I've seen huge changes in confidence and capabilities in these companies, some of which went from a few employees to hundreds."
“It takes a lot of work to build these relationships, but once you get there, it's very special.”
— Mick Kraly, Chevron
To date, more than 10,000 Nigerians, mostly from the Delta, have jobs at EGTL and were trained in international safety standards. More than 1,500 purchase orders have been placed with Nigerian vendors, and 500 contract companies are involved in EGTL. One of those companies is Biloritz Nigeria Ltd., a piping and engineering company that went from 46 employees in 2009 to 224 today.
"It takes a lot of work to build these relationships," said Kraly, "but once you get there, it's very special. The GMOU process builds hope, peace and a sustainable way of doing things."
NDPI: Moving Beyond Our Operations
Building on our foundation of participatory partnerships in Nigeria, in 2010 we launched the Niger Delta Partnership Initiative (NDPI) and announced our five-year, $50 million endowment.
The NDPI involves a multisector commitment with local and international partners. It broadens our involvement because it addresses regional economic development outside our areas of operation.
"The approach is unique in that it not only addresses social and economic problems in the Niger Delta but also analyzes them to understand their root causes and identify sustainable solutions," said Chevron's Dennis Flemming, who has worked for 25 years on socioeconomic development programs in developing countries.
Two foundations were created to support this goal. The NDPI Foundation was established in the United States to coordinate development-project funding, while the Foundation for Partnership Initiatives in the Niger Delta (PIND) is in Nigeria and actively engages in the design, development and monitoring of the programs funded by the NDPI and other donor partners.
According to Bill Grant, an economic development specialist with Development Alternatives Inc., the NDPI's efforts recognize that there cannot be meaningful change in the Niger Delta without the creation of a more enabling and peaceful environment for economic growth.
"These socioeconomic challenges are complex," said Grant, "and require an understanding of how all the elements fit together. NDPI uses market-development thinking as its underlying strategy to drive economic growth. This is all supported by analyzing what is—and is not—working and building advocacy to drive the changes. By building a constituency of local partners interested in the same objectives, the approach is pragmatic and generates ownership and a common understanding of the challenges and the solutions."
The NDPI quickly generated interest among the international donor community. In February 2011, the U.S. Agency for International Development (USAID) committed $25 million to jointly support a number of NDPI projects.
"The United States government, through USAID, is committed to working with the private sector in Nigeria to establish innovative and dynamic partnerships to promote socioeconomic development in the Niger Delta region, foster peace and stability, and improve the quality of life for residents," said Ray Kirkland, USAID's former mission director for Nigeria, during the signing of the agreement between the NDPI and USAID.
In 2011, the NDPI, along with the United Kingdom's Department for International Development and the German International Cooperation Agency (GIZ), analyzed potential high-growth commodities in the Delta, resulting in the identification of cassava, palm oil and farm-raised catfish as sectors having strong development potential. Analysis of the commodity value chains identified opportunities to address constraints on market development within those sectors. Initial pilot interventions are focusing on fish-farming associations and cooperatives operating from a cluster of more than 3,600 ponds in Ekpan, Delta State.
The NDPI intends to expand its network of organizations, businesses and consultants promoting economic development in the Niger Delta. PIND has awarded more than $350,000 in small grants to local civil-society organizations and partnered with GIZ to train 42 individuals from Edo and Delta States as trainers in enterprise formation.
Professor Obafemi Ajibola is a member of the PIND board of trustees and CEO of the New Nigeria Foundation, a nonprofit organization that encourages sustainable development. He believes the NDPI approach can succeed "because it identifies and deals with the systemic constraints faced by many economically active poor persons, thus encouraging creative market solutions."
Updated: May 2012