Piracy in West Africa

Posted on November 17, 2011

Originally published in The National:

This year, global piracy has risen to its highest levels since the International Maritime Bureau first started recording attacks back in 1991. The majority of attention has focused on Somali pirates, who have successfully hijacked dozens of vessels in the Gulf of Aden, and are currently holding just under 200 hostages.

But there has also been a surge in piracy in the Gulf of Guinea, off the coast of west Africa. To date there have been at least eight tankers hijacked and 20 or so attacks, up from zero in 2010. Many of the countries in the Gulf of Guinea – including Nigeria, Angola, Guinea, Cameroon, and Ghana – are oil producers. Rising piracy in their waters is a worrying trend, with negative implications for trade, the energy industry, and regional security.

So far the west Africa hijackings have been quite different than the Somali pattern of hostage taking and ransom negotiation. In Somalia, pirates capture and hold vessels that are in motion and on the high seas. They are willing to hold their passengers hostage for months on end, with the goal to secure the largest ransom possible.

In west Africa, pirates have not hesitated to employ violence. According to the International Maritime Bureau, pirates have fired at ships and a number of crew members have been injured.

West African pirates have also focused on ships that are anchored or stationary in the territorial waters off the coast of Nigeria and Benin. Instead of taking hostages, they steal the hijacked ship’s cargo and aim to quickly sell it on the black market. This has limited negotiation opportunities further.

The speed at which pirates are hijacking and leaving vessels in west Africa, and their focus on cargo theft, presents a threat to regional trade. Maritime crime costs the regional economy billion of dollars annually, at a time during which the region is trying to attract investment.

Benin, for instance, recently upgraded its port in Cotonou. The upgrades have increased the volume of goods transiting the port, and reduced custom clearance times and costs for shippers. But increased insurance rates for ships transiting the Gulf of Guinea could dampen interest in Benin’s port facilities. In August, Lloyd’s Market Association of London placed Nigeria and Benin in the same risk category as Somalia.

This rise in piracy in the Gulf of Guinea also presents a risk for oil-producing countries. Countries there produce more than 4.7 million barrels of oil per day, with the majority of production coming from Nigeria (2.2 million bpd) and Angola (1.7 million bpd). Ghana’s Jubilee Field is expected to produce 120,000 bpd by the end of the year.

For now, security analysts don’t anticipate piracy in west Africa will deter investment; rather, it will raise the cost of doing business, as companies put measures in place to deter pirates.

In fact, the negative effects of piracy on both regional trade and the oil industry will most likely not be felt by businesses at all, but rather be borne by the countries of west Africa and their citizens.

When the cost of shipping consumer goods goes up for traders, these price spikes are passed on to the public. What’s more, any oil that gets stolen and resold on the black market is not taxed, representing lost revenue for the state.

Nigeria is a worst-case scenario of how the lack of economic opportunity can facilitate crime, which then limits economic growth. In Nigeria, “oil bunkering” – the practice of stealing and selling oil on varying scales – has cost the country billions in lost revenue. In 2009, it is estimated that at least 10 per cent of the country’s oil production was stolen, at a cost of over $15 billion dollars. Despite significant oil reserves the majority of the population lives below the poverty line.

Since 2009, pipeline attacks and bunkering have been reduced by government efforts to demobilise militants in the Niger Delta. However, some analysts say that those same militants have now turned to offshore piracy in an attempt to find a new revenue stream.

International attention to west Africa piracy is increasing. Last week, the UN deployed a team to search for solutions. They have a few options.

First, any attempt to deter piracy in the Gulf of Guinea must boost the patrolling capacity of the region’s naval forces, as well as the capabilities of individual states to prosecute criminals. Nigeria has recently boosted the strength of its navy, but until other countries follow suit, pirates will just shift their attacks to other waters.

West African countries also need judicial assistance so that national legislation in each country allows the effective prosecution of maritime crime. International law covers crime on the high seas, but much of the current piracy is happening within the territorial waters of individual countries.

Finally, oil-producing countries in west Africa should do more to share the benefits of oil production with the general population. Ghana, for instance, has studied the way that Norway has managed its oil revenues, and is in the process of establishing a fund that will allow oil revenues to be used for public investment projects that will spur economic growth.

But government officials in Ghana have limited capacity to regulate the oil industry. Technical assistance from donors like the United States or the European Union could help develop this capacity.

International efforts to combat piracy off the coast of Somalia have narrowly focused on security. With piracy showing no signs of flagging off the east coast of Africa, the international community should take a different approach to address the growing piracy off the west coast.

Posted in: The National