Transcript: Niger’s first oil exports

This is an audio transcript of the FT News Briefing podcast episode: ‘Niger’s first oil exports’

Kasia Broussalian
Good morning from the Financial Times. Today is Monday, May 20th, and this is your FT News Briefing.

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Rescuers spent hours on Sunday looking for a helicopter carrying Iran’s president. And a border dispute is complicating Niger’s rise as an oil titan in west Africa. Plus, Russia has stopped the UN from monitoring sanctions on North Korea. I’m Kasia Broussalian and here’s the news you need to start your day.

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State media in Iran are saying that a helicopter carrying President Ebrahim Raisi crashed yesterday. The country’s foreign minister was also on board. They were coming back from Azerbaijan after inaugurating a joint dam project. As of late Sunday night, officials still hadn’t provided any details about their condition. The accident happened in a remote part of Iran and weather could have been a big factor. Rescue teams spent hours on Sunday trudging through rain and fog just trying to find the crash site. Raisi was elected back in 2021, and he’s close to the country’s powerful Revolutionary Guards and the supreme leader, Ayatollah Ali Khamenei. In fact, Raisi is seen as a top candidate to replace Khamenei, who’s 85.

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Niger is on the cusp of becoming an oil powerhouse. For the first time ever, the west African country can export crude. That’s thanks to a new pipeline that connects its oilfields to ports in the neighbouring country of Benin. And it’s supposed to be a big game changer for Niger but oil isn’t really flowing just yet. And here to get into why is the FT’s Aanu Adeoye. Hey, Aanu.

Aanu Adeoye
Hey, Kasia.

Kasia Broussalian
So tell me a little bit about this pipeline. What are some of the details of the project?

Aanu Adeoye
So the pipeline construction began in 2019. This was supposed to cost about $5bn. The idea is this 2,000km pipeline moving oil from Niger’s oilfields to the ports in Benin, which is its southern neighbour. The reason why this pipeline needs to exist is because Niger is landlocked, and that means it doesn’t have access to its own ports. And the idea of this pipeline is that oil will flow from Niger into Benin where they would then be loaded onto vessels and exported abroad for Niger.

Kasia Broussalian
And how big of a deal is this pipeline for Niger’s oil industry?

Aanu Adeoye
As you say, this is supposed to be a game-changer for Niger. Niger has a smallish oil industry. Right now it produces about 20,000 barrels of crude daily, but that’s used for domestic use because it doesn’t have its own export routes. But this new pipeline is supposed to scale up to 110,000. The IMF has predicted that Niger’s economy is expected to grow by 11 per cent. If that happens, that will be the fastest growing economy in the whole of sub-Saharan Africa. And the IMF is pegging this expected growth solely to its ability to produce crude on this scale that we’ve talked about.

Kasia Broussalian
Wow. So it sounds like a really ambitious project. Why hasn’t oil been flowing to that extent yet? Like, what are some of the challenges that have been happening?

Aanu Adeoye
Politics, that’s the answer. There’s a border dispute between Niger and Benin. There’s a military coup in Niger in July of 2023. After the coup, Ecowas, which is the Economic Community of West African States, think of it as the EU type bloc in west Africa. This bloc, Ecowas, imposed really severe sanctions on Niger to punish it for the coup. And so borders were closed, which also slowed down the building of the pipeline. But in February of this year, the sanctions were lifted and close to normal relations with Niger began again between Ecowas member states. But Niger has refused to open its own border with Benin. And if you listen to the official Niger version, they say that they are refusing to open the border because of quote unquote, security concerns. And the president of Benin, Patrice Talon, has said it makes no sense if you want to use our ports to move your goods abroad, but you refuse to open your land border with us. So this is the crux of the dispute.

Kasia Broussalian
OK, so it sounds like Niger at least is missing out on a huge economic opportunity here because of this border dispute. But what about the region more broadly?

Aanu Adeoye
I think it’s really crucial for Niger to be able to play nice with its neighbours. And I think it would also be a blow for the integration of west Africa as an economic bloc because the whole point of Ecowas is to foster trade and to foster the free movement of people. And it comes at a really perilous time for Ecowas, in particular, because there’s only 15 countries in Ecowas and this has come in amid a wave of coups and undemocratic takeovers in west Africa. So I think it’s really important that countries that are neighbours in this region that’s supposed to foster trade, get along with one another.

Kasia Broussalian
Aanu Adeoye is the FT’s west Africa correspondent. Thanks, Aanu.

Aanu Adeoye
Thanks for having me.

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Kasia Broussalian
The United Nations used to have a panel that oversaw sanctions on North Korea, but Russia recently broke it up. Now the west is racing to try to replace the programme and make sure that sanctions, which are still technically in place, are actually enforced. The FT’s Christian Davies has been following the events, and he joins me now. Hey, Christian.

Christian Davies
Hello.

Kasia Broussalian
So just to start us off, what’s the history of sanctions on North Korea?

Christian Davies
So the sanctions we’re talking about are UN sanctions imposed by the UN Security Council, with the consent of all the permanent members, that’s Britain, France, US, China and Russia. And the first round was in 2006 when North Korea first conducted a nuclear weapons test. And really, they’ve been ramping up ever since, as North Korea has continued to conduct nuclear tests and to develop its ballistic missile programme.

Kasia Broussalian
OK. And so there was this panel then that oversaw these sanctions. What exactly did it do before it was disbanded by Russia?

Christian Davies
A couple of years after the sanctions were first put in place, the UN realised they needed some kind of mechanism that would not only monitor the sanctions enforcement, how North Korea was evading them, which actors were helping North Korea to circumvent the sanctions, but also to have a political process involving all the major international players on the North Korea issue, whereby they had a forum to agree what would go into an official report submitted to the Security Council. And because all the major countries would be involved in that process, it would mean that the rest of the world would have something with the UN’s stamp on it and hopefully build a consensus around enforcement.

Kasia Broussalian
Yeah, kind of like a legitimacy test, these big global players are all co-operating towards the same goal, which kind of nudges everyone else to, you know, do the same. Why would Russia want to end that and why now?

Christian Davies
So the story of the panel’s demise really goes back to Russia’s invasion of Ukraine in 2022. They needed diplomatic allies and North Korea was very vocal in their support. But more importantly, recently, as Russia started to run out of ammunition to use on the battlefield in Ukraine, North Korea started to ship its stockpiles of ballistic missiles and most importantly, artillery shells for Russia to use. And many experts believe that this has actually helped to tilt the battle field to Russia’s advantage. And of course, not only is receiving North Korean weapons a blatant breach of sanctions, but the payments that Russia has been making in return, they’re also in flagrant breach of sanctions. And so Russia really didn’t want to have this body that was going to every year, document these flagrant violations. And so at the first opportunity they vetoed its mandate and the panel is no more.

Kasia Broussalian
Got it. And so is Russia the only major country that had an issue with this panel?

Christian Davies
China is not very happy about the panel’s work, mainly because the most important trading route for North Korea historically has been China. And so this has been quite embarrassing to the Chinese to have these sanctions violations documented. And therefore they consented to the panel to be dismantled.

Kasia Broussalian
OK. So what does this potentially mean for North Korea in the long run, either for its nuclear programme or even its struggling economy?

Christian Davies
I think it’s important to say that when the sanctions were first introduced, they were done so in the hope that they could be used to persuade North Korea to abandon its nuclear weapons programme. And that clearly has not happened. And now that China and Russia appear to be much less committed to sanctions enforcement, the nuclear weapons programme is probably going to accelerate. North Korea’s nuclear weapons programme is one of the few issues where the interests of the US, China and Russia really are aligned. And that’s why, of course, they all agreed to the sanctions in the first place. So the fact that they cannot any longer co-operate, even on questions where actually their interests are relatively aligned, is obviously a very worrying symbol for the wider picture of the international order.

Kasia Broussalian
Christian Davies is the FT’s bureau chief in Seoul. Thanks, Christian.

Christian Davies
Thank you.

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Kasia Broussalian
You can read more on all of these stories for free when you click the links in our show notes. This has been your daily FT News Briefing. Make sure you check back tomorrow for the latest business news.