The conflict in the Niger Delta region has been a major political and economic challenge for Nigeria. Armed militants have been attacking the oil industry, sabotaging installations and kidnapping foreign workers for ransom. At times the conflict reduced Nigeria’s oil production by as much as a third, pushing up the world price of crude oil and hurting government revenues. The militants have pointed to environmental pollution by oil extraction firms and widespread poverty among local communities as the causes for their grievances. Criminals have also taken advantage of the conflict to kidnap foreign workers for a ransom.

Prospects for a lasting solution improved in 2009 when the government struck a deal with the militants that could lead to the end of the conflict. Subsequently, the Movement for the Emancipation of the Delta (MEND), the main umbrella group for the militants, declared a ceasefire. Thousands of militants have surrendered their weapons and registered to participate in a reintegration program.

To date, peace in the Niger Delta has proved elusive with several past ceasefires breaking down. However, there is widespread optimism that this deal could succeed, given President Yar’Adua’s personal commitment. President Yar’Adua has also asked the National Assembly to approve legislation that will allocate 10% of Nigeria’s equity in oil joint ventures in the Niger Delta region to local communities. An implication of this proposal is that oil revenues to other states would be reduced, which may prove to be an obstacle to the passage of the proposed legislation. The government has also announced a series of projects involving the construction of schools, hospitals and roads in the Niger Delta region as part of a national fiscal stimulus package. President Yar’Adua has created ministry of Niger Delta affairs to co-ordinate state and federal spending in the region. A major challenge will be to ensure that funds allocated to the Niger Delta region actually reach the intended beneficiaries and do not become another avenue for corruption.

The year 2010 is expected to be full of political activity as campaign gets underway for the 2011 presidential, legislative and state-level elections. President Yar’Adua is eligible to run for a second term in office. However, he was hospitalised abroad for a heart condition, raising concerns about his fitness. President Yar’Adua has returned to Nigeria but his vice president, Goodluck Jonathan, continues to serve as acting president. Finally, Nigeria will play a role in global decision making. In November 2009 it took up a temporary seat on the United Nations Security Council.