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Published: July 3, 2009

Poor GDP growth and rising inflation combined are having an adverse affect on Nigeria’s income stream, prompting concern that Nigeria may see high levels of piracy and a renewed drive of kidnap-for-ransom schemes as criminal groups seek to procure alternate means of income, reveals a report by a leading risk consultancy that operates in the region.

The warnings are presented in a quarterly report produced by risk assessment experts Pilgrims Group. These reports aim to facilitate corporate decision making in relation to security risks to in-country operations and the security of assets and staff. The next report is due for release mid-July.

Pilgrims provides security, risk management and service support operations across the world’s most hostile environments and maintain a strong local presence in Nigeria. Since opening, the Pilgrims Africa division has gone from strength to strength by offering a new approach within the Nigerian marketplace.

The most recent report predicts the global economic crisis, particularly the marked change in commodity prices, is likely to have a strong effect on sub-Saharan economies and will likely have an effect on criminality in the Niger Delta. Oil theft will continue in the region as militant groups need to raise funds for weapons in the face of an effective offensive against them by the Nigerian security forces. While the recent settlement paid by Shell to the families of nine men hanged in 1995 has been welcomed in many circles, local groups say the gesture was not enough and there is still considerable resentment against government forces and multi-national corporations in the region that will continue to fuel both the insurgency and criminal activity.

Pilgrims also warn that the potential of kidnapping-for-ransom schemes spreading outside of the Niger Delta remains, with seven foreign nationals have been targeted in Lagos, Ondo, Ebonyi and Kaduna states since the beginning of 2009. Likewise, piracy along the coast of Nigeria remains notably high and could see an increase in the short term.

“Pirate attacks on vessels off the Nigerian coast are going unreported and could exceed those that take place off the coast of Somalia that are currently receiving so much attention from the media,” warned Michael Howlett, divisional director of the International Maritime Bureau. He claims that although approximately 40 attacks were reported in Nigerian waters in 2008, the actual figure was likely to be closer to between 150 and 200.

Pilgrims’ report has been compiled from a number of information sources including the Pilgrims Africa team, intelligence contacts, academia and government departments, as well as those engaged in-country on specific projects.

“All the information that a company requires to make risk-based decisions regarding operations in Nigeria is presented in one comprehensive document; which is continually updated and re-issued, allowing them to be informed of the changing threat picture,” says David Strachan-Morris, Manager of Information and Intelligence Services for Pilgrims.

“To research and produce a report of this nature takes time; a thorough understanding of the in-country dynamics as well as global influences is a must to provide comprehensive assessment and be fully informed. As Pilgrims is fully aware of the current threats, we have a responsibility to produce such a detailed document to inform corporations of the potential risks to their operations and staff,” he continued.

Peter Williams, formerly Special Adviser to the Chairman / Managing Director of Chevron Nigeria Ltd (2006-2009), has praised the report, saying: "Nigeria is a country richly endowed with natural resources and an abundance of educated, talented people. For diverse reasons, it is a country which is functioning way below its full potential; hopefully, it will not always be so. Pilgrims’ Quarterly Review encapsulates well the complexities and challenges of this frustrating yet compelling country. It covers the key strategic, operational and tactical issues in a thorough and objective manner. I recommend this report to anyone contemplating business activity in Nigeria".