Nigeria okays $1.34 bln for oil delta development

By Felix Onuah

ABUJA (Reuters) - Nigerian President Umaru Yar'Adua on Wednesday approved 200 billion naira in federal funding to build roads, hospitals and schools in the oil-producing Niger Delta.

The funding is the latest effort by the president to develop the impoverished region and halt years of unrest that has kept Africa's biggest energy industry from pumping above two thirds of its installed capacity.

"The projects range from the construction of bridges, roads, hospitals and schools. These projects will definitely accelerate the pace of development in the region," said Minister of Information Dora Akunyili.

A presidency source said the money would come out of the federal government's share of a $2 billion economic stimulus package released earlier this month.

Decades of neglect and frustration in the Niger Delta sparked a rise in militancy and criminal activity.

But violence has subsided over the past few months after thousands of gunmen accepted Yar'Adua's offer of amnesty.

Activists and sceptics fear the former militants could easily return to the creeks and resume attacks if the government fails to quickly find them work and a new way of life.

Yar'Adua wants to also provide 10 percent of the OPEC member's oil joint ventures to Niger Delta states, potentially providing hundred of millions of dollars each year to its residents.

Many details still need to be worked out and it is unclear whether the president will get enough political support from non-oil states to pass the legislation through parliament.