Tuesday, May 27, 2008

Nigeria: governance, politics and oil revenues.

first published 12-November-2004

This an excerpt from a letter to my cousin.

________________________________

Just focus your "findings" on estimates of revenues and expenditure since 1961 or whenever oil was discovered in Niger Delta. Let us assume some USD250BILLION been earned over the past 40 years. Then compare Nigeria's progress over that period with that of:

a) South Korea, which was roughly at the same "development" stage 40 years ago. Adjust for the fact that SK does not have significant crude oil resources, has had military governance, is in a hyper-competitive region, is the leading information technology power.

b) Brazil, which was roughly at the same "development" stage 40 years ago. Adjust for the fact that Brazil, while majority of African descent, has a small but socio-economically dominant "European" population.

c) China or India, which have undergone similar experiences with colonisation and imperialistic trade, yet have largely retained their cultural heritage even as they grafted on hyper-competitive economics.

d) Malaysia or Indonesia, which have significant crude oil or palm oil resources, multi-ethnic strife, rampant corruption, military dictatorships, and yet have largely retained a healhty socio-economic competitiveness.

e) Somalia. Somalia? Yes, Somalia. A north-central African country next door to Kenya and Ethopia. Has had NO CENTRAL GOVERNMENT FOR AT LEAST 13 YEARS while torn apart by multi-ethnic strife. Suffered greatly from international sanctions after its people defeated US special forces sent in to help impose governments similar to those the rest of Africa had EVER had. Somalia is now
Africa
's most EVENLY developed country.Why? The warlords had to live as far from each other as possible, yet communicate with their troops in the various war-fronts. Effectively, powerful warlords set up feudal governance in their bases of power. Fighters had to be paid so local enterprise was left encouraged and "taxed" to fund the war efforts. Warlords who did not pay their way were usurped. Meanwhile SOMALIAN technicians built transport and telecommunications infrastructure to enable travel and communications across the country and across the borders into Kenya, Ethiopia, etc where the warlords kept their "investments". Today, Somalia has one government. They are entirely self-reliant in technology adaptation. They are wary of the interests serviced by "international aid" or "foreign direct investment", and most importantly, they have self-conviction in their ability to chart their own progress, irrespective of what the "international community" thinks.

Influence on Governance:

Nigeria became heavily centralised under two influences:

a) The discovery of oil caused dissolution of the varying development agendas being pursued in the then-3 regions: Western, Eastern and Northern. Arguments about how to share the "national cake" still divide the country. The divisions have been physical (there are now 30+1 states, and ethnically.

b) The resurgent military with their innumerable coups. The military destroyed the decentralised, and competitive, governments of the 3 regions and imposed a rigidly centralised "command and control" structure. The country is still under this structure. The 30+1 state structure has only put layers of bureaucracy and plenty of opportunities for corruption into the system. The state governments have very limited statutory powers, and are heavily dependent on the centre for funding, resource control or protection.

Influence on Politics:

Oil production is predominantly in the southern Niger Delta region. Some oil-yielding tar sands have been discovered in the northern Lake Chad region, but there are few reports on commercial production in this area. Nigeria used to be a British colony. There is evidence that Britain had advance seismic studies indicating large oil deposits in Southern Nigeria from 1950 onwards. The Westerners led by Obafemi Awolowo and the Eastern region, whose most vocal proponent was Nnamdi Azikwe, were strongly progressive and indicated the need for political and economic independence. Initially, the agitation was for separate nation-states but diplomatic discourse ensured complicity with one Nigerian country. The British made sure that political administration of the newly independent Nigeria was vested in the Northern region.

The first coup was by military officers from the former Eastern region. They were protesting marginalisation of that region from national (read: oil) revenues by the Northern-dominated civilian regime of Ahmadu Bello.

Riots erupted in the former Northern region in protest at killing of Bello and senior Northern military officers. The rioters targeted settlers from the Eastern Region. These events led parts of the Eastern Region to declare the independent nation-state called Biafra. Civil war. The Yoruba people of Western Nigeria were drawn into this war when they were attacked by Biafran forces.

Post civil war, the Northern region has used dominance in national politics to ensure that region has disproportionate access to oil revenues. Their efforts led to the national capital being moved from Lagos in the former Western Region to Abuja, within easy access of the Northern power base. Significant oil revenues have been spent on building Abuja from near-virgin forest to a "federal capital city".

Under the guise of "national quotas" (a form of proportional representation), the over-centralisation of government has also ensured that Northerners gain control of the national budget (70pc of which is funded by oil revenues), government spending (mainly by award of contracts), the civil service (the largest employer in
Nigeria
), and the military forces.

Political strategies in Nigeria now focus almost entirely on "sharing the national cake" among the powerful scions of Hausa/Fulani (Northern), Igbo/Ibo (Biafra) and Yoruba (Western) regions. Elected politicians do not govern to empower their electorate. There is no need to. Rather, elected politicians govern to appease the powerful members or sponsors of their political parties. This is to ensure that access to government contracts continues on leaving office.

See, USA-style democracy works in Nigeria ;-)!

Hint: Me just keeps current on socio-economic issues and investment opportunities.

Hint 2: By all means, enjoy your holidays. But Do Not Visit Nigeria With Any Intention Of Gathering "Statistics" Or Of Working With Government.

Hint 3: IMF, EU, WB, etc, etc do not have accurate figures. They get most of their information from official figures released by Nigerian government. The many reports are usually guesstimates. But the Nigerian government cannot even ascertain how many Nigerians there are. Why? Consider that the current president will not confirm how many children he has, to Britain's BBC (he does not talk to "lowly" Nigerian journalists) because it is "bad omen to count one's children". This attitude is prevalent in Nigeria and prevents accurate census or other statistical information being gathered. Nonetheless, successive official "census" figures reveal demographics that are globally unique to Nigeria: that the semi-arid North is more densely populated than the tropical South. The political mathematics? Higher population = more National Quota = more allocation of oil revenues. To give such official figures some credibility, government usually quotes the IMF, WB . .

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