Nigeria’s Political Economy and Development

Nigeria’s Political Economy and Development

By Nicole Burchette and Daniel Meier

By Nicole Burchette and Daniel Meier

Nigerian State and Economy

Nigerian State and Economy

The Nigerian state controls much of the extraction, deployment, and allocation of scarce economic resources.

This led to massive amounts of corruption within the government. Corruption became an integral part of Nigeria ﾕ s government for decades.

A large part of Nigerian corruption was the rent system. Most of the money made by the Nigerian government is channeled through the bureaucracy of the government.

The money that gets allotted to different parts of the government are known as rents. The rents usually go to government contractors, who often get the job through connections.

This leaves about 70% of the Nigerian population without such advantages, suffering in poverty.

These people often make their livings on petty trade and subsistence agricultural. This is called the informal sector of the economy. It is estimated that about 20% of the Nigerian GDP is made up of this informal sector.

The Nigerian state controls much of the extraction, deployment, and allocation of scarce economic resources.

This led to massive amounts of corruption within the government. Corruption became an integral part of Nigeria ﾕ s government for decades.

A large part of Nigerian corruption was the rent system. Most of the money made by the Nigerian government is channeled through the bureaucracy of the government.

The money that gets allotted to different parts of the government are known as rents. The rents usually go to government contractors, who often get the job through connections.

This leaves about 70% of the Nigerian population without such advantages, suffering in poverty.

These people often make their livings on petty trade and subsistence agricultural. This is called the informal sector of the economy. It is estimated that about 20% of the Nigerian GDP is made up of this informal sector.

Shift of EconomyShift of Economy

During the end of its colonial period and shortly after, the Nigerian economy was heavily dependent upon agriculture. Agricultural products were both exported and consumed domestically.

Beginning in the 1960s, the focus of the Nigerian economy shifted to the large scale industrial production of non-food goods. This was attractive to the government, because it involved large amounts of money being spent by the companies there, and created jobs.

Many farms were bought up in order to build factories, which proved to be a critical blow to Nigeria’s agricultural sector.

Many farms were bought up in order to build factories, which proved to be a critical blow to Nigeria’s agricultural sector.

During the end of its colonial period and shortly after, the Nigerian economy was heavily dependent upon agriculture. Agricultural products were both exported and consumed domestically.

Beginning in the 1960s, the focus of the Nigerian economy shifted to the large scale industrial production of non-food goods. This was attractive to the government, because it involved large amounts of money being spent by the companies there, and created jobs.

Many farms were bought up in order to build factories, which proved to be a critical blow to Nigeria’s agricultural sector.

Many farms were bought up in order to build factories, which proved to be a critical blow to Nigeria’s agricultural sector.

Dependency on OilDependency on Oil

Nigeria’s most lucrative resource is oil. Due to its profitability, many people were drawn to Nigeria to exploit its resources and economically desperate government

By the mid 70s, Nigeria ’s economy had shifted its focus to petroleum production and exportation.

While oil resources worked out in the short run, the economy eventually became dependent on money from oil, leading to dramatic economic failure.

Since the early 1970s, Nigeria ’s economy is about 90% dependent on oil production and exportation.

This, along with rampant corruption, and presidents siphoning billions of dollars of state funds for their own pockets, created many difficult problems for Nigeria’s government and economy.

Nigeria’s most lucrative resource is oil. Due to its profitability, many people were drawn to Nigeria to exploit its resources and economically desperate government

By the mid 70s, Nigeria ’s economy had shifted its focus to petroleum production and exportation.

While oil resources worked out in the short run, the economy eventually became dependent on money from oil, leading to dramatic economic failure.

Since the early 1970s, Nigeria ’s economy is about 90% dependent on oil production and exportation.

This, along with rampant corruption, and presidents siphoning billions of dollars of state funds for their own pockets, created many difficult problems for Nigeria’s government and economy.

Economic ReformEconomic Reform

In 1985, Nigeria’s government seemed to be taking a turn for the better for one last time. Many anticipated the induction of Ibrahim Babangida, who promised to reform Nigeria ’s economy for the better.

He implemented an economic structural adjustment program (SAP). This was largely supported by the World Bank.

Another integral piece of the new economic plan was privatization, primarily of the oil industry. During the oil boom, the government took control of much of the oil industry. This led to extreme amounts of corruption, proving the union between oil and government to be messy.

The government involved itself in the oil industry through para-statals, which are enterprises owned by the state.

In 1985, Nigeria’s government seemed to be taking a turn for the better for one last time. Many anticipated the induction of Ibrahim Babangida, who promised to reform Nigeria ’s economy for the better.

He implemented an economic structural adjustment program (SAP). This was largely supported by the World Bank.

Another integral piece of the new economic plan was privatization, primarily of the oil industry. During the oil boom, the government took control of much of the oil industry. This led to extreme amounts of corruption, proving the union between oil and government to be messy.

The government involved itself in the oil industry through para-statals, which are enterprises owned by the state.

Outcome of ReformOutcome of Reform

The Babangida government fell prey to the same issues

that plagued earlier governments, leading Nigeria

through much economic stress during the 80s and 90s.

In 1994, the Nigerian Economic Summit Group (NESG) was

founded. The goal of this group was to resolve Nigeria

’s economic issues in an organized, rational manner.

In 1999, Olusegun Obasanjo took office, with familiar

promises of economic prosperity and reform. He fell

short of the vast majority of his promises, leaving

the Nigerian economy in as bad a shape as it was in

prior.

The Babangida government fell prey to the same issues

that plagued earlier governments, leading Nigeria

through much economic stress during the 80s and 90s.

In 1994, the Nigerian Economic Summit Group (NESG) was

founded. The goal of this group was to resolve Nigeria

’s economic issues in an organized, rational manner.

In 1999, Olusegun Obasanjo took office, with familiar

promises of economic prosperity and reform. He fell

short of the vast majority of his promises, leaving

the Nigerian economy in as bad a shape as it was in

prior.

Ethnic and Religious Diversity

Ethnic and Religious Diversity

Promotes competition and increases the hostility between different groups

Overwhelming poverty contributes to the constant conflicts

Dominance of Hausa-Fulani, Igbo, and Yoruba Undefined structure of government allows

for corruption and bias Battle of Muslim vs. Christian “Guns, Germs,and Steel” by Jared Diamond This differences between societies reflects

their environment

Promotes competition and increases the hostility between different groups

Overwhelming poverty contributes to the constant conflicts

Dominance of Hausa-Fulani, Igbo, and Yoruba Undefined structure of government allows

for corruption and bias Battle of Muslim vs. Christian “Guns, Germs,and Steel” by Jared Diamond This differences between societies reflects

their environment

Government TacticsGovernment Tactics

Earlier military governments attempted to maintain balance

In the 1980’s the Babangida regime was northern dominated and that opened doors for future corruption

Abacha’s regime also leaned towards the north

Many attacks against civilians from the south

Detained activists and closed universitiesPolice brutality against southern ethnic groups

Earlier military governments attempted to maintain balance

In the 1980’s the Babangida regime was northern dominated and that opened doors for future corruption

Abacha’s regime also leaned towards the north

Many attacks against civilians from the south

Detained activists and closed universitiesPolice brutality against southern ethnic groups

Movement for the Survival of the Ogondi

People (MOSOP)

Movement for the Survival of the Ogondi

People (MOSOP)Organized by the writer and environmentalist Saro-Wiwa

Ogondi people were brutalized after protesting about the oil revenues

Self-determination: increased local political autonomy and national political representation

Inspired many other groups to push for their rights

Organized by the writer and environmentalist Saro-Wiwa

Ogondi people were brutalized after protesting about the oil revenues

Self-determination: increased local political autonomy and national political representation

Inspired many other groups to push for their rights

Role of WomenRole of Women

Dominate agricultural productionAlthough women have economic importance that does not reflect very much in politics

Women’s associations in the past were based on more domestic issues, and not politics

Only 8 of 469 legislators are women

Dominate agricultural productionAlthough women have economic importance that does not reflect very much in politics

Women’s associations in the past were based on more domestic issues, and not politics

Only 8 of 469 legislators are women