To what extent is oil the beginning of Nigeria ‘s jobs?
Note to client: I have non used any of the information from your literature reappraisal as I thought you would prefer that I brought some new thoughts and beginnings to the thesis. This therefore gives you the option to unify my work and yours as you so take.
Background – Nigeria
Nigeria is retrieving easy from 15 old ages of corrupt military regulation under General Sani Abacha, who pillaged the state until his decease in 1998. In May 1999, Olusegun Obasanjo, a civilian—albeit a former armed forces ruler—was democratically elected as president. He set about destructing Mr Abacha’s abominable bequest.
But Nigeria ‘s jobs seem endless. Corruptness is prevailing and the economic system is overly dependant on oil. Religious struggle between Christians and Muslims and robbery in the oil-rich Niger delta are perpetually destabilizing the state. Since his controversial re-election in April 2003, Mr Obasanjo has pushed through some painful reforms, though a mountain of political obstructions stands in the manner of his technocrats’ best thoughts. He has set the day of the month for a presidential election in April 2007, which could see Nigeria ‘s first passage from one civilian authorities to another. But charges of corruptness threaten to defile its consequence.
The Economist, Backgrounder on Nigeria, 21 February 2007
(hypertext transfer protocol: //www.economist.com/research/backgrounders/displaybackgrounder.cfm? bg=759901 )
Nigeria gained independency from Britain in 1960 and wrote a federal fundamental law vouching rights to minority groups, and in 1963 Nigeria became a democracy. Since this clip, nevertheless, democratic authoritiess have been the exclusion instead than the regulation in Nigeria and for most of the clip since independency, the state has been ruled by military absolutism. ‘Colonial-era regional and cultural competitions carried on without intermission. In January 1966 Southerners led a military putsch which a cell of northern officers reversed six months subsequently. In January 1967, the eastern Ibo part tried to splinter, triping the Biafran war and a awful dearth which lasted until 1970. In 1979, a military authorities led by Olusegun Obasanjo restored civilian regulation and ratified a new, American-style presidential constitution’ ( Economist, 2004 ) . The oil roar in the 1970s brought wealth to Nigeria but this was accompanied by corruptness and undepocratic inclinations. In 1983 military regulation began one time once more with merely a brief period of civilian regulation in 1993 which gave manner to another five old ages of military regulation until General Abacha died in 1998. The longest back-to-back period of elective civilian regulation ( once more under Olusegun Obasanjo ) has been from 1999 to the present twenty-four hours, and this period has besides seen advancement made on some of Nigeria’s jobs.
In footings of homo development, Nigeria is ranked 159 out of 177 states harmonizing to the UNDP 2006 Human Development Report. Old ages of military regulation, combined with high degrees of corruptness and economic misdirection have had a important negative impact on the Nigerian economic system and Nigerian GDP per capita, adjusted for buying power para, was USD1,154 in 2004 ( UNDP 2006:285 ) . The one-year growing rate of GDP per capita was 0.8 % for the period 1990-2004 compared with 0.2 % for the period 1975-2004 ( UNDP 2006:333 ) . Average life anticipation in Nigeria is 43.4 old ages. Oil exports history for about half of GDP and about all of Nigeria’s exports. The state has had high degrees of foreign debt, but in 2006 became the first African state to pay off its Paris Club debt. However, the state still owes around $ 5 billion to the World Bank and private sector loaners.
Aside from jobs with keeping democratic regulation and prolonging economic development, Nigeria has besides suffered from assorted struggles since independency. The civil war of 1966-1970 is merely one illustration ; in fact struggle ( peculiarly in the oil bring forthing countries ) has persisted through military and civilian authoritiess and continues today, most notably in the Niger Delta country.
Background – the ‘resource curse’
The resource expletive refers to the general theory that an copiousness of natural resources is really harmful to a state. The injury that the natural resources cause may take different signifiers, and may impact on the state through different procedures or mechanisms. Thus specific theories of how resource copiousness can be a expletive instead than a approval have been developed. The biggest set of theories relate to how oil wealth novices or sustains violent struggle ( which may so indirectly lead to economic and political jobs ) . For illustration, it is argued that natural resources frequently provoke ‘greed-motivated’ struggles within societies as different groups battle for some of the returns from the resource wealth. This may take the signifier of breakaway struggles in the resource-rich part or may take a more elusive signifier such as battles for control of authorities or between different sections within a authorities for entree to some of the money generated from the natural resources.
Alternatively, an copiousness of natural resources may be damaging to the development of a system of political answerability. A authorities in a resource dependent state may non necessitate to revenue enhancement its citizens in order to cover the costs of authorities because they have sufficient income from the natural resources. While revenue enhancement may non be popular with citizens, it does enable them to demand answerability from the authorities which creates a fitter political relationship between the authorities and the governed. Furthermore, in the face of unfavorable judgment or ailment from the population, a authorities which relies on natural resources instead than revenue enhancement to pay for its armed forces is more likely to be able to stamp down dissent violently. Related to this, is the issue of corruptness. In resource-rich states, authorization may be maintained through the allotment of resources to obedient or favoured components and the inducement to further reasonable long-run economic and societal policies is decreased. As a consequence, the authorities has little need to construct up the institutional substructure usually needed to modulate and revenue enhancement a productive economic system, and the political establishments and economic system frequently remain undeveloped.
Natural resource wealth may besides impact the economic system through the exchange rate mechanism. This is known as ‘Dutch disease’ . This occurs when the export grosss from the natural resources increase the existent exchange rate, doing other exports ( such as agricultural and fabricating exports ) less competitory in international markets. Consequently these exports shrink and so the economic system becomes even more dependent on the natural resource exports therefore increasing volatility as the economic system is so vulnerable to any alterations in the monetary values for the natural resources. Since the monetary values of natural resources on the universe market can fluctuate wildly, such heavy dependance on natural resource exports can do unsafe volatility in a country’s economic system.
An copiousness of natural resources has besides been associated with inordinate degrees of foreign debt. Governments tend to seek loans because they are anticipating more income in the hereafter from the natural resources, and the loans are frequently easy accessible because the loaning states or establishments view the natural resources as collateral for the loans. This is all good and good when the monetary value of the resources is high but as mentioned above, monetary values tend to be volatile. Thus a bead in monetary values on the universe market can coerce a state into arrears on their debts, taking to penalty involvement payments and an increasing debt load.
This thesis is based on the theory that the copiousness of natural resources may be damaging to the development of a state economically, politically and socially. It seeks to find what inauspicious impact the extraction and export of oil has had on Nigeria. As such, it starts with a reappraisal of the chief literature refering the alleged ‘resource curse’ including an overview of ‘Dutch disease’ and ‘rentier state’ theories. It besides considers some other theories of African development jobs. This is followed by three substantial chapters each of which considers a debatable subject for Nigeria:
- economic system, poorness and inequality ;
- democracy and authorities ; and
I have arranged this thesis into these chapters as a means to construction the analysis around the three chief theories ( detailed in the literature reappraisal below ) of how resources impact development. This agreement is non intended to connote that these are distinguishable jobs which are non in any manner connected – on the contrary, I believe all three are inextricably linked, and some of the convergences between them will go obvious in the analysis that follows.
For each chapter I will sketch the nature of the job and so see how much of it can be attributed to oil or the ‘resource curse’ , and what parts other factors have played. Finally I will reason with a sum-up of the findings of each chapter and a brief consideration of how some of these jobs may be overcome in the hereafter, whatever their cause.
Resource expletive – Dutch disease, ‘rentier state’ and struggle theories
Since the late 1990s, several analyses found that natural resource wealth can be a expletive – the alleged ‘resource curse’ – in so far as this wealth causes a assortment of economic, political and societal jobs. It is argued that resource copiousness can, perversely, hamper economic growing. Further it has frequently been seen to decelerate political development and hinder democratic passages. It is besides frequently claimed that resource copiousness contributes to the oncoming and continuance of civil struggle ( which in bend shackles economic and political development ) through furthering greed or grudge.
Keen ( 1998 ) discusses the assorted economic inducements for warring parties to keep a certain degree of force in civil wars. ‘Economic force will be more likely when the possible wagess are great. Valuable natural resources and trading chances originating from struggle can both increase the economic benefits of war’ ( Keen, 1998:40 ) . The economic benefits of war do non normally contribute to sound economic direction by authorities or to good degrees of economic growing and poorness decrease. On the contrary, in fact, resource copiousness has been shown to hold anegative consequence on economic growing. In their much acclaimed analysis of the relationship between resource wealth and economic growing, Sachs and Warner ( 1995:2 ) ‘show that economies with a high ratios of natural resource exports to GDP in 1971 ( the base twelvemonth ) tended to hold low growing rates during the subsequent period 1971-89. This negative relationship holds true even after commanding for variables found to be of import for economic growing, such as initial per capita income, trade policy, authorities efficiency, investing rates, and other variables.’ Their consequences bind in with the theory of ‘Dutch disease’ , and confirm the importance of fabrication for endogenous growing effects ( Sachs & A ; Warner ( 1995:23 ) . Dutch Disease, harmonizing to Ross ( 2003:6 ) ‘occurs when a flourishing minerals sector raises both the existent exchange rate, and the cost of inputs for the fabrication and agricultural sectors. Both of these effects will raise the monetary value – and hence cut down the international fight – of exports from the fabrication and agricultural sectors. The net consequence may be an absolute diminution in chances for the poor.’
In footings of the impact of oil on poliotical and democratic development, de Soysa ( 2000:126 ) argues that over-dependence on natural resoucres ‘creates the political relations of the rentier province, which in the long tally leads to the diminution of province capacity, the corruption of formal establishments, and the witholding of the public goods that can guarantee economic development and peace.’ Similarly, Guaqueta ( 2003:83 ) explains that the extraction of natural resources, ‘especially in the oil and excavation sectors, has been often linked to human rights maltreatment and environmental spoil by inhibitory and corrupt states.’ As de Soysa ( 2000:121 ) explains, ‘theories of the “rentier state” are based on statements that suggest that resource copiousness, and the gross streams that it generates, affects the proper development of province establishments, fuelling corruptness and taking to perverse subsidisation policies and budgetary mismanagement.’ This prevents ‘long-term, concerted state-society agreements that derive from bargained results that guarantee the proviso of public goods, good economic and societal policies, higher economic public presentation, and possibly equity and peace.’
A immense sum of analysis has debated the relationship between resource copiousness and struggle. Collier & A ; Hoeffler ( 1998 ; 2002a ; 2002b ) , for illustration, find that resource wealth ( measured by primary exports as a proportion of GDP ) increases the likeliness of the oncoming of civil struggle. Fearon & A ; Laitin ( 2003 ) find that primary exports as a proportion of GDP have no impact on the oncoming of war but that oil exports specifically do increase the likeliness of war. Humphreys ( 2003 ) besides finds that oil production increases the likeliness of war although oil militias entirely have no important impact. While a batch of the quantitative analysis has indicated a relationship between resource wealth and struggle, this relationship is non uncontested. Harmonizing to de Soysa ( 2000:125 ) ‘an copiousness of undersoil assets has a direct positive consequence on intrastate armed struggle, cyberspace of variables commanding for economic, political, and societal factors.’ Ross ( 2004:338 ) examines a aggregation of recent surveies and claims his analysis ‘suggests four regularities – which could be characterized as two forms and two conspicuous ‘non-patterns’ . The first form is that oil exports are linked to the oncoming of struggle ; the second is that ‘lootable’ trade goods like gemstones and drugs are correlated with the continuance of struggle. The first non-pattern is that agricultural trade goods seem to be uncorrelated with civil wars, and the 2nd is that primary trade goods – a class that includes oil, non-fuel minerals, and agricultural goods – is non robustly associated with the oncoming of civil war.’ Oil resources may take to conflict because the lucrative grosss which authoritiess generate through contracts with foreign oil companies are used to finance violent runs against non-state armed groups, or struggle may be exacerbated as corrupt armed groups ( province or non-state ) usage methods such as the deliberate supplanting of civilian communities to procure for themselves the oil extraction and the money it generates ( Guaqueta 2003:83 ) . ‘Rebellions have frequently been concentrated in resource-rich countries. This is partially because local people feel they have non benefited from the resources in their country, and partially because these parts can prolong rebel movements.’ ( Keen, 1998:41 )
Other theories of African development jobs
It is impossible to insulate the jobs confronting Africa from the bequest of the continent’s colonial history. Colonial powers frequently exaggerated cultural differences and stray different cultural groups from one another in order to forestall a incorporate opposition. In many instances, such segregation has exacerbated cultural tensenesss in the post-colonial epoch. Kaldor ( 2001:81 ) claims that the European colonial leaders sought to sort and split the populations which they ruled, and imposed stiff cultural individualities on societies which had antecedently held merely a loose sense of cultural individuality. She explains that in ‘the post-independence period, most regnant parties espoused a secular individuality that embraced the frequently legion cultural groups within the unnaturally defined district of the new states. As post-independence hopes faded, many politicians began to appeal to particularistic tendencies.’
The ‘development’ procedures set in gesture across the South ( peculiarly those procedures instigated or imposed by international fiscal establishments such as the IMF and the World Bank ) since the terminal of the colonial epoch have besides been cited by many as a major cause of jobs across the development universe. In fact, it is argued by some that the development endeavor is a continuance of colonial power by a different name ( see, for illustration, Kothari 2005 ) . One facet of development direction ( or misdirection ) that has caused peculiar concern, is the structural accommodation programmes imposed ( as a status for much needed finance ) on many developing states by the IMF in the eightiess. As Duffield ( 2001:151 ) claims, the procedure of structural accommodation ‘instigated a great turbulence in national economic systems and accelerated the diminution in life standards.’
A note on set uping causality
It is of import to observe that though many surveies show a positicve important correlativity between resource copiousness and the oncoming or continuance of struggle, set uping a correlativity is really different from set uping which manner ( if any ) causality runs between the two variables. In fact, it may be that civil war causes resource dependance instead than frailty versa. As Ross ( 2004:338 ) explains, ‘civil wars might do resource dependance by coercing a country’s fabrication sector to fly while go forthing its resource sector – which is location-specific and can non easy travel – the major force in the economic system by default.’ Alternatively, the correlativity may be observed because although the two variables ( oil wealth and some step of struggle ) are non straight correlated with each other, they are both independently correlated with another, immeasurable 3rd variable ( e.g. weak regulation of jurisprudence ) .
The interrelated nature of the three types of jobs that I have identified may besides present a job for set uping causality, or at leats the mechanism through which cause leads to consequence. For illustration, oil may do struggle but it is non needfully clear whether this is more straight through a direct mechanism of the ‘resource curse’ or more indirectly through, for illustration, ‘rentier state’ theory – i.e. struggle is non inspired by greed for the resources but by grudge at the manner in which the province maps ( as a consequence of the petro-dollars ) . For illustration, as de Soysa ( 2000:121 ) explains, ‘the consequences of empirical analyses that find a strong positive connexion between natural resource copiousness and struggle may in fact be capturing the grudge effects generated by the perverse sociopolitical conditions associated with the falsifying effects of trust on convenient resource streams.’ There can be a negative procedure of underdevelopment, undemocratic political establishments and force which all provender in to each other. ‘Dutch disease and political factors such as rent-seeking, corruptness, and other dysfunctional political procedures are likely to be locked in a barbarous rhythm of underdevelopment and armed conflict’ ( de Soysa, 2000:126 ) .
Chapter 1: Economy, poorness and inequality
Nigeria ‘s freshly elected authorities presides over an economic system with huge oil wealth and plentiful labor and accomplishments. But it besides inherits a afflicted giant. For Africa ‘s 2nd largest economic system to recognize its full potency, its new leaders need to undertake a host of hard and complex challenges: encouraging broader-based wealth creative activity, bettering basic substructure and services, battling corruptness, and avoiding stultifying sectarian political differences. Besides more efficient domestic resource mobilisation, they besides must procure greater external funding and debt alleviation and pull more foreign investing to sectors other than oil.
Obadina ( 1999 )
The nature of the job
For most of the 1990s, per income capita growing was negative in Nigeria. This hapless record on macroeconomic growing is coupled with an highly skewed income distribution and accordingly high degrees of inequality. Harmonizing to Ross ( 2003:11 ) , ‘Nigeria has one of the highest inequality rates – measured by the gini coefficient – in sub-Saharan Africa. Furthermore, inequality seemingly rose from the mid-1980s to the late 1990s.’ The richest 10 % of the population receive 33.2 % of income while the poorest 10 % receive merely 1.9 % ( UNDP 2006:337 ) . The state has a immense debt load with high service demands and good over half the population is populating below the poorness line ( Akpobash, 2004:1 ) . From 1990 to 2003, 34.1 % of the population were populating below the national poorness line and in the same period, 92.4 % were populating on less than $ 2 per twenty-four hours ( UNDP 2006:294 ) .
Harmonizing to UNDP ( 2006:341 ) , primary goods accounted for 98 % of exports in 2004 while fabricating accounted for merely 2 % . This is a extremely skewed distribution of exports. Furthermore, exports accounted for 55 % of GDP in 2004 and this is remarkably high. In 2004, Nigeria received USD573.4 million of official development aid which equated to USD4.5 per capita. Net foreign direct investing flows were tantamount to 2.1 % of GDP in 1990 and 2.6 % in 2004 ( UNDP 2006:346 ) , and entire debt service as a per centum of GDP shrank from 11.7 % in 1990 to 3.3 % in 2004. From 2003 to 2004, public outgo on wellness accounted for 1.3 % of GDP, and military outgo was 1 % of GDP in 2004 ( UNDP 2006:350 ) .
The resource expletive
Akpobash ( 2004:1 ) argues that the hapless public presentation of the Nigerian economic system can be mostly blamed on the country’s dependance on oil. He claims that Nigeria ‘is a casebook illustration of an economic system under the influence of the Dutch Disease with its hurtful impact on the development of other facets of the existent sector. Oil generates about 90 % of foreign exchange net incomes and 75 % of authorities grosss. It contributes about 30 % of GDP but employs merely approximately 3 % of the labor force.’ Ross ( 2003:2 ) explains that despite immense rents from oil, income per capita has been falling since 1970 and poorness rates have non fallen. He blames the hapless economic public presentation on over-dependence on the oil sector and deficiency of variegation. ‘It would be hard to overstate the function of oil in the Nigerian economic system. Since the first oil monetary value daze in 1974, oil has yearly produced over 90 per centum of Nigeria’s export income. In 2000 Nigeria received 99.6 per centum of its export income from oil, doing it the world’s most oil-dependent country’ ( Ross, 2003:2 ) .
Harmonizing to Welch ( 1995:636 ) , oil ‘has been the hard currency beginning that keeps Nigeria semi-solvent. Well over 90 per cent of its foreign-exchange net incomes come from oil royalties and gross revenues. Export revenue enhancements provide the lion’s portion of national grosss and accrue straight to the Federal Government, which retains more than half before passing out portions to Nigeria’s 30 provinces and 589 local authorities authorities.’ This heavy dependance on the oil sector makes the economic system highly sensitive to any dazes in the oil markets. Any volatility in the oil market is reflected as volatility in the Nigerian economic system because the deficiency of other beginnings of income means the economic system is unable to absorb any dazes to oil monetary values. This volatility is clearly non contributing to steady growing and investing. For illustration, Nigeria increased its debt load in response to the oil roar of the1970s and so fell into arrears when oil monetary values on the universe market dropped in the 1980s such that by 1990, debt service amounted to 11.7 % of GDP.
Not merely has heavy dependance on the oil industry caused the economic system as a whole to endure, but it has had peculiar impacts on the poorer subdivisions of society. Oil extraction and export is non a pro-poor industry as it employs few unskilled ( i.e. hapless ) workers. The lone manner income from oil exports is likely to lend to cut downing poorness, hence, is through a ‘trickle-down’ procedure or through some signifier of governmental controlled re-distribution of income ( e.g. through a revenue enhancement and societal security system ) . As Ross ( 2003:5 ) explains, the fact that the oil industry doesn’t create much employment for the hapless sectors of society ‘would affair small if growing in the crude oil sector had a important multiplier consequence, bring forthing growing in other sectors of the economic system. Although this issue has non been well-studied, crude oil industries are normally seen as neglecting to bring forth growing in other economic sectors.’ In fact ‘trickle-down’ theory is mostly disputed across most sectors these yearss, but at the really least we can see that a trickle-down procedure is improbable to ensue from oil exports ( possibly because a big proportion of the income generated accrues to foreign companies who take it out of the state and to the authorities ) , and surely has non taken topographic point in Nigeria.
As mentioned in the literature reappraisal, development policies and, in peculiar, structural accommodation programmes in the 1980s caused economic jobs for many developing states. Nigeria was no exclusion. ‘In 1986, as the political passage was inaugurated, the Babangida authorities initiated a comprehensive Structural Adjustment Programme ( SAP ) , an economic liberalisation bundle inspired by the prescriptions of the IMF and the World Bank. While Nigeria eschewed direct loans from the IMF, the SAP however incorporated the cardinal elements of economic orthodoxy’ ( Lewis, 1996:336 ) . As Akpobash ( 2004:1 ) puts it: ‘Following the prostration of the oil market in the early 80s which saw Nigeria’s per capita income plumb bob from about $ 1,000 to about $ 300 and the drastic autumn in the degree of foreign exchange net incomes and authorities grosss, the state was forced to ship on a Structural Adjustment Programme ( SAP ) in 1986.’ The SAP in Nigeria was in fact ne’er to the full implemented and in any instance it did small to excite economic growing and surely nil for pro-poor growing, though it might be argued that it succeeded in partly cut downing the existent exchange rate which had increased as a consequence of ‘Dutch Disease’ . Arguably, the SAP did considerable harm to Nigeria, and non merely economically. The autumn in the exchange rate reduced the criterion of life for many Nigerians who could no longer afford basic goods and services such as nutrient and wellness attention. Demontrsations against the SAP resulted in violent clangs against the province forces and many protestors were killed.
Ross ( 2003:14 ) compares the development of Indonesia and Nigeria to show that oil wealth entirely does non do the jobs the Nigeria has faced. ‘Both states received big oil windfalls from the late sixtiess to the late seventiess, and both states squandered much of it on backing and money-losing public investings. The cardinal difference between the two, nevertheless, was the Indonesian government’s stronger committedness to developing the non-oil sector – peculiarly by advancing manufactured exports, and back uping agricultural development. The steady growing of these pro-poor sectors created occupations for low-skill workers and boosted rural incomes ; it besides diversified Indonesia’s export sector, doing the economic system and authorities less dependent on oil, and therefore, less susceptible to the volatility of the international oil market.’ Furthermore, the Indonesian authorities has minimised its financial shortage and maintained a competitory exchange rate, and has invested more in primary instruction – all three factors lending to take down poorness comparative to Nigeria.
Oil has been a major cause of Nigeria’s economic jobs. However, oil is non responsible all entirely. Development policies such as the 1986 structural accommodation programme have besides played their ain portion in worsening already bing economic jobs. Furthermore, even where oil can be seen as a cause of hapless economic growing and high degrees of poorness and inequality in Nigeria, it merely caused these jobs in concurrence with other forces. Had the oil exports been good balanced by fabricating exports, for illustration, it is improbable that Nigerian economic jobs would hold been ( or would go on to be ) so terrible.
Chapter 2: Democracy and authorities
By far, the most serious hindrance that the democratic procedure must get the better of in Nigeria is permeant poorness. In a state rich in human resources, in cultural traditions and in oil production, 1000000s of Nigerians live in desperate poorness. The relief of their conditions of life through the obliteration of poorness is a practical stipulation of an digesting democracy. Elections, parliamentary establishments, a free imperativeness and the regulation of jurisprudence are all necessary to a functioning democracy ; but they are non in themselves sufficient to procure it. If the people themselves are missing the properties of endurance, these elements are meaningless to their lives. Democracy in Nigeria must get the better of this most basic hindrance.
IDEA ( 2000: Eighteen )
hypertext transfer protocol: //www.idea.int/publications/democracy_in_nigeria/upload/democracy_in_nigeria.pdf
The nature of the job
After decennaries of British colonial regulation, Nigeria declared its independency in 1960 but has therefore far failed to keep democratic regulation for more than a few old ages at a clip. ‘From 1966 to 1979, and from 1983 to 1998, the state was ruled by military dictators. In 1966, when the military first intervened in Nigerian political relations, the intercession was greeted as a necessary undertaking concerned with nation-building and reordering the corrupt province, but within six months the ground forces was divided into cultural and regional cabals which exacerbated bing tensenesss and spurred a procedure of national decomposition ( Fayemi, 2003:58 ) . This resulted in a civil war ( 1967-70 ) which enhanced province power and provided some footing of legitimacy for the ground forces. Over clip the military became de-institutionalised and moved towards a more individualized manner of regulation. Writing during the current period of democratic regulation, Luckham ( 2003:13 ) categorises Nigeria as a state in which ‘democratisation remains extremely contested and its result uncertain.’
Writing after the failed presidential elections of 1993, Lewis ( 1994:340 ) explained that ‘ [ o ] nce once more the political category, newbreeds and veterans likewise, have demonstrated a misanthropic and ciphering neglect for democratic rule or behavior. The discredit of the politicians can merely function to weaken the democratic cause.’ Even since the terminal of military regulation in 1999, democratic values have non become normalised and deepened in society to the extent that was hoped, and nor has the passage been accompanied by the peace that many assumed would come manus in manus with democracy ( Fayemi, 2003:57 ) . With elections coming up in April of this twelvemonth, many are still worried that democracy has non been sufficiently consolidated to guarantee a free and just ballot. Talking in February, Atiku Abubakar, Vice-President, Federal Republic of Nigeria ( Chatham House, 2007 ) claimed that ‘the greatest challenge confronting Nigeria today in the runup to the April elections is the looming absolutism facing us head-on. Unless we redouble our attempts to salvage our democracy and put in a new sort of leading, a listening leading, a leading that respects and holds sacrosanct the wants and aspirations of all Nigerians, our state is clearly at a important hazard of a general dislocation of jurisprudence and order and serious internal conflict.’
OneWorld ( 2007 ) explains the Nigerian political system: ‘ [ T ] he Nigerian Constitution has established three weaponries of authorities – the executive ( President and cabinet ) , Legislature ( upper and lower house ) and Judiciary. There are now about 30 political parties, led by the opinion Peoples Democratic Party ( PDP ) , Alliance for Democracy ( AD ) and All Nigeria Peoples Party ( ANPP ) . The attack of presidential elections in April 2007 is showing a enormous challenge to the country’s democratic certificates. The northern provinces will experience that it is their “turn” to supply the leader whilst the troubled Niger Delta part will experience the same.’ The democratic passage in Nigeria is far from being complete and it is likely to be a long clip before democracy is consolidated. The Economist ( 2006 ) claims that the 1999 elections ‘had seemed to stop a cheerless rhythm of decennaries of military putschs and absolutisms. Nigerians were trusting following twelvemonth to see the first-ever peaceable handover from one elected president at the terminal of his constitutional term to another. Alternatively, they have witnessed an baleful rise in political recrimination and violence.’ Democracy is non universally accepted in Nigeria and it seems that force and non elections is frequently still the preferable agencies for deciding political differences.
Linz and Stepan ( 1996:10 ) cite three conditions which they consider to be requirements for the consolidation of democracy: ‘a lively and independent civil society, a political society with sufficient liberty and a on the job consensus about processs of administration, and constitutionalism and the regulation of law.’ Arguably, all three of these are missing in Nigeria. The inquiry, so, is to what extent the oil welath in Nigeria has prevented these three conditions from being met.
The resource expletive
Fayemi ( 2003:58 ) argues that after the civil war ended in 1970, the ‘improvement in the country’s economic system as a consequence of its freshly discovered oil wealth sharpened the marauding inherent aptitudes of the military opinion elite and its Alliess in the civilian bureaucratism and concern sector. This greatly undermined the institutional capacity for proper administration and, in bend, the nation-building project.’ Wantchekon ( 1999:18 ) besides attributes the over-centralisation of Nigerian authorities to the country’s over-dependence on oil, indicating out that while ‘the portion of oil grosss in the Nigeria’s GDP increased from 1 per centum in 1960 and 30 per centum in 1964 to more than 90 per centum after 1979, its authorities has become progressively centralized.’
Ross ( 2003:2 ) explains that since ‘the early 1970s, the Nigerian authorities has yearly received over half of its grosss – sometimes every bit much as 85 per centum – straight from the oil sector. These oil grosss are non merely big, they are besides extremely volatile – that is, they can fluctuate drastically in size from twelvemonth to twelvemonth, doing the size of authorities, and the support of authorities plans, to fluctuate accordingly.’ Clearly fluctuations in support for authorities programmes presents a major obstruction to continuity and the success of any political undertaking.
Welch ( 1995:636 ) high spots the deficiency of answerability in the Nigerian political system with the illustration of accounting for the petro-dollars. ‘Nigeria as a whole has received one million millions of dollars from oil – most of which seems to hold disappeared into the national economic system and/or private custodies without satisfactory accounting, and without perceptible benefit to most Nigerians.’ Ross ( 2003:11 ) cites the petro-dollars themselves as the cause of this deficiency of answerability on the footing that the oil wealths enable the authorities to bear down minimum revenue enhancements ( therefore cut downing the agencies by which citizens can keep the authorities accountable ) and to administer backing in order to keep order without a system of democratic representation. ‘The Nigerian authorities distributes a big fraction of its budget in the signifier of backing ; it has besides eliminated the personal income revenue enhancement ( at the federal degree ) . Although province and local authoritiess have the legal authorization to cut backing and raise revenue enhancements on their ain, they have deficient inducements to make so, given the big transportations they receive from the federal government’
Ross ( 2003:6 ) argues that ‘democracy typically evolves from societies undergoing industrialisation. The industrialisation procedure gives rise to a larger, and more influential, urban working category, which tends to do for a more stable and democratic authorities. Oil development by and large does non take to industrialisation ; it can even retard industrialisation by doing the Dutch Disease.’ Thus it can be seen that the deficiency of industrialization and the deficiency of a manfucating base ( which can be attributed to the oil dependance in Nigeria ) may hold had negative impacts on democratic passage and consolidation in Nigeria. Wantchekon ( 1999:16 ) compares the political development of Nigeria with that of Norway, explicating that ‘ [ w ] biddy oil was discovered, Nigeria had a weaker province capacity ; as a consequence, the cardinal authorities had more discretion over distributive policies. This discretional power generated a more centralised federal system and tenure advantage. Excluded or marginalized political groups reverted to non-constitutional agencies of political competition which lead to political instability and inhibitory military rule.’
Even if oil has been a major subscriber to the failing of democratic political establishments in Nigeria, it is the oil wealth entirely that has caused these jobs, it is the oil wealth interacting with other factors. Wantchekon ( 1999:5 ) claims that resource copiousness per Se will non barricade democratic regulation, but that ‘when the regulation of jurisprudence is weak and the authorities is centralized as was the instance in Nigeria after the oil roar, resource copiousness will be given to bring forth one party laterality and the dislocation of democracy.’ Furthermore, as Ross ( 2003:11 ) argues, democracy has non been common in post-colonial Africa by and large, and factors other than oil may hold played an even greater portion than the oil itself.
The colonial bequest has been a factor in hindering democracy across Africa. The colonial swayers divided the continent into states with arbitrary boundary lines embracing communities of different cultural and spiritual backgrounds while at the same clip overstating the differences between these societies. Welch ( 1995:637 ) explains that ‘ [ c ] olonial regulation created governmental machinery distant from the people, something both to be defended against and to be pressed for resources ; merely through cultural links could equilibrate be obtained.’ Thus immature African provinces have struggled to invent political systems which can efficaciously and reasonably represent their populations. In the instance of Nigeria, Welch ( 1995:635 ) claims that ‘ [ a ] lthough societal diverseness has been grudgingly recognised in the generation of governmental units, Nigeria remains marked by misdirecting federalism. Control comes from the top down.’ The federal system in Nigeria claims to stand for the many different cultural groups but in world each province in the federal system has its ain cultural bulk and minorities therefore the system is non every bit representative as it purports to be.
It seems that oil has hampered the development of accountable democratic establishments in Nigeria, but that the relationship is non every bit simple as it first sounds. In fact it was the weak capacity of the province in Nigeria when oil was foremost being exported that allowed the authorities to gain from the oil rents and non to administer the additions more equitably. This established a system of backing which has helped to prolong undemocratic regulation for most of the country’s history. There are besides many African states which are non so rich in natural resources ( and non about so resource dependant ) but which have had similar jobs in gaining a full democratic passage. Part of this job can be traced back to the system of colonial regulation.
Chapter 3: Conflict
The three chief cultural groups are the Yoruba in the West, Igbo in the East and Hausa in the North, with their ain linguistic communications and faiths. At a deeper degree, there are over 250 cultural groups to be found in Nigeria, many enduring poorness and exclusion from land and other rights with sensed grudges against their neighbors and the higher governments.
Political freedom has allowed cultural and spiritual groups to show their defeats but on many occasions this has been done violently, doing every bit many as 14,000 deceases since 1999. The recent debut of Shari’a jurisprudence in 12 northern provinces is the beginning of great clash with Christian communities who live at that place. Serious force between Christian and Muslim communities occurred in Plateau and Kano provinces in 2004. The province lacks the agencies and motivation to look into condemnable Acts of the Apostless and root out the culprits of force.
Inter-ethnic discord in Nigeria does non impart itself to easy analysis. For illustration, Human Rights Watch has reported that struggle in the oil-producing Niger Delta is more about entree to political backing that provides chances to gain from oil operations than bitterness against the oil companies themselves.
OneWorld Nigeria Country Briefing
(hypertext transfer protocol: //www.oneworld.net/guides/nigeria/development )
The nature of the job
Conflict of changing degrees of strength has been a job for Nigeria since independency in 1960, and non merely during the periods of military regulation. Indeed, quite the contrary harmonizing to Fayemi ( 2003:57 ) . ‘The graduated table, range and strength of struggle in Nigeria since the terminal of military regulation challenges the false nexus between military detachment with political relations and the demilitarisation of Nigerian society. Social force has increased since the start of civilian rule.’ In footings of its geographic location, struggle in Nigeria has tended to be concentrated in th eoil-producing countries, most notably ( but by no agencies entirely ) the Niger Delta part. As the Economist ( 2006 ) expalins, ‘an insurgence is declining in the Delta part, with regular onslaughts on oilinstallations, snatchs of Western oil workers and auto bombardments. Shoot-outs with the ground forces and constabularies are now serious personal businesss ; on October 2neodymiumapproximately 10 soldiers were killed in one such clang. A shady group naming itself the Movement for the Emancipation of the Niger Delta, which demands that more of the oil grosss go to the local people, is responsible for most of the mayhem.’
The resource expletive
The findings on the relationship between resource wealth and struggle which I outlined in the literature reappraisal suggest that there is a correlativity between oilexportsand the oncoming of struggle, even if oil resources per Se may non be correlated with struggle. Either manner, this is likely to hold a large impact in Nigeria as the state is to a great extent dependent on the export of oil – in 2000, fuel exports accounted for 99.6 % of entire exports and 48.7 % of GDP ( Ross, 2003:19 ) . It is no happenstance that much of the struggle in Nigeria has centred around demands from cultural minorities in the oil-producing parts to see a larger portion of the economic benefit derived from the oil exports. For illustration, ‘the agitation among the Ogoni and Ijaw peoples in the Niger Delta can in portion be traced to their desire to win a larger portion of the region’s economic wealth’ ( Ross, 2003:3 ) .
Harmonizing to Jonathan Bearman, speech production in July 2006 ( Chatham House, 2006 ) , struggle and force ( peculiarly in the Niger Delta part ) are still major jobs, even after several old ages of civilian regulation. ‘As for events in the Delta, Chevron can no longer run in the swamps, while Agip and Shell are doing losingss. A taking hawkish group in the part, the Martyrs Brigade, has declared war on Exxon Mobil. Violence in the part is bing the oil companies a great trade: US $ 3-4 billion. The problems could close down 50 % of production.’ This besides alludes to the well-documented opposite relationship between struggle and economic growing – but the relationship goes farther than to shut down production of foreign oil companies’ extraction workss. Collier ( 2000:101 ) , for illustration, provinces, ‘civil wars inflict really high costs on an economic system. I estimate that on norm during civil wars the economic system as a whole diminutions by around 2.2 per centum per annum relation to its implicit in growing path.’ But the impact of struggle on poorness and inequality may be even more terrible. FitzGerald’s ( 2001:37 ) highlights the fact that frequently it is hapless families who end up paying for the war while assorted powerful groups benefit from it.
Ross ( 2003:12 ) claims that the ‘1967-70 civil war was caused, in portion, by cultural tensenesss between the Ibo and non-Ibo peoples, which had been mounting since independence.’ Furthermore, much of the struggle and ciolence in Nigeria since 1970 has been along cultural and sectarian lines. There is surely a desire for self-government among many groups and there is struggle between different groups, and as already explained, much of this tenseness can be seen as a bequest of colonial regulation and the signifier of direction by classification combined with a policy of ‘divide and conquer’ . However, cultural competitions have besides been exacerbated since independency because many groups have been all but wholly unrepresented politically, and have been all but ignored economically. Welch ( 1995:635 ) argues that the‘communal force per unit areas that have characterised the Niger delta and many other parts of Nigeria are non merely affairs of cultural self-government but besides complex emanations of economic and political disparities.’ In the oil bring forthing countries ( such as the Niger Delta ) , the allotment of political and economic resources have been peculiar fuel for struggle because frequently the autochthonal populations do non see any of the benefit of the oil wealth, and alternatively are saddled with all of the negative outwardnesss of oil extraction ( such as environmental debasement ) . This takes us back to oil as the cause of the struggles but lone oil combined with certain other conditions ( such as distinguishable cultural groupings, existent cultural tensenesss, and the unequal distribution of oil-related benefits ) .
Luckham ( 2003:19 ) claims that ‘problems of societal exclusion, lifting offense, privatized force and possible military unrest… are all the more sever where, as in Nigeria, democratic administration and so the really nature of the province are contested and fragile.’ It is non merely economic grudge, hence, that has contributed to the high degrees of struggle and force in certain parts of Nigeria, but besides political grudge, and the deficiency of an recognized non-violent mechanism for the declaration of differences and the redressal of grudges. ‘While the immediate causes of increased force and offense reside in a perceptual experience of inequality in society, the loss of a civilization of via media and adjustment in the declaration and direction of struggles appears to lie at the bosom of the issue.’ ( Fayemi, 2003:65 )
Ross ( 2003:13 ) explains that while oil extraction activities began in Ogoniland prior to independence in the late fiftiess, it was non until 1990 that violent struggle arose, and argues that this indicates oil entirely has non been the cause of the struggle at that place. In fact the 30 or so old ages without active struggle could be because it was repressed by the armed forces or because the Ogoni people had the motive to incite struggle but non the agencies. Clearly the struggle there is really near linked to the oil development in the country. The Motion for the Survival of Ogoni People ( MOSOP ) has argued that the oil extraction has caused the environmental debasement of their native lands, taking to wellness jobs, impairment of angling sites, and even a signifier of race murder against the Ogoni cultural group. Their demands for the damages of their grudges were in fact directed to the oil companies which highlights the centrality of oil in this struggle. ‘In December 1992, MOSOP leaders demanded $ 10 billion from the oil houses working in Ogoniland, every bit good as environmental Restoration and other steps ; MOSOP threatened to interrupt their operations if houses failed to run into these demands within 30 yearss. The authorities responded with a military crackdown. Several months subsequently, violent clangs broke out between the Ogonis and the adjacent Andonis, clashes that the Ogoni believed were instigated by the government’ ( Ross, 2003:13 )
The Economist ( 2004 ) claims that, ‘Mr Obasanjo has made serious attempts at reform, but communal discord continues to split Nigeria: in February 2000, 1000s were killed in rioting over the execution of Islamic law.’ Fayemi ( 2003:64 ) argues that the many old ages of military regulation in Nigeria have bequeathed a high ‘level of militarism and social force. Despite assorted stairss taken by the civilian authorities since it assumed power in May 1999, the strength of struggle under civilian regulation underlines why military restructuring can merely take its proper topographic point within the context of institutionalized national restructuring.’ The federal system in Nigeria provides a veneer of representative political relations for the country’s many cultural and spiritual groups. However, the system does non reflect the worlds of the population. ‘Federalism was adopted chiefly to suit the country’s complex cultural, regional, spiritual and historical cleavages… What has made the rights claimed by cultural groups debatable in Nigeria, nevertheless, is the fact that the units of the federation ( in which rights inhere ) are provinces ( and parts before them ) , many of which are multiethnic, instead than cultural groups.’ ( Osaghae, 1996:181 )
Much research ( as detailed in the literature reappraisal ) has demonstrated a nexus between the export of natural resources and the incidence of struggle. However, states such as Norway have avoided this facet of the resource expletive, and it seems that other factors have been of import in finding where and how oil generates struggle. The heavy dependance on oil and the systems of backing and unjust distribution of welath in Nigeria have all combined to supply the mechanism through which the oil wealth comes to drive violent struggle. Furthermore, in the Nigerian context cultural and spiritual factors have played a major portion in fuelling struggle ( those these may besides hold been less debatable had the oil wealth been distributed more equally and had democratic political relations been to the full institutionalised. Osaghae ( 1996:181 ) explains that ‘what many groups complain about in Nigeria today is that they have non had the chance to make up one’s mind for themselves the footings of their rank of the federation, holding been bunched and glued together by the British colonisers. Equally long as the right to self-government is non recognized, it seems the federation will go on to be troubled.’
Undoubtedly oil has played a immense function in determining the manner and way in which Nigeria has developed. As I have shown above, the extraction and export of oil has contributed to the country’s economic and political jobs and has fuelled many of the country’s struggles. What this thesis has considered is how much oil has contributed to Nigeria’s jobs and what other factors have contributed to these jobs. What it has non done is identified the extent to which oil has had a positive consequence on Nigerian economic system, political relations and society. It is impossible to cognize how each of these would be working in the absence of the country’s oil resources because there is no counter-factual.
Furthermore, even if the resource expletive is a major subscriber to Nigeria’s jobs ( and it is, as I have demonstrated ) , the being of oil entirely can non be responsible. To exemplify this point, compare the developmental jobs in Nigeria with the reflecting illustration of Norway ( systematically judged by the UNDP to be in the top three most developed states in the universe ) , another oil-rich state. Therefore, it must be concluded that it is merely the being of oil in a certain context that seems to do so many jobs. In Nigeria, the copiousness of oil has combined with a figure of other factors which have led to the many jobs the state has encountered ( and continues to meet ) .
What, so, are these other factors, and even if they are distinguishable, has the being of the oil wealth accentuated or perpetuated them? The cardinal factors I would pick out from my findings above are:
- the deficiency of a fabrication base or diverseness in economic production and exports ;
- the de-institutionalised nature of political relations ;
- the failure of the federal system to stand for the demands and involvements of different groups ;
- the development of a system of backing instead than accountable administration ;
- the unequal distribution of wealth in general and oil wealth in peculiar ; and
- the mobilization of society.
Though these factors can all be examined clearly, they are besides wholly related to each other and ( straight or indirectly ) to the country’s oil wealth. The relationships are round and it is difficult to cognize which came foremost, the oil or the other factors. But oil is playing an of import function at least in perpetuating ( if non originating ) Nigeria’s jobs.
The foregoing analysis has provided a diagnosing of Nigeria’s jobs and an account of some of the causes of these jobs. The following logical measure is to analyze what the solutions might be. There do look to be some possible ways to get away the barbarous rhythm, and the improved public presentation of the state ( at least economically ) since 1999 attests to this. In order to to the full get away the rhythm, nevertheless, more alterations and reforms will be necessary.
The being of the oil wealth in Nigeria has contributed to the country’s dependance on that one peculiar resource but policies can be directed at developing other sectors of the economic system in order to cut down this dependance. ‘The volatility of the oil sector besides produces volatility in authorities grosss. All oil-rich states are capable to the same fluctuations in international oil monetary values. But non all authoritiess are every bit dependent on oil as a beginning of income. The more that a authorities relies on oil, the greater the impact that oscillations in oil monetary values will hold on the government’ ( Ross, 2003:4 ) . In footings of bracing the economic system, the best policy would be one directed at hiking the fabrication sector which will both cut down dependance on oil ( and hence cut down volatility ) and is besides similar to turn the economic system in a more ‘pro-poor’ way since fabrication creates far more occupations for unskilled labor than the oil extraction industry. This should besides indirectly contribute to the strengthening of democratic political relations in Nigeria since Ross ( 2003:16 ) claims that when a ‘government is extremely dependent on oil grosss, it will be plagued with corruptness and rent-seeking ; it will besides be harder to consolidate democratic reforms.’ Furthermore, the development of a fabrication sector should besides take to increased economic growing as a whole. In fact in recent old ages, Nigeria’s record on economic growing has been bettering, but more attempt demands to be made in this country peculiarly de Soysa ( 2000:126 ) high spots the importance of economic growing as a agency to get away the barbarous rhythm of the resource expletive, explicating that states ‘with higher per capita wealth are far less likely to endure internal struggle and are more likely to exhibit strong democracy’ .
Mehlum, Moene, & A ; Torvik ( 2006 ) argue that establishments are the cardinal mechanism through which the impact of oil exports on economic growing is determined. They argue that resource copiousness entirely does non take to the resource expletive, but resource copiousness accompanied by weak establishments. Indeed, they claim that with the right establishments, resource copiousness can take to high rates of growing. Thus another cardinal country for Nigerian policy should be the development and strengthening of establishments. This must be a precedence undertaking for whoever wins the elections in April of this twelvemonth. It is besides indispensable that the federal system is re-examined and re-evaluated to find if it could be structured in a different manner so as to supply better representation for the different groups in society. This could take to more cohesive political relations and would hopefully besides cut down the motives for ( and hence the incidence of ) violent struggle.
The system of backing and corruptness that has developed in topographic point of political answerability is a major subscriber to Nigeria’s jobs. ‘Post-colonial Nigerian political relations has been dominated by old ages of barbarous military regulation sustained by corruptness so permeant that Nigeria became synonymous with the apparition of bad administration in Africa. The authorities organic structure set up to undertake fiscal offense, the Economic and Financial Crime Commission ( EFCC ) , has late estimated that over $ 400 billion of oil grosss has been stolen’ ( Oneworld 2007 ) . The corrupt systems of patrongage have provided the perfect environment for oil wealth to be converted into an undemocratic political government with an unjust distribution of welath and an array of grudges which can advance violent struggle. That corruptness is a major issue in Nigeria is no secret – so the current president and his frailty president ( the two chief smugglers in this April’s presidential election ) are ‘trading accusals of corruptness against each other’ ( Economist 2006 ) .
The unequal distribution of both the welath from oil and all of the negative outwardnesss of oil production have resulted in a state of affairs where those who live in the oil rich countries of Nigeria are digesting assorted adversities ( environmentl, wellness, struggle etc ) which are associated with the oil extraction, without being compensated, and without having much of the grosss from the export of the oil. With the increasing popularity and importance of corporate societal duty, the international commercial sector is being encouraged to play a function non merely in economic development but besides in struggle bar and peace-building. Therefore, the actions of the foreign oil companies in Nigeria could be harnessed to the benefit of the whole state. As Duffield ( 2001:64 ) explains, oil companies ‘can contribute to conflict bar and Reconstruction in a figure of ways. In their direct operations, they can guarantee equal hazard appraisal to place any societal issues to be addressed: the turning away of graft and corruptness ; lending to human resource development in footings of instruction and preparation ; back uping the local economic system through subcontracting and local purchase policies ; active battle with concern and local spouses to raise concern criterions ; and turn toing security issues in a sensitive manner to beef up the regulation of jurisprudence and promote human rights.’ Lyon et Al ( 2006 ) besides point to the potency of local Nigerian concern as some sort of a agent in constructing peace between differetn cultural groups. They suggest that programmes be developed ‘that encourage networking and trade between cultural groups in order to construct cross-cultural societal capital. Many Nigerian concerns operate across cultural boundaries and have built cross-cultural societal capital, in some instances over coevalss. The agency for promoting more persons to take up these boundary-spanning activities need to be explored. Similarly, the usage of market topographic points as mediation infinites would profit from closer examination.’
Finally, the demilitarisation of Nigerian society as a whole ( and of the political machinery ) is indispensable if struggle is to be avoided and if democracy is to be consolidated and recognised ‘as the lone game in town’ such that if authorities and policies are unpopular, society seeks to alter the authorities and policymakers through the electoral system and non through the overthrow or sidestepping of the system itself. ‘Nigerians lost their civilization of duologue in a period when mobilization and the primacy of force had become province policy and it will necessitate a return to consensus-based political relations, instead than the current adversarial theoretical account, to recover that culture.’ ( Fayemi, 2003:65 )
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