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This document is from the archive of the Africa Policy E-Journal, published by the Africa Policy Information Center (APIC) from 1995 to 2001 and by Africa Action from 2001 to 2003. APIC was merged into Africa Action in 2001. Please note that many outdated links in this archived document may not work.

Nigeria: Great Decisions 2003

AFRICA ACTION
Africa Policy E-Journal
February 3, 2003 (030203)

Nigeria: Great Decisions 2003
(Africa Action document)

This posting contains several sections from the article on Nigeria in Great Decisions 2003, the annual briefing book and study series organized by the Foreign Policy Association ( http://www.fpa.org). It was written in November 2002 and published by the Foreign Policy Association in January 2003. The full article is available on the Africa Action website at the addresses indicated below.

Last year's Africa article in Great Decisions 2002 was on AIDS in Africa, and was also written by Salih Booker and William Minter. The 2002 article is available on the Africa Action web site in pdf format at http://www.africaaction.org/action/aids2002.pdf and in html at http://www.africaaction.org/action/aids2002.htm

Another posting today contains excerpts from a report just released by Human Rights Watch on political violence and the coming elections in Nigeria.

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The U.S. and Nigeria: thinking beyond oil

by Salih Booker and William Minter

Great Decisions 2003 (http://www.greatdecisions.org)

This article was published as one chapter in Great Decisions 2003, a briefing book published by the Foreign Policy Association to be used by hundreds of study groups around the U.S. during the year 2003. A TV program on the topic is also airing on PBS as part of the Great Decisions TV series. A pdf version of the article, including color photographs and other illustrations (3.8 M in size) is available at http://www.africaaction.org/featdocs/nig2003.pdf The full text of the article, with no graphics, is also available at http://www.africaaction.org/featdocs/nig2003.htm

Introduction

Nigeria, Africa's most populous nation, is also the most important state in U.S.-Africa relations today. Nigeria is America's major trading partner in Africa. It plays the largest role of any country in peacekeeping efforts on the continent. Nigeria's attempt to build democracy from the ashes of authoritarian rule will arguably have even more consequential effects for the continent than South Africa's victory over apartheid in 1994. Although it is oil that attracts Washington's attention the most, the ramifications of Nigeria's success or failure will extend far beyond the energy sector.

In past centuries, Nigeria's territory was home to a series of powerful and technically advanced societies, renowned for their artistic, commercial and political achievements. It was also a pioneer in the movement for African independence. But since independence its growth has been stunted by internal conflict and military misrule.

Yet today, Nigeria is again one of Africa's most influential countries. Its unique human resources and vast oil reserves create the capacity for enormous prosperity and regional leadership. In 2002, Nigeria was the fifth-largest supplier of oil to the U.S., ranking behind only Canada, Saudi Arabia, Mexico and Venezuela. Along with Royal Dutch Shell, a British-Dutch firm, U.S. oil supermajors ChevronTexaco and ExxonMobil Corp. dominate oil production in the oil-rich Niger Delta. Since emerging from military dictatorship in 1999, its nascent democratic institutions have survived huge challenges but have performed disappointingly in the eyes of tens of millions of Nigerians. Their capacity to deliver the peace and prosperity Nigerians want is still unproved. The fate of Nigeria has profound implications for the entire continent: both the potential and the obstacles are on the giant scale of the country itself.

Presently, the Bush Administration is inclined to give even greater attention to the strategic significance of West African oil than did previous Administrations. Yet a long-term view of U.S.-Nigerian relations must confront fundamental issues of democracy, conflict resolution, resource use, the environment and poverty. Nigeria's interests are in harnessing the country's wealth to achieve development while building a stable democratic political system. U.S. long-term interests are the same. Competing U.S. domestic constituencies with interests in Nigeria include the big oil companies, banks and investment houses, and the multiple Africa-interest groupings among African-Americans, religious groups, organized labor, environmentalists, global justice advocates and human-rights organizations. In addition, the rapidly growing Nigerian-American community is a well-educated and wellpositioned segment of the American immigrant community. Meanwhile, the accelerating process of globalization is driving ever-closer and more-intricate interaction between the two countries on matters of trade, immigration, and shared regional and global concerns. Realizing the positive potential of those ties requires going beyond "business-as-usual" thinking.

Nigeria, whose almost 130 million people make up nearly one sixth of Africa's population, reflects virtually all the major problems confronting the continent. Its success or failure will resonate far beyond its immediate neighbors in West Africa. The HIV/AIDS pandemic, the crippling debt burden, protection of the environment against corporate greed, the need to break out of dependence on raw-material exports, the establishment of peaceful MuslimChristian and ethnoregional relations and balancing national and local government accountability are all cases in point.

In Nigeria, as around the world, oil has been a source of great wealth. But dependence on oil has also fostered conflict, environmental damage, gross economic injustice, corruption and shortsighted economic policies.

The key test for U.S. policy toward Nigeria is whether public pressure can force policymakers to think beyond a narrow focus on oil. If so, then there is great potential for sustainable benefits for both countries. If not, then narrow elites may gain short-term profit, but the long-term prospects for most Nigerians will be bleak, and enduring U.S. interests will suffer as well.

One fundamental prerequisite for dealing with particular issues is that Americans become more aware of the richness and complexity of Nigeria's history, Nigeria's people, and the current initiatives Nigerians are taking to solve their own problems. Outside formulas for solving these problems will inevitably fail. But U.S. actions can do much to hinder or help.


Oil, environment, and resource use

[not in this posting: see full text at
http://www.africaaction.org/featdocs/nig2003.htm]


Debt and loot vs. public investment

With the economy so heavily dependent on oil, the income Nigeria receives fluctuates wildly, depending on international oil prices. Prices soared in the 1970s and dropped in the 1980s. Despite somewhat greater stability in the 1990s, the price in recent years has ranged between slightly more than $10 a barrel (in Jan. 1999) and almost $29 a barrel (in Sept. 2002).

Poverty, however, has shown a consistent rising trend. The proportion of Nigerians living in poverty increased from 28% in 1980 to 66% in 1996 to about 70% in 2000. As much as 90% of national wealth is estimated to be in the hands of only 10% of the population, and an average of 3 million people a year enter the saturated job market without skills.

Much of the wealth that has flowed in has also flowed out, to pay interest on foreign loans or to swell foreign bank accounts held by corrupt officials. A sustainable future for Nigeria's economy requires not only that current oil income be spent productively, but also that steps be taken to halt the drain of over $3 billion a year in debt service and to recover billions more in overseas assets stolen by former military rulers.

The return to elected government in 1999, and the approach of new elections in 2003, has created incentives for politicians at national, state and local levels to seek to deliver new benefits to voters. Both civil society and the press have added their voices to calls to deliver the democracy dividend. But there are serious questions about how that can be done.

International financial institutions focus their advice on maintaining macroeconomic stability, with the usual prescriptions for budget cutting, privatization and reducing regulation. They also now recognize the need to combat corruption, on which Nigerian civil society, the UN and international development groups all agree. But the latter stress that balanced budgets and conventional economic management will be ineffective or counterproductive unless there is a quantum leap in long-term investment in health, education and infrastructure.

As of the year 2000, Nigeria was spending less then 1% of national income (gross domestic product, or GDP) on health and less than 1% on education, with more than 2. 5% going to pay off foreign debts. Spending has increased somewhat since then, but does not begin to approach the 15% on health targeted by African leaders at their summit on AIDS in the Nigerian capital in April 2001. Yet the HIVinfection rate in Nigeria is now estimated to have passed 5% for adults, the point at which experts say the pandemic threatens its most explosive growth. With Nigerian journalists and civic groups increasingly vocal, public awareness is growing that failure to confront this threat will undermine any prospect of economic growth under any model. But the scale of the response does not match the magnitude of the threat.

Both international and national studies show that investment in health, education and information infrastructure is essential for countries like Nigeria to make a new economic start. Yet finding the resources requires the political will to act by Nigeria's creditors as well as Nigerians themselves, on two fronts: debt cancellation and corruption.

Nigeria owes approximately $29 billion to foreign creditors, much of it the result of loans they knowingly provided to corrupt and repressive governments. In 2001 Nigeria paid $2.1 billion on its debts, 10 times its spending on health that year. Yet Nigeria is not even included in the World Bank's Heavily Indebted Poor Countries (HIPC) initiative because it doesn't meet the bank's GDP-based criteria for what constitutes a "poor" country. In September 2002, the government said it would only be able to pay $1.5 billion of the $3.2 billion due for the year. International economist Jeffrey Sachs and others proposed that Nigeria and other African countries simply stop paying debt and invest the resources in health. But Nigerian officials engaged in negotiations with creditors felt unable to take such decisive action. While President Obasanjo continued to call for full cancellation, the debts stayed on the books.

Culture of corruption

Similar obstacles faced efforts to recover stolen wealth and combat corruption. Internally, the government faced a pervasive culture of corruption. While President Obasanjo himself has a reputation for personal honesty and his administration has launched significant anticorruption measures, last year Nigeria still ranked as the second-most-corrupt country in the world according to polls by Transparency International (an organization of which Obasanjo was a founding member).

Both Nigerian and international observers, however, have often noted that this level of corruption would be impossible without external partners. Former military ruler Sani Abacha, for example, is estimated to have siphoned off $4 billion to foreign bank accounts. The Obasanjo administration has been engaged in efforts to recuperate some of these resources, through negotiations with the Abacha family and pressure on banks in Europe and North America. These efforts have not yet succeeded, however, and civil society groups were scathingly critical of a proposed settlement that would allow the Abacha family to retain $100 million if they returned $1 billion.

In Nigeria, as in the case of other oil-producing countries, tracking and controlling the huge sums of money paid by oil companies requires not only vigilant national governments and press. It also requires transparency by oil companies and banks and proactive regulation and investigation by the governments of the countries where those giant enterprises are based.

In sum, whether it is combating AIDS, removing the debt overhang, or fighting corruption in public spending, redirecting Nigeria's economy will require action not only by Nigerians but by those outsiders who now profit from Nigeria's wealth.

Nigeria's human security imperatives

Most Nigerian and outside analysts agree that Nigeria neither faces nor poses a significant external security threat. Discontent over the 2002 International Court of Justice ruling for Cameroon on the disputed potentially oil-rich Bakassi Peninsula in the east might lead to incidents. But the real security threats to Nigerians are internal, and directly related to the economic and social issues. As poverty, AIDS, and inequality increase, can the country avoid a return to military rule? Can politicians and the military dampen and manage conflicts among Nigeria's diverse peoples, or will they exploit and exacerbate the divisions? Can the police and justice system improve their capacity to provide protection against both violent crime and its white-collar counterpart? In the long term, Nigeria's role as a force for regional stability will depend on answers to these questions.

In one area, President Obasanjo has won credit for lessening the chances of backsliding into military rule. He quickly retired the so-called "political soldiers" who had held political office while on active duty and reinforced those officers committed to military professionalism. Despite popular disappointment with the dividends of democracy, polls show that more than 70% of Nigerians strongly oppose a return to military rule.

Yet the overall record is much more mixed. Since the return to civilian rule in 1999, communal violence and, in some cases, harsh military action to repress violence, has cost some 10,000 lives. The roots of violence are neither ethnic nor religious, commented The Economist (London), September 15-21, 2001, echoing the consensus among analysts. But when conflict explodes in Nigeria's crowded cities or in rural areas beset by competition for land, communal dividing lines may quickly become battle lines. Violence broke out between Muslims and Christians on several occasions in 2001 and 2002, in Kano and Kaduna in the North, Jos in central Nigeria, and southern cities as well. In most of these incidents, with the noticeable exception of Jos in September 2001, the military responded quickly and professionally to limit the violence. At Odi in the Niger Delta in 1999, and in Benue state in 2001, however, the military itself killed hundreds of civilians in retaliation against communities. The military and President Obasanjo have resisted open inquiries into responsibilities for these abuses.

The essential prerequisite for the needed changes, says leading Nigerian security studies scholar Dr. Said Adejumobi of Lagos State University, is building in new structures for broader accountability. Greater discipline and professionalism in the military is to be applauded, but it is not enough. The 1999 constitution, for example, gives wide powers to the National Assembly for oversight of the military. With the principle of civilian control well established, the Ministry of Defense and Ministry of Finance could also take more decisive action. But both expertise and political will are lacking.

Ultimately, whether the Nigerian military is held accountable depends on whether the politicians themselves are held accountable by voters, the press and public opinion. Elections in 2003 will provide a key test of whether democratic institutions can not only survive but become more effective.


A giant that has not yet found its feet;
The U.S., democracy, and human rights

[these two sections not in this posting: see full text at http://www.africaaction.org/featdocs/nig2003.htm]


The Role of the Nigerian Diaspora

No one knows the exact numbers, but it is estimated that as many as 15 million Nigerians live outside the country, in neighboring countries and across the African continent, in Britain and throughout the Commonwealth, in other European countries, and in many Asian countries as well. The latest U.S. census data counts 87,000 U.S. residents born in Nigeria. If children born in the U.S. are included, these numbers would expand to between 200,000 and 300,000 in the Nigerian-American community. Few Nigerian immigrants or other observers doubt that even this estimate is much too low.

Nigerians abroad excel in many areas and are found among top professionals in academic, medical and other sectors. A Nigerian-American heads Credit Suisse First Boston, one of the leading American investment banks. The Association of Nigerian Physicians in the Americas numbers more than 2,500 doctors in the U.S. and Canada, and in most countries of the Western Hemisphere it would be hard to find a university without a Nigerian on the faculty.

There is also a minority of Nigerians who have turned their talents to crime, leading to widespread stereotypes justifiably resented by the vast majority of immigrants. The "419" scam, for example, named after the clause in the Nigerian criminal code for fraud, now finds gullible victims worldwide through Internet email. No one knows whether the majority of con artists using it are Nigerians at home or abroad, or copycats who have followed their example.

Less publicized are the contributions of Nigerian immigrants in the U.S., many of them naturalized U.S. citizens, to their professions and communities. With African immigrants at the highest educational level of immigrants from any continent, and Nigerians among the best-educated of national groups, the returns from the investments their families and communities made in their education are in large part being reaped here in the U.S.

Even less noticed are the quiet contributions Nigerian families are making by sending remittances to relatives at home for school fees, medical care and simple survival. Or the volunteer efforts of computer professionals on visits home, bringing equipment and expertise. Or the nonprofit organizations as well as business ventures that support schools, clinics, small businesses, or local governments back home in Nigeria. A study published by the Federal Reserve Bank of Chicago, for example, estimated that family remittances to Nigeria were equivalent to more than $1. 3 billion, more than six times the annual flow of foreign aid to Nigeria. Based on research among Nigerian immigrants in Chicago, the study also estimated that they sent home an average of $6, 000 a year, or 12% of household income.

The Nigerian-American community is growing and becoming more active in American political life. There are local elected officials who are Nigerian born, and the Nigerian-American vote is significant in key cities such as Chicago where it helped to unseat Sen. Carol Mosley-Braun (D-Ill.) because of her dalliances with the Abacha regime. The increase in this community's participation in U.S. policy debates on Nigeria will become a major influence in years ahead.


U.S. policy options; Questions; Readings and Resources

[these three sections not in this posting: see full text at http://www.africaaction.org/featdocs/nig2003.htm]

+++++++++++++++++++++Document Profile+++++++++++++++++++++

Date distributed (ymd): 030203
Region: West Africa
Issue Areas: +political/rights+ +economy/development+ +security/peace+ +US policy focus+


The Africa Action E-Journal is a free information service provided by Africa Action, including both original commentary and reposted documents. Africa Action provides this information and analysis in order to promote U.S. and international policies toward Africa that advance economic, political and social justice and the full spectrum of human rights.

URL for this file: http://www.africafocus.org/docs03ej/nig0302a.php