Nigeria
Political and
Economic
Changes
Presentation Outline
IV. Political and Economic Changes
a) Politics in Nigeria before 1999
b) Democratization after 1999
c) Rentier state
d) Para-statals
e) Attempts at economic liberalization
IV. a) Nigerian politics before 1999
• From independence in 1960
until 1999 Nigeria had several
military coups, some brief
interludes of democracy, and
generally corrupt and
authoritarian rule
• The most notorious of Nigeria’s
military dictators was General
Sani Abacha who ruled Nigeria
from 1993-1998
General Sani Abacha
Nigeria under Abacha’s dictatorship,
1993-98
• Nigeria was ranked as one of the world’s most
corrupt states
• Abacha was accused of stealing 5 billion
dollars from the Nigerian treasury
• There were widespread human rights abuses
including the arbitrary arrest, imprisonment,
and execution of several journalists and high
profile human rights activist
Abacha ranks as one of the most corrupt
leaders in modern history
In 1998 Nigeria was considered the 4th most
corrupt state in the whole world!
Ken Saro Wiwa was a
member of the Ogoni tribe
who protested the
environmental damage and
corruption caused by the
MNC Shell Oil corporation
in the Niger Delta. On
Abachi’s orders he was tried
and executed in 1995. This
one of Nigeria’s most
blatant human rights
abuses. Saro-Wiwa’s
execution was widely
condemned by the
international community.
IV. b) Democratization after 1999
• After Abachi’s death in 1998 the military
decided to hand over rule to a democratically
elected civilian leadership
• A new, democratic constitution was created
which established a presidential, U.S. style
republican democracy
Attempts at institutionalizing
democracy
• In 1998 the Independent National Election
Commission (INEC) was established to ensure
and oversee competitive, free, and fair elections
• Although a multi-party system did evolve in 1999,
the most international observers have
characterized Nigerian elections as fraudulent
and corrupt.
• Even INEC itself has been accused of rigging
elections in favor of the ruling PDP Party
• Nigeria’s Supreme Court has the power of
judicial review
• In 2007, the Court successfully removed two
state governors who sought to stay in power
and also blocked President Obasanjo’s
attempt to seek a third term
• In 2003 the Economic and Financial Crimes
Commission (EFCC) was established to reduce
corruption and punish fraud
• Despite several high profile arrests in 2007,
the EFCC’s budget has been cut and it is
uncertain whether it will be allowed to
operate freely and independently in the future
Improving press freedoms and a
reduction of corruption
• Nigeria’s press is characterized as partly free
and, although corruption remains a serious
problem in Nigeria, it has improved since 1999
• The press has been generally free to report,
investigate, and cover national elections
Nigeria’s press is considered partly free. Not nearly as
restricted as several states in Africa. However, Nigeria’s press
is hardly a model of democracy even by African standards
Russia
U.K.
Mexico
China
Iran
Nigeria
Nigeria is certainly corrupt
but fairs better than several
states in Africa and Asia
IV. c) Rentier state
• Like Iran, Nigeria is a rentier state whose
economy is dependent on oil revenues
• Over 80% of Nigeria’s exports are from oil
sales
• When the price of oil is high, Nigeria’s
economy remains stable
• However, when oil prices decline, Nigeria’s
economy can potentially fall into chaos with
huge unemployment and hyperinflation
Nigeria’s economy is nearly completely dependent
on oil production.
Oil has been both a blessing and a curse for Nigeria
Oil: a blessing and a curse
Blessing
• Huge source of
revenues
• Oil revenues have been
used to build roads,
schools, and hospitals
• As a member of OPEC
Nigeria has
international influence
Curse
• Has led to violent
clashes in the Niger
Delta region
• Has polluted Nigeria’s
natural environment
• Oil wealth has been
squandered by
corruption
• Nigeria has failed to
diversify its economy
IV. d) Para-statals
• Para-statals are government run corporations
• In Iran, they are called bonyads
• Para-statals are generally run inefficiently, a
major channels of corruption, and represent
obstacles to full economic liberalization
• Nigeria’s Power Holding electricity company
has been infamous for its high prices and large
scale power outages
Some of Nigeria’s major para-statals
Nigerian Postal Service
Nigerian Sugar Company
Nigerian Petroleum
Power Holding Company of Nigeria
Nigerian National Insurance Commission
IV. e) Attempts at economic liberalization
• Beginning in 1985 Nigeria sought assistance
from the International Monetary Fund (IMF)
to manage and restructure its debt
• Nigeria’s economy had been suffering due to
rapidly falling oil prices in the 1980s
• The IMF agreed to help Nigeria on the
condition that Nigeria accept structural
adjustment (SAP)
Structural Adjustment
• Under the terms of the IMF SAP, Nigeria had
to agree to the following:
1) Allow foreign direct investment (FDI)
2) Balance its national budget
3) Take steps to reduce corruption
4) Privatize key sectors of its economy
5) Promote the rule of law
Results
• Nigeria has fulfilled its pledge to increase FDI
• Corruption has been addressed but remains a
major problem
• The rule of law has been made a government
priority but remains a problem
• As soon as oil prices started to climb in the early
2000s Nigeria fell back on its promises to fully
privatize its economy and still has major debt,
though it is in a much better situation
economically than it was in the 1980s and 1990s
and is the fastest growing economy in Africa
Since 1999 Nigeria’s GDP growth has been higher than
the Middle East and African average
Of the BRIC countries, only China’s economy has grown more than
Nigeria’s since 1999!
Huge growth in FDI since 2002!