Nigeria: Political and Economic ChangeBrian Huang

Outline: The Three Eras

•Pre-colonial (800-1860)•Colonial (1861-1960)•Modern Nigeria (1961-present)

▫Four republics

Pre-colonial Era (800-1860)

•Fulani establish the Sokoto Caliphate in the north (1808)

•Traded with Northern Africa•Southern Nigeria was part of the Atlantic

Ocean trade •Slave trade

▫Driven by demand for western goods▫Ended in 1833

Colonial Era (1861-1960)

•British imposed “indirect rule” (1860) •Trained, southern natives filled the

European-style bureaucracy•British left the Islamic north alone—

leaving the established political hierarchies

•Lagos was a trading outlet: resource rich and cheap labor

Mercantilism

•Nigeria exported raw materials to Britain•Imported finished goods from Britain•1939 Economic focus: Peanut north,

Cocoa west, Palm oil east•Contributed to the modern troubles in

industry and service sectors

Independence from Britain

•October 1, 1960

Causes Effects

Western Education and the creation of a literate population

Economic instability

Constitution set in place Intensification of ethnic cleavages

Developed government structure

Power struggle

Nigerian desire for independence

Modern Nigeria (1960-present)

•1960-1966: 1st Republic: Parliamentary system

•1966-1998: Coup d'états and assassinations▫Failed 2nd and 3rd republics

•1999-present: Presidential Democracy▫Election fraud and violence

•National Question: “Can Nigeria survive on its own?”

Timeline of PowerYears Ruler Type of

Government

1960-1966 Tafawa Balewa Republic

1966 Johnson Aguyi-Ironsi Military Dictatorship

1966-1975 Yakubu Gowon Military Dictatorship

1975-1976 Murtala Muhammed Military Dictatorship

1976-1979 Olusegun Obasanjo Military Dictatorship

1979-1983 Shehu Shagari Presidential Democracy

1983-1985 Muhammed Buhari Military Dictatorship

1985-1993 Ibrahim Abangida Military Dictatorship

1993-1998 Sani Abacha Military Dictatorship

1999-2007 Olusegun Obasanjo Presidential Democracy

2007-2010 Umaru Yar’ Adua Presidential Democracy

2010-Present Goodluck Jonathon Presidential Democracy

1979: Democracy

1983: Military Coup1993: Military Coup

1985: Military Coup

1999: Democracy

Corruption•Stems from oil•Military presidents maintained foreign

bank accounts stowing away Nigerian funds▫Abacha: $500 million in Swiss Accounts

•Nigerian elite received funds by patron client system

•Caused: voting fraud and political instability

•Desperately needed: increased transparency

Oil Economy•1970s: oil prices boom

▫Everything is focused on oil ▫Lack of advancement in other sectors of

the economy like agriculture•1980s: oil prices plummet

▫Economy tanks because of the lack of advancement in other sectors

•Challenge to balance long term economic logic with immediate social needs

•Main exports: minerals, natural gas, petroleum, and oil

Oil Profits

•Corporations (Exxon Mobile, Shell, ChevronTexaco, etc.) drill oil reserves and receive 43% of the profits

•Nigerian Profits: 80% government, 16% operational costs, 4% investors

•Less to the north•Leaders are rent-seeking

Nigerian Debt

•Accumulated $35 billion in debt from international organizations (World Bank and IMF)

•Paid Paris Club $12.4 billion for $30 billion in debt (2006)

•Effects: Removes the barriers of debt, providing economic momentum to shift the focus away from oil; attracts foreign investors

•Current debt: $15.73 billion (2014)

Current Statistics

•GDP: $478.5 billion (2013)•GDP per capita $2,800 (2013)•31% agriculture, 43% industry, 26%

services (2012)•70% live below the poverty line (2010)•GINI Index 48.8 (2010)

GDP Breakdown (2012)

A = Agriculture, Hunting, Forestry and Fishing B = Mining and Quarrying (including oil and petroleum) C = Wholesale and Retail Trade; Repair of Motor Vehicles, Motorcycles and Personal and Household Goods D = Financial Intermediation, Real Estate, Renting and Business Activities

From Euromonitor

Privatized Industries

•Military coups nationalized most industries

•1992 – Privatization of 73 companies (insurance, banking, etc.)

•1990s – Electricity and Telecommunications privatized by advice of IMF and World Bank

Modern Reforms• New Partnership for African Development

(NEPAD) encourages good governance, promotes foreign investment, increases in foreign aid, and liberalizes trade (2001)

• National Economic Empowerment and Development Strategy (NEEDS and SEEDS) empower citizens by promoting agriculture and improving water and electricity supplies, communications, roads, schools and health facilities (2004)

Russia and Nigeria

•Chechen Civil War and the Biafran Civil War

•Ethnic cleavages affect politics

China and Nigeria

•China established a national (communist) ideology which serves to unite the ethnic groups

•Nigerian rulers have never established an ideology; it has been military coup after military coup

•Nigeria, without an ideology, cannot stop fragmentation

UK and Mexico and Nigeria

•UK and Mexico have had more time to establish democracy and institutionalize the government

•Curse of Oil in Nigeria and Mexico•Mexico has debt, but is backed by the

United States•Nigeria’s debt is in the World Bank and

other international organizations•~Gini as Mexico