Nigeria’s Horrors and Hopes
It’s easy to write off Nigeria as a place destined to perpetuate violence, corruption and plutocracy. Successive oil-enriched governments have followed the tradition of the nation’s military dictators, dividing the spoils between a Muslim north and a Christian south. Lately, the collapse in oil prices has crippled the country’s finances. Nigeria is also battling waves of terror from the Islamist militants of Boko Haram in a humanitarian crisis that has displaced as many as 7 million people in the region. Discontent has brewed among its roughly 170 million citizens, and their number is expected to more than double by mid-century, which would make Nigeria the world’s third-most populous country behind China and India. Is Nigeria doomed? A new president took office in 2015 in the country’s first democratic transfer of power since the end of colonial rule in 1960, offering a chance for a nation weary of poverty and graft to set a new course.
President Muhammadu Buhari, a 73-year-old northern Muslim and former military ruler, faced the challenge of a Treasury left “virtually empty” by the plunge in oil revenue. Nigeria's economy shrank in the first quarter of 2016 as the government struggled to pay civil servants. Buhari resisted calls to devalue Nigeria’s currency for more than a year, which encouraged capital flight and suffocated businesses. The government finally gave in and allowed the naira to float freely from June 20, prompting a slump in the currency's value. Buhari is trying to clamp down on graft while driving back Boko Haram terrorists in the north and grappling with a renewed campaign of violence by rebels in the oil-rich south. The election last year was seen as a critical test of Nigeria’s ability to hold a free and fair contest and break a pattern of post-election clashes. When Buhari last ruled Nigeria, from 1983 to 1985, the country was also suffering from a drop in oil prices. At that time, he ignored advice to depreciate the currency and refused financial assistance from the International Monetary Fund.
Nigeria’s ethno-religious rivalry is a legacy of colonialists who bundled a Muslim-ruled north with the south’s majority Yoruba and Igbo Christians. In the insular north, the British allowed a hierarchy of emirs to remain intact, while the south was transformed by missionaries. Today more than half of people in the north live in poverty, while the south is endowed with oil and skilled professionals who work in Lagos, Africa’s biggest city. Nigeria has had the fastest economic growth of any major country this century, helping it overtake South Africa as the continent’s largest economy. Nigerian billionaire Aliko Dangote became the wealthiest African with an empire built on selling cement, sugar, salt, fruit juice and pasta to the masses. The relative lack of development in the north bred resentment that gave birth to Boko Haram, whose seven-year campaign of terror has killed more than 20,000 people. The jihadists captured world attention in 2014 with the kidnapping of 276 schoolgirls. The conflict has spilled over into neighboring countries, which have been working together to push back the militants. Attacks by a different group of rebels on pipelines in the crude-producing Niger River delta, along with kidnappings and pirate attacks on vessels, have driven investors Shell and Chevron to easier-to-secure installations offshore.
To optimists, rising incomes and a surging, young population give Nigeria the potential to follow in the footsteps of hot emerging markets like India or China. That could spur development and provide a model for African democracy. But first the country needs to make progress on fighting corruption. Some lawmakers in the capital, Abuja, earn more than $1 million a year in salary and allowances. Nigeria also needs to overcome its divisions and improve basic services, as the vast majority of its people live without regular access to electricity. Fewer petrodollars might help the country break out of the resource curse of crude wealth, forcing the new government to diversify the economy and expand tax collection. The election has paved the way for help from the U.S. and other countries to fight Boko Haram. What is certain is that Nigeria is becoming too big to ignore.
The Reference Shelf
- “Frontier: Exploring the Top Ten Emerging Markets of Tomorrow,” a book by Gavin Serkin, makes the case for Nigeria as a hot emerging market of the future.
- Nigeria’s electoral commission collected biometric data and distributed voting cards to help ensure a credible ballot, while the Nigeria Civil Society Situation Room provided a platform for groups that monitored the election.
- Bloomberg Markets article on the unraveling of Nigeria’s economy.
- Nigeria reports from the Afrobarometer research project.
- QuickTakes on the resource curse and Boko Haram.
First published March 20, 2015
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Chris Kay in London at email@example.com
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