Nigeria’s Horrors and Hopes
(Bloomberg) -- It’s easy to argue that Nigeria’s squandered the opportunities that come with having Africa’s biggest population and oil reserves. Under successive governments, it’s become a byword for corruption and inefficiency. Religious and ethnic tensions have festered. This year the Brookings Institution, a Washington-based think tank, estimated that Nigeria had overtaken India as the nation with the largest number of people in extreme poverty: 87 million. The last few years have been anything but easy. The crash in oil prices in 2014 sparked an economic and currency crisis. Boko Haram’s Islamist insurgency may have been contained to the northeastern state of Borno, but its fighters have still killed hundreds of people there this year. Meeting the needs of the country’s population of almost 200 million will only get tougher if, as the United Nations expects, the number doubles by mid-century.
President Muhammadu Buhari, 75, took office in 2015 on a wave of optimism fueled by the country’s first-ever peaceful transition of power to an opposition candidate. Hopes were raised that he could curb corruption and diversify an economy dependent on oil and gas for 90 percent of exports. His popularity waned as joblessness and inflation soared after the drop in oil prices. Investors blamed Buhari for exacerbating Nigeria’s recession and deterring investment by imposing capital controls. He also leaned on the central bank not to weaken the currency, the naira, which it was eventually forced to do. His health has been an issue, too, after he left the country repeatedly for months at a time for medical checks. But Buhari, a Muslim, remains popular among Nigeria’s masses, thanks largely to his reputation for piousness, and will likely be hard to beat when he runs for a second term in elections scheduled for February. The opposition’s ranks have swelled thanks to defections of lawmakers from the ruling All Progressives Congress party who accuse Buhari’s administration of mismanaging the economy and using an anti-corruption campaign as a pretext for clamping down on political dissent. Critics also condemn his handling of another flashpoint: As the Sahara desert advances southward, herders seeking grazing land are moving into central and southern Nigeria, leading to clashes with farming communities that killed about 1,300 people in the first six months of 2018.
Nigeria’s ethno-religious rivalries are a legacy of British colonialists who bundled a Muslim-ruled north with the south’s majority Yoruba and Igbo Christians to create the country in 1914. The population is almost evenly split between the two religions, though the south is endowed with all of the oil wealth and Lagos, the main commercial hub and home to about 20 million people. Though oil fueled a boom in Nigeria’s economy from the start of this century, inequality is stark, with billionaires such as Aliko Dangote, Africa’s richest man, living close to large slums. Weak governance and corruption fueled the resentment that gave birth to Boko Haram, whose campaign of terror since 2009 has led to the deaths of more than 20,000 people. The jihadists captured world attention in 2014 when they kidnapped 276 schoolgirls in the village of Chibok. The conflict has spilled over into neighboring countries such as Niger and Cameroon, which have worked with Nigeria to push back the militants. Pipeline bombings and kidnappings by different groups of rebels in the Niger River delta have driven Royal Dutch Shell Plc and Chevron Corp. to divest from onshore oil fields and instead focus on easier-to-secure installations off Nigeria’s coast, limiting foreign investment.
To optimists, rising incomes and a surging, young population give Nigeria the potential to follow in the footsteps of hot emerging markets such as India or China. Faster development might help ease conflicts and enable Nigeria to provide a model for African democracy. The government has invested in roads and railways to help farmers and manufacturers in an effort to help the country break out of the so-called resource curse. If he wins a second term, Buhari promises to do more to tackle graft and improve institutions such as the judiciary and the civil service. Yet Nigeria is still struggling to provide basic services, as the vast majority of its people live without regular access to electricity and clean water, and schools and hospitals are notoriously poor. Faster-growing African countries such as Ethiopia and Rwanda have taken bolder steps to build infrastructure and improve business conditions to lift more people out of poverty.
The Reference Shelf
- A report by the International Crisis Group on Nigeria’s conflict between herders and farmers.
- A QuickTake Q&A on Nigeria's succession jitters and an explainer on why rebels are blowing up oil wells again.
- A Bloomberg View op-ed column from Buhari.
- “Frontier: Exploring the Top Ten Emerging Markets of Tomorrow,” a book by Gavin Serkin, makes the case for Nigeria as a hot emerging market.
- 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.
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