Transcript PowerPoint Presentation - Nigeria Political and Economic Change

The Federal Republic of Nigeria
Political and Economic Change
By Ajay Kannan
Overview


Causes for Nigeria’s present day political and
economic situation can be found in its history
Three time periods in Nigerian history
 Pre-colonial era (800 CE – 1860)
 Colonial era (1860 – 1960)
 Modern era (1960 – present)
Pre-colonial Era
Sokoto Caliphate (18081900) Muslim state in
north
 Slave trade started in
south – 16th century to
early 20th century

 Africans fought wars to
obtain slaves to sell
 Driven by demand for
western goods
 Outlawed in 1936
Source: activehistory.ca
Colonial Era
Britain imposed indirect rule – trained natives to fill
the European-style government the British installed
 British influence was strongest in the south (Islamic
hierarchies were already established in the north)
 Introduction of western-style schools

 Christian missionaries set up many schools
 Created a relatively literate population, but reinforced
cleavages – rich & poor, south & north
Colonial Era

Mercantilism
 Nigeria exported raw materials to Britain
 Imported finished goods from Britain
 Contributed to modern day troubles in industry and service
sectors

Nigerians wanted independence
 They saw other African countries preparing for independence
 English values, such as freedom and justice, were taught in
their Western education
 Peaceful, slow transition to autonomous rule, while the British
prepared Nigeria for independence on October 1st 1960
Modern Era


1960-1966: 1st Republic – parliamentary system
1966-1998: Instability
 Military dictatorships prevalent, with many coups and
assassinations
 2nd and 3rd republics unsuccessful

1999 – present: Presidential Democracy
 1999, 2003, and 2007 elections are marked by violence and
fraud, but it has satisfied the 3 election rule, suggesting that
Nigeria will maintain its democratic constitution
 People’s Democratic Party (right-wing) has won all three
elections



1967-1970 – Biafran war
(south wanted to
secede)
2000 – rebellions against
Sharia law
Oil profits are split
between federal and
state governments leads
to poorer conditions in
the north
Source: http://www.movements.org
Source: http://nigeriansabroadlive.com/wp-content/uploads/2010/12/NigeriaMap_resources.jpg
Nigeria’s Economy Today






Rentier state: a state that derives much of its
revenue from its resources
Largest exports: Oil & natural gas make up ~90% of
export profits and ~80% of government revenue
Largest imports: machinery
Agriculture 31.9%, industry 32.9%, services 35.2%
32th largest GDP, but 182th GDP per capita
Africans are drawn to Nigeria for economic
opportunity, but reforms must be made to improve
quality of life
Economic Problems


Inexperienced military leaders failed to industrialize
Corruption and Inefficiency




Agriculture has suffered under incoherent government policy
There is unused farmland and untapped mineral sources
Nigeria does not use oil profits to invest infrastructure or
education enough
2003-2007 – NEEDS and SEEDS (National/State
Economic Empowerment Development Strategy)
attempted to address these problems with mixed
success
 Deregulation, privatization, transparency, and accountability
 Provide jobs by improving infrastructure







1956 – oil discovered
1970 – Nigeria joined OPEC (Organization of the
Petroleum Exporting Countries)
1970 – oil began to be drilled
1970s – oil production increased, especially as
multinational corporations became interested in
profits in Nigeria
1971 – Nigerian National Oil Corporation
founded, renamed Nigerian National Petroleum
Corporation in 1977, state-owned
1980 – global recession, huge drop in oil profits
2000s – GDP increased because oil prices rose

Large multinational corporations have the
capital to find, claim, and drill oil reserves
 Royal/Dutch Shell, ChevronTexaco, Exxon Mobile,
Totalfia Elf, Agip and PanOcean Oil get 43% of the
profits

Of the profits Nigeria gains, 80% profit goes
to the government, 16% goes to operational
costs, and 4% goes to investors
Highly susceptible to corruption, crashes in global
recessions, mismanagement
 Decline in the competitiveness of industry and service
sectors

 “Dutch disease” – oil increases the demand for the Nigerian naira, since
companies must pay Nigerians in naira for their oil. The increased demand
results in a higher value for their currency. Thus, the cost of goods made in
Nigeria increases compared to goods made in other countries, and people
stop buying Nigerian goods.

Debt troubles – lenders charge high interest rates if the
industry is not doing well


Nigeria, like many developing states, gets loans
from international organizations (IMF, World
Bank)
2006 – Nigeria became the first African country to
pay off debt to the Paris Club
 Nigeria worked out a plan to officially pay off debt to Paris
Club (paid $12.4 billion out of the $30 billion borrowed)
 $1 billion dollars more to use in federal budgets

Nigeria still owes money to international
organizations (IMF, World Bank)
Most industries nationalized in 1970s and early 1980s
1992 – Privatization of 73 medium-small government
owned companies (i.e. cement, insurance, banking)
 Late 1990s – 2nd and 3rd largest industries privatized


 National Electric Power Authority (NEPA) and Nigerian
Telecommunications (NITEL) were privatized in
accordance with IMF and World Bank advising to grow its
economy
Finance and banking industries are fairly developed
 Textile production – growing slowly with investment
from other countries


Economy is as strong as it has ever been
 Relatively low inflation (10 to 12%), GDP growth ~6-9%
annually – projected to become a top 30 economy

Since early 2000s, the government has
increasingly focused on market-oriented reforms
urged by international organizations
 Modernizing the banking system, curbing inflation,
providing jobs
Almond, Gabriel, et al. Comparative Politics Today: A World View. 9th ed. 1911.
Lewis, Peter M. "The Dysfunctional State of Nigeria." Center for Global
<http://www.cgdev.org/doc/ shortofthegoal/chap3.pdf>.
New York: Pearson Longman, 2002. Print.
Development. N.p., n.d. Web. 19 Feb. 2011.
Nellor, David. “Nigeria Needs Sustained Reforms to Build on Success .” IMF Survey Magazine 15 Feb. 2011: n. pag. Web.
14 Feb. 2011. <http://www.imf.org/external/pubs/ft/survey/so/2008/CAR021508A.htm>.
Obadina, Tunde. "Nigeria Unveils New Privatization Plan." Africa Recovery.
<http://www.un.org/ ecosocdev/geninfo/afrec/subjindx/123nigr.htm>.
United Nations, Dec. 1998. Web. 19 Feb. 2011.
"OlusegunObasanjo." Encyclopædia Britannica. Encyclopædia Britannica Online. Encyclopædia Britannica, 2011. Web. 17
Feb. 2011. <http://www.britannica.com/EBchecked/topic/423633/Olusegun-Obasanjo>.
"SaniAbacha." Encyclopædia Britannica. Encyclopædia Britannica Online. Encyclopædia Britannica, 2011. Web. 17 Feb.
2011. <http://www.britannica.com/EBchecked/topic/701368/Sani-Abacha>.
"ShehuShagari." Encyclopædia Britannica. Encyclopædia Britannica Online. Encyclopædia Britannica, 2011. Web. 17 Feb.
2011. <http://www.britannica.com/EBchecked/topic/537642/Shehu-Shagari>.
Ukaegbu, Chikwendu Christian. "The Structure of Nigerian Industries and the Utilization of Scientific and Technological
Manpower." The Journal of Economic and Social Studies 33.1 (1991): n. pag. University of Wyoming, Department of
Sociology. Web. 19 Feb. 2011. <http://uwacadweb.uwyo.edu/ chris/Articles/Structure.pdf>.
United States. Central Intelligence Agency. “Nigeria.” The World Factbook. N.p., 24 Jan. 2011. Web. 17 Feb. 2011.
<https://www.cia.gov/library/publications/the-world-factbook/geos/ni.html>.
- - -. Dept. of State. Background Note: Nigeria. By Bureau of African Affairs. U.S. Department of State: Diplomacy in
Action. N.p., 3 Feb. 2011. Web. 14 Feb. 2011. <http://www.state.gov/r/pa/ei/bgn/2836.htm>.
Questions?
Discussion Questions