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| Author: | Mary Crane, Editorial Coordinator |
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Updated: March 22, 2007
With 133 million citizens, Nigeria is Africa's most populous country and the world's eighth-largest oil exporter. In 1999, Nigeria returned to civil rule under Olusegun Obasanjo after sixteen years of military rule. Nigeria now chairs the African Union, an organization that aims to promote cooperation on the continent, and has taken the lead in regional peacekeeping initiatives. Yet Nigeria is still one of the poorest countries in the world, ranking near the bottom in many human development indices. Corruption is endemic, unemployment is growing, illiteracy rates are near 50 percent, HIV/AIDS is on the rise, and now the deadly avian flu virus has infected Nigerian poultry farms. Crime and violence in the Niger Delta has handicapped oil production, while sectarian fighting between Muslims and Christians has killed thousands.
Religious fighting and violent attacks in the oil-rich Niger Delta. Popular frustration over the government's failure to deliver basic services continues to rise. Much of the violence is said to be rooted in poverty and unemployment—about 57 percent of the population now falls below the poverty line of a dollar a day. Though largely unrelated, both sectarian clashes and violence in the oil-rich Niger Delta present the government with a major security challenge.
Nigeria is the world's eighth-largest crude-oil exporter and the fifth-largest U.S. source for imported oil. Oil exports account for 95 percent to 99 percent of Nigeria's foreign revenues. However, the distribution of oil funds has historically been undermined by corruption and mismanagement, and few Nigerians have benefited from the oil wealth since exploration began in the 1970s. Nigeria's powerful state governors governments lay claim to nearly half the federal budget, feeding corruption and limiting the federal government's control over corrupt local officials, says Princeton Lyman, CFR's Ralph Bunche senior fellow for Africa Policy studies and former U.S. ambassador to Nigeria. "Out of the thirty-six states, thirty of the governors are really corrupt," says Robert Rotberg, director of the Program on Intrastate Conflict and Conflict Resolution at the Kennedy School of Government at Harvard University. "The others are only marginally so."
The government has committed itself to a number of economic reforms, including the newly launched National Economic Empowerment and Development Strategy (NEEDS) that focuses on reforming the government and developing the non-oil private sector. Obasanjo is also looking to pass a fiscal responsibility bill, as well as a privatization program to be implemented by the Bureau of Public Enterprises. In December, the Paris Club of donor countries approved a historic debt-relief deal that eliminated $30 billion of Nigeria's total $36 billion external debt. Before that, in October 2005, the International Monetary Fund (IMF) rewarded Nigeria its first-ever Policy Support Instrument (PSI), which is intended to support the country's economic reform efforts. These instruments, designed for low-income countries that do not want or need IMF assistance, help implement reforms, underwrite a government's economic credibility, and encourage international investment.Obasanjo has also stepped up anti-corruption efforts.
The World Bank's 2005 Nigeria brief credited Obasanjo with embarking "on a fight against corruption that is bearing fruit." A number of state governors have been impeached on corruption charges, as well as Nigeria's ex-police chief Tafa Balogun; the Economic and Financial Crimes Commission continues to pursue corrupt officials; and the Independent Corrupt Practices Commission has prosecuted a number of high-profile officials who worked with militia groups to siphon government funds for personal gain. Abuja has also commissioned an international audit of the entire oil sector, the Nigerian Extractive Industries Transparency Initiative (NEITI), which in its interim reports revealed the gaps in record-keeping that had allowed much of the corruption. Obasanjo's efforts have annoyed many senior Nigerian politicians who say his anti-corruption campaigns are politically motivated.
The U.S. State Department Nigeria brief, updated in February 2006, says there has been "marked improvement" in human rights, press freedoms, and democratic politics under Obasanjo, and since his inauguration, the U.S.-Nigerian relationship has "continued to improve." Washington recognizes the important role Nigeria plays in the region: engineering a common plan for African economic recovery called the New Partnership for African Development (NEPAD); participating in the Economic Community of West African States (ECOWAS); and providing the bulk of troops for UN peacekeeping missions in Africa, including missions in Sierra Leone, Liberia, and Sudan. Nigeria also participates in Africa-directed U.S. humanitarian and democracy-promotion initiatives like the African Growth and Opportunity Act (AGOA) and the President's Emergency Plan for AIDS Relief (PEPFAR). Nigeria has also supported Washington's counterterrorism efforts, supporting military action against the Taliban and al-Qaeda and coordinating counterterrorism exercises in sub-Saharan Africa.
Many experts say these reforms are too little, too late. Although the country's economic growth—6 percent in 2005—remained high, critics speculate much of Nigeria's growth has more to do with record-high oil prices and energy demands than any real changes at home. Lyman says Obasanjo's reforms are the kind that will take years to affect the lives of average Nigerians and "haven't given him a big popular boost." In the meantime, experts say deeply entrenched interests and the confusing overlap between local, state, and federal governments will slow any real progress. While Obasanjo's government is an improvement on past dictatorships, "he hasn't managed to exert control in a way people were hoping for in Nigeria's first real democracy," says Rotberg.
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