from Africa in Transition

Following the Money in Nigeria

July 12, 2012

Blog Post

On July 6 and July 9, Democracy in Africa published a must-read, comprehensive analysis of Nigeria’s current political economy. The anonymous author opens with a discussion of the replacement of National Security Advisor Andrew Azazi by Sambo Dasuki, which he sees as a gesture by President Goodluck Jonathan to reach out to the traditional Northern Islamic establishment and to former President Ibrahim Babangida, in response to the continued depredations of Boko Haram, the radical Islamic movement in the North.

However, most of anonymous’ attention is devoted to the central role of money in current Nigerian happenings: funding of Jonathan’s narrow patronage network in the aftermath of the 2011 elections, the January attempts to eliminate the fuel subsidy, the scams related to fuel importation (amounting to 25 percent of Nigeria’s budget), and the consequences of the Jonathan government’s running out of cash. He reports that some of the states have not received their federal budgetary allocations since April, and in those states under emergency rule, salaries have not been paid at all in months.

Where is the Jonathan administration going to find the money? The author dismisses cuts in government expenditure as politically unrealistic. He credibly disposes of arguments that the government could borrow what it needs abroad or secure transformative Chinese investment. He concludes, grimly, that the government must take the money out of the hides of its own citizens, and that the government is likely to try to eliminate that remaining fuel subsidy and possibly alter the funding of local governments. He predicts the consequence would be “fireworks” and a crackdown by the government.

Most of us are focused on Boko Haram, Islamic radical leakage from the Sahel, and the possible resumption of a Delta insurrection. But anonymous makes the case that Nigeria’s true Achilles’ heel is government finance. That’s what ended the Old Regime of Louis XVI.