Economic Regress and Niger Delta Grievances

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Economic Regress and Niger Delta Grievances”1


ABSTRACT

The epicenter of Nigeria’s deadly political violence is the clash for benefits from petroleum, more than 90 percent of which is produced in the Niger Delta (Ibaba, 2005). The sources of conflict in Nigeria include its ruling coalitions facing pressure from economic stagnation and the high-stakes rent seeking for the control of oil. Delta grievances derive from the lack of community control and land rights, the little revenue for petroleum’s producing region, and the environmental degradation and other diseconomies borne by oil-bearing regions. Grievances also come from the lack of democratic accountability, high inequality, and Delta poverty that, while lower than Nigeria generally, is enough to trigger relative deprivation, the perception of social injustices from discrepancies between expectations and actuality.

INTRODUCTION

From 1949 to 1963, Nigeria’s British-constructed tripartite Regional structure, the Northern, Eastern, and Western Regions, was dominated by the Hausa-Fulani, Igbo, and Yoruba ethnic communities, respectively, each comprising about four-fifths of the Region’s population. This structure entrenched the hegemony of these three communities, despite the continuing expansion to 36 States in 1996.

The initial opposition to the tripartite dominance arose from the nation’s ethnic minorities. However, the 1958 Willink Commission of Enquiry’s findings were supported by the major parties in the three Regions because the Commission opposed the creation of new States for minorities, such as those in the Niger Delta.

“The smaller ethnic groups in each of the regions tended to see themselves as confronting a situation akin to a majoritarian dictatorship [in which ethnic minorities were powerless] in the face of ethnicised electoral politics” (Mustapha, 2000, p. 87). Delta minorities first tried to get their own States, but failing that formed their own parties, seeking allies among major parties. South-eastern minorities Ijaw, Ibibio, Ogoni, Ekoi, and Efik resented Igbo discrimination, mostly welcoming invading federal troops in early 1968. The federal government created new States five times since 1996, so that the Niger Delta (South South) comprises nine States, consisting of 75,000 square kilometres and a current population of about 31million.

The Economist Intelligence Unit (EIU) (2007, p. 13) estimates “that at least 50,000 people have been killed in various incidents of ethnic, religious and communal violence since [the return of civilian rule in] May 1999. This gives Nigeria a [death] rate from internal conflict that is one of the highest in the world.” While some casualties are from election violence in 2007 or ethnic and sectarian conflict in States outside the Niger Delta, a substantial number of deaths are from the clashes over petroleum of federal security forces with Delta militias, criminal gangs, and civilians or among Delta groups. Armed rebellion and fighting in the Delta contributed to lost oil production of 750,000-975,000 barrels per day (33% of capacity) in early 2007, while loss from organized theft was 20,000-40,000 b.p.d. The kidnapping of petroleum personnel by militias or criminal gangs has been widespread (ibid.).

Most lost oil production from theft, hijacking, sabotage, and kidnapping can be attributed to armed militia groups or other alienated Delta groups who want regional autonomy. Hundreds have been killed through fighting between Delta dissidents and the federal government or its attack on locals. Since early 2006, the Movement for the Emancipation of the Nigerian Delta (MEND), a guerrilla group trying to be an umbrella group for Niger Delta militias, has been the source of many attacks and kidnappings. Militia members, primarily discontented youth, are increasingly sophisticated, massively disrupting production with attacks on pipelines, pumping stations, and oil platforms. MEND has been involved in intermittent fighting with federal police and armed forces.

Delta dissidents complained about lack of social amenities and substantial environmental pollution, and demanded control of land and resources. They wanted a share of power along with the three dominant communities. Since 1967, the federation’s revenue allocation has been continually revised, but even increases to the Delta under civilian government have been a far cry from Delta demands (Mustapha, 2000, p. 95).

This paper examines not only the economic grievances of the Niger Delta but also the way in which declines in petroleum output and real GDP per capita, 1983-1999, reduced the rents of ruling military elites, exacerbated mass discontent, and increased the poverty, income inequality, and environmental degradation of the Niger Delta during a period of repression. A part of this story includes the pervasive rent seeking by ruling elites, including their control of petroleum revenues that largely fund Nigeria’s federal and State governments, with little benefit to the people of the Delta. While most of the focus of the paper is on the Delta, the paper starts with a brief discussion of Nigeria’s economic development and its effects on rent seeking, which exacerbated the high-stakes game among military and political elites.

2. PER-CAPITA GROSS PRODUCT AND ITS GROWTH

Intrastate conflict is more likely in slow-growing low-income and lower-middle-income countries (Collier & Hoeffler, 1998, pp. 563-573; Nafziger and Auvinen 2003), experiencing relative deprivation. Nigeria is a low-income country, with a 2007 GNP per capita estimated at US$1,319 PPP (Economist Intelligence Unit, 2008, p. 15) (PPP adjusts for purchasing power). Nigeria’s real five-year moving average GDP (gross domestic product) per capita (US$), 1962-2001, grew only 0.32% yearly (table 1; graphed in Nafziger, 2008).

****TABLE 1 HERE****

Except for the 1967-70 civil war, Nigeria experienced steady growth from 1960 to the late 1970s. Annual real GDP per-capita growth, 1966-1977, was 1.4%. However, in the late 1970s, naira real appreciation (reducing traditional exports and import substitution) decreased post-war agricultural and manufacturing growth.

After 1970, Nigeria experienced the beginning of substantial long-term increments in the volume of petroleum production. Nigeria’s politics became a high-stakes game to extract rents from export revenue to buttress military or electoral power (table 2, graphed in Nafziger, 2008). Political, bureaucratic, and military leaders began to view manipulating government spending as “the golden gateway to fortune,” labeled “pirate capitalism” (Schatz, 1984, pp. 45-57).

****TABLE 2 HERE****

Nigeria’s annual GDP (US$PPP) growth per capita, 1973-1998, was minus 0.63%, so that Nigeria’s 1998 real average income after 25 years of mostly military rule was 84% of that in 1983 (Maddison, 2001, p. 196). Stagnation and economic decline make ruling coalitions difficult to sustain, as rents and other benefits for potential allies are difficult to maintain. The 1973-98 economic collapse sharply contrasts with the 2.9% yearly growth of another repressive oil-exporting country, Indonesia, during the same period (Nafziger, 2006, pp. 196-199). 2005 GNP per capita (PPP) in Nigeria ranked 117th among 130 countries (World Bank, 2007) and the 2006 Human Development Index (a single composite index combining three indicators: life expectancy, education, and living standards), of 0.448 (Niger Delta 0.564) ranked 159th among 177, compared to oil exporters Saudi Arabia’s 0.800, Libya’s 0.799, and Indonesia’s 0.697 (United Nations Development Program or UNDP, 2006a, pp. 288-291; UNDP, 2006b, p. 15).


3. ECONOMIC DECLINE AND REGIME TURNOVER

Unlike Indonesia, Nigeria invested little of its oil surplus in improved food and industrial production technology. Nigeria’s fall in average GDP, 18%, 1980-90, resulted primarily from overdependence on a single export, contributing to a declining commodity terms of trade (price index of exports/price index of imports) by 74%. Moreover, from its 1980 peak, Nigeria's export purchasing power fell 72% in 1982 and 60% further in 1983, almost without peacetime precedent internationally (Nafziger, 1993, pp. 67-70). This fall placed an intolerable burden on President Shehu Shagari’s re-elected government, overthrown by the military in 1983.

Nigeria's negative net transfer of resources, 12.5% of exports, 1984-86, from debt servicing and falling terms of trade, approximated the war-reparations transfer burden borne by Germany, 1925-32, that contributed to the depression, unemployment, and resentment that fuelled fascism. In Nigeria in 1985, during the greatest resource transfer, the Mohammed Buhari military government was overthrown by Major-General Ibrahim Babangida (Nafziger 1993:27-8, 67-9, 129-34). Declines in the terms of trade and living standards especially put pressure on Nigeria’s repressive, authoritarian military regimes in the 1980s and 1990s, increasing the proportion of resources to the powerful at the expense of politically weak regions such as the Niger delta. Following the military’s lack of response to the Campaign for Democracy; a 1993 free election aborted by the military; General Sani Abacha’s 1993-98 military rule, perhaps “the most repressive government in Nigeria’s post-independent history” (Lewis 2007:240); and the 1998 death of Abacha under mysterious circumstances, “Nigerians were tired of military rule and Hausa-Fulani domination,” (Bah 2005:32) as the Niger Delta, the South, and the Middle Belt had generally been excluded from political influence by the three Northern military leaders, 1983-1998 (Lewis 2007:240). Interim ruler General Abdulsalam Abubakar restored civilian presidential rule in the election of January 1999.

4. RENT SEEKING

Rent seeking, which ranges from lobbying to coercion, is unproductive activity to obtain private benefit from public action and resources. In Nigeria, where the state has lacked rule of law under both civilian and military rule, rent seeking has been pervasive since independence. The Nigerian government has been dependent on buying political support through concessions to powerful interest groups. According to Nuhu Ribadu, Nigeria’s chief corruption fighter, 2003-07, “more than $380 billion has either been stolen or wasted by Nigerian governments since independence in 1960” (BBC, 2006). The panel chaired by Pius Okigbo that probed the Central Bank of Nigeria reported that $12.4 billion of oil revenues had disappeared beyond budgetary oversight, 1988 to mid-1994 (Economist, October 22, 1994, p. 50). Previous panels investigating corruption had also found billions missing. In 1994, Nigeria’s military government and its allies expropriated “more than a thousand million dollars annually – equaling as much as 15 per cent of recorded government revenues – flow[ing] to smuggling networks and confidence teams, many of whom operated with connivance of top elites” (Lewis, 1996, p. 97). In 2007, Transparency International ranked Nigeria 148th among 180 countries.

Nigeria’s slow growth, reduced external funding, and the increased liberalism of the international financial institutions, 1980-2000, compelled Nigerian military and political elites to rely on widespread rent seeking to maintain power. Yet while elites competed for influence, most Nigerians, including the poor and those that lacked powerful ethnic or regional patrons, such as the fishers, farmers and workers of the Niger delta, missed out on the benefits.
5. INCOME DISPARITIES

Large income inequality exacerbates the vulnerability of populations to political conflict and repression. In Nigeria, ruling elites’ emphasis on distributive politics to maintain power means that reducing regional and class inequality has taken a back seat. Nafziger and Auvinen (2003, p. 90) and Alesina and Perotti (1996) use pooled data for scores of less-developed countries over long periods to find that income inequality, by fueling social discontent and relative deprivation, increases domestic conflict.

Nigeria’s Bureau of Statistics’ 2004 survey (updated to 2006) found poverty rates and Gini (income concentration) for 36 States, six regional zones, and nationally. Poverty was measured, using a multidimensional concept of poverty, including nutrition, income, assets, education, and health, providing detailed poverty mapping, with local data on poverty assessment and basic-needs indicators (Nigeria, 2005).

If we focus on discrepancies between actuality and expectations, we can observe in Tables 3 and 4 a number of potential sources for discontent or relative deprivation. Nigeria’s Gini, 0.49, is the 27th highest of 127 countries in 2005. Gini is high in the discontented regions of the Niger Delta and the highly urbanized South-west. Moreover, during military rule (see 1980-1996, table 3), when a few men at the center made huge gains from rent seeking, poverty rates increased nationwide. Thus, all zones were deprived relative to previous periods, raising the potential for social discontent and political violence. Even under repressive military rule, discontent boiled to the surface, culminating in huge deprivation deficits in 1999. All this occurred amid a falling level of living during military rule, 1983-1998. This negative-sum game to win control of the center’s oil revenues contributed to increased conflict among regions and communities, and between majority and minority groups.


****TABLES 3 & 4 HERE****

Through the demonstration of consumption levels of the relatively well off, high income concentration increases the perception of relative deprivation by substantial populations, even without the absolute deprivation of 1983-99. The risk of conflict or repression to suppress potential conflict increases with a surge of income disparities by class and within and between region, and community, especially when these disparities lack legitimacy. Class and communal economic differences often overlap, exacerbating perceived grievances and potential strife. Regional differences in income also correspond to regional differences in educational and employment opportunities.

6. NIGER DELTA GRIEVANCES FROM FEDERAL REVENUE ALLOCATION AND LAND TENURE POLICY

A major Delta grievance is so little revenue to the producing region. Nafziger (1983) discusses how disputes about the formula for revenue allocation, especially oil revenue, contributed to Biafran secession and the civil war, 1967-70. The revenue distribution formula changed frequently after 1967, with different weights on population, equity, need, land area, and derivation, a State’s rights to a proportion of taxes from primary production within the State. Decree No. 51 in 1969 put all petroleum under federal government ownership and control. A 1970 federal decree reduced the share of the State of origin’s claim to petroleum rents, royalties, and exports, and a 1971 decree eliminated all revenues from offshore oil production. General Olusegun Obasanjo, as military ruler, promulgated the Land Law of 1978, making government the owner of all land. The Ijaw community’s Kaiama Declaration of 1998 ceased to recognize these decrees.

From 1983-99, the “lack of transparency and political accountability meant that federal authorities had wide latitude in making actual disbursals and allotting resources” (Lewis, 2007, p. 142). During 1983-99, derivation as a component for distribution fell from 50% to 0 so that the Delta received only what it was entitled to based on population, viz., 3% of federal revenue. In December 1998, the Ijaw Youth Congress “demanded the immediate withdrawal from Ijawland of all military forces of the Nigerian State,” which has had majority ownership in oil prospected by Shell Oil (Mustapha 2000:86-108). In 1999, Obasanjo’s new civilian government increased derivation to 50% so that the Delta received 13% of central revenue (UNDP, 2006b, p. 39), which was still far below the Delta’s entitlement when based on property rights.

A major institution associated with the provision of incentives to invest in resources and use them efficiently, as well as promoting economic development and reducing land conflict and grievances, is laws and mores pertaining to the rights of property owners and users. Ibaba (2005, pp. 92-93) argues: Nigeria’s “Land Use Decree [of 1990] stands out as a major instrument that has been used to dispossess the Niger Delta people of their lands and the benefits thereof.” Land is vested in each State, so “that the people have lost the rights of their land to the state.” This policy, together with the Land Law of 1978, created a central government monopoly over land tenure, used by military rulers to further their and their allies’ interests. A person or community is not likely to economize on, pay for, invest in, or conserve land without an assurance of secure and enforceable rights over it and the right of transfer.

For De Soto (2000, p. 56), the most important attribute for success is legally enforceable property titling, based on painstaking accrual of law written by legislatures and consistent with the social contract or laws and principles of political right that people live by. “One of the most important things a [modern] formal property system does is transform assets from a less accessible condition to a more accessible condition, so that they can do additional work. . . . By uncoupling the economic features of an asset from their rigid, physical state, a representation makes the asset ‘fungible’ – able to be fashioned to suit practically any transaction” (de Soto, 2000, p. 56). Whereas an asset such as a factory or oil field may be indivisible, the concept of formal property enables citizens to “split most of their assets into shares, each of which can be owned by different persons, with different rights, to carry out different functions [so that] a single [asset] can be held by countless investors” (ibid., p. 57).

In developing counries similar to Nigeria, formal land and credit markets do not exist for most owners and residents, so that most potential capital assets are dead capital, unusable under the legal property system, and inaccessible as collateral for loans or to secure bonds. De Soto (2000, pp. 6-7, 30-54) and his critics estimate dead (or informal) capital in the five-sixths of the world without well-established property rights as $4-9 trillion, representing substantial capital that could be “unlocked” by clear property rights.

De Soto recommends giving formal property rights, i.e. legal title to the property that they actually possess, to poor and middle-class people in developing countries. In Nigeria, that need not mean abrupt compulsory individualized titling of land. Under most Nigerian traditional community or village systems, farm families not only have inheritable use rights to cropland, pastures, and forests, but these traditional land rights are transferable, providing tenure security at low cost and thus not discouraging individuals from investing in the operation. To reduce Delta grievances, the government of Nigeria will need to improve Delta access to revenue from petroleum, especially by increasing Delta control and use rights over their own resources.

7. GRIEVANCES FROM OIL-INDUSTRY DISECONOMIES BORNE BY NIGER DELTA RESIDENTS

The lack of community control and property rights by Niger Delta citizens has contributed to substantial diseconomies, including environmental degradation from oil production and its adverse effect on water, health, soil fertility, and livelihoods. Orubu, Odusola, and Ehwarieme (2004, p. 203) contend that environmental diseconomies created by Nigeria’s oil industry are largely responsible for the crisis in the Delta.

Before the late 1980s and early 1990s, Nigeria lacked laws requiring environmental impact assessment and regulation. Since then, regulating petroleum has been hampered by excessive centralization, inadequate capability, weak enforcement, and governmental inter-agency disputes. Delta environmental problems from the oil industry include: (1) damage to the mangrove ecosystem, including loss of fuel wood, fish, and other aquatic host organisms; and degradation of control and protection from floods, storms, hurricanes, and erosion, with governmental compensation only a fraction of the damage; (2) destruction of lowlands, wetlands, and other environmentally sensitive areas, blockage of natural water courses, and disruption of seabeds and river channels by dredging for pipeline installations and the construction and breakage of oil wells; (3) the pollution of air, surface water and groundwater and the destruction of forest and farm land, vegetation, and human settlement by companies’ wells, fields, pipelines, flow stations, refineries, and gas flares, and increased leaded vehicle exhaust emission; (4) the decreased water from safe sources; polluted rivers, lakes, ponds, other untreated surface water, unprotected wells, and boreholes contribute to less than half of communities (about one-fourth in rural areas) having access to safe drinking water; (5) the effects of pollution on the diversion to marginal farms, fishing waters, and the cutting down of forests; (6) the oil spills and blown pipelines, both accidental and deliberate, that have degraded forests, contaminated food, killed fish and vegetation, and destroyed natural resources essential for local livelihoods; (7) the natural gas flares (75% waste) and leaks that emit hydrocarbons that affect water organisms and the atmosphere, cause subsidence and sediment, and contribute to acid rain; (8) the construction of canals that diverts saltwater into freshwater, destroying its ecology; (9) the erosion that has threatened the public facilities, houses, and economic assets of coastal communities; (10) the shortage of dry and relatively well-drained land; and (11) the waste discharge from oil operations into the land and sea, degrading water and harming human health. Even with federal environmental protection and law, and federal half ownership of oil companies, the Delta people see little evidence of governmental concern, with rapid uncontrolled urbanization (e.g., Port Harcourt and Warri), loss of fishing grounds, disappearance of livelihoods, and shortages of land resulting from the devastation of the ecological balance (UNDP, 2006b, pp. 175-311; Orubu, et al., 2004, pp. 203-214).

The Delta needs more attention to the environment and investment in agriculture and fishing. The Delta’s non-oil infrastructure has been neglected, with poor access to education, electricity (Bayelsa State is not linked to the national electric power grid), safe drinking water, roads, and health facilities. No part of the region has regular access to potable water. Few Delta residents have water security; average liters of water use per person daily, 1998-2002, although higher than Nigeria generally, was 45, compared to a poverty threshold of 50, and 495 in Australia.

Few people have telephones, electrical lights, or refuse disposal, and housing is of poor quality. Primary-school facilities are in a state of extreme disrepair, and while statistics are lacking, few children attend secondary school. Modern health care service is largely absent and the few existing health care centers are in need of repair, and lack doctors, nurses and critical supplies. 60-70% of children are malnourished, and 10-12% severely so. HIV/AIDS prevalence in the Delta is among the highest in Nigeria. Among Nigeria’s six regions, the Niger Delta ranks highest or second highest in post-neonatal, infant, and maternal mortality death rates (UNDP, 2006b, pp. 90-93). There are too few health facilities to cope with malaria, gastroenteritis, measles, worm infestation, anemia, and heart and respiratory diseases, increasing substantially but not a serious health problem until after the widespread commercial exploitation of petroleum. Health care facilities are few and widely dispersed, and travel to these centers difficult. A reflection of the Delta’s low Human Development Index is that life expectancy, 43, the same as Nigeria generally, ranks 159th in the world, while the Delta’s child mortality rate of 178 per 1000 is among the highest in the world (ibid., pp. 25-42, 304).

Delta citizens perceive collusion between oil companies and government, and the UNDP (2006b, p. 294) indicates a lack of avenues for redress, with courts outside of reach. Amid the concentrated wealth from petroleum, the Niger Delta suffers “from administrative neglect, crumbling [transport], infrastructure and services, high unemployment, social deprivation, abject poverty, filth, and squalor, and endemic conflict” (UNDP, 2006b, p. 25). Whole villages have been destroyed and their population displaced because of conflict. Violence and insecurity is growing; social values have disintegrated; and elders and other traditional authorities have lost control over youths. People fear attacks by hijackers, oil bunkerers, hostage takers, youth gangs, and hijackers, and the crossfire between militant groups, and between them and government law enforcement officials (ibid., pp. 306-311).


8. POVERTY IN THE NIGER DELTA

Tables 3 and 4 indicate that the Delta, although poor relative to 1980, is not poor compared to other Nigerian zones. The Delta, as Nigeria generally, experienced increased income poverty during military rule, reflected in statistics, 1980-1996, but reduced poverty some during President Obasanjo’s economic reforms (reflected in 1996-2004 figures). To be sure, UNDP’s view (2006b, pp. 36-37) is that “the true level of poverty in the [Delta] region [is] underestimated. . . . If tied to purchasing power, the actual poverty level could be much higher, as prices are tied to the high earnings of oil sector workers.” Additionally, poverty is multidimensional, including not only low income but also lack of food, assets, and access to basic infrastructure (roads, transport, and clean water); illiteracy; poor health; powerlessness; and vulnerability (Nafziger, 2006, pp. 167-168).


INSERT TABLES 3 AND 4

UNDP (2006b, pp. 36-37) states: “Poverty has become a way of life due to economic stagnation; agricultural underdevelopment from soil infertility; unemployment; poor quality of life due to shortages of essential goods, facilities and money; isolation and poor communication; government insensitivity; and an unhealthy environment spreading disease and malnutrition. . . . Other issues include poor environmental quality and high levels of pollution, conflict and lack of security, threats to health and well-being including HIV/AIDS, and unsustainable livelihoods.” Niger Delta activists, however, contend that oil companies should pay rents and royalties for land to its owners or communities instead of the federal government.

For the UNDP (2006b, pp. 36-37):

The critical issue in the Niger Delta is not only the increasing incidence of poverty, but also the intense feeling among the people of the region that they ought to do far better. This is based on the considerable level of resources in their midst, and the brazen display and celebration of ill-gotten wealth in Nigeria, most of which derives from crude oil wealth. . . . In addition, the oil and gas industry has damaged farmlands and fishing grounds, which have harmed traditional occupations such as fishing, farming, lumbering, crafts and small-scale agro-based activities. . . . [Moreover, the] region [has] been excluded from tapping into modern infrastructure.

This has contributed to the indignation, social discontent and frustration (ibid.) and mobilization of deprivation into collective violence by militias.


9. THE LACK OF DEMOCRATIC ACCOUNTABILITY IN THE NIGER DELTA
Stakeholders, meeting in Port Harcourt in February 2006 and representing all Delta States, told UNDP (2006b, pp. 41-42) the following:

In 2003, no election took place in (our state). The State Governor simply allocated figures and put the people he liked in the House of Assembly. . . . Most state parliamentarians are not true representatives of the people, and do not owe any allegiance to the electorate but only to the powers that be. Thus, the elected state assemblies in the region do not provide the necessary check on the executive branch in the way money is allocated and spent. There is a very strong belief in the delta that the state governors divert most of the fiscal allocations from the Federation Account and Derivation Fund to their states for their own private use. The mismatch between allocations and the low level of infrastructural development and service delivery seems to lend credence to such a claim. . . . In some of the core delta states, it is an ‘open secret’ that local officials do not reside in the locality and hardly visit their offices at all for months on end. Yet thy collect and disburse the monthly allocations from the Federation Account. No poverty alleviation programme can be implemented in an atmosphere of such gross and barefaced official corruption.


UNDP (2006b, pp. 40-41) states the following about Delta region governance:

Part of the problem of poor service delivery is traceable to the absence of effective machinery to hold elected officials accountable to the electorate. . . . with rulers not acknowledging any obligation to be accountable to citizens. Civil democratic rule has not changed the situation much because elections are flawed in several ways. . . . Those with ample funds employ thugs to terrorize opponents, and prevent free and fair access to the electorate. Federal and state elections are usually rigged and not a reflection of voter preferences, while local elections, conducted by state electoral commissioners, are even less related to local wishes. Election administrators and security agencies condone and/or abet the perpetuation of electoral malpractices, thereby eroding public confidence in electoral outcomes, which in turn leads to declining legitimacy of elected officials and their institutions.

“Part of the problem of poor service delivery is traceable to the absence of effective machinery to hold elected officials accountable to the electorate.” Officials fail to acknowledge any obligation to be accountable to citizens (UNDP, 2006b, pp. 40-41).


10. CONCLUSION

Since the late 1960s and 1970s, with the expansion of crude petroleum and centralization of its revenues, controlling the federal government has become a dangerous high-stakes contest. From 1980 through the first decade of the twenty-first century, the failed expectations of Nigerians from stagnation in petroleum revenues and slow or negative per-capita growth put pressure on Nigeria’s ruling elites. A zero-sum game meant that rulers could no longer expand rent seeking opportunities for members of the ruling coalition without losing support from other allies or clients, thus increasing potential discontent. Governing Nigeria became even more difficult as economic regress contributed to increased poverty amid large income discrepancies.

Elites, focusing on regime survival and their own wealth accumulation, felt compelled to expand rent-seeking opportunities that can trigger a vicious circle of stagnation and deadly violence. Moreover, regime survival meant choosing personnel for their political support and clientage rather than their consistent and knowledgeable economic policy advice. Ake (1996:1, 18) writes, based primarily on Nigeria’s experience: “the problem is not so much that development has failed as that it was never really on the agenda in the first place. . . .Leaders were in no position to pursue development; they were too engrossed in the struggle for survival.”

The Niger Delta was most vulnerable to the stagnation and repression of 1983-1999. The Delta was too politically weak to insist on greater control over and property rights to petroleum, the resource that generated the lion’s share of revenue for the federation and States. Rather than benefiting from its resources, the Delta incurred substantial diseconomies and low basic-needs attainment, including environmental degradation, crumbling infrastructure and services, poverty, filth, squalor, and endemic conflict.

A long period of military rule and subsequent electoral violence has contributed to Nigeria’s political decay. Nigeria lacks the economic institutions and governance structures, such as efficient and transparent administration and legislation, enforcement of contracts and property rights, and efficient and non-partisan civil service. Nigeria will need transparent and able leadership to undertake the economic reform to spur faster economic growth and create a more equitable income distribution to eliminate the ruling elites’ low-sum games.


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Table 1 Nigeria: GDP per Capita in US$/year

1960 291.06 1984 281.83

1961 284.35 1985 299.90

1962 288.49 1986 298.40

1963 305.14 1987 287.73

1964 311.91 1988 307.73

1965 318.59 1989 320.02

1966 297.02 1990 336.53

1967 243.63 1991 342.64

1968 234.18 1992 342.60

1969 283.05 1993 340.09

1970 344.27 1994 330.60

1971 382.61 1995 328.94

1972 384.66 1996 333.42

1973 394.22 1997 333.15

1974 425.95 1998 330.60

1975 392.21 1999 325.93

1976 415.45 2000 331.56

1977 427.67 2001 333.69

1978 391.10 2002 330.76

1979 404.99 2003 357.36

1980 409.18 2004 388.09

1981 344.51 2005 416.81

1982 332.98 2006 440.99

1983 305.50 2007 470.53


Source: World Bank 2007 and (for growth after 2003) Economist Intelligence Unit 2008:15


Table 2 Value of Nigerian Petroleum Exports in millions of US $ (1960-2006) [Source: World Bank 2007]

Year










1960

12







1961

32







1962

48







1963

57







1964

90








1965

191







1966

258







1967

199







1968

109







1969

422







1970

718







1971

1,375








1972

1,803







1973

3,049







1974

8,997







1975

7,744







1976

9,444







1977

11,561






1978


9,452







1979

15,624







1980

24,931







1981

17,291







1982

11,883







1983

9,941







1984

11,534





1985


12,568







1986

4,770







1987

7,024







1988

6,267







1989

7,470







1990

13,265







1991

11,792





1992

11,642







1993

10,859







1994

11,040







1995

11,512







1996

14,888







1997

14,391







1998

8,754







1999

12,453







2000

20,040







2001

17,188







2002

17,083







2003

22,184







2004

33,309







2005

46,770








2006 52,520




Table 3 National and Zonal Trends in Poverty Levels (%), 1980-2004 ($1/day poverty line)
National/Zonal 1980 1985 1992 1996 2004
National 28.1 46.3 42.7 65.6 54.4
South South (Niger

Delta) 13.2 45.7 40.8 58.2 35.1

South East 12.9 30.4 41.0 53.5 26.7

South West 13.4 38.6 43.1 60.9 43.0

North Central 32.2 50.8 46.0 64.7 67.0

North East 35.6 54.9 54.0 70.1 72.2

North West 37.7 52.1 36.5 77.2 71.2
Source: Nigeria, National Bureau of Statistics, 2005; and UNDP, 2006b, p. 35.
Table 4 Population, Poverty and Income Concentration by Zone and Nation

Average Monthly

Population Household Incidence of

(000) Income (N) Poverty Gini

Region 2006 1998/99 2005 2005

South South (Niger Delta) 31,223 1412.12 35.1% 0.507

South East 9,613 1677.12 26.7% 0.449

South West 24,141 2096.37 43.1% 0.554

North Central 20,265 1141.45 67.0% 0.393

North East 18,973 680.55 72.2% 0.459

West 35,260 738.94 71.2% 0.371

National 139,475 1142.59 54.4% 0.488
Source: Same as Table 3.


1Paper presented to the International Conference on the Nigerian state, oil industry, and the Niger delta, March 12. 2008, at Wilberforce Island, Bayelsa State, Nigeria. Thanks to Kansas State University’s African Studies Center for financial support.







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