Nigeria
- Can Africa's
biggest country make it?
By
Jonathan
Power
TFF Associate
since 1991
Comments to JonatPower@aol.com
November 4, 2005
LONDON - There are 101 small - and
not so small - things that are starting to go right in
Nigeria, Africa's most populous country. But the big
thing is not happening - persuading the electorate that
after twenty years of gross mismanagement followed by the
austere belt tightening and pruning of the democratic
rule of President Olusegun Obasanjo, that their lives can
be better.
Obasanjo is not popular. Only if
Obasanjo can turn this negative psychological state
around in the coming eighteen months of his final term
will Nigeria's forward momentum into the future be
secured. Otherwise his successor will be feel pressured
to raid the piggy bank - where Nigeria's bountiful oil
earnings are stored for a rainy day - and buy his/her way
into cheap popularity by offering to cut petrol prices,
subsidize food, boost civil service employment and all
the other wasteful expenditures that Obasanjo has done
away with.
The Obasanjo administration is
approaching the cusp of success. But on either side is
the precipitous path to ruin, one that Obasanjo
personally will never take but that a successor might
well.
Only last month the International
Monetary Fund reported on Nigeria's macro economic
reforms in glowing terms. Its report card told of an
economy now enjoying a sustained upswing with growth at 5
to 6% a year. The non-oil economy, both manufacturing and
agriculture, after years of decline, is now growing at a
satisfactory rate. Privatisation is accelerating and with
the sale over the next year of ports, airports, and
Nigeria's telecommunications and power companies the
process will take another big step forward. Inflation is
coming down to appropriate levels and now with the
recently negotiated debt-buy back and relief scheme
sizeable funds are available both for important
infrastructural and social expenditures. The most serious
problem the IMF points to is the political one of
resisting Congress' attempt to legislate too fast the
spending of money.
Corruption remains the biggest
single drain on the economy. But vigorous prosecution of
some important figures including the head of the
country's police force shows that the tide is gradually
being turned. Moreover, the arrest a month ago in London
on charges of money laundering of the governor of one of
the important oil producing states, has been a shot
across the bows of Nigeria's 35 state governors who, with
few exceptions, are also thought to be corrupt and who
shelter behind a provision in the constitution, shortly
to be revised, that gives them immunity from prosecution.
Investors are beginning to take
Nigeria seriously. Indian and Chinese companies are
looking at its defunct railroads and giant steel mill and
considering taking them over. And in the last couple of
years a range of companies from Microsoft to South
African cell phone operators to Chinese motorbike firms
have set up manufacturing plants in the country. Indeed
one sign that the economic reforms are beginning to show
results at the personal level is the sharp increase in
motorbike ownership.
Whilst all this is applauded by
professional observers the critics are asking why was it
that the Obasanjo government really didn't get the most
important reforms moving until he won his second term of
office in 2003?
I put this question to Obasanjo. He
replied, "In my first term I had to learn the ropes and
the intrigues of party politics. I inherited a situation
where the military had ruled for 15 years so I had to
bring in people from many parts to give them a sense of
participation. But they weren't all in support of my
policies. When I won re-election I knew the party
sufficiently to handle it. In my first term I couldn't
have brought in outsiders - there would have been too
much resistance."
His most important second term
appointment was a vice-president of the World Bank, Ngozi
Okonjo-Iweala, as finance minister. She together with her
able deputy, also a woman, Nenadi Usman, have driven
through a series of reforms that have totally revamped
Nigeria's old way of doing things. Apart from the
rigorous macro economic reforms, they have introduced
transparency in the oil accounts and in revenue
allocations. Two years ago Ms Usman told me that she saw
the oil industry as an albatross around Nigeria's neck
but now she speaks of it becoming a positive force in
Nigeria's development.
For all the success of his second
term the clock is now ticking for Obasanjo. Only if the
pay off from the macro reforms becomes much more apparent
in every day living conditions might it be possible to so
lock in the reforms that it will be difficult for a
successor to undo them.
Copyright © 2005 By
JONATHAN POWER
I can be reached by
phone +44 7785 351172 and e-mail: JonatPower@aol.com
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