Nigeria: Slow Recovery From An Epic Fail


December 28, 2022: Despite being one of the largest countries in Africa and possessing a large oil production and export industry, Nigeria did not make a list of the 12 Most Advanced countries in Africa. That assessment is correct because the growth of corruption in Nigeria was fueled by the growing oil wealth produced in the Niger River Delta and offshore oil fields. Reform efforts since the 1990s included a 2008 audit of Nigerian oil income since the 1960s which concluded that a trillion dollars of the $1,190 billion of oil income was stolen with the help of corrupt politicians and businesses. The most obvious result was that the standard of living in Nigeria declined as oil income increased. This was most obvious when compared to rising living standards in neighboring countries lacking oil wealth. That oil money and tribal feuds led to over three decades of violence and military rule, interspersed by brief periods of elected government. Nigerians never lost their faith in democracy and in 1998 the last military government peacefully gave way to democracy. Elections have continued, as has a growing effort to curb corruption. The key problems have been identified but finding an effective and enduring solution has been difficult.

The twelve more advanced, but usually smaller and less affluent (in terms of income from natural resources) countries included Ivory Coast, Zimbabwe, Tanzania, Senegal, Namibia, Ghana, Egypt, Kenya, Botswana, Tunisia, Morocco and South Africa. These twelve had better living standards and infrastructure as well as a better educated, healthier and more productive population.

Nigerian reformers have, over the last two decades managed to reduce the percentage of oil money stolen but this has not yet led to major improvements in rebuilding of infrastructure or expanding the number of firms creating employment for the growing population. Local corruption is as bad as ever but nationwide there has been some progress exposing the extent that oil income has been stolen and real efforts are being made to halt that and recover some of the lost billions. It has not been easy. But that effort is apparently one reason why the economy is recovering from a sharp, but apparently temporary decline in world oil prices.

The 2014-15 collapse in oil prices hurt the economy for several years. Yet even with Boko Haram and oil thieves still active and more and more corrupt officials being indicted, the kleptocrats know they still have a lot of power and do not hesitate to use it. Case in point is the need for economic reforms and changes in government spending. This has to go through the national legislature where budget details are subject to all manner of legal and illegal adjustments by legislators and senior government officials. Despite the growing waves of bad publicity this year, the kleptocrats in the legislature are doing what comes naturally and ignoring the increased risk of indictment and prosecution.

Despite the resistance, Nigeria is starting, for the first time, to look better in the international rankings for things that, indirectly, rate the degree to which corruption cripples the economy and public wellbeing in general. The World Bank, which has pioneered a lot of these international rankings, says Nigeria is becoming a more attractive place to invest in legitimate (legal) businesses. But the larger (and long term) investments requiring some certainty that the good government will last are not yet comfortable in Nigeria..

Corruption has at least become a major and persistent issue in the media. Beyond that not much has actually been done other than a few prosecutions (not always successful) of notoriously corrupt former officials (usually former state governors). Corruption is now a news staple and those speaking up no longer have to worry as much about retribution, which was once often fatal. But people notice that the billions of dollars allegedly recovered so far are now showing up in new projects. Lots of plans and promises but not much to show for it so far. Some of this bad news is expected but still disappointing. For example, journalists in the Niger Delta can now see coastal tankers (as pointed out by locals) still engaged in smuggling. A little more investigation confirmed that these tankers do indeed obtain oil stolen from ruptured pipelines and sold to brokers who pay bribes to allow their tankers to move the oil to neighboring countries where it is sold as legitimate. Revelations like this put officials of the national oil company under more pressure but so far there isn’t much to show for it. The Delta is still notoriously corrupt and recent renewed threats by local militants are suspected of being connected with yet another effort by corrupt local politicians to deal with (and evade) anti-corruption investigators.

Many Nigerians attribute the corruption stalemate to the fact that the major political parties (especially the APC, currently in power) are busy trying to avoid accepting any blame for ignoring the corruption. It has become fashionable to declare corruption allegations an excuse by political rivals to bring down an honest opponent. Popular opinion considers all of them dirty to one degree or another and that the most corrupt should be tended to first. These politicians have the most to lose and have been very effective in hiding behind this “it’s all politics” smokescreen. Corruption is deeply entrenched and difficult to clean up, but in a democracy you have to show some tangible progress or get voted out of office by less honest politicians.

During the last two decades, Nigerian reform efforts have been making slow progress against disorder (tribal and religious violence as well as criminal behavior in general) because the army and national police were resistant to reform efforts. Corrupt politicians were still getting elected but more of them were later arrested and prosecuted for corruption. More and more of the stolen money is recovered, even in foreign banks or property. The educational and health care systems still need a lot of work as does the government bureaucracies in general.

Reforming the national police, whose gratuitous violence against any disagreeable group turned Boko Haram into a major Islamic terrorism movement, is still a problem. It has finally been recognized as impediment to solving many problems besides corruption, so there is growing pressure for major reforms in the police as well as the Nigerian government in general. This is a much larger and entrenched problem than a major outbreak of Islamic terrorism.

December 26, 2022: After three years, the country continues taking a beating economically despite the oil prices more than doubling since 2020. The nationwide economic disruptions caused by covid19 are still being felt. The inflation rate has risen more than 50 percent since 2020 to 21 percent and the Nigerian currency, the naira, is at record low value against the dollar. has lost nearly half its value on international markets as more Nigerians try to convert their naira for the safer dollar. While it cost 360 Naira to buy a dollar five years ago, now it is 460. On the black market, where a growing number of Nigerians must go to get dollars, it costs over 700 naira to buy one dollar. The economic crisis has made endemic and epidemic corruption more visible. This is very visible in the oil production industry, which has greatly inflated costs because of corruption. Higher oil prices are canceled by declines in production caused by criminals and corruption. Corruption inflates the cost of everything and reduces the quality of work done by the government, especially when it comes to infrastructure.

December 20, 2022: In the northeast (Borno State) the air force received information that a large number of Boko Haram men were assembling at a remote village. As the army dispatched troops to the area, the air force carried out a series of air strikes which, it was later discovered, left at least 103 Boko Haram members dead, including several known leaders.

December 12, 2022: In the northeast (Borno State) four senior Boko Haram leaders surrendered to the army. The four had been based in the Sambisa Forest for over a decade but found their situation increasingly dangerous because of more attacks by aggressive army patrols and rival Islamic terror groups. In the last few years, the army has seen 83,000 Boko Haram fighters and their families surrender. Over 70 percent of these people are wives and children of the adult male Islamic terrorists. The army and the government have a problem with preventing these kids from growing up and becoming Islamic terrorists or gangsters. The anti-corruption efforts have not created enough additional economic activity to provide jobs for all the young men who often turn to crime when legitimate employment is not available. There are accusations that the army has killed nearly a hundred of these children for not surrendering in a convincing manner. The army is also accused of forcing some of the pregnant wives or girlfriends to have abortions.

November 20, 2022: For the second time since 2021 declines in Nigerian oil production in October meant Libya became the largest oil producer in Africa, with 1.163 million BPD (barrels per day). Nigerian production fell sharply. Normally the largest producers in Africa are Nigeria, Angola and Libya. Angola suffers from some of the same corruption and internal violence problems as Nigeria and for October is in third place behind Libya and Nigeria. Given the investments in oil production, mainly by foreign companies, Nigeria can produce 4 million BPD. That has not happened. The reasons are continuing problems with oil theft gangs and repair/maintenance backlogs, especially of the pipelines, in the Niger River Delta. Then there are the decades of government inability to deal with these problems. That led to a growing number of foreign oil companies selling their Nigerian assets and going elsewhere. In effect, it is more profitable to do business in other countries.




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