Special Report Nigeria at 50

NIGERIA AT 50
30 September 2010

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Frustration at promise unfulfilled
By William Wallis
Published: September 29 2010 15:43 | Last updated: September 29 2010 15:43
When Britain’s colonial administrators lowered the Union Jack in Lagos on October 1 1960, Nigeria was Africa’s great hope. Its pool of talent, mass of fertile land and newly discovered oil promised economic transformation and a role leading independent Africa on to the global stage.

The same promise lives on 50 years later, having survived civil war, military dictatorship, economic mismanagement and social turmoil.

However, the journey to fulfil it remains tortuous, while the demands of a restless population, at 150m, nearly four times its size at independence, press ever more urgently.

As the gloves come off in the battle for control of the presidency ahead of elections due early next year, the country from which one in five black Africans hail is caught by a mood of renewed uncertainty.

Some of the same obstacles that have thwarted its potential in the past, skewing the role of the state towards serving special interests, dividing its citizens along ethnic and religious lines and trapping generations in poverty, remain stubbornly in place.

A profound mismatch exists between the country’s aspirations and the nature of the political system that has evolved since the military handed power back to civilians in 1999 and that is charged with fulfilling them.

Reform-minded officials lament a rapid run-down in surpluses generated by the high price of oil, on which the government depends typically for 80 per cent of revenues, amid ballooning budgets and lax controls.

Sub-Saharan Africa’s leading energy producer, they warn, is in danger of squandering another opportunity to upgrade its infrastructure and revive public services, in the service of a patronage system that has leaked billions into the pockets of individuals at federal and state level during the boom.

Yet there have also been tantalising glimpses of what Nigeria might be.

The past decade has thrown in the mix a succession of talented technocrats who have fought vigorously for change and periodically registered success. This, and the dynamism unleashed in parts of the business community have shown that the state and private sector can and do get it right.

For nearly a decade telecoms have been growing as fast as anywhere in the world. While the edge has come off a parallel boom in banking since the 2008 stock market crash, there is cause to hope that next time there is a take-off it will have more solid foundations.

In the past year, Lamido Sanusi, the central bank governor, has faced down politically connected fat cats in an attempt to sanitise a financial sector that had mirrored the west’s in its unregulated quest for bonanzas.

There are the germs too of a revival in manufacturing. In Aliko Dangote, the country has its first world-class industrialist. He has invested billions from his trading empire into producing cement, flour and sugar, creating more than 20,000 jobs and promising many more.

It is the oil price that has underpinned growth of more than 6 per cent in recent years, Mr Sanusi agrees. But where there have been reforms, these have encouraged periodic waves of optimism about the country’s capacity to lead a continental revival at a time of unprecedented global interest in African markets and resources.

“It’s like managing a fund. You have 150m or 1bn in the fund, but if you have bad managers you won’t make money, you’ll lose it,” says Olusegun Aganga, the finance minister, who was recently recruited from Goldman Sachs in London. “We have what it takes. What we are looking for are the good managers.”

It is this that is fuelling worry as Nigeria enters another election season, after what has already been a precarious year of intrigue.

A prolonged drift under the ailing former president, Umaru Yar’Adua – a scion of the Muslim north installed after flawed 2007 polls – turned to crisis last November, when he was evacuated to Saudi Arabia, suffering from a heart condition.

The refusal by his entourage to allow Goodluck Jonathan, then deputy president to assume control, left the country rudder less for months, prey to rapacious deal makers and vulnerable to coup plots.

In the midst of this, Kaduna-born student Umar Farouk Abdulmutallab tried to blow up a passenger jet over Detroit, serving a sharp reminder of Nigeria’s capacity to export danger as well as oil. Unrelated communal violence broke out soon afterwards, claiming hundreds of lives around the central city of Jos.

That Mr Jonathan was ultimately eased into power, and the constitution broadly respected, was a reassuring sign for some of the country’s capacity to step back from the brink. For others, the whole episode underscored the willingness of gangsters within the political class to put personal above national interest.

Since Mr Yar’Adua’s untimely death in May, the situation has steadied. But the reprieve may only be temporary, as the electoral showdown looms with the hegemonic People’s Democratic party split over the decision by Mr Jonathan, a southern Christian to stand.

If he wins the primaries, his candidacy, against four contenders from the north, potentially scuppers a pact within the PDP to rotate power between the north and south over two terms in the electoral cycle.

The end of the arrangement, designed to ease tensions between rival power bases and religions “could lead to post-election sectarian violence, paralysis of the executive branch, and even a coup,” John Campbell, a former US ambassador, concluded in the US journal Foreign Affairs.

Odein Ajumogobia, the foreign minister, hit back, accusing Mr Campbell of selecting facts to paint a doomsday scenario.

Mr Jonathan, hitherto a discreet understudy, has looked busy in the short time he has held the reins. He quickly shuffled out of office a host of officials, some of whom had been compromised, and appoint ed a respected academic to replace the discredited head of the electoral commission.

In another encouraging sign, Mr Jonathan revised an old power programme, which has gathered dust while costly stand-by generators worked overtime, and made it policy.

This has the potential with time to ease the chronic electricity shortages, which, more than anything, have held the economy back.

Meanwhile, oil flows have recovered, thanks to an amnesty for militants in the Niger delta whose campaign for a greater share of revenues had cut production by about a third. The durability of the peace, and fate of broader reforms planned for the industry, are less sure.

What is certain is that almost everything still needs to be fixed. The scale of the challenge is outlined in a report commissioned by the British Council to coincide with the 50th anniversary of independence.

The report argues that, with effective spending on infrastructure and policies to fix chronically underperforming education and health, Nigeria’s aspiration to become one of the world’s top 20 economies is realisable. Its young population, set to top 200m by 2025, could be its greatest resource.

Without the right policies, however, competition for scarce resources will intensify and the frustrations of the young, undereducated and unemployed risk boiling over.

Nigeria, in other words, has all the ingredients for both success and failure. Its next generation of leaders will have less of a margin to get it wrong.

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Inside this issue

• The ascent of a president who has more than lived up to his name

• The development of at least three offshore oil projects hangs in the balance - -

CONTENT
Frustration at promise unfulfilled
William Wallis considers what might be in store ahead of the presidential elections after a year of intrigue
Goodluck Jonathan: Improbable rise to pinnacle of power
William Wallis and Tom Burgis on the ascent of a president who has more than lived up to his name
Economy: Slipping down the ladder again
William Wallis fears there may be a return journey to stagnation
Electoral reform: Big push to eliminate endemic fraud
Shyamantha Asokan reports on efforts to compile a legitimate register
The young: Frustration at the gap between ‘where we could be and where we are’
Would-be reformers have few routes to the top, writes Shyamantha Asokan
Gas: Reasons for paucity despite plenty of fuel
Simon Mundy reports on the obstacles that hold back investment in collection systems and pipelines
Guest column: How it is that things haven’t fallen apart
Nigeria’s greatest achievement is its determination to make democracy work, writes Helon Habila
Oil industry: Controversial bill still hangs in the balance
Tom Burgis asks whether long negotiated legislation has been worth the effort
Concessions: A complex game of brinkmanship
New operators are queueing around the block to get in, writes Tom Burgis
Guest column: Leadership required to tackle delta’s oil spills
The issue is finally at the forefront of global attention, writes Patrick Dele Cole
Electricity: Anxious to avoid yet another false dawn
Regional profile: Industrial towns are hostage to forces beyond their control
Fuel barons: Oligarchs’ party may be over
Interview: Lament for a lost sense of civic duty
Politics: Change in zone system threatens old guard
The Niger delta: Patronage model ‘is a route to disaster’
Telecoms: Mobiles may be future of banking
Broadband: Competition is expected to bring a burst of e-commerce activity
Banking: Regulatory blitz starts to restore confidence in scandal-prone sector
Excess crude account: Rainy day fund runs dry
Lagos state: What it takes to get things done
Capital markets: Regulator intends to shake up the bourse
Private equity: Professionals see the money to be made back home
Distressed assets: Brothers go for broke
The North: Behind in every single measure of development
University: ‘You learn to do things on your own’
Lamido Sanusi: A champion of development
The slow lane: Gridlocked streets cast blight on Lagos
Churches: Riches in this life, salvation in the next
Aliko Dangote: How to flourish in a tough environment
The Chinese: Traders struggle in a hostile environment on their home turf
Music: Pirates take lion’s share of profits from Fela’s successors
Slums: There’s more to life than scamming
New consumers: The new middle class is in manufacturers’ sights