Transparency as Cure for the Resource Curse? A Nigerian Case Study
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Transcript of Transparency as Cure for the Resource Curse? A Nigerian Case Study
School of Social and Political Sciences
The University of Melbourne
POLS40011
Political Science Thesis
Transparency as Cure for the Resource Curse?
A Nigerian Case Study
Sebastian Hancock
134922
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Oil creates an illusion of a completely changed life, life without work, life for free…The concept of oil expresses perfectly the eternal human dream of wealth achieved through lucky accident…In this sense oil is a fairy tale and like every fairy tale a bit of a lie.
Ryzard Kapuscinki1
1 Quoted in Michael Watts, ‘Resource Curse? Governmentality, Oil and Power in the Niger Delta, Nigeria’, Geopolitics, Vol. 9, No. 1, 2004, p. 51.
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Contents Acknowledgements 5 List of Abbreviations 7 Chapter 1: Introduction 9 Chapter 2: The Resource Curse and the EITI 16 Chapter 3: The Slide into the Resource Curse 34 Chapter 4: Social and Political Causes 59 Chapter 5: Transparency as Cure? 69 Chapter 6: Analysis and Conclusions 73 Bibliography 77
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This thesis is dedicated to the loving memory of Ruth Hanley,
and to the strength of the Hanley family.
Acknowledgements I am heavily indebted to my thesis supervisor, Dr. Tom Davis, whose input, advice, encouragement, and above all patience, have been invaluable during the past year. I would also like to thank Susan Allen, Simon Lands, and George Hancock for reading all or sections of this thesis at various stages of its production, and providing useful suggestions and corrections. Thanks are also due to the University of Melbourne, and to the School of Social and Political Sciences in particular, for providing both the opportunity to complete this thesis, and the resources to do so. Lastly, I would like to thank Clare Hanley, not only for taking the time to comment on this work, but for all her love and support throughout a difficult year for us both, without which none of this would have been possible.
Sebastian Hancock
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List of Abbreviations
CCB Code of Conduct Bureau
CCT Code of Conduct Tribunal
CPI Corruption Perception Index
EITI Extractive Industries Transparency Initiative
EFCC Economic and Financial Crimes Commission
GDP Gross Domestic Product
G8 Group of Eight
HDI Human Development Index
ICPC Independent Corrupt Practices and Other Related Offences Commission
IMF International Monetary Fund
NEITI Nigerian Extractive Industries Transparency Initiative
NGOs Non-‐Governmental Organizations
NNPC Nigerian National Petroleum Corporation
NPC Northern People’s Congress
NPN National Party of Nigeria
OPEC Organization of Petroleum Exporting Countries
TI Transparency International
UN United Nations
WB World Bank
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Chapter 1: Introduction
Sub-‐Saharan Africa, home to 13 percent of the world’s population,
currently contributes only 3.3 percent of global Gross Domestic Product (GDP).
Growth and development have, moreover, been sluggish at best. As a result, in
the only region in the world where poverty has increased in the past 25 years, up
to 60 percent of the population live on less than US$1.25 per day.2 This is
despite the fact that sub-‐Saharan Africa holds seven percent of the world’s oil
reserves, not to mention large deposits of other valuable primary commodities
such as gold, diamonds, and minerals. Yet in spite of this apparent wealth, of the
177 countries contained within the United Nations (UN) Human Development
Index (HDI), sub-‐Saharan African countries are consistently ranked lowest.3
The inability to achieve significant social and economic development
amidst enormous resource wealth is a phenomenon widely known as the
‘resource curse’.4 Though it extends to resource-‐rich developing countries
across the globe, it is generally accepted that sub-‐Saharan African countries have
fared the worst from this ‘disease’. The resource curse manifests itself in
2 Hazel M. McFerson, 'Extractive Industries and African Democracy: Can the "Resource Curse" be Exorcised?’, in International Studies Perspectives, Vol. 11, 2010, p. 335. 3 Ibid, p. 336. 4 Richard Auty first coined the term ‘resource curse’ in 1993. Richard M. Auty, Sustaining Development in Mineral Economies: The Resource Curse Thesis, London, Routledge, 1993, pp. 1-‐6. The relationship is also commonly described as the ‘paradox of the plenty’, a reference to the title of Terry Lynn Karl’s seminal work. Terry Lynn Karl, The Paradox of Plenty: Oil Booms and Petro-‐States, Berkeley, University of California Press, 1997. The term resource curse will be used for the remainder of this study.
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economic stagnation, political instability, conflict, corruption, institutional and
societal failure, and ultimately underdevelopment.5 Nowhere has its effects been
more virulent than in Nigeria, where enormous oil wealth exists alongside
internal conflict, economic collapse, extreme poverty, endemic corruption,
instability, and long periods of authoritarian and predatory rule.6 Currently,
Nigeria’s UN HDI rating of 0.423 (with 1 being the highest score) ranks it well
below other oil producing states such as Saudi Arabia (0.800) and Indonesia
(0.697).7
The current global response to the resource curse, including its
manifestation in Nigeria, is centred on the energy governance framework known
as the Extractive Industries Transparency Initiative (EITI). Launched by Tony
Blair in 2002 at the World Summit on Sustainable Development in Johannesburg,
the EITI seeks oil-‐sector transparency via the voluntary publishing of
government revenues originating from resource extraction companies. Under
the EITI framework, countries firstly obtain ‘candidate’ status by successfully
meeting benchmarks for four signup indicators. Once completed, the country
can secure ‘compliant’ status by producing regular validation reports showing
the aforementioned flows of revenue.8 By undergoing this process it is felt that
5 See for example, Helen M. McFerson, ‘Governance and Hyper-‐Corruption in Resource-‐Rich African Countries’, Third World Quarterly, Vol. 30, No. 8, 2009, p.1529-‐1545. 6 Ibid, pp. 1540-‐1542. 7 When adjusted for income inequality this figure plummets to 0.246. This ranking puts Nigeria at 142 out of 169 countries measured. Saudi Arabia and Indonesia are ranked at 55 and 108 respectively. Nigerian’s currently have a life expectancy of just 48.4 years. United Nations Development Programme, International Human Development Indicators, retrieved 16 March 2011, available from <http://hdrstats.undp.org/en/ countries/profiles/NGA.html. 8 EITI signup indicators – ‘1. The government must issue an unequivocal public statement of its intention to implement EITI. 2. The government must commit to work
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civil society organizations in compliant countries will be able to use the release
of revenue information to hold their governments to account, thereby reducing
corruption and institutional failure, and helping to cure the resource curse.9
Nigeria is often presented as a test case for the effectiveness of the EITI
framework. Over 80 percent of Nigeria’s oil revenue has historically gone to only
one percent of the population, largely due to systematic corruption and graft.10
The cumulative effect of this enrichment has been the loss of resources that
could have been invested in social, economic and cultural development.11 After
returning to democratic governance in 1999 following prolonged periods of
military rule, the incumbent government signed up to the EITI framework,
completing the process by achieving compliant status on 2 March 2011.12
Although significant progress has been made towards oil-‐sector transparency,
the entrenched nature of systematic corruption and the failure of weak civil
society organizations in Nigeria to respond purposefully to the publishing of
with civil society and companies on EITI implementation. 3. The government must appoint a senior individual to lead on EITI implementation. 4. The government must publish and make widely available a fully costed Work Plan containing measurable targets, a timetable for implementation and an assessment of capacity constraints.’ Extractive Industries Transparency Initiative, Signup, retrieved 8 March 2011, available from <http://eiti.org/eiti/ implementation/signup>. For candidate status requirements see Extractive Industries Transparency Initiative, Country Implementation, retrieved 8 March 2011, available from <http://eiti.org/eiti/implementation>. 9 Daniel M. Firger, 'Tranparency and the Natural Resource Curse: Examining the New Extraterritorial Information Forcing Rules in the Dodd-‐Frank Wall Street Reform Act of 2010’, Georgetown Journal of International Law, Vol. 41, 2010, pp. 1064-‐1067. 10 Adekunle Amuwo, ‘Towards a New Political Economy of the Niger Delta Question in Nigeria’, Politikon, Vol. 36, No. 2, 2009, p. 241. 11 S.O. Osoba, ‘Corruption in Nigeria: Historical Perspectives’, Review of African Political Economy, Vol. 23, No. 69, 1996, p. 383. 12 Extractive Industries Transparency Initiative, Press Release: Six More Countries Compliant with Transparency and Accountability Standard, 2 March 2011, p. 1, retrieved 16 March 2011, available from <http://eiti.org/news-‐events/press-‐release-‐six-‐more-‐countries-‐compliant-‐transparency-‐and-‐accountability-‐standard>.
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information under this framework raises doubts about the EITI’s ability to cure
the resource curse in this country.13
This study will address the question of how effective the EITI as a global
governance mechanism can be in ‘curing’ the resource curse. It will attempt to
answer this question through an inductive case study method focusing on
Nigeria. It will ask: To what degree has the historical weight of specific social
and political factors in Nigeria entrenched its distinct manifestation of the
resource curse within its socio-‐political structures? It will analyse the historical
interplay of ethnic division, endemic and systematic corruption, and violent
competition for the state in Nigeria in order to uncover root causes for
developmental failure and the resource curse. Given the results of this analysis,
this study will ask whether the voluntary EITI framework is indeed wholly
inadequate, and whether deep structural and cultural change is in fact required
in order for resource abundance to be turned into positive developmental
outcomes.
Nigeria has been selected as the subject of this case study as it meets the
criterion of ‘typicality’ required for assessing the general effectiveness of the EITI.
The presence of extensive oil reserves, along with the country’s status as one of
the most corrupt in the world,14 has made Nigeria both a typical case of the
13 Ayo Obe, ‘The Challenging Case of Nigeria’, in Ann Florini (ed.), The Right to Know: Transparency for an Open World, New York, Columbia University Press, 2007, p. 147. 14 As at 2010, Nigeria was 134th out of 178 countries listed under Transparency International’s Corruption Perception Index. Transparency International, Corruption Perceptions Index 2010, Berlin, Transparency International, 2010, p. 13, retrieved 16 March 2011, available from <http://www.transparency.org/policy_research/ surveys_indices/cpi /2010/in_detail>.
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resource curse, and a test case for the capacity of the EITI framework to alleviate
the disease.15 Nigeria therefore satisfies John Gerring’s requirement that the
typical case be representative of a broader set, allowing for insight into some
broader phenomenon.16
The use of case study methodologies within the scholarly literature on the
resource curse is severely lacking. Instead, the vast majority of research has
taken the form of cross-‐country correlation analysis. Yet the sole use of the
latter methodology can be inadequate due to its inherent limitations. For
instance, the uncovering of correlations in datasets does not necessarily aid in
the formation of causal models, nor in dealing with complexity.17 It is these very
limitations that correspond to the advantages of case study research. For
whereas statistical analysis is the process through which conclusions are drawn
about the existence of characteristics in a population through study of a sample,
logical inference from case study data is the process whereby conclusions
regarding the essential linkage between those characteristics are made in terms
of a ‘systematic explanatory schema’ or theory.18 The two methodologies can
therefore be thought of as complementary, adding to a deeper understanding of
social forces through concurrent usage.
15 Alexandra Gillies, 'Obasanjo, the Donor Community and Reform Implementation in Nigeria’, Round Table, Vol. 96, No. 392, 2007, pp. 570-‐572. 16 John Gerring, Case Study Research: Principles and Practices, Cambridge, Cambridge University Press, 2007, p. 91. 17 Ibid, pp. 3-‐4. 18 J. Clyde Mitchell, 'Case and Situation Analysis’, in Matthew David (ed.), Case Study Research: Volume II, London, SAGE, 2006, p. 72.
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This is not to say that case study research has no limitations of its own.
There can be no doubt, for example, that the interpretation of case study data
lacks the level of objectivity obtainable in statistical analysis. Yet, the possibility
of ‘noisy, fallible, and biased’ results does not necessarily preclude the
attainment of knowledge; rather, it requires a critical reading with bias in
mind.19
In order to address the issues described above, this study has been
separated into sections. In chapter two I will discuss the status of the literature
surrounding the resource curse and its relationship to the EITI framework, while
identifying areas in which I feel the literature is lacking. In chapter three I will
provide an overview of the ongoing historical process in Nigeria, and the effect
the entry of oil had on that process. This overview will draw upon the available
primary and secondary sources, the former largely being documents related the
to the EITI and its Nigerian counterpart, the Nigerian Extractive Industries
Transparency Initiative (NEITI), and the latter consisting of works on Nigerian
social and political history, regional case studies, and analyses of particular
aspects of the Nigerian socio-‐political system. In chapter four, I will analyse the
specific social and political factors drawn out of that overview, and the effect
they have had on the specific manifestation of the resource curse in Nigeria.
From the results of this analysis I will assess, in chapter five, the suitability of the
EITI framework as a cure for the resource curse. In the final chapter, I will draw
19 Campbell, Donald T., '"Degrees of Freedom" and the Case Study’, in Matthew David (ed.), Case Study Research: Volume III, London, SAGE, 2006, p. 138.
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some conclusions from this study in relation to the questions outlined above, and
to the status of the literature on the resource curse and the EITI.
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Chapter 2: The Resource Curse and the EITI
Over the last two decades, a significant body of literature has emerged
which seeks to explain the seemingly contradictory relationship between natural
resource abundance and poor development outcomes, often referred to as the
resource curse. Within this body of literature, three separate sub-‐literatures can
be identified: natural resources and economic stagnation; natural resources and
civil war; and natural resources and governance failure. While this thesis sits
within the latter of the three, it is important first to address the development of
the resource curse theory.
From Consensus to Curse
During the 1950s and 1960s, prominent development economists had
argued that developing countries were suffering from an imbalance in the factors
of production, caused by an oversupply of labour, and a shortage of capital. As
such, countries with abundant natural resources were in an advantageous
position; through exploitation of these resources, Walter Rostow and others
argued, their economies would ‘take-‐off’ thanks to the capacity of primary
exports to raise capital and attract foreign investment.20 While there were a
20 For an example of this argument see Walter Rostow, The Stages of Economic Growth: A non-‐Communist Manifesto, Cambridge, Cambridge University Press, 1960, p. 39; see also W. Arthur Lewis, The Theory of Economic Growth, London, Allen and Unwin, 1955, p. 52, where he argues that not only did natural resources lead to better development
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number of radical economists who challenged this view, their
underrepresentation in global development bodies negated their ability to alter
the overriding consensus.21 On the contrary, the oil boom years of the 1970s,
which led to soaring prices and a glut of capital in oil exporting countries,
solidified natural resources as a ‘blessing’ within the emerging neoliberal
mainstream.22
With the collapse of oil prices in the early 1980s and the economic
stagnation amongst exporters that followed it, this ‘blessing’ began to be
seriously questioned. Indeed, the majority of resource-‐rich developing countries,
with the notable exception of the East Asian economies, had not experienced
accelerated growth on the back of resource booms. Moreover, having geared
their economies towards primary exports, many were left heavily dependent
upon volatile global markets for national income.23 At the same time, conflict
outcomes, but ‘[m]uch of the world’s economic history can be written very simply in those terms.’ 21 For example see H. W. Singer, 'The Distribution of Gains between Investing and Borrowing Countries’, American Economic Review, Vol. 40, No. 2, 1950, pp. 482-‐483, and Raúl Prebisch, The Economic Development of Latin America and its Principal Problems, New York, United Nations Department of Economics, 1950, pp. 8-‐14, who argued that exporters would suffer from declining terms of trade in the long term. See also Jonathan V. Levin, The Export Economies: Their Pattern of Development in Historical Perspective, Cambridge, Harvard University Press, 1960, pp. 186-‐202, who argued that due to the boom and bust nature of resource markets, and correspondingly sharp price fluctuations, resource exporters would be left with volatile domestic economies, leading to unreliable foreign exchange supplies and a poor investment climate. 22 Andrew Rosser, The Political Economy of the Resource Curse: A Literature Review, Brighton, Institute of Development Studies, University of Sussex, 2006, p. 9. For an example of neoliberal arguments on natural resource backed ‘take-‐off’ see Bela Balassa, The Process of Industrial Development and Alternative Development Strategies, Princeton, Princeton University Press, 1981, pp. 2-‐4, and P.J. Drake, 'Natural Resources Versus Foreign Borrowing in Economic Development’, Economic Journal, Vol. 82, No. 327, 1972, pp. 951-‐952. 23 As Isham et al. have shown, since 1980 developing countries dependent upon natural resource exports suffered significant and ongoing slowdowns in economic growth, while manufacture exporters have experienced no such slowdown. Jonathan Isham et al. 'The
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and political instability were rife, signalling a general malaise, especially in the
case of sub-‐Saharan Africa.24 This failure to produce positive development
outcomes initiated renewed debate on the concept of ‘take-‐off’, and sparked the
emergence of resource curse theory.
Numerous empirical studies have since been undertaken by economists
in an effort to confirm the existence of the resource curse. These studies have
largely taken the form of cross-‐country statistical analysis in an effort to uncover
significant correlations between natural resource abundance and a variety of
indicators for poor economic, political, and social outcomes. The most influential
of these studies, Jeffrey Sachs’ and Andrew Warner’s seminal 1995 work Natural
Resource Abundance and Economic Growth, found that a one standard deviation
increase in the ratio of natural resource exports to GDP in developing countries
is associated with a decrease of just less than one percent in annual per capita
growth.25 In the years following, several other studies appeared which produced
similar results, albeit with variations in datasets and measurements.26 While
Varieties of Resource Experience: Natural Resource Export Structures and the Political Economy of Economic Growth’, World Bank Economic Review, Vol. 19, No. 2, 2005, p. 143. 24 Karl, The Paradox of Plenty, p. 1-‐2. 25 Jeffrey D. Sachs and Andrew M. Warner, Natural Resource Abundance and Economic Growth, National Bureau of Economic Research Working Paper 5398, Cambridge, National Bureau of Economic Research, 1995, p. 8. Specifically, Sachs and Warner found a one standard deviation increase led to a 0.93 percent per annum reduction. 26 See for example Alan H. Gelb, Oil Windfalls: Blessing or Curse?, New York, Oxford University Press, 1988, pp. 221-‐223, who found a statistically significant relationship between the size of natural resource endowments and growth of output; Richard M. Auty, 'Introduction and Overview’, in Richard M. Auty (ed.), Resource Abundance and Economic Development, Oxford, Oxford University Press, 2001, p. 3, who found that per capita incomes in resource-‐poor countries grew between two and three times faster than resource-‐rich countries between 1960 and 1990; and Carlos Leite and Jens Weidmann, Does Mother Nature Corrupt? Natural Resources, Corruption and Economic Growth, Washington, International Monetary Fund, 1999, p. 29, who focused on oil
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these findings have certainly generated controversy,27 Sachs and Warner, in
reviewing the evidence for the research curse in 2001, asserted that while not
‘bulletproof’, empirical support for its existence is nonetheless ‘quite strong’.28
With its existence largely confirmed, attention has concentrated on the causal
mechanisms of the resource curse, leading to the creation of three sub-‐
literatures.
Sub-‐Literature 1: Economic Structure
The first sub-‐literature focused on observed economic stagnation, and
suggested structural deficiencies as the explanatory variable. The most
prominent model put forward was the ‘Dutch Disease’, which describes the
negative effect resource booms can have on the growth of non-‐resource sectors
of the economy (manufacturing and agriculture for example) and refers to the
experience of The Netherlands following the discovery of natural gas in the late
exporters, and concluded that a one standard deviation increase in Sachs’ and Warner’s ratio led to a 0.6 percent decrease in output growth. 27 See for example Daniel Lederman and William F. Maloney, 'Neither Curse Nor Destiny: Introduction to Natural Resources and Development’, in Daniel Lederman and William F. Maloney (eds.), Natural Resources: Neither Curse nor Destiny, Palo Alto, Standford University Press, 2007, p. 3, who found that natural resources in fact stimulate growth, if measurements for natural resource abundance, other than Sachs’ and Warner’s, are used; Christa N. Brunnschweiler, 'Cursing the Blessings? Natural Resource Abundance, Institutions, and Economic Growth’, World Development, Vol. 36, No. 3, 2008, pp. 412-‐413, who used natural resource allocation per capita and found that between 1970 and 2000 there was a positive and direct effect on real GDP growth; and Graham Davis 'Learning to Love the Dutch Disease: Evidence from the Mineral Economies’, World Development, Vol. 23, No. 10, 1995, pp. 1774-‐1777, who found that by some measures such as infant mortality, life expectancy, and the UN’s HDI, they have actually outperformed non-‐mineral economies. 28 Jeffrey D. Sachs and Andrew M. Warner, 'The Curse of Natural Resources’, European Economic Review, Vol. 45, No. 4, 2001, p. 828.
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1950s.29 Yet as Michael Ross argues, structural economic mechanisms such as
the Dutch Disease tend to ignore the positive effect corrective government policy
could have, and fail to explain why such action is not undertaken.30 For as Paul
Collier and Anke Hoeffler have pointed out, natural resources have led to
accelerated development in Malaysia and Botswana, not to mention Norway and
Australia, rather than to manifestations of the resource curse.31 In response to
such criticisms, two further sub-‐literatures emerged which attempted to identify
broader causal mechanisms underlying the merely economic and structural.32
Sub-‐Literature 2: Curse and Conflict
The second sub-‐literature on the resource curse focuses on natural
resource abundance and the occurrence and duration of civil wars in resource-‐
rich countries. Several studies have sought to establish a positive correlation
between the two using cross-‐country analysis. For instance, Collier and Hoeffler,
in a 1998 study of 98 countries and 27 civil wars, found this relationship to be 29 Specifically, due to booms in the resource sector, productive resources are drawn away from other tradeable sectors of the economy towards ‘non-‐tradable’ sectors such as services, thereby shrinking productive output. Michael Burno and Jeffrey D. Sachs, 'Energy and Resources Allocation: A Dynamic Model of the "Dutch Disease"’, Review of Economic Studies, Vol. XLIX, 1982, pp. 845-‐846. See also W. Max Corden and J. Peter Neary, 'Booming Sector and De-‐Industrialisation in a Small Open Economy’, Economic Journal, Vol. 92, No. 368, 1982, pp. 825-‐842; and Peter J. Neary and Sweder van Wijnbergen, 'Natural Resources and the Macroeconomy: A Theoretical Framework’, in J. Peter Neary and Sweder van Wijnbergen (eds.), Natural Resources and the Macroeconomy, Oxford, Basil Blackwell, 1986, pp. 13-‐45. 30 See Michael L. Ross, 'What Do We Know About Natural Resources and Civil War?’, Journal of Peace Research, Vol. 41, No. 3, 2004, pp. 306-‐307. 31 Paul Collier and Anke Hoeffler, 'Rents, Governance, and Conflict’, Journal of Conflict Resolution, Vol. 49, No. 4, 2005, p. 627. For a good examination of the case of Botswana see Daron Acemoglu et al., An African Success Story: Botswana, CEPR Discussion Paper 3219, London, Centre for Economic Policy Research, 2002. 32 Michael L. Ross, 'Review: The Political Economy of the Resource Curse’, World Politics, Vol. 51, No. 2, 1999, p. 303-‐308.
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positive, which they would confirm in two subsequent studies of 2004 and
2009.33 Mary Kaldor, Terry Lynn Karl and Yahia Said, who examined oil
specifically, argued that these civil wars should be thought of as ‘new oil wars’,
for unlike those of the 20th century in which oil was seen as a strategic resource,
requiring territorial control or at the very least influence over host governments,
these new wars are essentially fought over access to resource rents. According
to the authors, conflict arises due to different groups within countries seeking
control over the economic gains generated from oil exploitation. This rent-‐
seeking behaviour, and the conflict that ensues, negatively affects economic
growth, leads to institutional failure, a predatory political culture, and ultimately
the resource curse.34
Sub-‐Literature 3: The Curse of Political Structures
The third sub-‐literature on the resource curse, and the one in which this
study is broadly located, focuses on what Karl terms the ‘political/institutional
phenomenon’ of the resource curse.35 As it became increasingly clear that
economic mechanisms alone failed to explain the existence of a resource curse,
the literature has since the mid-‐1990s progressively shifted toward explanations
focused on governance failures. These explanations emphasize abundance as the
33 Paul Collier and Anke Hoeffler, ‘On Economic Causes of Civil War’, Oxford Economic Papers, Vol. 50, No. 4, 1998, p. 571. In their two subsequent studies the data sets were greatly expanded, with their results holding regardless. See Paul Collier and Anke Hoeffler, 'Greed and Grievance in Civil War’, Oxford Economic Papers, Vol. 56, No. 4, 2004, pp. 563-‐588; and Paul Collier and Anke Hoeffler, Beyond Greed and Grievance: Feasibility and Civil War’, Oxford Economic Papers, Vol. 61, No. 1, 2009, pp. 13-‐24. 34 Mary Kaldor et al., 'Introduction’, in Mary Kaldor et al. (eds.), Oil Wars, London, Pluto Press, 2007, pp. 2-‐26. 35 Karl, The Paradox of Plenty, p. 257.
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root cause of institutional collapse, corrupt government practices, and rent-‐
seeking behaviour, which in turn act as both cause and effect of the resource
curse. Resource wealth, moreover, allows political elites to maintain control of
corrupt and inefficient systems through excessive spending on military and
internal security capacities, as well as political support.36 For these theorists,
natural resource abundance is associated with low levels of democracy and
democratic values, which helps to preclude development for the majority.37
A number of studies have found a correlation between natural resource
abundance, particularly in the case of point-‐source resources such as oil, and low
levels of democracy. In a study of 113 countries from 1971-‐1997, Ross found
that the presence of extensive oil reserves in particular has a detrimental effect
on democracy in developing countries.38 Nathan Jensen and Leonard
Wantchekon, who conducted a survey of 46 sub-‐Saharan countries between
1970 and 1995, also found that countries with higher levels of resource
dependency tended to be authoritarian compared with those less reliant on
natural resource endowments. Further, following the ‘third wave’ of
democratization in the region, those resource-‐rich countries tended to revert to
authoritarian rule over time.39 These and other studies confirmed a positive
36 Gavin Hilson and Roy Maconachie, '"Good Governance" and the Extractive Industries in Sub-‐Saharan Africa’, Mineral Processing & Extractive Metallurgy Review, Vol. 30, 2009, pp. 61-‐62. Rosser, The Political Economy of the Resource Curse, p. 20-‐22. 37 See for example, Karl, The Paradox of Plenty, pp. 14-‐18; Hazem Beblawi, 'The Rentier State in the Arab World’, in Hazem Beblawi and Giacomo Luciani (eds.), The Rentier State, New York, Croom Helm, 1987, pp. 49-‐62 in relation to the Middle East; and Nathan Jensen and Leonard Wantchekon, 'Resource Wealth and Political Regimes in Africa’, Comparative Political Studies, Vol. 37, No. 7, 2004, pp. 834-‐836 in relation to Africa. 38 Michael L. Ross, 'What Do We Know About Natural Resources and Civil War?’, Journal of Peace Research, Vol. 41, No. 3, 2004, p. 342. 39 Jensen and Wantchekon, ‘Resource Wealth and Political Regimes’, p. 836.
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correlation between natural resource abundance and non-‐democratic
governance.40
Explanations for this correlation have focused on the detrimental effects
of economic rents associated with resource extraction, and the subsequent
establishment of ‘rentier states’. While rent in the broadest sense of income
derived from ownership of natural endowments is present in all economies, the
‘rentier state’ is a more detrimental phenomenon. Hossein Mahdavy, the first to
develop the concept, defined the ‘rentier state’ as one in which a significant
proportion of national income is derived from external economic rents.41 Hazem
Beblawi, observing the phenomenon across the oil-‐producing Arab states,
expanded upon this concept, arguing that ‘rentier states’ are not only
characterized by the reliance upon such rents, but that the gains derived are
produced for the benefit of a relatively small proportion of the population, who
are coalesced around the state. The remainder of the population, being excluded
from the generation of wealth, are engaged only in its ‘distribution and
utilisation’.42
Various mechanisms through which the rentier state gives rise to the
resource curse have been advanced. This thesis can be located amongst those
deemed ‘state-‐centric’, though others have also done important work on
40 For an overview of many to the studies not mentioned here, see Rosser, The Political Economy of the Resource Curse, p. 20. 41 Mahdavy developed the concept in relation to pre-‐revolutionary Iran. Hossein Mahdavy, ‘Patterns and Problems of Economic Development in Rentier States: The Case of Iran’, in M. A. Cook (ed.), Studies in Economic History of the Middle East: From the Rise of Islam to the Present Day, Oxford, Oxford University Press, 1970, p. 428-‐429. 42 Beblawi, ‘The Rentier Sate in the Arab World’, pp. 50-‐52.
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cognitive and societal mediation.43 A prominent example of the state-‐centric
approach is Karl’s Paradox of the Plenty. In it she argues that the origin of state
revenue determines all levels of governance, and hence the ability of the state to
foster economic growth. As decision-‐making and governance in the rentier state
are based upon linkages between power and abundance, accumulation and rent
seeking become the mainstay of political activity, and define the nature of the
state itself. Special interests, social classes, and negative patterns of action form
around oil rents, and competition for control of the state becomes paramount.44
For Karl, the particular characteristics of oil, including its enclave nature, high
capital requirements, and strategic value, produces an extreme form of the
rentier state’s institutional setting, which she terms the ‘petro-‐state’.45
As indicated above, once a rentier or petro-‐state has been established,
state-‐centric approaches argue that the tendency will be towards authoritarian
forms of rule. For Ross, three causal mechanisms mediate this relationship – the
rentier effect (the combined use of rent distribution and low taxes in order to
impede democratization), the repression effect (the use of resource rent wealth
to build up internal security apparatuses) and the modernization effect (the
absence of social and cultural changes towards democracy brought about by
sustained economic development).46 It is this ‘executive discretion’ over the
distribution of rents that helps to bring down democracies and sustain
authoritarian rule. Competition for the state can be contained only by (resource
43 See Ross, ‘Review: The Political Economy of the Resource Curse’, pp. 309-‐312. 44 Karl, The Paradox of Plenty, pp. 14-‐15. 45 Ibid, p. 15-‐17. 46 Michael L. Ross, 'Does Oil Hinder Democracy?’, World Politics, Vol. 53, No. 3, 2001, pp. 332-‐337.
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rent financed) authoritarian and military repression.47 This argument is
consistent with the findings of Benjamin Smith, who found that countries
abundant in oil wealth tend to exhibit fewer instances of civil war and anti-‐state
protest alongside high regime stability, as a result of the presence of rents.48
At the heart of these approaches, therefore, is the corrupting influence of
rents derived from natural resource abundance, and the negative effect this
influence has on the nature of the state, and on development generally. Little
attention is given to the ways in which external power forces related to geo-‐
political and geo-‐economic environments help shape the resource curse in
producing countries.49
Neglecting the Subject
Two key points can be made regarding the above literature for the
purposes of the current study. Firstly, at the heart of the majority of work on the
resource curse sub-‐literature lie the relative size of a country’s resource
endowment, and the rents it generates, as the explanatory variables. As a result
there is a tendency to ignore the specific social and political context into which
resource extraction penetrates.50 This is not to say that impediments to
development that can arise in specific contexts, such as ethnic division and
instability for example, are not acknowledged as an important mediator in the 47 Jensen and Wantchekon, ‘Resource Wealth and Political Regimes’, pp. 834-‐836. 48 Benjamin Smith, ‘Oil Wealth and Regime Survival in the Developing World, 1960-‐1999’, American Journal of Political Science, Vol. 48, No. 2, 2004, pp. 235-‐243. 49 Rosser, The Political Economy of the Resource Curse, p. 22 50 Ibid, p. 23; Watts, 'Resource Curse?’, p. 75.
26
relationship between natural resource abundance and the nature of governance
in these countries. But too often they are seen as being determined by the
resource base, rather than having historical roots specific to each country.51 In
order to understand better the discrepancy between the results of oil
exploitation in different countries, the effects of oil on specific social and political
factors needs to be explored.
Secondly, the shift in the resource curse debate towards the role of host
country governance has left the literature relatively silent on issues external to
those countries.52 One such issue, which will also be focused on here, is the role
of global energy governance in precipitating, extenuating, and perhaps curing the
resource curse. This issue will be addressed in the following section. As will be
shown, it is on the findings of the resource curse literature, at least in part, that
global responses have been based. The EITI framework is the current global
governance response to poor development outcomes amongst the resource-‐rich,
and it is to this issue and its associated literature that we now turn.
51 Rosser, The Political Economy of the Resource Curse, p. 10. There are a few exceptions to this neglect. See Gwenn Okruhlik, 'Rentier Wealth, Unruly Law, and the Rise of Opposition: The Political Economy of Oil States’, Comparative Politics, 31, 3, 1999, p. 309, who points out that the character of state institutions are mainly shaped prior to the imposition of oil; Watts, ‘Resource Curse?’, pp. 53-‐4, who argues that ‘petro-‐capitalism’ produces new forms of rule and political authority as it interacts with pre-‐existing social and political factors; and Kiren Aziz Chaudhry, ‘Economic Liberalization and the Lineages of the Rentier State’, Comparative Politics, Vol. 27, No. 1, 1994, p. 21, who argues through a case study of Saudi and Iraqi reform efforts that widely different results will be experienced in similar situations due to local characteristics. 52 Hilson and Maconachie, ‘”Good Governance”’, p. 62.
27
Governance, Transparency, and the EITI
Global energy flows have historically been governed by a patchwork of
institutions whose overlapping authority and jurisdiction make for complicated
analysis. Included in this institutional architecture are a myriad of bilateral
agreements; bodies such as the International Energy Agency (IEA) and the Group
of Eight (G8), in which energy exporters are grossly underrepresented; financial
institutions such as the World Bank (WB) and the International Monetary Fund
(IMF), which provide technical and financial assistance to developing countries;
poorly regulated and heavily distorted markets; and weak and nonbinding rule
systems which emanate from the above sources.53 Prior to the emergence of
transparency as an international norm, this fragmented institutional framework
was largely directed towards the correction of market failures, the lowering of
transaction costs, and the regulation of market exchange.54 Of importance to
those involved were value-‐free realpolitik concerns about the security of energy
supply and price stability.55 Such calculations were especially significant in the
case of oil – it is the foremost strategic good, the backbone of modern industrial
53 It is beyond the purview of this study to examine these institutions in full, or to list the full gamut of bodies involved in global energy governance. This has been attempted elsewhere with varying success. See for example Ann Florini and Benjamin K. Sovacool, ‘Who Governs Energy? The Challenges Facing Global Energy Governance’, Energy Policy, Vol. 37, No. 12, 2009, pp. 5239-‐5248. 54 Andreas Goldthau et al., 'Global Energy Governance: The Way Forward’, in Andreas Goldthau and Jan Martin Witte (eds.), Global Energy Governance: The New Rules of the Game, Washington, Brookings Institution Press, 2010, p. 344. 55 Thorsten Benner and Ricardo Soares de Oliveira, 'The Good/Bad Nexus in Global Energy Governance’, in Andreas Goldthau and Jan Martin Witte (eds.), Global Energy Governance: The New Rules of the Game, Washington, Brookings Institution Press, 2010, p. 287.
28
economies, and hence critical to the maintenance and survival of the state.56
Broader issues arising from energy extraction affecting the political, social, or
environmental concerns of exporting countries were treated on an ad-‐hoc basis,
often by bodies outside of the energy governance framework.57 ‘Good’ or ‘bad’
governance within this framework was therefore to be judged primarily in
economic terms.58
This narrow geo-‐political/geo-‐economic focus of global energy
governance has been reflected in the literature on the subject. As Ann Florini
and Benjamin Sovacool point out, insufficient scholarly attention has been paid
to the patchwork of institutions that currently make up the global energy
governance framework, or to the conspicuous institutional gaps that exist
between them. Rather, the global energy governance literature is focused upon
either the ‘technological or economic aspects of systems, markets, and policy
decisions’,59 or on energy security in the context of shifting geo-‐political
landscapes.60 According to Andreas Goldthau, this concentration on essentially
zero-‐sum games diverts attention from the institutional architecture that
underpins global energy governance.61
56 Dries Lesage et al. Global Energy Governance in a Mulitpolar World, Burlington, Ashgate, 2010, p. 183. The significance of maintaining the security of oil supply is unlikely to diminish, with global needs to rise by as much as 50% by 2030, assuming no drastic changes to national energy policies. Gillies, ‘Reputational Concerns’, p. 107. 57 Florini and Sovacool, ‘Who Governs Energy?’, p. 5239. 58 Benner and Oliveira, ‘The Good/Bad Nexus’, p. 287. 59 Florini and Sovacool, ‘Who Governs Energy?’, p. 5240. 60 Included here are China’s “scramble for Africa”, access to the Caspian Sea gas fields, as well as the beginnings of the race for the Arctic. See Andreas Goldthau and Jan Martin Witte, 'The Role of Rules and Institutions in Global Energy: An Introduction’, in Andreas Goldthau and Jan Martin Witte (eds.), Global Energy Governance: The New Rules of the Game, Washington, Brookings Institute Press, 2010, pp. 1-‐2. 61 Ibid, pp. 1-‐2.
29
During the preceding two decades a significant normative shift has
occurred at the global level towards the promotion of ‘good governance’ and
transparency.62 Thorsten Benner and Ricardo de Oliveira delineate four key
factors contributing to this normative shift as it relates to oil-‐sector transparency
and the resource curse. Firstly, the failure of the Washington Consensus policies
to promote economic development through value-‐free structural adjustment, led
donor agencies to link bad governance to developing country malaise.63
Secondly, studies linking poor governance and corrupt practices with the onset
of the resource curse, and underdevelopment more generally, gained influence
amongst international institutions during the 1990s. In response, bodies such as
the G8 and the WB began to re-‐examine the role of the extractive industries in
national governance failure. Thirdly, corruption emerged as a key global
concern, in part due to pressure exerted on the international community by Non-‐
Governmental Organizations (NGOs) such as Transparency International (TI).64
Lastly, the exploitive behaviour of corporate multinationals in developing
countries, perceived or actual, came under scrutiny, and led to calls for stricter
regulation and industry governance.65 The EITI, with its underlying normative
dimensions of transparency and ‘good’ governance, stands at the confluence of
62 Gillies, ‘Reputational Concerns’, p. 103-‐105. 63 Though rather than being the content of the reforms per se, it was felt that weak and corruptible public institutions serve to block real structural reform. As such it became necessary for external actors to promote good governance in domestic settings. Ibid, p. 291. 64 Prior to the 1990s corruption was barely on the global agenda, and indeed bribes were tax deductible for many European officials who operated in foreign markets. Ibid, 291. For an examination of the role of various NGOs in bringing the eradication of corruption to the forefront of the global agenda see Gillies, ‘Reputational Concerns’, pp. 109-‐110. 65 Benner and Oliveira, ‘The Good/Bad Nexus’, pp. 290-‐292.
30
these concerns, and has become the key policy response to the resource curse
and ‘bad governance’.66
A fifth and arguably critical factor may be added to this list. As several
analysts have argued, the role of the reputational agendas of multinational oil
companies, international financial institutions, and many Western governments
were decisive in the emergence of oil-‐sector transparency as an international
norm for the extractive industries.67 For the emergence of the EITI deflected
attention and scrutiny away from these bodies at the very time their
responsibility for the resource curse was being questioned, and towards the host
governments as the source of economic mismanagement and corruption.68 The
multinationals, for their part, supported the EITI’s entrance in forums such as
the G8 and, as Nicholas Shaxson has argued, ‘love the EITI – it takes pressure off
them and puts it onto African governments to disclose.’69 The EITI was thus
attractive to multinationals, international institutions and Western governments
alike, and received support for its usefulness in protecting their public images.70
Supporters of the EITI, including international institutions and various
NGOs, argue that it has been a great success. Peter Eigen, the body’s inaugural
chairman, points to its global acceptance rate, which as of 2009 included twenty-‐
three candidate countries in Africa, Asia and Latin America, as well as the 66 Virginia Haufler, 'Disclosure as Governance: The Extractive Industries Transparency Initiative and Resource Management in the Developing World’, Global Environmental Politics, Vol. 10, No. 3, 2010, p. 54. 67 Gilles, ‘Reputational Concerns’, p. 115; see also Hilson and Maconachie, ‘“Good Governance”’, pp. 55-‐76. 68 Ibid, p. 55. 69 Shaxson, Poisoned Wells, p. 218. 70 Gillies, ‘Reputational Concerns’, p. 104.
31
endorsement of thirty-‐seven oil, gas and mining companies worldwide, and
numerous NGOs.71 Proponents argue that, within countries compliant with the
framework, the EITI will ‘help civil society groups to work towards a democratic
debate over the effective use and allocation of resource revenues and public
finance’ by empowering host country populations through knowledge
dissemination.72 Armed with information, civil society will force greater
accountability, reduced corruption and mismanagement, and state/society
cooperation, while also increasing state legitimacy and strengthening public
institutions.73
Yet, as Mark Fenster rightly points out, herein lies the weakness of
transparency initiatives such as the EITI. They rely on a ‘simplistic model of
linear communication that assumes that information, once set free from the state
that creates it, will produce an informed, engaged public that will hold officials
responsible.’74 As many critics of the EITI have pointed out, the citizenry of a
corruption-‐rich state is often already well aware of the corrupt practices of state
actors past and present.75 Moreover, their civil society organizations are often
severely lacking in political power. For this reason, the recent pressure for
71 Peter Eigen, 'A Coalition to Combat Corruption: TI, EITI, and Civil Society’, in Robert I. Rotberg (ed.), Corruption, Global Security, and World Order, Washington, D.C., Brookings Institute Press, 2009, p. 426. 72 Quoted in Haufler, ‘Disclosure as Governance’, p. 59. 73 Ibid, p. 54. 74 Mark Fenster, 'The Opacity of Transparency’, in Iowa Law Review, Vol. 91, No. 3, 2006, p. 885. 75 See for example, Yinka O. Omorobge, 'Alternative Regulation and Governance Reform in Resource-‐Rich Developing Countries of Africa’, in Barry Barton et al. (eds.), Regulating Energy and Natural Resources, New York, Oxford University Press, 2006, p. 55; Benner and Oliveira ‘The Good/Bad Nexus’, p. 303; and Haufler, ‘Disclosure as Governance’, pp. 55-‐56.
32
transparency and reform of corruption has largely originated from external
sources rather than the agitation of citizens.76
Nonetheless, western donor organizations and NGOs still bemoan the
failure of top-‐down efforts to provoke significant grass-‐root action, or produce
lasting results.77 For Shaxson this speaks of a simplistic and externally derived
definition of corruption: ‘individual misuse of public resources for private gain’.
Such a definition underestimates the systemic nature of corruption in many
countries.78 As Martin Wolf, a Financial Times columnist put it, ‘in a society when
everyone cheats and takes or pays bribes, there is little incentive not to join in’.79
If there is an overriding consensus in the literature critical of the EITI as
an effective governance mechanism, it is that significant institutional and
cultural change within host countries must precede its implementation. The
literature argues that without such prior and wholesale changes, external reform
of one part of the problem will do little other than mask the underlying issues.80
For the changes the EITI aims to make exist at a ‘superficial or rhetorical’ level
and, while challenging the history of global energy governance, does not attempt
deeper structural and cultural change.81
76 Ibid, p. 70. 77 Nicholas Shaxson, ‘Oil, Corruption and the Resource Curse’, in International Affairs, Vol. 83, No. 6, 2007, p. 1134. 78 Ibid, p. 1125. 79 Quoted in ibid, p. 1126. 80 See Hilson and Maconachie, ‘”Good Governance”’, p. 58. 81 Benner and Oliveira, ‘The Good/Bad Nexus’, pp. 309-‐10.
33
To summarize, the main argument of this literature review is that
resource curse analysis of country specific social and political factors is seriously
lacking. So too is an understanding of how those factors may affect external
reform measures such as the EITI aimed at curing the curse. The aim here is to
add to this literature through an in-‐depth case study of Nigeria and its resource
curse in order to ascertain to what degree Nigerian social and political factors
have entrenched the resource curse in that country, and hence demand
wholesale structural and cultural change.
34
Chapter 3: The Slide into the Resource Curse
Any analysis of the social and political factors affecting modern Nigeria
must begin with its pre-‐colonial and colonial history.
The imposition of colonial rule in Nigeria, occurring in the late
nineteenth-‐century, was preceded by centuries of economic and cultural
interaction between Europeans and the indigenous population.82 Predominately
this took the form of the slave trade, conducted through native intermediaries
along the West African coast, which would see several million people forcibly
removed to the plantations of America, South America, and the West Indies,
between the fifteenth and mid nineteenth-‐centuries.83 During this period the
slave trade became central to the economies of several of the states and societies
of what became Nigeria, and came to underpin their political stability and
economic might.84 Indeed, the slave trade was instrumental in the emergence of
three large and centralized states, ethnically based, which would come to
82 Philip Terdoo Ahire, Imperial Policing: The Emergence and Role of the Police in Colonial Nigeria, 1860-‐1960, Philadelphia, Open University Press, 1991, p. 1-‐2. 83 Oronto Douglas and Ike Okonta, Where Vultures Feast: Shell, Human Rights, and Oil in the Niger Delta, San Francisco, Sierra Club Books, 2001, pp. 6-‐7. Though the trade was outlawed in Britain in 1807, it would continue illegally until around 1850. Oladimeji Aborisade and Robert J. Mundt, Politics in Nigeria, New York, Longman, 1998, p. 6-‐7. 84 Slavery as an institution had existed in the area that would form Nigeria prior to 1500, but slaves tended to be assimilated into their new community, and it existed alongside different forms of social bondage related to social and political interaction. See Toyin Falola and Matthew M. Heaton, A History of Nigeria, Cambridge, Cambridge University Press, 2008, pp. 40-‐45.
35
dominate the Nigerian political and economic landscape, and thus greatly affect
the federated structure of the post-‐colonial state.85
Located in the northern, western and eastern regions of Nigeria
respectively, these peoples were wholly distinct in their social and political
structures. In the North, the Hausa-‐Fulani lived in a hierarchal, even feudal,
society, which after the Fulani jihad of the early nineteenth-‐century was formed
into a caliphate under the Sultan of Sokoto. The Sultan was represented in the
provinces by emirs, who ruled a society split between the sarakuna (ruling) and
talakawa (commoner) classes, a status ascribed at birth. In the West, Yoruba
pre-‐colonial society was, like the Hausa-‐Fulani, hierarchical in nature, though
perhaps not as authoritarian as their northern neighbours. The monarchs (Oba)
though divinely appointed, did not have absolute power over the chieftaincy or
ruling council, whose hereditary status precluded arbitrary dismissal.86 Conflict
and competition were ubiquitous, leading to inherent instability. In the East, the
Igbo, by contrast, were organized around federated democratic norms that we
might recognize today. Each autonomous village contained an assembly, made
up of adult males and some prominent women, where open and free debate on
issues took place. Representatives would be elected for the village, but there
were no centralizing or kingship institutions prior to the colonial period.87 The
establishment of British colonial dominance would result in the forced
restructuring of these political and social institutions, particularly in the western
85 Ibid, pp. 59-‐60. 86 Those in the ruling council could only be of non-‐royal lineage. Funso Afolayan, ‘Nigeria: A Political Entity and a Society’, in Paul A. Beckett and Crawford Young (eds.), Dilemmas of Democracy in Nigeria, Rochester, University of Rochester Press, 1997, p. 53. 87 Ibid, pp. 52-‐54. See also Falola, A History of Nigeria, pp. 21-‐29.
36
and eastern regions, such that they could accommodate colonial ‘indirect rule’
systems.88
It was Britain’s attack on the supply side of the slave trade coupled with
the ‘legitimate’ trade in another form of oil, palm oil, which led to a settled
British presence to Nigeria.89 Palm oil, used in the lubrication of machinery, and
in the production of soaps and margarine, was in high demand, and in high
supply.90 The trading patterns established by the slave trade were essentially
reproduced, although recalcitrant native traders had to be displaced, thereby
creating interference in local politics. Some local populations resisted and some
were violently suppressed by the British representatives.91 As the level of
profitability in the region became clear, and the need for order became more
apparent, the British moved towards outright control, beginning with the
creation of the Lagos colony in 1861, and leading to the annexation of the Niger
Delta and its hinterland under the Oil Rivers Protectorate in 1885.92
With the coastal areas now under control and, under missionary influence
embracing Christianity, the British sought to expand their influence inland.
Wary of the similarly expansionist policies of the French and Germans in West
Africa, the British forcibly spread their political interests across the Yoruba and
88 Falola and Heaton, A History of Nigeria, pp. 113-‐116. 89 Ahire, Imperial Policing, pp. 2-‐4. 90 The port of Bonny, a coastal Ijo town and the richest port in the Delta was exporting more than 25,000 tonnes of palm oil a year by 1856. Douglas and Okonta, Where Vultures Feast, pp. 6-‐7. 91 Aborisade and Mundt, Politics in Nigeria, pp. 6-‐7. 92 The annexation was on the pretext, according to the Foreign Office, ‘to protect and develop the important trade of which their town is the sear; and to exercise influence on the surrounding tribes’. Douglas and Okonta, Where Vultures Feast, pp. 8-‐10.
37
Igbo states through a series of ‘small wars’, a euphemism for the brutal seizure of
territory.93 By 1897, the renamed Niger Coast Protectorate had joined the Lagos
colony and stretched across Southern Nigeria.94 In order to gain supremacy in
the region, short of complete colonial take-‐over, the British Government had
entrusted its interests to the Royal Niger Company95 of George Taubmann Goldie,
the ‘founder of modern Nigeria’, by way of a Royal Charter granted in 1886.96
In exchange for a monopoly of trade and political control, the company
was to negotiate ‘treaties’ with local rulers, which were secured through
coercion, including the bombardment and razing of towns that dared to resist. 97
Once control of an area was ensured, the company would establish judicial and
political institutions, structures upon which the colonial state would be built.98
In 1899, however, with the palm oil trade now worth £3.4 million per year, and
accusations of maladministration by the company continually surfacing, the
British government instituted direct colonial rule over southern Nigeria.99
Attention now moved to the newly created Protectorate of Northern
Nigeria, ruled by the Sokoto Caliphate. Under the command of Frederick Lugard,
93 ‘Small wars’ were conducted through attrition and the destruction of anything of value in order to intimidate into submission. For example, the village of Satiru was set on fire in 1903, with a curse placed upon its site to ward off rebuilding. Toyin Falola, Colonialism and Violence in Nigeria, Bloomington, Indiana University Press, 1999, pp. 174-‐175. 94 Falola and Heaton, A History of Nigeria, p. 98. 95 Previously known as the National African Company, but would be renamed following the granting of the Charter, and the amalgamation of three other companies operating in the area. Ibid, p. 98. 96 Ibid, p. 99. 97 Douglas and Okonta, Where Vultures Feast, pp. 13-‐14. 98 Ahire, Imperial Policing, p. 10. 99 Douglas and Heaton, Where Vultures Feast, p. 16.
38
who would later became the first Governor of unified Nigeria, the British military
led a series of offensives against the North, culminating in the battlefield death of
the caliph in July 1903.100 Once the caliph was deposed, the British
administration under Lugard and his successors supplanted the caliph’s
authority over the emirs with their own, instituting a policy of indirect rule.
Under the British, however, the economy floundered and became reliant on aid
from the South. In order to better centralize revenue allocation and bring about
wider economic integration, the Northern and Southern Protectorates were
amalgamated in 1914 to form a unified Nigeria.101
The Colonial Project
Prior to 1914, the nominal indirect rule policy of the colonial
administration varied significantly in operation depending on local conditions.
In principle both areas were to be ruled according to the Dual Mandate –
obtaining advantage for the home country, while leaving indigenous structures
intact so that Africans could be ‘civilized’ gradually. The existing feudal authority
system in the North allowed the British to apply the policy of indirect rule, which
saved costs by ‘employing’ the emirs to govern through their existing
institutions.102 In the South, however, the British had to be more directly
involved in the running of the Protectorate due to a lack of readymade
authoritarian political structures. The traditional institutions had to be
100 Falola and Heaton, A History of Nigeria, p. 93. 101 The Lagos colony and the Niger Coast Protectorate had been amalgamated in 1906 to form the Protectorate of Southern Nigeria. Ibid, p. 117. 102 Kalu Ndukwe Kalu, State Power, Autarchy, and Political Conquest in Nigerian Federalism, Lanham, Lexington Books, 2008, p. 34.
39
significantly restructured to accommodate colonial rule.103 Although Lugard
would extend his form of indirect rule across Nigeria following its amalgamation
into a single administrative unit, the two areas were already on different paths,
with the South being far more Europeanized than its northern neighbours.104
The ideology that underpinned the imposition of colonial rule, regardless
of its ‘indirect’ nature, rested upon the perception of African culture and society
as backward in relation to its European counterpart. The British colonialists
presented their role in Nigeria as one of assisting in the elevation of indigenous
society to European levels, while maintaining existent structures, rather than of
exploitation and domination for their own gain.105 In reality, however, the drive
behind colonization included the exploitation of Nigerian natural resources for
the furtherance of industrial aims in Britain. The economy was directed towards
primary production, which utilized unskilled labour and discouraged industrial
development, leading to far reaching consequences, such as the overreliance on
one crop or product.106 The material benefits of this economic structure flowed
heavily towards the colonialists and a select group of European educated
indigenous elites while the majority of the population were alienated and
103 Joseph A. Umoren, Democracy and Ethnic Diversity in Nigeria, Lanham, University Press of America, 1996, p. 66. 104 Falola and Heaton, A History of Nigeria, p. 116. For example, Lugard had forbidden the entrance of missionaries into the North, arguing that such action was required to preserve traditional cultures. In the South, where missionaries established a system of Christian education, which involved among other factors the imposition of the English language, an educated middle-‐class had already begun to evolve. As a result, with access to education being far more limited, the North fell behind, a source of resentment still prevalent today. Umoren, Democracy and Ethnicity, pp. 67-‐68. 105 Ahire, Imperial Policing, p. 17. 106 Ibid, p. 19.
40
suppressed, forced into exploitative labour, and to live under the influence of
policies which they felt degraded and eroded traditional structures.107
Not surprisingly, the imposition of colonial rule in Nigeria spurred
resistance movements from the outset. Initially these movements were for the
most part successfully suppressed by the colonial administration.108 Moreover,
where resistance movements did arise, they tended to be ethnically or spatially
based, precluding a pan-‐Nigerian movement for change. From the 1930s
onwards, however, broad based anti-‐colonial movements, united by a desire for
Nigerian involvement in governance, began to emerge. They successfully
pressured the colonial administration to undertake constitutional reform,
leading to elite involvement, especially in regional governance, and eventually to
outright independence on 1 October 1960. Yet, despite the feeling of unity
during the initial stages of independence the country was still divided along
ethnic and religious lines, leaving the foundations of the new Nigerian state weak
as a consequence.109
From Euphoria to Civil War
Despite the outpouring of euphoria at the time of independence, three
significant factors intersected with the reality of division, and almost
immediately began to undermine the promising prospects of the First Republic.
Firstly, the federated structure of the new state did little to solve what would
107 Falola and Heaton, A History of Nigerian, p. 136. 108 Falola, Colonialism and Violence, p. 171. 109 Falola and Heaton, A History of Nigeria, pp. 136-‐137.
41
become known as the ‘national question’ -‐ how to engender a unified national
consciousness out of ethnic and religious differences compounded by political
ambitions and economic disparities. The regional emphasis of the new
Constitution ensured that national power was determined by control at the
regional level. Thus, the Hausa-‐Fulani, the Yoruba, and the Igbo came to
dominate their regions and the contest for control of the federated state.
Minorities within those regions, fearful of domination by the majority, became
alienated from the political process. As such, an already fractured nation,
created artificially, began to fragment further within a supposedly unified nation
state.110
Secondly, the direct importation of the British Westminster system of
government ensured northern and Muslim domination of the new legislature.111
Favoured by a much larger population, confirmed by the 1952-‐3 census, the
Northern People’s Congress (NPC) would achieve outright majority during the
1959 parliamentary elections. Drawing its membership primarily from the
Katsina College, established by the British for the education of the former elite of
the Sokoto Caliphate, the NPC represented the most pro-‐British and conservative
forces in the country. As a result, independence constituted a mere ‘cosmetic
110 Ibid, pp. 158-‐159. 111 It is an enduring myth that Africa had no viable institutions of its own prior to the arrival of the colonists. As Ayittey points out, this confusion stems from the inability to differentiate between the existence of a particular institution, and the various forms it can take. Thus are shopping malls and bazaars part of the same phenomenon of the market. George B. Ayittey, Africa in Chaos, New York, St. Martin's Press, 1998, p. 85. Importantly though, the importation of the Westminster System was supported by many in the Nigerian elite owing to a belief that it would hasten the withdrawal. Robert T. Suberu, ‘Institutions, Political Culture, and Constitutionalism in Nigeria’, in Michael J. Baun and Daniel P. Franklin (eds.), Political Culture and Constitutionalism: A Comparative Approach, Armonk, M.E. Sharpe, 1995, pp. 197-‐198.
42
change’ from colonial rule, encouraging the withdrawal of the Yoruba and Igbo
elite from a commitment to a ‘Nigerian’ state.112
Thirdly, the Nigerian elites taking control of state apparatuses maintained
a regional political and social orientation, and an adherence to traditional
patrimonial relationships. They often looked upon those apparatuses as a source
of personal and communal accumulation, especially where capital was scarce.113
Almost immediately federal funds were diverted to clients at the regional/local
level, draining the state’s coffers and severely undermining its legitimacy.
Corruption would thus become endemic during the First Republic, a situation
that would only worsen with the beginning of the oil boom, and the subsequent
influx of immense oil rents. Such behaviour, along with the impending
fragmentation of the state, would provide the military with a ready excuse to
usurp the democratic government.114
It is little wonder that the First Republic lasted a mere six years. Unable
to solve the ‘national question’, a recurring theme throughout modern Nigerian
history, and replete with instability and corruption, the civilian government was
replaced by successive military coups. The first occurred on 15 January 1966,
and was led by the ‘five majors’,115 drawn from each of the three regions of
112 Toure Kazah-‐Toure, ‘Nigeria: Challenges to the State and Ways of Breaking Through the Quagmire’, in George Klay Kieh, Jnr. (ed.), Beyond State Failure and Collapse: Making the State Relevant in Africa, Lanham, Lexington Books, 2007, p. 153. 113 Axel Harneit-‐Sievers, Constructions of Belonging: Igbo Communities and the Nigerian State in the Twentieth-‐Century, Rochester, University of Rochester Press, 2006, p. 90. 114 Osoba, ‘Corruption in Nigeria’, p. 375. 115 Kaduna Nzeogwu, E. Ifeajuna, D. Okafor, C. I. Anuforo, and A. Ademoyega were later known as the ‘five majors’, but power would eventually devolve to Major General John Aguiyi-‐Ironsi, albeit briefly. Falola and Heaton, A History of Nigeria, p. 172.
43
Nigeria. Many in the North, however, came to see the coup as part of a southern
Igbo conspiracy, and on 29 July 1966, a northern Lieutenant Colonel, Yakubu
Gowan, gained control of the country following a successful counter-‐coup.
Another Lieutenant Colonel and commander of the Eastern region,
Chukwuemeka Odumegwu-‐Ojukwu, fearing for the safety of the Igbo in the
aftermath of the coups, and distrustful of Gowan, declared the east independent
under the new state of the Independent Republic of Biafra. Not willing to allow
the region to secede, partly due to the presence within it of 67 percent of known
petroleum reserves, Gowan plunged Nigeria into a civil war that would last four
destructive years.116 Clearly there were countless issues contributing to the
descent into civil war, but oil certainly provided an extra ingredient.117 In the
aftermath of the war Nigeria remained unified, at least in name, and the military,
as corrupt as their democratic predecessors, and operating with little regard for
the public they ruled, continued their dominance of the state.118
The Arrival of Oil Wealth
The evolution of the Nigerian oil industry began many years prior to the
oil booms of the 1970s and early 80s. In 1908 the German-‐owned Nigerian
Butimen Company attempted several well drills without success, leading to a
hiatus in exploration until 1937. In that year the British government granted
Shell D’Arcy concessions totalling 357,000 square miles, equal to the entire
116 Ibid, pp. 172-‐175. 117 Scott Pearson, Petroleum and the Nigerian Economy, Stanford, Stanford University Press, 1970, pp. 138-‐139. 118 Falola and Heaton, A History of Nigeria, pp. 175-‐176.
44
territory of Nigeria.119 Though interrupted by hostilities during World War II,
Shell D’Arcy had by 1951 successfully used seismic data to confirm that the Niger
Delta was the most likely area for oil extraction. Further exploration narrowed
the target area so that by 1962 the company had obtained 46 oil-‐mining leases
over territory covering 15,000 square miles.120 The first successful well was
drilled by Shell in Oloibiri, around 65 miles to the west of Port Harcourt, in 1956.
Four further wells were drilled by 1957, and exports would commence the
following year.121 With several other companies conducting their own
explorations, and exponential rises in exploitation capacities, the Nigerian oil
industry would see an extraordinary jump in production from just 5,100 barrels
per day in 1958, to 2.4 million in 2006.122
This rapid rise in oil production soon corresponded with two periods of
rapidly increasing world oil prices. The oil shocks of 1971-‐1973, and 1980-‐1981,
led to phenomenal rises in oil income across producing nations. In Nigeria the
boom saw oil revenue jump from $US1.2 billion in 1972, to $US6.6 billion in
1975, and then following a plateau in prices, to $US25.4 billion in 1980.123
Meanwhile, the military government had made progressive moves towards
ownership, if not control, of the oil industry and the profits emanating from it,
119 Shell D’Arcy was a joint venture between Shell and British Petroleum. Douglas and Okonta, Where Vultures Feast, 23. 120 Soala Ariweriokuma, The Political Economy of Oil and Gas in Africa: The Case of Nigeria, New York, Routledge, 2008, p. 23. 121 Nigerian crude oil would first be exported to European oil refineries in 1958. Ibid, p. 25. 122 For an in depth history of the various companies involved in extraction in Nigeria see ibid, pp. 23-‐25. 123 George Philip, The Political Economy of International Oil, Edinburgh, Edinburgh University Press, 1994, p. 174.
45
under the Nigerian National Petroleum Corporation (NNPC).124 With the boom
came extensive national development plans and investment in all manner of
infrastructure projects. Unfortunately, the boom proved unsustainable, and
following a collapse in world prices, oil revenue would reach only $US7 billion in
1986.125 At the same time, Nigeria’s agricultural industry suffered sluggish
growth, with urban construction and a growing informal sector drawing the
young away from the rural economy.126 The state, having become dependent on
oil revenues for its spending, turned to extensive international borrowing
programs. The growing debt burden, combined with poorly conceived structural
adjustment policies, would plunge the country into a recession lasting until 1992
causing plummeting standards of living.127
Oil had been received as a gift from providence, a wealth that could
reunite the nation after the civil war. Nigeria was remade in the ‘image of a
highly valued commodity form’ as centralized rent distribution led to destructive
state-‐fetishism.128 Yet the gains were not distributed evenly, benefiting
primarily those with access to state power. Prior to the boom years of the 1970s,
revenue allocation in Nigeria had been based upon the derivation principle; that
124 The Nigerian National Petroleum Corporation, which today controls the Nigerian industry, was created in April 1977 with the amalgamation of the Nigerian National Oil Corporation (established in 1971 following the joining of the Organization of Petroleum Exporting Countries (OPEC)) and the Ministry of Petroleum Resources. The intention of these bodies was to ensure the participation of the Nigerian state in oil exploration and production. Having become heavily involved in joint ventures, production sharing contracts, and service contracts, it has largely succeeded in this goal. Ibid, pp. 56-‐57. In 1979, General Olusegun Obasanjo would nationalize large parts of the oil industry. Falola and Heaton, A History of Nigeria, p. 196. 125 Philip, The Political Economy of International Oil, p. 174. 126 Watts, ‘Resource Curse?’, pp. 74-‐75. 127 Falola and Heaton, A History of Nigeria, pp. 203-‐205. 128 Andrew H. Apter, The Pan-‐African Nation: Oil and the Spectacle of Culture in Nigeria, Chicago, University of Chicago Press, 2005, p. 22.
46
is, resource-‐producing areas were to receive the largest share of revenues.
Progressive changes in this formula led to its complete reversal by 1982, with 55
percent going to federal coffers, 35 percent to the states, and 10 percent to local
governments. Funds that could have been used in welfare or environmental
protection measures for the oil producing regions were diverted elsewhere.129
Often these funds found their way into the pockets of government and military
elites, either through fraudulent contracts, kickbacks, or outright looting.
Coupled with ineffective financial management systems, corruption caused
development to suffer heavily.130 Simultaneously, conflict on religious, ethnic or
communal grounds had become omnipresent, and would only worsen as the
years unfolded.131
The Post-‐War Slide to Predatory Rule
The exponential growth in the Nigerian oil economy during the 1970s
was overseen by two military regimes. Gowan’s rule, despite constant
accusations of widespread corruption and mismanagement, would survive until
30 July 1975 when, on the pretext of ‘corrective’ rule, he was disposed in a
bloodless coup, bringing General Murtala Mohammed to power. Although
Mohammed was assassinated during an abortive coup attempt in February 1976,
and replaced by his second in command, Lieutenant General Olusegun Obasanjo,
the Mohammed/Obasanjo regime is generally considered together, owing to 129 The Okigbo Commission report of 1980 advised that only one percent should be allotted for environmental protection, and two percent for ‘special problems’ in exploitation areas. Augustine A. Ikein, The Impact of Oil on a Developing Country: The Case of Nigeria, New York, Praeger, 1990, pp. 27-‐29. 130 Obe, ‘The Challenging Case of Nigeria’, p. 145. 131 Falola, Colonialism and Violence, p. 184.
47
continuity in stated policies and aims, including the eradication of corruption
and the return to civilian rule.
In order to achieve the former, Mohammed carried out purges of the
military, the police force, the judiciary, and the civil service, replacing those
deposed with individuals having no links to the previous regime. Yet this action
had little effect on already endemic political corruption, primarily because a lack
of systematic reform of weak state structures meant they could continue to be
manipulated.132 Moreover, the credibility of the regime was undermined by
measures such as the 1976 decree banning accusations of corruption or
mismanagement against sitting government officials.133 In fact, much like Gowan,
Mohammed and Obasanjo presided over burgeoning corruption, gross
mismanagement of public funds, and the solidification of a kleptocracy in
Nigeria.134
General Obasanjo did, however, keep his promise to hand over power to a
civilian government. Following the formulation of a new constitution, and
parliamentary elections in 1978 that brought the National Party of Nigeria (NPN)
to power, the country was returned to democratic control, albeit briefly, under
the Second Republic.135 The constitution introduced several levers to engineer
political inclusion and stability in response to the failures of the First Republic. It
attempted to nullify conflict by creating more states, and required that, in order
132 Falola and Heaton, A History of Nigeria, pp. 188-‐189 133 Ibid, p. 196. 134 Ibid, p. 181. 135 Ibid, p. 198-‐199
48
to win elections, support amongst voters external to a candidate’s own state had
to be garnered. Unfortunately, this approach met with little success having
merely favoured those individuals whose ethnic groups crossed several state
lines.136 The NPN proved to be every bit as corrupt as its military precursors,
using the distribution of oil rents throughout countrywide patron-‐client
networks to ensure continued political support.137
Such was the extent of corruption that the populace itself began to call for
military intervention. This duly occurred in November 1983, on the back of an
NPN election victory in October, when in yet another coup Major General
Muhammadu Buhari took control of the state. Again the pretext was ‘corrective’
rule but, although Buhari aggressively prosecuted corrupt members of the
Second Republic, he failed to bring the economy under control and was removed
from power in 1985 by a military coup staged by Major General Ibrahim
Badamais Babangida. Unwilling to accept a democratic transition, and amidst
near total political chaos, Babangida was himself supplanted in a November
1993 coup by General Sani Abacha, considered by many to be the most
oppressive ruler in Nigeria’s history.138 Each of these regimes oversaw both the
further entrenchment of corruption, and the drastic decline of the Nigerian
economy, while maintaining their rule through brutal repression.139
136 John Boye Ejobowah, ‘Constitutionalism and Political Inclusion in Nigeria’, in Okon Akiba (ed.), Constitutionalism and Society in Africa, Aldershot, Ashgate, 2004, pp. 103-‐105. 137 Falola and Heaton, A History of Nigeria, pp. 198-‐202. 138 Babangida had promised to hold presidential elections as part of the creation of a Third Republic, initially in 1990, but this was held back until 12 June 1993. Babangida would, however, annul the results of the election, throwing the country into chaos, paving the way for his removal. Ibid, pp. 216-‐229. 139 Ibid, pp. 209.
49
By the time of Abacha’s take-‐over economic malaise had already become a
reality. The imposition of the Structural Adjustment Program in 1986 at the
behest of the IMF, while temporarily deferring debt repayments, led to drastic
reductions in government expenditure.140 In combination with an already
severe economic recession, falling state expenditures curtailed the traditional
avenues of patronage with government contracts, subsidies, and employment
being almost wiped out. Nevertheless, so entrenched were corrupt practices
within state activity that graft skyrocketed, even as the economy deteriorated
rapidly.141
During the Babangida and Abacha regimes, the latter especially,
substantial moves towards predatory and despotic rule were made, while a
reconfiguration of ethnically based patron-‐client relations towards less diffuse
forms heralded the onset of the personalized control of systematic corruption.
Consequently, the head of state sat at the top of a corruption pyramid, wielding
absolute power over his patrons below. The concentration of power in the
executive, along with the expanded repressive capacity of the security forces,
also allowed for the relentless persecution of civil society and human rights
groups.142 By the later years of the Abacha regime, extra-‐judicial murder was
rife, as was the execution of political prisoners.143
140 Ibid, p. 219. Debt interest payments had at reached 37.5 percent of revenue by the end of the Buhari regime, crippling the state treasury. Ibid, p. 215. 141 Peter Lewis, ‘From Prebendalism to Predation: The Political Economy of Decline in Nigeria’, Journal of Modern African Studies, Vol. 34, No. 1, 1996, p. 97. 142 Lewis, ‘From Prebendalism to Predation’, pp. 99-‐101 143 Kalu, State Power, Autarchy, and Political Conquest, p. 102.
50
Another consequence of the period following the collapse of the Second
Republic was the further entrenchment of a politicized economy. Politics had
become the quickest way in which to accumulate wealth, with those closest to
the centre being the main beneficiaries, thereby increasing competition for state
access.144 With state processes orientated towards accumulation, followed by
distribution, rather than taxation and expenditure, the state was less inclined to
be involved in the provision of the public good.145 Indeed, the head of Nigeria’s
Economic and Financial Crimes Commission (EFCC) estimated in 2006 that since
independence, US$380 billion in oil revenues had been either stolen or
wasted.146 During the Babangida and Abacha regimes alone almost US$12 billion
in oil revenues was siphoned off the federal budget and into off-‐budget
accounts.147 Inevitably, by the time of the democratic transfer in 1999, Nigeria
found itself with extraordinary levels of crippling debt, with the United
Kingdom’s Department of International Development estimating that US$28.4
billion was owed externally by 2001.148 At the same time, despite abundant
natural resources, the majority of Nigeria’s people were living in poverty having
received little in the way of benefit from that blessing.149
144 A. G. Adebayo and Toyin Falola, ‘Politicians and the Economy’, in Segun Gbadegesin (ed.) The Politicization of Society during Nigeria's Second Republic, 1979-‐83, Lewiston, Edwin Mellen Press, 1991, pp. 13-‐24. 145 Jibrin Ibrahim, ‘Obstacles to Democratization in Nigeria’, in Paul A. Beckett and Crawford Young (eds.), Dilemmas of Democracy in Nigeria, Rochester, University of Rochester Press, 1997, pp. 156-‐158. 146 Larry Diamond, The Spirit of Democracy: The Struggle to Build Free Societies Throughout the World, New York, Times Books, 2008, p. 248. 147 Lewis, ‘From Prebendalism to Predation’, p. 101. 148 Mansur Muhtar et al., ‘Introduction’, in Mansur Muhtar et al. (eds.), The Debt Trap in Nigeria: Towards a Sustainable Debt Strategy, Trenton, Africa World Press, 2002, pp. 28-‐32. 149 Obe, ‘The Challenging Case of Nigeria’, 154-‐155.
51
The Slow Growth of Civil Society and its Co-‐option in the Niger Delta
The period following the collapse of the Second Republic can also be
characterized by the slow growth of civil society organizations in Nigeria. These
bodies grew primarily in opposition to the maladministration of the state, and
were thus a crucial reason for the increasing repression of society by successive
military regimes.150 The most well known of these civil society organizations,
the Movement for the Survival of the Ogoni People (MOSOP), gained
international recognition as a symbol of opposition to the oppressiveness of the
Nigerian state. Its leader, activist and author Ken Saro-‐Wira, was executed in
1995, along with eight other MOSOP officials. They were convicted for inciting
the murders of four Ogoni chiefs who had sided with the government during the
struggle for minority rights in the Niger Delta.151
Saro-‐Wira had campaigned against corruption and the destruction of the
Niger Delta environment as a result of oil exploitation. He claimed that Shell had
‘successfully waged an ecological war against the Ogoni people since 1958’ with
the explicit support of the Nigerian security agencies.152 In fact, by the time of his
execution, the military and police forces had killed over 2000 people and razed
numerous villages, while the Ogoni land had been scarred by the effects of oil
150 Civil society organizations such as labour unions, student groups, and religious bodies had existed prior to the 1980s. But following the moves towards predatory rule, new bodies began to mobilize who were more involved in subverting the will of the military state. See Falola and Heaton, A History of Nigeria, p. 210. 151 Several witnesses would later claim to have been bribed either by the government or Shell to provide incriminating testimonies. Charles Lock, ‘Ken Saro-‐Wiwa, of "The Pacification of the Primitive Tribes of the Lower Niger"’, in Craig W. McLuckie and Aubrey McPhail (eds.), Ken Saro-‐Wira: Writer and Political Activist, Boulder, Lynne Rienner Publishers, 2000, pp. 4-‐5. 152 Ibid, p. 6.
52
spills, poisoned water supplies, and natural gas flaring.153 As Human Rights
Watch argued, the government and multinationals had ‘ravaged their land and
contaminated their rivers, while providing little, if any, tangible benefit in
return’.154
Although MOSOP would dissolve after Saro-‐Wira’s execution, many other
organizations emerged in its wake. Despite experiencing negative publicity over
MOSOP, the Abacha regime brutally repressed them, leading to the growth of
radicalized militia-‐type insurgencies across the Niger Delta, who directed
violence against both the government and the companies operating there.155
While the return to democracy in 1999 momentarily quelled this conflict, the
perceived continuity in government policy in the following years reignited, and
indeed worsened the violence. Even increases in oil revenue shares for
producing regions, from three to thirteen per cent, failed to diminish militant,
and increasingly criminal, activity, partly because the extra funds merely served
to line the pockets of local government officials. These funds were then
channelled back into the recruitment of Niger Delta militia groups, whose
leaders were often former civil society activists, for their use in intimidation
153 Rob Nixon, ‘Pipe Dreams: Ken Saro-‐Wiwa, Environmental Justice, and Microminority Rights’, in Craig W. McLuckie and Aubrey McPhail (eds.), Ken Saro Wira: Writer and Political Activist, Boulder, Lynne Rienner Publishers, 2000, p. 111. 154 Quoted in Joseph Mclaren, ‘A Political Assessment: Genocide in Nigeria: The Ogoni Tragedy’, in Craig W. McLuckie Aubrey McPhail (eds.), Ken Saro-‐Wira: Writer and Political Activist, Boulder, Lynne Rienner Publishers, 2000, p. 18. 155 In a study of civil society radicalization between 1960 and 2002 amongst southern Nigerian ethnic associations, Adekson found that the policies of the state had led to the overt radicalization of such organisations, particularly after 1994. Adedayo Oluwakayode Adekson, The "Civil society" Problematique: Deconstructing Civility and Southern Nigeria's Ethnic Radicalization, New York, Routledge, 2003, pp. 19-‐20.
53
tactics during subsequent election years.156 Indeed, the fraternization of civil
society groups across Nigeria with the apparatuses of the state has, more often
than not, led to their corruption.157
Obasanjo and the Democratic Turn
Following the death of Abacha on 8 June 1998, moves were made under
the transitional government of General Abdulsalami Bubakar towards a
democratic transfer. Elections held for the state assemblies and governorships
on 9 January 1999 and for the Presidency on 27 February brought the People’s
Democratic Party (PDP), and their candidate and former military dictator,
General Obasanjo to power. Though allegations of vote rigging and intimidation
were widespread, the long period of military rule was finally put to an end with
the swearing in of the Fourth Republic on 29 May 1999.158
During his inauguration speech Obasanjo specifically called for an end to
corruption, the ‘greatest single bane of our society today’. Significant reforms
were undertaken in the years following the democratic transfer, including the
granting of autonomy to the legislative and judicial branches, increases in press
freedom, and moves towards transparent governance. Bodies directed towards
the eradication of corruption were established or strengthened. They included
the Code of Conduct Bureau (CCB), and the Code of Conduct Tribunal (CCT),
156 Darren Kew and Cyril Obi, ‘Nigeria: Dilemmas of Militarization and Co-‐optation in the Niger Delta’, in Thania Paffenholz (ed.), Civil Society & Peacebuilding: A Critical Assessment, Boulder, Lynne Rienner Publishers, 2010, pp. 356-‐358. 157 Falola and Heaton, A History of Nigeria, p. 212. 158 Ibid, pp. 234-‐235.
54
which had been established under the 1979 constitution in order to enforce the
declaration of assets and conflicts of interest, but had hitherto been ineffectual.
Obasanjo also created the Independent Corrupt Practices and Other Related
Offences Commission (ICPC) to investigate public complaints and educate the
public, and the EFCC to investigate economic and financial crimes.159 These
bodies have laid several high level charges since 1999, though most have not led
to lengthy jail terms or significant asset seizures.160
The Obasanjo government also made moves towards entering the EITI
framework. Obasanjo committed Nigeria to the framework in November 2003,
and launched the NEITI in February 2004. The first validation report was
released in 2006 (encompassing the period 1999-‐2004), and uncovered
significant discrepancies in the reporting of both government and multinational
company revenues. The second validation report (encompassing 2005), not
released until October 2008, uncovered similar discrepancies.161 Despite such
disparities, Nigeria was accepted as a candidate country on 27 September 2007,
having passed the NEITI Act in May, which made it an offence to give false
159 Rotimi T. Suberu, ‘The Travails of Nigeria's Anti-‐Corruption Crusade’, in Robert I. Rotberg (ed.) Corruption, Global Security, and World Order, Washington, Brookings Institution Press, 2009, pp. 262-‐264. 160 There have been several large-‐scale charges laid since 1999. For example, federal cabinet ministers Sunday Afolabi, Mohammed Shata, and Hussaini Akwanga, have all been charged for misappropriation, and in 2008 Minister for Health Adenike Grange and other officials were charged with siphoning off more than one million dollars through fake contracts. The most spectacular charges, however, were against state governors, who under the new system received 24 percent from the federation account. Between 1999 and 2007 31 governors of the 36 states were indicted. Unfortunately, more often that not, charges did not lead to sentences. Ibid, pp. 265-‐269 161 For instance, the second validation report included discrepancies amounting to $US800 million in missing funds. Extractive Industries Transparency Initiative, Nigeria, retrieved 16 March 2011, available from <http://eiti.org/Nigeria>.
55
information or false statements of accounts within that framework.162 Following
the release of the 2011 validation report, covering 2006-‐2008, and showing
unreconciled payments of US$917.1 million,163 Nigeria was accepted as a
compliant country on 2 March 2011, indicating its full acceptance into the EITI
framework.164
Despite the significance of these moves towards the reform of the heavily
corrupted Nigerian system, their success has been somewhat muted. Arguably
the reform initiatives have been inconsistent at best, and often contradictory at
worst, despite the enthusiastic response of donor countries. For example, in the
lead up to the farcical 2007 elections, Obasanjo was seen to be using the organs
of the anti-‐corruption campaign for his own political ends in order to remove
obstacles to his preferred candidate Alhaji Yar’Adua.165 Moreover, institutions
such as the ICPC and EFCC have been starved of resources and their efforts have
not been complemented by wider reform.166 Within the EITI framework
auditors have been given only restricted access to NNPC finances, obvious
shortcomings in the NEITI reports have not been addressed, and the audits
themselves have been significantly delayed and underfunded.167 Obasanjo
himself was linked to land grabs, extortion, failure to declare assets, and the
deliberate alienation of civil society groups, trends which changed little under
162 Ibid. 163 Nigeria Extractive Industries Transparency Initiative, 2006-‐2008 EITI Reconciliation: Final Report, 3 February 2011, p. 17, retrieved 16 March 2011, available from <http://www.neiti.org.ng/2006-‐2008ReconciliationReport.html>. 164 Extractive Industries Transparency Initiative, Press Release, p. 1. 165 Alexandra Gillies, ‘Obasanjo, the Donor Community and Reform Implementation in Nigeria’, Round Table, Vol. 96, No. 392, 2007, pp. 575-‐577. 166 Suberu, ‘The Travails of Nigeria’s Anti-‐Corruption Crusade’, pp. 275-‐277. 167 Gillies, ‘Obasanjo’, pp. 580-‐581.
56
his protégé Yar’Adua.168 At the same time, more than two-‐thirds of the
population still lives in poverty.169
With the military in control for 29 or the 51 years since independence, it
is hardly surprising that transparency is not ingrained within the political
system. No doubt transparency will take many years to achieve. Yet the
continuing involvement of the military, and specifically former dictators in
Obasanjo and Yar’Adua, his deputy head of state from 1976-‐1979, does not bode
well for change.170 During the 2003 and the 2007 elections, intimidation, vote
rigging, and widespread calls for annulment only intensified,171 while Nigeria
remained firmly fixed at the bottom of TI’s Corruption Perception Index (CPI)
ratings.172
A New Beginning?
In April 2011 Nigeria held what has widely been hailed as the most free
and fair elections in its history. Goodluck Jonathan, who replaced Yar’Adua
168 Suberu, ‘The Travails of Nigeria’s Anti-‐Corruption Crusade’, pp. 270-‐275. For example, Obasanjo did not declare his assets in 1999 under Section 140 (I) of the constitution. When this was pointed out by the Human Rights Law Service to the CCB, it advised that he had made the declaration in private and was not required to make a public declaration. Obe, ‘The Challenging Case of Nigeria’, p. 166. Yar’Adua, for his part, allowed the removal of the highly respected Mallam Nuhu Ribadu, head of the EFCC under trumped up corruption charges widely believed to have been politically motivated following his pursuit of government supporters. Global Integrity, Global Integrity Scorecard: Nigeria 2008, Washington, Global Integrity, 2008, pp. 1-‐2, retrieved 8 March 2011, available from <http://report.globalintegrity.org/Nigeria/2008>. 169 Helen M. McFerson, ‘Governance and Hyper-‐Corruption’, p. 1541. 170 Obe, ‘The Challenging Case of Nigeria’, p. 147. 171 Kalu, State Power, Autarchy, and Political Conquest, pp. 163-‐165. 172 Nigeria was second last on the TI CPI ratings in 2003, with a similar rating in 2004, and a slight raise to sixth last in 2006. Obe, ‘The Challenging Case of Nigeria’, p. 149.
57
following his death in office in May 2010, was elected to his first full term over
the former military dictator Buhari, winning by 23 to 12 million votes. As
opposed to the series of elections since 1999, this vote has been given a pass
mark by foreign observers, with minimal violence and vote rigging being
reported during the process.173 The election was far from perfect, however, and
rigging claims by Buhari’s supporters have been prevalent in the post-‐election
period. Yet high hopes are held for Nigeria with many believing it has turned a
corner on its past.174
The reality is that change will be a slow exercise. Despite what appeared
to be an orderly process, violence was brewing just below the surface. In post-‐
election violence in the country’s Muslim North, 500 people (mostly Christians)
were recorded killed, with widespread rioting accompanying the violence.175
Moreover, immediately following Jonathan’s inauguration, bomb blasts occurred
in the country’s north.176 What this underlines is that deep divisions still exist
across the country, and will be a significant challenge for Jonathan to
overcome.177
173 Joe Brock, ‘Nigerian Election Victory for Goodluck Jonathan Sparks Riots’, Guardian, 19 April 2011, p. 16. 174 David Smith, ‘Goodluck Jonathan Elected President as Nigeria Takes a Hopeful Step’, Guardian, 19 April 2011, retrieved 27 April 2011, available from <http://www.guardian.co.uk/world/2011/apr/19/goodluck-‐jonathan-‐president-‐unrest-‐nigeria>. 175 Reuters, ‘Hundreds Killed in Nigerian Post-‐Election Violence’, Guardian, 25 April 2011, p. 22. 176 Reuters, ‘Bomb Blast at Nigerian Army Barracks’, ibid, 30 May 2011, retrieved 4 June 2011, available from <http://www.guardian.co.uk/world/2011 /may/30/bomb-‐blast-‐nigerian-‐army-‐barracks?INTCMP=SRCH>. 177 John Campbell, ‘Nigeria: The Morning After’, International Herald Tribune, 3 May 2011, retrieved 4 June 2011, available from <http://www.nytimes.com/2011/05/03/ opinion/03iht-‐edcampbell03.html>.
58
Conclusions
Clearly, oil entered into an arena where ethnic and religious divisions,
corruption, and violent competition for control of the state were already
entrenched within the socio-‐political system. Oil certainly exacerbated these
existing problems, but it did not create them. Rather, these social and political
factors, specific to the Nigerian historical context, are the underlying causes of
the resource curse as manifested in that country.
59
Chapter 4: Social and Political Causes
Natural resource abundance compounded an already deteriorating
political and social context in Nigeria. What would normally be regarded as a
blessing would be whittled away through graft for personal or communal ends.
In this chapter the social and political causes of the resource curse in Nigeria, as
identified in the historical overview, will be explored in greater detail in order to
clarify their causal role.
Ethnic Division and the State
The creation of an amalgamated Nigerian state by the British colonial
administration in 1914 would, at least outwardly, seem to signify the possibility
of a unified, or unifiable, national consciousness. State formation in Nigeria has,
however, been plagued by the reality of entrenched ethnic and religious
divisions, which have precluded the fostering of a pan-‐Nigerian identity.
Local and regional communities have remained the focal point of identity
formulation, and persistent and often violent struggle for the centre has marred
the shaping of a viable post-‐colonial state.178 Oil, and the vast rent yield that
accompanies its exploitation, became the context in which this conflict has taken
178 Falola and Heaton, The History of Nigeria, pp. 158-‐159
60
place, but its roots go far deeper than the ‘devil’s excrement’ itself.179 Indeed, the
failure of successive regimes, military or otherwise, to solve the ‘national
question’ lies at the root of Nigeria’s inherent political and social instability,
which in turn explains the inability to turn resource abundance into
developmental windfall.180
Ethnic division is so embedded within the Nigerian polity that its
particular manifestation is generally, and negatively, referred to as ‘tribalism’.
More than mere ethnic nationalism, itself not necessarily inherently damaging,
tribalism refers to a ‘morbid loyalty and commitment to one’s ethnic group to the
exclusion, prejudice and often at the expense of other groups’.181 Despite the use
of a rather anachronistic sounding term, the phenomenon it describes owes
more to alienating colonial policies and perverse manipulation by Nigerian elites
than to pre-‐colonial ethnic formations and relationships. Despite differing
traditions, languages, and forms of political organization, West African ethnic
groups had often interacted peacefully in areas of common interest such as trade,
idea transference, and religious practice, prior to colonization.182 Yet they had
not experienced broader political unification, a fact that ensured amalgamation
would be ‘inorganic, alien, and transformative’.183
During the colonial period the British deliberately used divisive policies
to control the population thereby exacerbating differences either perceived or 179 Juan Pablo Pérez Alfonso, Venezuelan oil minister in the 1960s and one of the founders of OPEC, quoted in McFerson, ‘Extractive Industries’, p. 337. 180 Falola and Heaton, A History of Nigeria, p. 159. 181 Afolayan, ‘Nigeria’, p. 51. 182 Ibid, p. 46. 183 Falola and Heaton, A History of Nigeria, p. 109.
61
actual.184 As many retreated towards traditional solidarity groups in an attempt
to evade the pernicious effects of colonial rule, the foundations of the post-‐
colonial state were significantly weakened.185 Thereafter, persistent
manipulation of ethnic loyalties by the new Nigerian political elites for their own
personal or communal ends has instilled fear, hatred and aggression within the
Nigerian political and social system, as witnessed in the aftermath of even the
comparatively calm 2011 elections.186
The insular nature of Nigerian tribalism has served to reinforce the
country’s prevailing form of official corruption known as ‘prebendalism’.
Developed by Richard Joseph, this term describes the manipulation of traditional
patron-‐client networks in Nigeria to serve modern corruption networks at the
expense of state coffers. As in the notion of the ‘prebend’ – an office of a feudal
state, acquired either through service or purchase, and subsequently used for
accumulation by the holder – these networks have been used throughout the
post-‐colonial era in the acquisition of state offices, whose holders subsequently
divert public funds back to client groups as recompense.187 With the inclusion of
enormous oil rents into this dynamic, political activity deteriorated into an
‘unremitting and unconstrained struggle for possession and access to state
offices, with the chief aim of procuring direct material benefits to oneself, and
184 Afolayan, ‘Nigeria’, p. 47. 185 Claude Ake, ‘Political Ethnicity and State-‐Building in Nigeria’, in Winston A. van Horne (ed.), Global Convulsions: Race, Ethnicity, and Nationalism at the End of the Twentieth-‐Century, Albany, State University of New York Press, 1997, p. 300. 186 William D. Graf, The Nigerian State: Political Economy, State Class and Political System in the Post-‐Colonial Era, London, J. Currey, 1988, pp. 19-‐21. 187 Diamond, The Spirit of Democracy, p. 248.
62
one’s acknowledged communal or other sectional groups’.188 In turn, Nigeria’s
oil wealth would become associated with, and appropriated by, these ethnically
delineated patron-‐client networks, thereby assigning a material value to
ethnicity.189
Official corruption and its direct links to ethnicity in Nigeria would reach
its zenith during the 1990s, rather than in the heady days of the oil booms. In the
earlier decades patron-‐client networks and the corruption emanating from them
had been largely decentralized and diffuse. The Babangida and Abacha military
regimes moved towards more personalized forms of rule and predatory state
apparatuses, and instigated a more rapacious and autocratic control of the
state.190 Both ran roughshod over already debilitated public institutions and
embryonic civil society organizations, looting the state treasury almost at will,
and all while standing at the apex of hegemonic and ethnically framed patron-‐
client networks.191 Personalized control of this nature served to preclude the
emergence of an ‘impersonal state’, based upon the rule of law. As Max Weber
argued, this leads to a state lacking in the ‘bureaucratic separation of the “private”
and the “official” sphere’.192 The transition to democracy, and the continued
manipulation of this system by the Obasanjo administration, has done little to
break this trend towards ethnically based control. On the other hand, the failure
188 Quoted in Apter, The Pan-‐African Nation, p. 30. 189 Ibid, pp. 30-‐31 190 Lewis, ‘From Prebendalism to Predation’, pp. 99-‐101. 191 Peter Lewis, ‘Nigeria: An End to the Permanent Transition?’, Journal of Democracy, Vol. 10, No. 1, 1999, pp. 144-‐148. 192 Quoted in Ibrahim, ‘Obstacles to Democratization’, p. 156.
63
to address underlying ethnic tension has led to an explosion of resentment, and
ultimately violence, particularly in the Niger Delta oil region.193
Endemic and Systematic Corruption
Following independence, corruption became the primary means through
which elites accumulated wealth. This fact served to shape both political activity
and the nature of the state itself, as well as fuelling aggressive competition for
state power. There can be no doubt that the considerable volume of available oil
rents intensified unscrupulous behaviour, however, it is important to recognize
it was already pervasive in the years leading up to the oil boom, and was a
significant factor in the collapse of the First Republic.194 Indeed, corruption was
endemic during the late colonial period, both in objective reality, and as a matter
of public discourse.
The emerging political elites, who had begun to take over positions of
power within the bureaucracy, and who continued to honour traditional
patrimonial relationships, began diverting public funds back to their client bases.
Traditional forms of patron-‐client obligation were therefore corrupted as they
were implanted into modern political systems, though the extent of the problem
had yet to enter into public awareness. Ostensibly concerned about the
implications for self-‐rule, the British inserted concerns over rampant corruption
193 Falola and Heaton, A History of Nigeria, p. 235. 194 Osoba, ‘Corruption in Nigeria’, p. 371.
64
in public office into the debate over the transference of power.195 Corruption
was, therefore, thrust into the public discourse, becoming politicized in the
process, and was being increasingly utilized in political competition as a weapon
against one’s foes.196 Despite the level of awareness corruption obtained during
the late colonial period, little definitive action was taken to combat it, and
independence would bring about only a ‘cosmetic’ change, paving the way for the
systematization of corruption within the Nigerian political edifice.197
Attempts at the eradication or negation of corruption have rarely risen
above the level of symbolism in Nigeria. Having given corruption as the primary
motive for military intervention one would expect some degree of systematic
investigation. Instead, a recurring pattern emerged in which an agenda of
corrective rule would be framed amongst rhetorical flushes, followed by the
establishment of investigative commissions whose final report would be
subsequently buried and forgotten. Beyond the prosecution of a handful of
corrupt politicians, the majority of whom happened to be political rivals, little
real change would be instigated.198
Such was the case in the aftermath of the original military take-‐over in
1966 by the Gowan regime, and in the formation of the 1975 Public Complaints
Commission following his disposal by Murtala Mohammed. As a consequence of 195 For example, gift giving in the North was viewed as dangerous for the modern polity, a pre-‐colonial hangover that needed to be cleared. Such concerns were pushed over and above others such as ethnic tension and general bureaucratic incompetence. Robert L. Tignor, ‘Political Corruption in Nigeria before Independence’, Journal of Modern African Studies, Vol. 31, No. 2, 1993, pp. 175-‐176. 196 Ibid, pp. 175-‐176. 197 Osoba, ‘Corruption in Nigeria’, p. 373. 198 Ibid, pp. 375-‐36.
65
the lack of enduring and systematic measures undertaken prior to the
democratic handover in 1999, corruption has been allowed to become
embedded within the Nigerian political system, almost to the point of public
acceptance.199 Furthermore, the contradictions inherent in Obasanjo’s assault on
corruption from 1999 onwards have undermined the push for tangible change.
Corruption in the Nigerian context has not been caused by the
introduction of significant oil abundance and corresponding rents. Rather, oil
rents provided more opportunities for graft and more fuel for violent
competition for the state. The underlying cause of corruption in this case is the
interplay and mismatch between traditional obligation structures and the
formation of modern political systems. Once implanted, corruption became
entrenched within those systems, and everyday society. It has instilled the belief
that honesty does not pay, leading to its acceptance as a reality at the local
level.200 For ordinary Nigerians, corruption has become a ‘survival strategy and
moral imperative – for to be without a patron is to have no resources’ – while at
the same time standing in the way of economic and social advancement.201
Competition, Statism, and Violence
The Nigerian political system exhibits an extreme form of statism, which
in turn engenders violent competition for the control of the state. Claude Ake,
199 Suberu, ‘The Travails of Nigeria’s Anti-‐Corruption Crusade’, p. 263. 200 Osaba, ‘Corruption in Nigeria’, pp. 384-‐385 201 Daniel Jordan Smith, ‘The Paradoxes of Popular Participation in Corruption in Nigeria’, in Robert I. Rotberg (ed.), Corruption, Global Security, and World Order, Washington, Brookings Institution Press, 2009, p. 284.
66
addressing the May 1981 Conference of the Nigerian Political Science
Association, described it thus:
The Nigerian state appears to intervene everywhere and to own virtually everything including access to status and wealth. Inevitably, a desperate struggle to win control of state power ensues since this control means for all practical purposes being all powerful and owning everything. Politics becomes warfare, a matter of life and death.202
Such a political environment is not favourable to the fostering of democratic
institutions and values, rather serving to solidify economic competition as the
mainstay of political activity. The introduction of extensive and valuable natural
resources into this dynamic both extends competition for the state, and provides
those already in power with a tremendous advantage.203
The federal state structure established at the time of independence did
little to defuse this competition. By instituting regionalism, whilst giving no
power to the constituent units themselves, Nigerian federalism bred instability
in the form of contests for control of the centre.204 This inherent instability in
the political sphere is evidenced by the fact that between 1960 and 2000 there
have only been two instances of orderly power transitions – 1979 and 1999. The
remaining twelve transfers occurred violently, arbitrarily, and
unconstitutionally.205 Moreover, the continual creation of additional states, with
many of them being unsustainable, has merely bred new opportunities for
202 Quoted in Suberu, ‘Institutions, Political Culture, and Constitutionalism’, p. 203. 203 Ibid, p. 203. 204 Rotimi T. Suberu, Federalism and Ethnic Conflict in Nigeria, Washington, United States Institute of Peace, 2001, pp. 16-‐20. 205 Victor Oguejiofor Okafor, A Roadmap for Understanding African Politics: Leadership and Political Integration in Nigeria, New York, Routledge, 2006, p. 11.
67
conflict over borders, distribution and discrimination.206 At the same time,
ethnic minorities within those states, ever fearful of majority domination, have
tended to withdraw from the political process, further undermining the system
itself.207
Competition for the control of the state in Nigeria is compounded by a
political culture steeped in violence. Threatened or actual violence had been an
integral element of the imposition of colonial rule, and the subsequent
maintenance of domination. Violence would also mark the state soon after
independence, with the country plunged into a bitter civil war within seven
years. Thereafter, the belief in violence as a useful political tool, and further that
its use was required in the maintenance of power, became fossilized in the
political psyche. Members of the political class, whether of military origin or
otherwise, have often controlled the state’s apparatuses through murder and
intimidation, behaviours which seeped into civil society itself. Thus did the
agents of the state become impediments to change, and instruments of state
directed terrorism.208 Unfortunately the transition to democracy has thus far
failed to eradicate violence from the political process, with Human Rights Watch
reporting that violence and corruption are so pervasive in Nigeria that politics
has come to resemble criminal activity. Indeed, overt vote rigging and violent
206 Eghosa E. Osaghae, ‘Interstate Relations in Nigeria’, Publius, Vol. 24, No. 4, 1994, pp. 85-‐86. 207 Falola and Heaton, A History of Nigeria, p. 159. 208 Falola, Colonialism and Violence in Nigeria, pp. 171-‐185.
68
intimidation so marked the elections of 1999, 2003, and 2007 that each
approached the level of a farce.209
Military control of the state has been disastrous for Nigeria’s social and
political development. A prime example of Harold Lasswell’s ‘garrison state’,
Nigerian politics is based upon the military model, as is the structure of state-‐
society relations. Despite the shift to democratic modes of governance, civilian
leaders have by and large reverted to command and control governing styles, not
least because they frequently had a history of involvement in the military. In the
Obasanjo government, for example, many retired generals found their way into
the legislature, despite the forcible retirement of 150 officers who had served in
the 1984 to 1999 period.210 This continuity of military rule across several
decades has created a militarized state and political culture, and at the very least
contributed to the appearance of violence in social interactions. The argument
that the military prevents outbreaks of chaos, repeated in the lead-‐up to every
coup since Gowan’s, is disingenuous.211
209 Human Rights Watch, Criminal Politics: Violence, “Godfathers”, and Corruption in Nigeria, 9 October 2007, Vol. 16(A), pp. 1-‐2, retrieved 11 January 2011, available from <http://www.hrw.org/en/reports/2007/10/08/criminal-‐politics-‐0>. 210 Kalu, State Power, Autarchy, and Political Conquest, pp. 146-‐149. 211 Ibrahim, ‘Obstacles to Democratization in Nigeria’, pp. 160-‐163.
69
Chapter 5: Transparency as Cure?
The above social and political factors all served to embed the resource
curse deep within the Nigerian system once abundance arrived. The current
global response to the failures of the Nigerian state, which they have engendered,
the EITI, seeks to alleviate the curse by emboldening civil society to hold
governments to account. According to TI, ‘[t]ransparent resource governance is
the key to reversing a country’s resource curse into a blessing’. It will do so by
making ‘civil society better equipped to hold policy makers accountable for
actions on related development decisions’, and ‘provide citizens with key
evidence needed to pressure governments’.212 Such confidence in civil society’s
ability to act as a bulwark against state power seemingly echoes Tocqueville’s
observation that there is an inverse relationship between a state’s ability to
coerce and the extent to which organized local interest groups advance their
interests.213 Indeed, a robust civil society is considered by many to be the
‘missing ingredient’ of state legitimacy and viable state-‐society interaction in
Africa more generally. Civil society is the point at which the citizenry at large is
involved in rule making, and agreed rules are essential to a functioning society,
212 Transparency International, Enhancing Revenue Transparency in Oil and Gas Company Reporting, Transparency International Policy Position 05/2008, Berlin, Transparency International, 2008, pp. 1-‐2, retrieved 16 March 2011, available from <http://www.transparency.org/publications/publications/policy_positions/pp5_enhancing_revenue_transparency>. 213 Joel D. Barkan, ‘Resurrecting Modernization Theory and the Emergence of Civil Society in Kenya and Nigeria’, in David E. Apter and Carl R. Rosberg (eds.), Political Development and the New Realism in Sub-‐Saharan Africa, Charlottesville, University Press of Virginia, 1994, p. 91.
70
and to the interaction between state and society. Its emergence is therefore
considered essential to the ‘prevention of political decay that undermined new
African governments a generation ago’.214
Yet civil society, and a working relationship between state and society
more generally, are severely lacking in Nigeria. The absence of a unifying
political culture and deep divisions within society itself has undermined the
growth of viable civil society organizations, even in the democratic era. So, too,
has the often-‐violent repression of embryonic bodies by predatory state
apparatuses.215 The political weakness of those organizations supposedly
keeping the government accountable is clear from the EITI process itself; when
the NEITI was first setup in 2004, of the 28 member National Stakeholders
Working Group overseeing its implementation, only two were drawn from civil
society.216 This is perhaps not unexpected given that there is a conspicuous lack
of a coalition of civil society at the national level that can act as counterpoise to
societal division on the one hand, and rapacious elites on the other.217 Attempts
have been made to bring together civil society and militant groups from the
Niger Delta region, yet they have encountered significant obstacles, including the
weak structures of most organizations, a culture of violence, and the absence of a
unifying agenda.218 Arguably, without addressing the social and political factors
214 John Harbeson, ‘Civil Society and Political Renaissance in Africa’, in Naomi Chazan et al. (eds.), Civil Society and the State in Africa, Boulder, Lynne Rienner Publishers, 1994, pp. 2-‐3. 215 Kalu, State Power, Autarchy, and Political Conquest, pp. 18-‐19. 216 Obe, ‘The Challenging Case of Nigeria’, pp. 154-‐155. 217 Peter Lewis, Growing Apart: Oil, Politics, and Economic Change in Indonesia and Nigeria, Ann Arbor, University of Michigan Press, 2007, p. 262. 218 Kew and Obi, ‘Nigeria’, p. 352.
71
that have hindered the emergence of a viable civil society in Nigeria, the mere
provision of incriminating information will do little to strengthen their position.
Despite these clear obstacles to its success, the EITI and its Nigerian
counterpart have already been declared as victories. The CPI compiled by TI,
using expert assessments obtained from sources both internal and external to
the country, has seen Nigeria rise from last in 1999, to equal 134th (out of 178
countries) in 2010.219 Furthermore, Nigeria was announced as a compliant
country in March of 2011, notwithstanding glaring evidence of large
discrepancies occurring since 1999.220
Looking at the TI’s own Global Corruption Barometer, however, which
measures public opinion through surveys within the country itself, we find a far
different story. Over the period of 2007 to 2010, 14 percent responded that
corruption had decreased, whereas 73 percent felt that it had increased.221 The
reality is that, regardless of the rhetoric and backslapping on the part of
international organizations and the Nigerian government, civil society is barely
represented in the EITI process, and the same structures that led to the problem
remain, as do the individuals. External reform will simply not have the desired
effect, unless internal processes are arrested and reversed. This dynamic
between the external and the internal has been wholly overlooked by the
literature on the resource curse.
219 Transparency International, Corruption Perceptions Index 2010, p. 13. 220 Extractive Industries Transparency Initiative, Nigeria. 221 Transparency International, Global Corruption Barometer 2010, Berlin, Transparency International, 2010, p. 44, retrieved 16 March 2011, available from <http://www.transparency.org/policy_research/surveys_indices/gcb/2010/in_detail>.
72
My argument here is not that transparency in the resource sector of
Nigeria is a waste of time and effort. Transparency is essential to the functioning
of an open democracy whose ends are directed towards the public good rather
than the pockets of the political elites. But as a solution to the resource curse, oil
sector transparency falls despairingly short. Perhaps if the underlying cause for
the resource curse in Nigeria were purely the nature of the state as ‘rentier’ the
fair and transparent distribution of oil rents would alleviate the curse. Yet as
Kalu Ndukwe Kalu argues, rather than the ‘rentier state’ describing the nature of
the state itself, it outlines the activities undertaken by it. In this way it is a
‘process-‐driven phenomenon’ as opposed to a definition of what a particular
state is.
The presence of natural resources, and the existence for an international
market for them, has determined the processes in which the state will be
involved.222 But natural resource abundance does not determine the nature of
the state itself, nor the functioning or otherwise of Nigerian society. As should
be clear from the above discussion, social and political factors, played out across
a long period of history, have entrenched corruption, division, and violence
within a weak Nigerian state, precluding successful development. It will take
wholesale change to rend this asunder.
222 Kalu, State Power, Autarchy, and Political Conquest, p. 124.
73
Chapter 6: Analysis and Conclusions
As outlined in the Introduction, this case study was undertaken to
determine the effectiveness of the EITI framework as a cure for the resource
curse, to see how one country’s historical social and political factors entrenched
the resource curse within its socio-‐political structures, and to see whether
deeper structural change is required in order to address the resource curse. The
central argument of the thesis is that the EITI is not of itself a cure in Nigeria, and
cannot be so unless and until the historical legacy is understood and addressed,
and major structural and cultural change is undertaken.
The resource curse in Nigeria results from historical processes well
underway by the time of the 1970s oil boom. The cumulative effect of these
processes resulted in a weak post-‐colonial state, replete with division and
instability, as well as endemic and systematic corruption. Oil wealth certainly
raised the stakes for those competing for the control of the state. Yet the
structure of state and society changed little in qualitative terms upon and since
its arrival. Rather, oil came to dominate economic, social, and political activity in
a way that concealed the social and political deterioration that had been well
under way since the colonial period.223 During the oil boom and its aftermath,
those with access to state power continued to treat the country’s resources much
as they had before: as capital to be deployed in the maintenance of power, rather
223 Graf, The Nigerian State, pp. 218-‐219.
74
than as funds through which to alleviate poverty, much to the detriment of
Nigeria’s development.224
For these reasons the EITI framework is wholly inadequate in the case of
Nigeria. Rather than addressing the underlying historical factors, which to a
large degree are the cause of the resource curse in that country, the EITI merely
seeks to confront its overriding symbol, the oil-‐sector. While oil-‐sector
transparency is no doubt helpful, as a cure it falls short. Externally-‐driven
reform of this kind must be complemented by internal structural and cultural
change, preferably originating from Nigerians themselves. While it is not
possible to draw definitive conclusions from this case study for the operation of
the EITI in other oil producing and resource curse affected countries, the extent
of the difficulties experienced in Nigeria would suggest that comparative work
may find the EITI to be an inadequate response to the problem elsewhere.
These findings have significant implications for the bodies of literature
discussed in chapter two. The resource curse literature has been directed
primarily towards cross-‐country statistical analysis, showing correlations
between abundant natural resources and measurements of poor governance.
The findings above indicate that, in the case of Nigeria, the cause of this
correlation is not necessarily abundance itself, but the historical social and
political factors which have been discussed in chapter four, and the interaction of
these factors with abundance. Thus, the literature appears to be lacking in case
study research, which may illuminate the causes and possible solutions to the
224 Obe, ‘The Challenging Case of Nigeria’, p. 149.
75
resource curse further. Secondly, the reality of the entrenched nature of the
causes of the resource curse in Nigeria indicate that the criticisms of the EITI
framework – that it operates merely at the superficial or rhetorical level and
hence does not attack the system itself – may be well founded. What is required,
in this case, is more fundamental structural and cultural change rather than
simply tinkering at the edges. If global attention remains concentrated on the
edges, the causes of the resource curse will continue to fester, and constrain the
development of a large part of the global economy.
76
77
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