Public Policy
Public Policy
-- Nigeria’s years of military rule resulted in a top-down policymaking process. Power is concentrated in the presidency, and much inside output
comes from the president and his cabinet ministers through channels established by patron-clientelism.
-- Senior government officials are supported by a broader based of loyal junior officials, creating a sort of “loyalty pyramid”.
-- State control of resources means that those in the pyramid get the spoils, and they alone have access to the wealth and influence. Since the
military was in control since 1999, the pyramids are backed by guns, so protesting the corruption could be dangerous.
-- Historically, this pattern of top-down, self-interested rule was put in place during colonial times when the British relied on native chiefs to
ensure that Nigerian trade and resources benefitted Great Britain.
-- To break this pattern, political elite must get in touch with their older roots - the communalism from pre-colonial days.
-- Democratic rule requires that political leaders are responsible for the welfare of the people, not only to those they owe favors to.
Economic Issues
-- One result of the loyalty pyramid has been the squandering of Nigerian health. Currently, the country finds itself deeply in debt, and most of its
people live in poverty. Tremendous oil revenues have disappeared into the pockets of government officials, and most Nigerian have not
profited from them at all.
-- In February 2001, the federal government asked the supreme court to allow the federal government to collect oil revenues and pool them into
a “federal account”. On the surface, this appears to be revenue sharing, or allowing the entire country benefit from offshore oil profits.
-- However, the areas in the south along the Niger Delta protested the practice strongly, partly because they saw the policy as coming from
northerners who wanted to take southern profits away.
-- And without trust in their government, almost no one believed that the profits would benefit anyone except corrupt government officials.
Oil: a Source of Strength or Weakness?
-- Like Iran, Nigeria is a rentier state. A rentier economy is heavily supported by state expenditure, while the state receives rent from other
countries.
-- Iran and Nigeria receive income by exporting their oil and leasing out oil fields to foreign countries. The states main role in the economy is in
controlling the nation’s revenues, and in spending those earnings, known as rents, which came mainly from oil.
-- Individuals, groups, and communities have learned to respond through rent-seeking behavior, primarily by competing for the government’s
largesse. Those that win the competition do so through political connections provided through the patron-client system.
-- Most Nigerians struggle along without much access, and participate in the informal economy of unreported incomes from small-scale trade
and subsistence agriculture.
-- Through the years, Nigeria has gained clout whenever Middle Eastern tensions have cut off oil supplies from that region, forcing developed
countries to rely more heavily on Nigerian oil.
-- However, Nigeria’s over reliance on oil has meant that the country’s economy suffers disproportionately whenever oil prices go down.
Structural Adjustment
-- After international oil prices plummeted in the early 1980s, Nigeria was forced to turn to international organizations for help in managing its
huge national debt. In 1985, the Babangida regime developed an economic structural adjustment program with the support of the World
Bank and the International Monetary Fund.
-- The program sought to restructure and diversify the Nigerian economy so that it could decrease its dependence on oil. The government also
pledged to reduce government spending and to privatize its para-statals.
-- This “shock treatment” has had mixed results, but generally timelines for debt repayment have been restructured because Nigeria could not
keep up with its payments. Parastatals are still under state control, and the private economic sector has not grown significantly. The large
national debt remains a major problem for Nigeria today, especially as oil prices have plummeted since 2008.
Reactions to the Global Economic Crisis of 2008
-- Nigeria’s economy hasn’t suffered as much as others since the crisis of 2008, partly its banking system was improved significantly under an
initiative during President Obasanjo’s second term in office (2003-2007). As part of a policy to squeeze weak or failing banks out of business,
in 2005 the Central Bank of Nigeria raised banks’ capital requirements (money they must have on hand), so that the number of banks dropped
from 84 to 29 by the end of the year.
-- Another contributing factor to Nigeria’s relatively stable economy was the fact that it had paid off sizeable debts under the structural
adjustment program. However, the sharp decrease in the price of oil did do a great deal of economic damage, including a devaluation of the
currency, the naira.
-- The Nigerian Stock Exchange also went into steep decline, housing prices dropped, and the small amount of international tourism that
Nigeria attracted virtually disappeared. Nigeria’s inability to provide electrical power has continued, with President Yar’Adua reversing
Obasanjo’s order to privatize power companies.
-- One bright spot is agriculture, with production strong and local food and tobacco prices remaining high compared with world prices.
Federal Character
-- Federalism is seen by most Nigerians as a positive, desirable characteristic for their country. Federalism appeals to many countries because it
promises that power will be shared, and that people in all parts of the country will be fairly represented.
-- Federalism also allows citizens more contact points with government, so that true democratic rule can be more easily achieved. In Nigeria,
the goal is to seek a “federal character” for the nation, a principle that recognizes people of all ethnicities, religions, and regions, and takes t
their needs into account.
-- The Nigerian Constitution has put many provisions in place that support the goal of “federal character”. However, so far this ethnic balancing
has not promoted unity or nationalism, but has only served to divide the country more. One negative effect of federalism has been to bloat and
promote corruption within the bureaucracy. Since all ethnicities must be represented, sometimes jobs have been created just to satisfy the
demand.
-- Since all ethnicities must be represented, sometimes jobs have been created just to satisfy the demand. Once established within bureaucratic
posts, these appointees see themselves as beholden to ethnic and regional interests. Another negative effects takes place within the
legislative chambers. The 36 states vie for control of government resources, and see themselves in competition with other ethnic groups for
political and economic benefits.
-- Many southerners contend that true federalism will exist only when the central government devolves some of its power to the state and local
levels.
-- Northerners generally don’t support the “true federalism” movement because their regions historically have not had as many resources or
as much revenue to share.
-- Many northern states benefits more than southerners from nationally-sponsored redistribution programs.
Democratization
-- Despite all its problems, Nigeria shows some signs that democracy may be taking root in its presidential system, including these:
* Some checks and balances between government branches - The legislature rejected President Obasanjo’s attempt to change the
Constitution to allow him to run for a third term in 2007, despite a great deal of pressure from the political elite.
* Some independence decisions in the courts - President Obasanjo’s attempt to keep his vice president Atiku Abubakar, from
running for president in 2007 were foiled by the courts after the president’s allies used corruption charges to bar his candidacy. The
Supreme Court ruled in Abubakar’s favor, even though his name was not returned to his ballot until the last minute. The elections
tribunals set up to investigate allegations of electoral fraud were allowed to function under President Yar’Adua’s new administration,
and some officials were actually removed from office through court order.
* Revival of civil society - Nigeria’s many civic and religious groups, driven underground from military rule, have reactivated and freely
criticized the government’s handling of the 2007 election.
* Independent media - During the 2007 election the media sent countless correspondents across 36 states to bring back reports of
stuffed ballot boxes, intimidated voters, and phony results. Internet and cell phone connections allowed poll observers, voters, and
political parties to freely communicate, making it much more difficult to hide election fraud.
* A peaceful succession of power - For the first time in Nigerian history, power passed between two citizens as President Obasanjo
stepped down in 2007, peacefully allowing Umaru Yar’Adua to take over.
* Improving Freedom House scores - Freedom House, an organization that studies democracy around the world, ranks countries on
1 to 7 freedom scale, with countries given a 1 being the most free and those given a 7 being the least free. In 2007, Freedom House
gave Nigeria a 4, putting it squarely in the “partly free” category. Nigeria’s score has improved over the years, along with those of
many other countries in Africa. In 1976, the vast majority, 25 (including Nigeria) were “not free”. Today the “not free” category has
shrunk to 14 states, with most falling into the partly free category (including Nigeria).
-- Nigeria’s years of military rule resulted in a top-down policymaking process. Power is concentrated in the presidency, and much inside output
comes from the president and his cabinet ministers through channels established by patron-clientelism.
-- Senior government officials are supported by a broader based of loyal junior officials, creating a sort of “loyalty pyramid”.
-- State control of resources means that those in the pyramid get the spoils, and they alone have access to the wealth and influence. Since the
military was in control since 1999, the pyramids are backed by guns, so protesting the corruption could be dangerous.
-- Historically, this pattern of top-down, self-interested rule was put in place during colonial times when the British relied on native chiefs to
ensure that Nigerian trade and resources benefitted Great Britain.
-- To break this pattern, political elite must get in touch with their older roots - the communalism from pre-colonial days.
-- Democratic rule requires that political leaders are responsible for the welfare of the people, not only to those they owe favors to.
Economic Issues
-- One result of the loyalty pyramid has been the squandering of Nigerian health. Currently, the country finds itself deeply in debt, and most of its
people live in poverty. Tremendous oil revenues have disappeared into the pockets of government officials, and most Nigerian have not
profited from them at all.
-- In February 2001, the federal government asked the supreme court to allow the federal government to collect oil revenues and pool them into
a “federal account”. On the surface, this appears to be revenue sharing, or allowing the entire country benefit from offshore oil profits.
-- However, the areas in the south along the Niger Delta protested the practice strongly, partly because they saw the policy as coming from
northerners who wanted to take southern profits away.
-- And without trust in their government, almost no one believed that the profits would benefit anyone except corrupt government officials.
Oil: a Source of Strength or Weakness?
-- Like Iran, Nigeria is a rentier state. A rentier economy is heavily supported by state expenditure, while the state receives rent from other
countries.
-- Iran and Nigeria receive income by exporting their oil and leasing out oil fields to foreign countries. The states main role in the economy is in
controlling the nation’s revenues, and in spending those earnings, known as rents, which came mainly from oil.
-- Individuals, groups, and communities have learned to respond through rent-seeking behavior, primarily by competing for the government’s
largesse. Those that win the competition do so through political connections provided through the patron-client system.
-- Most Nigerians struggle along without much access, and participate in the informal economy of unreported incomes from small-scale trade
and subsistence agriculture.
-- Through the years, Nigeria has gained clout whenever Middle Eastern tensions have cut off oil supplies from that region, forcing developed
countries to rely more heavily on Nigerian oil.
-- However, Nigeria’s over reliance on oil has meant that the country’s economy suffers disproportionately whenever oil prices go down.
Structural Adjustment
-- After international oil prices plummeted in the early 1980s, Nigeria was forced to turn to international organizations for help in managing its
huge national debt. In 1985, the Babangida regime developed an economic structural adjustment program with the support of the World
Bank and the International Monetary Fund.
-- The program sought to restructure and diversify the Nigerian economy so that it could decrease its dependence on oil. The government also
pledged to reduce government spending and to privatize its para-statals.
-- This “shock treatment” has had mixed results, but generally timelines for debt repayment have been restructured because Nigeria could not
keep up with its payments. Parastatals are still under state control, and the private economic sector has not grown significantly. The large
national debt remains a major problem for Nigeria today, especially as oil prices have plummeted since 2008.
Reactions to the Global Economic Crisis of 2008
-- Nigeria’s economy hasn’t suffered as much as others since the crisis of 2008, partly its banking system was improved significantly under an
initiative during President Obasanjo’s second term in office (2003-2007). As part of a policy to squeeze weak or failing banks out of business,
in 2005 the Central Bank of Nigeria raised banks’ capital requirements (money they must have on hand), so that the number of banks dropped
from 84 to 29 by the end of the year.
-- Another contributing factor to Nigeria’s relatively stable economy was the fact that it had paid off sizeable debts under the structural
adjustment program. However, the sharp decrease in the price of oil did do a great deal of economic damage, including a devaluation of the
currency, the naira.
-- The Nigerian Stock Exchange also went into steep decline, housing prices dropped, and the small amount of international tourism that
Nigeria attracted virtually disappeared. Nigeria’s inability to provide electrical power has continued, with President Yar’Adua reversing
Obasanjo’s order to privatize power companies.
-- One bright spot is agriculture, with production strong and local food and tobacco prices remaining high compared with world prices.
Federal Character
-- Federalism is seen by most Nigerians as a positive, desirable characteristic for their country. Federalism appeals to many countries because it
promises that power will be shared, and that people in all parts of the country will be fairly represented.
-- Federalism also allows citizens more contact points with government, so that true democratic rule can be more easily achieved. In Nigeria,
the goal is to seek a “federal character” for the nation, a principle that recognizes people of all ethnicities, religions, and regions, and takes t
their needs into account.
-- The Nigerian Constitution has put many provisions in place that support the goal of “federal character”. However, so far this ethnic balancing
has not promoted unity or nationalism, but has only served to divide the country more. One negative effect of federalism has been to bloat and
promote corruption within the bureaucracy. Since all ethnicities must be represented, sometimes jobs have been created just to satisfy the
demand.
-- Since all ethnicities must be represented, sometimes jobs have been created just to satisfy the demand. Once established within bureaucratic
posts, these appointees see themselves as beholden to ethnic and regional interests. Another negative effects takes place within the
legislative chambers. The 36 states vie for control of government resources, and see themselves in competition with other ethnic groups for
political and economic benefits.
-- Many southerners contend that true federalism will exist only when the central government devolves some of its power to the state and local
levels.
-- Northerners generally don’t support the “true federalism” movement because their regions historically have not had as many resources or
as much revenue to share.
-- Many northern states benefits more than southerners from nationally-sponsored redistribution programs.
Democratization
-- Despite all its problems, Nigeria shows some signs that democracy may be taking root in its presidential system, including these:
* Some checks and balances between government branches - The legislature rejected President Obasanjo’s attempt to change the
Constitution to allow him to run for a third term in 2007, despite a great deal of pressure from the political elite.
* Some independence decisions in the courts - President Obasanjo’s attempt to keep his vice president Atiku Abubakar, from
running for president in 2007 were foiled by the courts after the president’s allies used corruption charges to bar his candidacy. The
Supreme Court ruled in Abubakar’s favor, even though his name was not returned to his ballot until the last minute. The elections
tribunals set up to investigate allegations of electoral fraud were allowed to function under President Yar’Adua’s new administration,
and some officials were actually removed from office through court order.
* Revival of civil society - Nigeria’s many civic and religious groups, driven underground from military rule, have reactivated and freely
criticized the government’s handling of the 2007 election.
* Independent media - During the 2007 election the media sent countless correspondents across 36 states to bring back reports of
stuffed ballot boxes, intimidated voters, and phony results. Internet and cell phone connections allowed poll observers, voters, and
political parties to freely communicate, making it much more difficult to hide election fraud.
* A peaceful succession of power - For the first time in Nigerian history, power passed between two citizens as President Obasanjo
stepped down in 2007, peacefully allowing Umaru Yar’Adua to take over.
* Improving Freedom House scores - Freedom House, an organization that studies democracy around the world, ranks countries on
1 to 7 freedom scale, with countries given a 1 being the most free and those given a 7 being the least free. In 2007, Freedom House
gave Nigeria a 4, putting it squarely in the “partly free” category. Nigeria’s score has improved over the years, along with those of
many other countries in Africa. In 1976, the vast majority, 25 (including Nigeria) were “not free”. Today the “not free” category has
shrunk to 14 states, with most falling into the partly free category (including Nigeria).
