Nigeria: The Governance predicament

I have no way of knowing whether the estimates are true that up to ten percent of Nigeria’s oil income is disappearing in this way before it even enters the books.  But few independent observers doubt that a very large proportion of the vast wealth, up to a trillion dollars, that Nigeria has earned or should have earned from its oil production has been lost, stolen or squandered.  It goes without saying that something is seriously wrong when the Governor of the Central Bank finds that during an 18-month period between January 2012 and July 2013 Nigeria failed to repatriate three-quarters of the roughly $65 billion it presumably earned from oil sales.

Add to this the findings of the Farouk Lawan Committee, which exposed a fuel subsidy scam costing Nigeria some $7 billion, the work of Nuhu Ribadu and the Economic and Financial Crimes Commission, and so many other reports and revelations not just in recent years but over the tragic history of oil wealth in Nigeria, and it is hard to dismiss the assertion of former World Bank Vice President and former Minister Oby Ezekwesli that some $400 billion of the Nigeria’s oil revenue has been stolen or misspent since its independence.

As one of the most astute foreign scholars of Nigeria, Peter Lewis, recently observed to me, “In the last decade, the government has been hemorrhaging the resources from Nigeria’s second oil boom. Not even the electricity program that is supposed to be part of the government’s “transformation agenda” can move ahead.”

It is just not credible for defenders of the current order to dismiss all these allegations as partisan or “unproven”.  They form a pattern of documentation of embezzlement, mismanagement and misappropriation of public funds that is shocking in scale, irrefutable in essence, and devastating in impact.

Certainly Nigerians perceive that corruption is out of control.  In the recent Global Corruption Barometer, 78 percent of Nigerians—one of the largest proportions in the world—said corruption is a significant problem in the country. 72% felt it had increased substantially in the last two years. 75% said the government was doing little to combat it.  94% perceived political parties as corrupt or extremely corrupt (and about the same percentage the police as well). These percentages are backed up by expert ratings, such as those done by the World Bank, which rank the quality of governance in Nigeria in the bottom quartile of all the world’s countries.

This scale of corruption has serious consequences for development and human wellbeing.  To understand this, let us look at one simple statistic—the percentage of children under five years old who die every year.  And let us compare Nigeria and Ghana.  Four decades ago, in the wake of the first oil boom, Nigeria was a much wealthier country than Ghana.  Its per capita income was about 40 percent higher than Ghana’s.

Since the darkest days of military rule and partial state collapse in Ghana, that country has moved forward to develop democracy and lift up state capacity and performance.  Nigeria has not.  As a result, Ghana has significantly improved its rankings onthe quality of governance, while Nigeria’s have remained miserable.  In control of corruption, Ghana is now in the 56^th percentile worldwide, Nigeria is in the 11^th percentile.  On Rule of law, Ghana is in the 50^th percentile.  Nigeria is in the bottom 10 percent.  Here are the other percentile rankings, on a scale from 0 to 100:

State effectiveness:  Ghana 52, Nigeria 16.
Voice and accountability: Ghana 60, Nigeria 27
Regulatory quality: Ghana 56, Nigeria 25.