Nigeria
With an estimated 120 million people, Nigeria is Africa’s most populous nation. It is also the United States’ fifth largest oil supplier. Although Nigeria potentially could offer investors a low-cost labor pool, abundant natural resources, and the largest domestic market in sub-Saharan Africa, its economy remains stagnant, its market potential unrealized. The country suffers from collapsing infrastructure, possesses an inconsistent regulatory environment, and enjoys a well-deserved reputation for endemic crime and corruption. Following decades of misrule, Nigeria’s transportation, communications, health and power public services are a mess. Once a breadbasket, Nigeria has witnessed a severe deterioration of its agricultural sector. Social, religious, and ethnic unrest, and a lack of effective due process, further complicate business ventures in Nigeria. Moreover, the government remains highly over-reliant on oil exports for its revenue and thus subject to the vagaries of the world price for petroleum. Investors must carefully research any business opportunity and avoid those opportunities that appear “too good to be true.”
Nigeria has, over the past four decades, earned a reputation for corruption on a grand scale. Modest requests for dash early in the country’s history grew by leaps and bounds, with the exploitation of centrally controlled oil resources from the 1960s onward, into truly massive transfers of public funds from government coffers to private accounts. The military by no means started the system—allegations of corruption figured heavily in the first (“January”) coup in 1966—but men such as Ibrahim Babangida and Sani Abacha certainly escalated the scale of corruption to astounding levels.
Public monies are viewed as open access goods; anyone who fails to grab as much as he can as fast as he can is a fool, stupidly stinting himself and his relatives and friends so that others may benefit. This concept has become entrenched in Nigerian thinking about public affairs. A latter-day Hausa political adage—In na gwamnati ne, ba na kowa ba (“If it belongs to the Government, it belongs to no one”)—encapsulates the idea that public funds are fair game for anyone who can capture them. The majority of office holders at all levels of public secular government seemingly prefer to risk jail for embezzlement of public funds entrusted to their care rather than risk opprobrium in their home areas for failing to enrich themselves and their communities during their time at the public trough.
Nigeria experiences civil unrest, violence and strikes. The causes and locations vary. Locations where outbreaks of violence have occurred include the Lagos area, Southwestern Nigeria, the oil-producing states in the southeast, and Kaduna State. There has been an increase in the number of unauthorized automobile checkpoints. These checkpoints are operated by armed bands of police, soldiers, or bandits posing as or operating with police or soldiers. Many incidents, including murder, illustrate the increasing risks of road travel in Nigeria. Reports of threats against firms and foreign workers in the petroleum sector recur from time to time. Chadian troop incursions have occurred at the border area in the far northeast, near Lake Chad. Incidents also occur in the southeast in the disputed Bakassi Peninsula at the border area between Nigeria and Cameroon.
While General Sani Abacha ruled, the Government continued to suppress harshly demands for greater local autonomy by members of ethnic minorities in the oil-producing Niger River delta region, including the Ogoni minority. In June 1998 Abacha died and was succeeded by General Aboulsalami Abubakar, who launched a program intended to restore decentralized constitutional democracy in the form of a federal republic. After Abubakar consolidated his authority in the armed forces the largely ceased to use lethal force to repress nonviolent political activities. The Government acted to mitigate ethnic and regional discrimination and tensions by restoring a federal system of government with substantial local and regional autonomy.
