Nigeria and the Silver Linings Playbook

President Goodluck Jonathan

By Chandni Sinha Das.

While preoccupied with the Arab Spring and the rise of extremism, the United States began a shortsighted policy of sidelining the African continent’s most important players. Luckily, President Obama renewed his commitment to the region through Power Africa, an initiative aiming to use energy to double access to electricity in six sub-Saharan countries. Not surprisingly, one of the key nations to benefit from Power Africa is the continent’s rising star: Nigeria.

Nigeria is a natural resource gold mine; it is the continent’s leader in natural gas production at 23 billion cubic meters per year, and produces over 2 million gallons of oil per day. Additionally, Nigeria is projected to have an eight-fold increase in its population over the next 100 years while the birth rates of western countries slow down. With this population growth comes a substantial middle class, which could become one of the world’s largest work forces. For those who study economic development, the combination of high birth rates and large economic growth is typically the sign of a society poised to become the next ascending power in an increasingly multipolar political system. Therefore, as it stands now, there is little in the way of Nigeria’s rise to prominence in the coming decades.

However, the nation’s incredible potential is tempered by political corruption, religious tension, and a troubling income disparity. Anti-corruption advocates throughout Nigeria fault President Goodluck Jonathan for failing to adequately investigate corruption and criminal activity among those connected to governing institutions, as well as the justice system for making it difficult to pursue corruption cases. Additionally, Nigeria’s most contentious divide is between the predominantly Muslim north and heavily Christian south. Boko Haram, an Islamic extremist group hailing from the north of the country, has become a powerful domestic force in Nigeria, having claimed the lives of over 2,000 people since 2009. Adding to this vicious cycle of corruption and religious violence is an alarming level of income inequality. As of February 2012, 60.9 per cent of all Nigerians lived in abject poverty. While Nigeria’s GDP grew at a rate of 6.56 per cent in the first quarter of 2013 – far higher than the U.S’s 1.8 per cent – a vast majority of Nigerian citizens operate in a ‘grey market’ that sits uneasily between illegal and unofficial, virtually ensuring that they cannot reap the benefits of the GDP growth.

The characteristics of Nigeria’s development bare a striking resemblance to India’s economic position about 10 years ago, when it too was on the cusp of an economic boom. India is the most populous country in Asia to be colonized by England—as Nigeria was in Africa—and suffers from a troubling Hindu-Muslim divide. India’s GDP growth rate in 2004 was 6.4 per cent and the wealthiest 20 per cent owned 42.3 percent of total income. Similarly, Nigeria’s current growth rate hovers around 6 per cent, and its wealthiest 20 per cent owns 54.01 per cent of total income. Both nations posses powerful militaries, relatively stable democracies and growing middle classes. If Nigeria’s growth mirrors India’s even slightly, then there is gravity to the claim that Nigeria could become the next rising power.

While the United States spent the last three years viewing Nigeria through the prism of the Arab Spring, China made tenable political and economic inroads in the country. Nigeria has become China’s third largest trade partner in the continent, with annual trade growing to $13 billion. Meanwhile, Nigeria’s trade with the US has fallen 12 per cent between 2011 and 2012, and India replaced the United States as Nigeria’s primary export market. The Chinese government also plays an instrumental role in infrastructure development through investing in the building of roads and establishment of free trade zones while the United States’ involvement remains limited. Over 200 Chinese companies operate in Nigeria, and the Chinese government makes it clear that Nigeria is a strategic and respected ally—something that the United States has so far failed to accomplish. While it is important to acknowledge that current United States’ interests are not being jeopardized by its inaction—Nigeria is not considered a strategic African state in the War on Terror and, regardless of China’s increased economic and political partnership, the United States is in no danger of being ignored—such a weak partnership will have tangible repercussions in the coming decades.

There remains, however, a silver lining. While the cost of energy is low in Nigeria and Beijing has smartly invested in energy infrastructure, the Chinese approach to business does not sit well with most Nigerians. Critics of Chinese investment point to low salaries, the destruction of national businesses, like the textile industry, due to an inability to cope with low Chinese prices, and a disregard for regulation. Elections throughout the African continent have been won with anti-Chinese sentiment, and Chinese labor unions are equally frustrated. There is still space for America to forge a great relationship if it is willing to enter the arena.

The good news for the US is that the Obama Administration has finally done so. Power Africa aims to not only provide access to electricity, but intends to do so by relying deeply on clean energy. Such a policy allows Nigeria to develop infrastructure independently of its expansive oil and gas reserves, which may prove invaluable as the world gradually moves towards renewable energy. President Obama also recently opened a drone base in Niger, and while the unarmed surveillance drones are meant primarily for identifying insurgents in Mali, their secondary assignment has been assisting Nigerian soldiers in the fight against Boko Haram. The United States now has the ability to address the crippling institutional failure in preventing religious tensions- a problem that China has repeatedly ignored. If the United States can carry these policies to fruition, then it has a chance at forging a strong relationship with Nigeria.

As the world watches the rise of another nation it must adjust its political calculations accordingly. While the Arab Spring will merely be a transient period in world history, Nigeria will become a permanent fixture in international politics, and the future of the United States will be affected by the relationship it cultivates with this emerging power.




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