Corruption in Nigeria: Profile of a Political Economy

Yima Sen

Nigeria is on the verge of being completely destroyed by corruption. This is no longer news. What is news is that, since the middle of the 19th century, the Berlin Conference of 1884-885, the biggest theft in world history has been the colonisation of Africa.

Since 1960, the biggest theft in human history has been the colossal amount of money, approximately US$450 billion or N285 trillion lost through corruption in Nigeria, the main homeland of blacks in the world. The picture of corruption in Nigeria is a horror movie.

This is the more compelling reason to begin to understand the political economy of a corruption, a socioeconomic and political malady which is doing so much damage to a territory of vast human and material resources. Such huge human, material and capital resources are enough to build a modern state that can compete favourably with the rest of the world in the era of globalisation. While Nigeria has effectively or functionally failed, it still retains a national carcass which can be resuscitated with the injection of good leadership.

Political economy here refers to the connection between political and economic factors in understanding development dynamics in social formation or national entities. And its use precedes the Keynesian paradigm of government intervention in market forces. A political economic analysis integrates considerations of historical, cultural and social factors with those of political and economic systems. In this sense, behaviour and values combine with political and power factors, and the production, distribution and exchange of elements of economics to determine the human condition over historical periods. Ultimately, what is happening to people’s incomes, wellbeing and livelihoods, becomes the concern and target of political economy. The fact that recent studies have established that critical public institutions are the main centres of corruption justifies a political economy analysis of corruption in Nigeria,

What colonialism did was to integrate the pre-industrial mercantilism and petty production economy of the Nigerian colony established fully in 1914 into the global mercantilist, industrial, tyrannical, public relation and entertainment complex in their historical phases. This process of globalisation has not been peculiar to Nigeria. What has been exceptional here is the volume of slave-trading off the Nigerian coast in an era, and the liquidation of the Nigerian political economy by corruption; much of it institutionalised during the military era. This character has also become dominant with civil rule.

White settler colonialism and European-type productive capacity and a well-guided anti-colonial ideology have, for instance, been instrumental to propelling South Africa forward. Egypt has performed well on the basis of political stability founded on a concrete ideology. South Africa has flourished despite a high crime rate apparently resulting from the transition from injustice to too slowly evolving equity. Egypt has marched on despite regional instability, including cross-border and neighbourhood wars. These countries should be on the same pedestal with Nigeria in terms infrastructure and social services, as well as productive capacity with Nigeria on the continent, but they have, as it were, disgraced Nigeria. Nigeria has chosen to become the African star in corruption.

The colonial economy of Nigeria was founded essentially on agricultural and solid minerals. Groundnuts, cocoa, palm oil and kernels, beniseed and livestock, including hides and skins, were the principal cash agro-products. There were also food agro-products like cassava, yams, rice, maize, corn and others. The solid minerals of tin, columbite and coal also nourished the export-oriented Nigerian economy. Even with the discovery of oil at Oloibiri in 1957, the fundamental economic resources of Nigeria were still agriculture and solid minerals, now abandoned for the monoculture of the hydrocarbon industry.

The hydrocarbon or oil and gas economy which has come to dominate foreign exchange earnings and accounts for much of what is called the federation account. The account provides the funding for emoluments and overhead costs of the public sector and finances the capital projects that are implemented mainly by the private sector. Nigerian oil and gas are extracted by mainly foreign partners of the Nigerian National Petroleum Corporation (NNPC) within the quotas of the Organisation of Petroleum Exporting countries (OPEC). Other forms of crude extraction and sales are oil bloc allocations, spot lifts and bunkering. Oil resources have immediate target beneficiaries of about two million Nigerians and through multiplier effects of about five to ten million people. This is the money that is appropriated and expended by the President, Ministers, Federal Agencies and Departments, the National Assembly, Governors, Commissioners, State Assemblies, Local Government Chairmen, and Councilors as well as sundry government contractors, consultants and others. The excess crude account which captures the surplus from favourable international crude oil pricing has become a controversial fund subject to abuse.

Outside the capital that is managed in the non-contracting private sector, the mainstream economy including manufacturers, bankers and traders, it is the federation account money that has been the main victim of corruption. Of course, fraud and other forms of crimes exist in the wider society on an unacceptable scale.  There have been other forms of politically-induced corrupt accumulation through indigenisation, privatisation and monetisation.  The biggest damage to the society seems to come from the theft of public money meant for development purposes, like power, education, health, public transportation, water, housing and national security, among other sectors.

All forms of corruption are bad, but the one that bites hardest seems to be political corruption. However, in the case of the federation account, it is distributed to the federal government, states and local governments. Its distribution is in such a way that most non-oil producing states receive about 10 to 15 percent less than the oil-producing states. Added to this is a policy of 13 percent derivation, the Niger Delta Development Commission, the Niger Delta Ministry, and the community development programmes of oil companies, which also channel its revenues from oil back to oil producing communities for community development, environmental rehabilitation, infrastructure, services and human capital development. Much of this money from government and the oil companies is embezzled.

A couple of examples, one of the chief executives of the predecessor to NDDC, a university professor, stole a lot of money and migrated from Nigeria with his television presenter wife. The ‘tummy-tuck’ governor of oil-rich Bayelsa State was arrested in Europe with large sums of money. He jumped bail and mysteriously returned to Nigeria, only to be impeached and prosecuted. He is reputed to have helped himself with substantially stolen public money while in office.  Another oil-rich state governor is on the run, wanted for theft. On this one, the whisper is that he took away from the federation account alone, about US$667 million or N100 billion in a period of eight years in office, slightly less than his colleague from another oil-rich state who took from the same source about US$800 million, or N120 billion during the same period. Presently another former oil-rich state governor is facing charges of stealing ‘only’ US$ 300 million or N45 billion.

This revelation is blood cuddling in a country like Nigeria where the big news would be that there are no corrupt practices to report. Governors of other states have also been accused of such wrongdoings, although involving smaller amounts of money. So have Presidents, Ministers and Assemblymen and women. Even top bankers have been exposed to be grand thieves.

However, the Niger Delta militants need to know who is stealing national wealth in their domain in order to know where to properly channel their wrath and aggression. The other national wealth comes from local and international loans, grants and taxes, customs duties and sundry internally generated revenue at the federal and state levels. Elsewhere, in the upper northern states, a feudal psychology, primitive culture, the subjugation of women, youth exclusion and dessert encroachment are pauperizing large communities and populations.

Conversely, the south-west having benefitted from Awolowo’s education policy, early westernisation, insular politics. and Obasanjo’s largesse, seems to be sitting pretty. However, the east, despite massive energy and resourcefulness, has too little land. They need to be fully re-integrated after the civil war. The region needs to tame its materialism which leads a more of the general southern challenge of having its people engage in bad crimes worldwide. The agrarian middle belt suffers from pre-industrial agriculture, lack of agro-industry and a needless identity complex. All states in the federation receive their statutory allocations from Abuja, their criticism of the shares of appointments based on federal character, and underdevelopment should be placed at the doorstep of their governors and local government chairmen, not on imaginary Hausa-Fulani oppressors.

The problem of Nigeria is not that of building alliances within regions or between and among ethnic or religious groups and a mix of nationalities or zones for elections. It is a problem of a national thieving elite versus the broad masses, both of which classes are everywhere. Those who steal public resources use them to purchase political power, so they recycle themselves. They create or amend the constitution to protect their interests and thereby promote the hegemony of corruption. So that despite the ingenuity and relevance of zoning and rotation of political and other top public service positions to deal with the national question in Nigeria, its political development challenges go beyond that.  They include how to promote equity and egalitarian development and ensure that due processes are not violated or manipulated in public administration.

Morally speaking, reprobates cannot promote a productive economy because they do not need to do so. The monies they steal are hidden or laundered in properties, cars or used to satisfy newly acquired expensive tastes in clothes, jewellery, champagnes, sexual tourism or just plain prostitution. This corruption trickles down to pollute the rest of the society and associates with or promotes bribery and other forms of crimes and vices. They do not have a need for a productive economy because the objectives of production are to make money and provide services. However, since they are anti-social and irresponsible, and their money is made easily. It is substantial and it needs to be hidden, why bother about production?

In any case, Nigeria’s factors of production are too weak or rendered too weak to propel the country forward. There is difficult land access across the physical terrains, coupled with underemployed, unpaid or unemployed labour, scarce capital, largely misplaced entrepreneurial skills, low technology, and a hardly existing industrial base. Low productivity engenders unemployment and poverty which promote criminal militancy, war and a high crime rate among the youth bulge. This is the story of the political economy of corruption in Nigeria.

This is the problem that has been thrown into the laps of three agencies: the Code of Conduct Bureau (CCB), the Independent Corrupt Practices Commission (ICPC) and the Economic and Financial Crimes Commission (EFCC). So, when the former EFCC boss, Farida Waziri cries out that the courts and the press are used by corrupt people, and that there should be capital punishment for some categories of offenders, we know that as a lawyer and a former senior police officer, she has appraised the problem to be very serious.

Nigeria could have done better but it seems to have derailed. Maybe the mishap was caused by military rule, the civil war and the discovery of oil. This must have cumulatively and conjointly corrupted the country and removed its good leaders from prominence. Some of the present crop of political leaders in Nigeria are probably the worst that are running any twenty- first century state anywhere in the world. They are opportunistic, unprincipled, unscrupulous and despicable. There is as a result no alternative to the return of Nigeria back on its correct political economic track except through a revolutionary reconstruction of its society, economy and polity.

Capitalism, whose theoretical foundation is rooted in selfishness and greed, is more prone to corruption than socialism. However, legislation, reforms and checks and balances have somehow blunted the vicious fangs of capitalism in many global communities, despite its recent crash, which has highlighted its weak foundations and vulnerability. In Nigeria, we seem to have moved into a combined phase of barbarism and savagery in a colony of corruption, run by its hegemons.

There are two approaches at solution: One, the international  community, in the post-cold war  era, must  push Nigeria towards  a left-of-centre leadership; and  two, Nigerians  themselves regardless of clan, ethnicity, religion, section, zone or region must rise up against their oppressors  and enthrone  a leadership  in the left-of-centre tradition. This leadership must be situated within a system of governance that rewards correctness substantially and punishes corruption and crime severely.

Read Also: Corruption in Nigeria: Profile of a Political Economy

Other than that, the Nigerian political economy becomes a factory churning out poverty and underdevelopment. It gives leverage to ‘dirty rich’ people, whom the manufactured poor depend on for either systemic ‘safety nets’ which, in any case, are not available or become useless, or philanthropy. A better society is one that has systemic equity and egalitarianism, and which makes safety nets and philanthropy irrelevant.

*Sen is a communication and development specialist. yimasen@yahoo.com