The emerging-market darling is coming apart at the seams. And Boko Haram is just the beginning.
- By Adrienne KlasaAdrienne Klasa is an editorial researcher at Foreign Policy.
It is late at night in August 2013, and the talk has turned to politics around our small table in the courtyard of the moldering 1970s-era Sheraton Hotel complex in Abuja, the capital of Nigeria. My companion is a former intelligence officer from the country’s turbulent, insurgency-ridden north. We are discussing Nigeria’s exponential economic growth over the past decade — how suddenly the West, never particularly interested in Nigeria before, now sees the country as a "frontier market," an "emerging powerhouse," the vanguard of Africa’s rise.
"Make no mistake, the illusion will crumble," the officer warns as we sip tea. "This is Nigeria, this is the game: the ultimate 419."
A "419" infamously refers to the section of Nigeria’s criminal code that covers the prosecution of fraud and scammers. Colloquially, it refers to anything illusory or deceitful. In this overwhelmingly populous, under-regulated, and under-serviced country, the term gets thrown around a lot.
Eight months after our conversation, the jig may finally be up. Just a few weeks after what was supposed to be Nigeria’s crowning moment — when new statistics, released in April, finally showed it to be the largest economy in Africa — the Islamist Boko Haram insurgency in Nigeria’s northeast erupted into the international community’s consciousness as the security threat du jour. Now, instead of new plaudits from Western economists and media organizations, there is fresh news of bombings and attacks every few days. The death toll of a recent attack, on May 20, has climbed to more than 100.
Nigeria’s hosting of the World Economic Forum (WEF) on Africa in Abuja on May 7 to 9 was supposed to serve as the country’s coming-out party as a global economic force to be reckoned with. Instead, the event only served to focus international attention on the escalating violence and the government’s apparent inability or unwillingness to effectively counter it.
Western pundits had been keen to dub Nigeria one of the MINTs (Mexico, Indonesia, Nigeria and Turkey) — the countries that are supposed to be the next generation of rising economies, after the BRICs. As recently as January, economist Jim O’Neill, who coined the term BRICs, argued that Nigeria should join the G-20. Nigeria’s finance minister, Ngozi Okonjo-Iweala, meanwhile, was feted during a trip to Washington in April. She courted investors and financial institutions following the debut of Nigeria’s new GDP numbers, which were revised in a long-overdue rebasing exercise, "boosting" the size of the economy by 89 percent, to $510 billion.
But the events of the past two months — the bombings, the Chibok schoolgirls’ kidnapping, the government’s embarrassing, dissembling response, and the arrival of U.S., French, and Israeli military advisors to attempt a belated rescue — have all served to expose the hollowness of Nigeria’s prosperity. Scratch the surface and look beyond the boldfaced numbers, and it quickly becomes evident that long before these horrific recent developments, Nigeria was already grappling with poor governance and failing institutions.
In reality, the growth story was never so simple. Inequality has long been part of the subtext. The majority of Nigerians have actually grown poorer as their country has thrived, exacerbating tensions between the newly rich and those who haven’t seen any benefits from the boom. "[C]learly, maintaining the status quo is not tenable," says Elsie S. Kanza, Africa director of the WEF. "It is not tenable to leave populations out of the growth process."
A few numbers illustrate this point all too clearly. Nigeria’s growth averaged 7.4 percent over the past decade. In that same period, the number of Nigerians living on less than $1 a day rose from 54.7 to 60.9 percent. And these disparities do not show promising signs of improving for the next generation. According to UNICEF, Nigeria has the world’s largest number of children not enrolled in school: Approximately 10 million children don’t attend classes. Most of them are concentrated in the underserved, majority Muslim north, the same region that serves as a base for Boko Haram’s operations and recruitment. According to Kanza, the recent abductions of schoolgirls are particularly alarming for their potential long-term effects — "for what it means in terms of access to education if parents feel that their girls are better off being at home rather than being in school," she said. As authorities revealed for the first time in mid-May, Nigeria also has a vast population of internally displaced people, many of whom were uprooted by Boko Haram-related unrest. The country is home to 3.3 million displaced people — more than the approximately 3 million disrupted by decades of nearly continuous warfare in the Democratic Republic of the Congo.
Nigeria’s endemic corruption, meanwhile, remains as entrenched as ever. In April, Lamido Sanusi, then the highly respected central bank governor, made public records demonstrating that at least $20 billion had disappeared from accounts at the state-run Nigerian National Petroleum Corporation (NNPC) — a shortfall equivalent to nearly double the GDP of Zimbabwe. Sanusi was summarily fired by President Goodluck Jonathan, who accused him of "financial recklessness" while in office. Sanusi then filed suit against the president, saying Jonathan had violated the constitutionally enshrined autonomy of the central bank. But on May 20, a court dismissed Sanusi’s suit, saying that the dispute was a matter of contract law between an employer and employee, and not a constitutional matter.
The ruling does little to reinforce confidence in the independence of the country’s central bank — or the judiciary, for that matter. Amid all this, the missing billions seem to have become something of an afterthought. The government appears to have no interest in digging into the NNPC’s books — which would align it against entrenched interests fleecing public coffers — in the lead-up to the 2015 election. "Campaign fundraising is closely linked to oil revenues, and so the timing for a real crackdown is not ripe as the long election season heats up," explained Philippe de Pontet, head of the Africa practice at the political risk firm Eurasia Group.
And the government has made only limited progress in shaking off its dependence on oil. Nigeria’s rebased GDP reveals that only 5 percent of government revenues come from taxes — "about one of the weakest revenue mobilization ratios anywhere," says Razia Kh
an, head of Africa research at Standard Chartered. Another 70 percent of revenues come from oil, and oil comprises 97 percent of Nigeria’s exports. "Yes, oil is a much smaller share of overall GDP, and the economy itself is more diversified. But … its overall dependence on oil earnings remains in place," Khan said. "It’s still a big concern."
Nigeria’s security forces fare no better when held up to scrutiny. Boko Haram’s tactics — targeting churches, bus depots, schools, and other vulnerable civilian targets — are deplorable. But the roots of the movement lie in large part with the group’s dissatisfaction with the Nigerian state and, in particular, with the subset of the military and police force known as the Nigerian Joint Task Force (JTF). The JTF, based in Maiduguri, the capital of the northeastern state of Borno, and dedicated to countering the Islamist insurgency, is infamous for its brutality. While Boko Haram abducts local women and children, the JTF has also "disappeared" thousands of men and boys suspected of being linked to the insurgency, and it has held families of suspects as leverage during interrogations. Amnesty International reported a March 14 incident in which Boko Haram operatives attacked the Maiduguri prison, freeing over 1,000 detainees. Nigerian military planes fired on the unarmed escapees from above, according to the New York Times. By the end of the day, the JTF rounded up and summarily shot at least 622 of them. The bodies were buried in three mass graves the following day.
The splinter groups that would eventually form Boko Haram in 2002 had been coalescing in Borno state since the mid-1990s, in a vacuum left by an inattentive federal government more interested in extracting oil from the rich southern deltas. The group’s founder, Mohammed Yusuf, a Salafist, did not initially preach the overthrow of the Nigerian state. Violent overthrow only became one of the group’s ambitions in 2009, after Yusuf and several family members and lieutenants were executed on camera by the military. While some reports claim that popular support for Boko Haram may now be waning, the heavy-handed tactics of the Nigerian military and the government’s neglect of the region have helped ensure the group local support for many years.
The area where Nigeria appears to have had some limited success in curbing an insurgency is in the south, where once-rampant kidnappings and incidents of oil pipeline sabotage conducted by an alliance known as the Movement for the Emancipation of the Niger Delta (MEND) have ebbed somewhat. Since 2009, when the campaign was in its heyday, the number of kidnappings has fallen from more than 1,000 per year to one or two per month, according to reports from the leading kidnapping and ransom insurer AKE Group.
But this, too, was a sort of 419. The Israelis provided assistance, in the form of military advisors who helped train and lead security forces. And some of the drop may be attributable to the effects of a controversial amnesty program, which offers cash in exchange for militants laying down their arms. Yet sources in the Delta argue that much of the decline in kidnappings and sabotage can be chalked up to the fact that southern militant groups have realized that oil theft is the more lucrative business. While ransom for a foreign national usually runs in the $28,000-$204,000 range, theft can net a crew over $6,000 per day — and attracts considerably less global scrutiny. According to a 2013 study by the think tank Chatham House, Nigeria now loses 100,000 barrels of oil each day (or nearly 5 percent of its total output) to theft. In other words, southern militants — alongside "the corrupt members of the security forces…" who are involved in facilitating theft, according to the Chatham House study — have found their own way to share in the benefits of their country’s growth.
All this is not to say that Nigeria’s economic boom isn’t real. As the rebased figures show, the country has flourishing industries in addition to the oil sector: Nigerians are working in services, tech, film and music, and startups. But recent violence and other events should underscore the risks of crowning victors before the title of "country on the rise" has truly been earned.
The West wanted to believe in the narrative of Nigeria’s rise because it would have validated long-held assumptions that growth on this scale could not occur without some underpinnings of political substance and popular benefit. Now it’s time to revisit these assumptions. The illusion of Nigerian prosperity may have been homegrown — but it was the determination of the West to believe in, reinforce, and exploit this narrative that allowed it to advance, largely unquestioned, to the point where it could implode so spectacularly.