Prof. Kalu N. Kalu

I will begin by providing some empirical information as a way of creating a more useful backdrop for what will come later. It is my intention, therefore, to draw out the broader contours of these problems, their effects on government, and how they reinforce the states’ inability to meet the demands of rising expectations in the country. Yes, as we celebrate Nigeria’s 61st Independence Day, this should also be a moment of somber reflection on the successes, the opportunities lost, and the prospects of what could have been. While I will try to strike a positive note as much as possible, but I will also like to cast any sense of unlimited optimism within the general context of the endemic challenges faced by the country: from the ensuing collapse of oil prices, rising inflation spurred on by a precipitous decline in the value of the domestic currency, a series of market failures and macroeconomic dislocations culminating in a never ending unemployment, rising insecurity everywhere and a resilient insurgency in the Northeast that could not be placated. And to crown it all, the rise of an Orwellian mafia-state held in check by the suffocating boot of a prebendalist cabal.
Nigeria today has a youthful society, with a total population of approximately 181.562 million persons. The age structure is such that 43% of the population is aged between (0-14 years); 19.38% (15-24 years); 30.6% (25-54 years); 3.94% (55-64 years); and 3.11% (65+ years). There are a series of assumptions that could be drawn from this:
• About 50% of the population is between 15-54 years.
• About 43% of the population is between 0-14 years (and will become adolescents at some point).
• With a population growth rate of 2.45% per year, it will add approximately 4,448,269 million persons annually
• If this trend continues, the population of the country will double in the next 41 years
• Unemployment rate 23.9% (2011 estimates)
• Labor force 57.46 million persons (2015 estimates)
• Employment in agriculture (70%); Industry (10%); and Services (20%) of the population
• Population living below the poverty line (70%, by 2010 estimates)

With a declining Gross Domestic Product (GDP) growth rate 2.2% in 2019 (India’s GDP growth rate was approximately 20.1% during the same period); a budget deficit of -4.76% of GDP (2019); and a youth dependency ratio of 82.6%; the major task of the Nigerian government and the challenge for national development planning is how to generate the skill sets as well the employment opportunity for the rising youth population in the years ahead. While the easy part has been to initiate specific national development programs as a way of providing essential public goods and services, the problem arises in the state’s inability to manage the nexus between development planning and its contributory effects on economic growth—its spillover effects on public sector employment, wealth creation, and poverty reduction.
On the premise that the state is a central actor in economic development; historically the typical African state was seen as an instrument for grabbing and holding political power, but at the same time it also became a symbol for ethnocentric and group identification as well as the ultimate price of political competition. Unfortunately, Nigeria too has not been spared. Invariably, the primary mission of the state—to provide public goods, domestic and external security—became secondary. The state-building agenda, which was originally embarked upon with great enthusiasm in the immediate post-independent years, became a victim of the glory and promise that it, up till then, had presented to its citizens; as everyone began to see the state as the ‘goose that lays the golden egg,’ hence worthy of complete capture and domination. But as Nigeria aspires to become a truly democratic state, there still has to be recognition of a simple truism about democracy – that it has a unique way of raising people’s expectations, and when citizens ascribe to it, for them it becomes a kind of political investment. But like a bet in the stock market (at least metaphorically), when a portfolio constantly does not yield dividends, and when investors see no light at the end of the tunnel, they are apt to divest from it and but instead opt for a safer bet.
The bane of Nigeria’s democracy is the potentially imminent collision of rising expectations (from the investment) and rising frustration (in the absence of dividends)—two equally potent trajectories that are both substantively and logically antithetical to each other, hence mutually exclusive. To the extent that citizens depend on state institutions, the values they attach to them, invariably reflects the extent of their regard for state authority and legitimacy. Because much of this has been lacking over the years, it has generated tension between several segments of the population and the government. It has become a daily occurrent for many Nigerian legislators and public officials from the North to state categorically that “democracy is a game of numbers.” As wrong as they are, this is the type of mindset that has continued to hold the country in a stalemate thereby turning it into the beast that it has become. Democracy is not a game of numbers, rather it is a game of consultation, representation, accommodation, compromise and consensus-building. Even the common denominator of “majority rule” does not say that the majority must triumph; but what it suggests is that democratic deliberations should done in such a way the basis for attaining a majority vote on the issue at hand is by building cross-cutting cleavages in such a way that minority interests are also protected. A majority rule in which the minority is perennially unhappy will not last long as an enduring majority – and here we are not talking about a majority-minority relationship based on any ascriptive characteristics (such as race, ethnicity, religion) but one based on distinct differences about policy issues, opinions, and ideological persuasions. Understandably so, the point is that majority rule is not a sine qua non to democracy, and neither is democracy a sine qua non to majority rule. This is what has been missing in Nigerian politics where the majority-minority nexus has, unfortunately, always been built around ethnicity, religion, and region.
There are five critical issues that are consequential in Nigeria’s democratic experiment, state-building, and national development planning both in ideal, practice, and ultimately in its success:
• A collective understanding that the operational norm of democracy is less about political competition than political accountability.
• The need for political leaders to create an environment of shared ownership in the practice of governance and in the generation of ideas needed to govern well;
• The ability of the state to meet the challenge of rising expectations within the political system.
• Judicial objectivity and rule of law: The adjudication of all political and social problems must be rested within the existing tenets of the constitution and the law.
• Dealing decisively with corruption: A recognition that even when committed by an individual, corruption has a broader social and economic cost. In whatever way it occurs, corruption introduces costs into the general economy. While it can undermine the rule of law and administrative accountability; but when corruption occurs over an extended period of time (or become institutionalized), the ‘spread effects can have negative consequences for both the public and private sectors as well as the survival of the state itself.

I will organize the rest of this discussion in the context of a few philosophical traditions that may influence, more or less, the nature and direction of Nigeria’s national development planning. I will focus on central issues such as economic liberalization, diversification, privatization, and the distortionary effects of corruption on government effectiveness.

Economic Liberalization

The idea of an ‘open market’ regime is at the heart of economic liberalization or what is mostly referred to as the free-market system. But why are some states economically successful and others are not? In the same vein, there is nothing fundamentally wrong to cautiously integrate a country’s economy into the international system under a combination of neo-mercantilism, protectionism, and state dirigisme, at least in the early stages of international market entry. A precipitous leap into a free market system could expose the fledgling or existing factor endowments to intense international market competition that could force a series of dislocations in the domestic economy. New policy instruments and the capacities they create could be useful in stabilizing the economy and also help it to withstand any financial crises with minimum economic distress and contraction. It can also provide a source of new employment, individual capital accumulation, and increased demand for goods and services as a result of the reciprocal growth in the productive sector and in individual disposable income. Hopefully, this would create the needed dynamism that prepares the domestic economy well enough for eventual entry into the highly-competitive international market regime.
For developing countries (especially those of the South), there is a great lesson to be learned from the case of South Korea. South Korea’s monumental economic growth and development was achieved, for the most part, as a result a proactive state role in shaping the method and timing of the country’s entry into the open market regime. By then, the country also had a couple of things in its favor—all of which reinforced the domestic capacity to withstand the sudden distortions in factor movements during the early phase of market entry. The state offered protection to domestic industries by imposing high tariffs and import quotas on competing product categories thereby making them more expensive for South Korean consumers to buy. The state also played a key role in the acquisition and implementation of new and cutting-edge technologies that spurred domestic innovation and created employment. The already existing high educational level was a valuable asset since it provided a readily available skilled labor pool. While it was self-sufficient in agricultural and food production, the savings that could have been used to import staple commodities was redirected into investment capital. And its Confucian heritage which encouraged the ethic of asceticism was equally instrumental in the development of a culture of savings—which provided an initial source of domestic capital lending and investment.
But for many African countries, including Nigeria, the path of entry into the ‘open market’ regime has, more often than not, been paved by acceding to the conditionalities demanded under the structural adjustment program. They end up falling into what Thomas Friedman refers to as the “golden straight-jacket” of openness and liberalization in order to appeal to the sentiments that attract international investment capital. They quietly swallow the “poison pill” (conditionalities) attached to the multilateral lending facilities of the IMF and the World Bank. Because “conditionalities” are tied to the overall theory that ‘open market’ regimes and international capital mobility represents the proper and best path to economic growth and development; they oftentimes include a requirement for increased privatization of public facilities, reduction in public spending and labor force, currency devaluation, and debt rescheduling.
Ironically, all of these can and do have deleterious effects on the domestic economy and the state’s ability to provide the enabling condition needed for economic growth and development. A decrease in government spending and public sector employment can also lead to a rise in unemployment since the government is the largest employer as well as the major source of private capital accumulation in many developing countries. Currency devaluation has the tendency to become inflationary thereby raising the cost of goods and depleting disposable income as consumers dig deeper and deeper into their savings (if any). If currency devaluation is not matched by a reciprocal increase in wages (as is often the case), it drives down the demand for goods and services which, invariably, slows down economic productivity and growth as manufacturers are left with stockpiles of unsold goods in their warehouses.
Alternatively, if the government institutes a short-term tight-money policy (as a way of combating inflation), it will only aggravate the problem by increasing the interest rate which also makes the cost of borrowing money and the cost of goods and services more expensive. Debt rescheduling is also problematic because the deferred interest is generally recapitalized into the loan as part of the original principal. In the end, a country that reschedules its debts may have a few years grace period, but it will eventually pay a much higher principal and interest to settle the debt over an extended period of time. It would thus be shifting current economic burdens to future generations yet unborn. A few years ago, I read an article titled “What Did Structural Adjustment Adjust?” That is the enduring and profound question that still resonates today in Nigeria.

Diversification without Institutional Foundation:
Although oil has provided great benefit for Nigeria’s economic development, but it has also cast a dark shadow on the promise and fortunes that should have accrued to the country. The share of oil in Nigeria’s economy began from “a modest 5% of total national revenue in 1965 to 26.6% in 1970; 43.3% in 1971, and 80% in 1980.” Today, it hovers at about 90-95% of total government revenue, and its influence has become so intoxicating that the country has lost its economic footing as a result of the precipitous fall in oil prices in the international market.
Prior to that, the contribution of agricultural exports to national development exceeded that of the petroleum industry by more than 3 to 1. “Although palm produce exports declined dramatically as a result of the civil war (since a high proportion came from the former Eastern Region); cocoa (of which Nigeria was the world’s second largest producer) earned £54.7m (pounds sterling) in 1967; groundnuts (of which Nigeria was the world’s largest exporter) earned £35.4m; rubber £6.3m; cotton £6.4m; and timber £3.5m.” This array of crops made Nigeria one of Africa’s most diversified economies agriculturally and their earnings, although progressively forming a smaller share of total export earnings (67% in 1962 and 47% in 1967), continued to pay for most of Nigeria’s existing industries and infrastructure at that time.” But all these were lost once oil became prominent and a central actor in the generation of government revenue and in the creation of unlimited access to economic rents and the financial pilferage that goes with it.
Based on the aforesaid, the perennial call for the diversification of the Nigerian economy will not be easy simply because the institutional foundation needed to reconstruct the existing macroeconomic infrastructure does not yet exist; and the bureaucratic and professional attitude critical for effective and accountable governance is yet to developed at a level of sophistication typical of most transitional states. While the country’s political leaders have at different times embraced the idea of privatization as a way of building the economic foundation for a promising free-market enterprise; but ironically, its impact has encouraged not economic growth and wealth redistribution, but more socioeconomic inequality, poverty, as well as official corruption.

Privatization:
As a way of making government more “efficient and effective,” the idea of privatization has always been touted, particularly by the World Bank and the IMF, regarding the developmental and growth strategies for developing countries. But the irony has been that while such a program may work for advanced and more sophisticated societies with a vibrant middle class, the prospects for most underdeveloped polities has been shown to be quite dim. While privatization may make the already rich richer, it is less likely to spread the wealth and may, in fact, lead to more pauperization of the already poor – for the simple fact that only those who already have money or the financial means to do so could be able to invest in and/or take advantage of the opportunities offered by privatization of public utilities. “Privatization may have its clear economic advantages, but its effect on containing corruption appears ambiguous.” “More often than not, private firms pay more bribes than their well-connected state-owned counterparts;” hence “downsizing the public sector does not help in reducing corruption, at least not in the transition period.” While “long-term positive effects from privatization may be possible, especially where competitive pressures are superior in avoiding inefficiencies and corruption, but such advantages are likely to require best practice in the process of privatization.” And the more practical question is to what extent does privatization serve the public interest as opposed to the economic interest of private investors, particularly those who may now have been granted full or quasi-monopoly of critical sectors of the economy through government largesse?
The Nobel Laureate Joseph Stiglitz offers a scathing analysis of privatization and its potential pitfalls for the macroeconomic adjustments necessary to grow and advance the prospects for underdeveloped economies. For him, the most serious concern with privatization, as it has so often been practiced, is corruption. While “the rhetoric of market fundamentals asserts that privatization will reduce the ‘rent-seeking’ activities of government officials who either skim off the profits of government enterprises or award contracts and jobs to their friends; but in contrast to what it was supposed to do, privatization has made matters so much worse that in many countries today privatization is jokingly referred to as ‘briberization.’” For this very reason, Stiglitz concludes that “if a government is corrupt, there is little evidence that privatization will solve the problem; after all, the same corrupt government that mismanaged the firm (agency, or public utilities) will also be the one to handle the privatization.”
In Nigeria and over the years, “an increasing number of retired senior military officers have found themselves appointed to the governing councils or boards of important government agencies, investment companies and industrial concerns, including banks where the government had controlling shares.” With the drive toward privatization and market economy,” many state-owned economic concerns have been sold-off to the rich and influential including retired military officers or to currently serving officers through their surrogates (or third parties).” As a result, “many of these officers have emerged as dominant figures in certain sectors of private business, industry, and agriculture.” They have thus become economic entrepreneurs – a factor that has sustained them as a potent force in the ongoing struggle for control of state as well as the political space. In country after country, government officials and their cronies have realized that privatization meant that they no longer needed to be limited to annual profit skimming; hence by selling a government enterprise at below market price, they could get a significant chunk of the asset value for themselves rather than leaving it for subsequent officeholders. “In effect, they could steal today much of what would have been skimmed off by future politicians.” Because the “efficiency costs of corrupt privatizations will be especially high if the winning bidder must actually operate the company for a time; but if the winner can sell out to a more efficient competitor, it can cheat the state from some of the gains of privatization.”
In a perverse way, state collaboration with the financial and banking sector has also become another easy route for sustained corruption and pilferage of public funds. Eager to lend to the states the funds needed for various long-term mega-projects; most Nigerian banks have become accomplices to an emerging predatory finance scheme that have seen several banks go belly-up or tither on the brink of insolvency or collapse. Although in certain circumstances, the Nigerian Central Bank has acted as “a lender of last resort, providing the liquidity needed to stabilize troubled banks and stem potential panic” among depositors and investors; yet the responsible government officials are not as bothered since, after all, they know that the fiscal burden imposed by loan default can easily be passed on to upcoming state administrations to deal with. In the worst case, records and statements of such borrowing are either falsified, destroyed, or programmed in such a way to suggest that the proceeds from the loan were already ‘legitimately’ spent for the projects they were earmarked for.
In dealing with public funds in Nigeria, there are many ways the political system makes it more likely to escape official culpability; and there is no doubt that, in many ways, that corrupt relationships between government and the banking sector has “led to excessive borrowing and inefficient investments.” Unscrupulous banks are more than willing to fund government mega-projects even when they know that much of that fund will be siphoned away for purposes unconnected to the original purpose for extending the credit. But in the end, everyone pays the price particularly when the government is unable to pay up when due; and as the interest multiplies over time, the debt is shifted to future generations of unsuspecting citizens. The banks have no choice than to declare insolvency or bankruptcy thus leaving depositors holding an empty bag. To sustain growth and development, emerging and transitional market economies such as Nigeria “need good institutions and property rights such as the rule of law, constraints on government expropriation, and absence of corruption; as well as institutions that promote an efficient financial system – financial regulation to encourage transparency, prudential supervision to limit excessive risk taking, and good enforcement of financial contracts.”
Corruption and its Effect on Government
It has become an inescapable fact of post-independent Nigerian history that “public perceptions, official audits, press reports, official anticorruption enforcement data, and estimates based on international norms all of which indicate that corruption” in Nigeria is both endemic as it is corrosive. While it is easy to point to one or a few reasons as to why some countries are more corrupt than others; nonetheless the causal features of corruption are more complex and multi-faceted than what seems most evident. Because there are individual, socioeconomic, cultural, and systemic reasons that may or may not induce corrupt behavior, the issue of reverse or reciprocal causality becomes more profound. Several studies have sought to advance one hypothesis or the other, and the literature is fraught with several possible explanations. But what is most evident from a greater majority of these studies is that corruption has negative consequences for the political and economic development of states. And when it becomes systemic and chronic, the results could be quite debilitating.
As the nature of interest aggregation and interest articulation become more constrained and delimited, they usher in new socialization processes (new political habits and values) that undermine the legitimacy of government. While “there is no administrative creation of meaning; there is at best an ideological erosion of values, hence any acquisition of legitimacy becomes self-destructive as soon as the mode of acquisition is exposed.” Because corruption and corrupt behavior does not necessarily follow the legitimate path of conformity that supports the political order; decay occurs when incumbent political actors entrench themselves within a political system and block possibilities for institutional change.” Amid growing levels of uncertainty and as existing political institutions become increasingly dysfunctional, “clientelism thrives under this conditions, since the individualized benefits offered by politicians, and the ability to generate rents in the public sector, are often a much more effective path to economic security than the private sector.” Politics, therefore, “centers around zero-sum struggles over rent distribution rather than over programmatic policies;” and “that is why the impact of democracy on corruption and government performance in Nigeria has been so limited and disappointing.”
And for these reasons, what I seek to do in the remaining parts of this presentation is to review those areas of the literature that touches on the peculiar characteristics of the Nigerian situation, the institutional role of the political system, as well as the role of cultural disposition in laying the foundation for the propensity to engage in corrupt behavior or other symptoms of similar tendencies. The reason for this seems to me to be that there is a continuous need to deal with the broader issue of corruption in light of its political, economic, sociological, and cultural implications. Nigeria is a particularly unfortunate example “where the state has been described as a national cake to be divided and sub-divided among officeholders.” And for the fact this situation has been exacerbated by the presence of massive petroleum deposits for which oil revenues represents almost 90% of government export earnings; oil resources and rents “provide huge windfall gains to those who control them and their political allies.”
Because all forms of economic activity in Nigeria revolve around the petro-economy of oil which, invariably, is under state control; it thus means that emerging platforms of political contestation will focus centrally on the control of state power since this is the locus for the distribution of incentives and the allocation of values in society. In the sense that “factions of the country’s elite, with strong interests in the allocation, appropriation, and use of oil revenues, dominate all levels of government; their interests combine conveniently with those of the state to support a regime of predatory accumulation and lawlessness.” Analysis of data from Nigeria’s Economic and Financial Crimes Commission (EFCC) shows that embezzlement and diversion of public funds are the most common forms of public sector corruption, with the rents running into billions of US dollars. The culprits have been shown to emanate from a motley crew of current and former politicians, military leaders, as well as members of the business elite and their surrogates in various government bureaucracies.
But then this is the easiest part. The problem becomes more acute when the process of elite formation mirrors the shape and divisions of the country’s geopolitical and ethno-linguistic structure. For most divided states there is, for better or worse, a dominant group that always retains political power; but where ethnic divisions have not been well handled, as in Nigeria, the result can be a state focused on sharing the spoils, not promoting overall prosperity. “No coalition believes that it will retain power for long and so uses its time in office to amass personal gains instead of making public policy.” The Nigerian political elite understand this very much and are akin to practically drive the message home beginning from the first day they enter into public office. The various state governors and their commissioners, the federal minsters and key members of the federal executive structure, leaders and members of the national assembly and directors of major government parastatals have shown themselves to be willing and practicing recruits into this unholy fraternity.
And so when it comes to addressing the issue of corruption, Nigeria is in a very difficult situation, much more difficult than between a rock and a hard place. Because corruption is not a problem that can be attacked in isolation; it cannot at the same time be expected to wither away just because a reform government has taken power or because economic growth is vigorous. “So long as officials have discretionary authority, corrupt incentives will remain;” and to the extent that “more fundamental shifts in political structure are needed, but this will, invariably, be difficult to produce” – as a result of “a well-entrenched system of narrowly focused patronage relations.” And “for the simple fact that key members of the political and economic elite are connected to the rentier (oil) economy through various forms of patronage, they are less receptive to making the tough decisions needed to address major market failures as a result of over-reliance on oil rents.”
To be caught in a corruption trap is bad for any government and society, no matter which one. The consequences of corruption are far-reaching, and can be manifested well beyond the immediacy of the moment when and where it occurs. And that is why it can and has, in fact, resulted in the destruction and failure of governments and the states they represent. As a result of a reduced public trust in government, the vulnerability in the economic productivity of the poor increases as corruption in government contributes to disaffection; and the absence of trust serves as a disincentive to engage in economically productive activities. “The public may no longer develop consistent and generally shared expectations vis-à-vis the operation of public office holders.” The ensuing administrative inefficiency means that everybody suffers, rules are circumvented, little gets done, a lot of time is wasted dealing with unnecessary bureaucratic red-tapes, and the wheels of government comes to a paralyzing standstill – even though the administrative institutions may still be in existence. Although corruption is generally viewed as a systemic problem, it is a problem that has several sources of inspiration and the foremost among them is that it is, invariably, an individual or human problem. Systems do not independently make themselves corrupt; it takes human action or intervention to design systems in such a way that they abet, facilitate, or function in corrupt ways. Hence, corruption or corrupt behavior could be considered a ‘rebellion of the heart,’ – akin to Hannah Arendt’s sobering rendition of “the modern individual and his endless conflicts, his inability either to be at home in society or to live outside it altogether, his ever-changing moods and the radical subjectivism of his emotional life” – all of which were born in this rebellion of the heart.
The problem with Nigeria is not Nigeria; the problem with Nigeria is the people who govern Nigeria. And despite the existing problems, what Nigeria needs today are great leaders and great thinkers who can think and act above their own parochial interests; leaders who fully understand that there is an enduring value to be celebrated by all her citizens; and even when irredentist aspirations seem to have spilled over onto the center of national debate – Nigeria’s unity and diversity are values (if well harnessed and managed) can serve the best interest of all her citizens. It is only when political leaders introduce abject selfishness, cronyism and regionalism into political governance that the argument for unity losses its practical and moral grounding. As we interrogate the Nigerian project from different persuasions and belief systems, we must realistically remain true to our better judgement; we must at the same time consider the unpredictable uncertainty of an alternative life without Nigeria (even if for the sake of argument or nostalgia), versus an easier possibility of a future Nigeria that can be redeemed if we all work together to harness its most evident potentials.
Kalu N. Kalu, Ph. D, is AUM Distinguished Research Professor of Political Science & National Security Policy, Auburn University Montgomery; Docent Professor, Tampere University, Finland; FDD Academic Fellow on Counterterrorism and Intelligence (Israel); and a Fulbright Scholar. He is the author of State Power, Autarchy, and Political Conquest in Nigerian Federalism (2008); Political Culture, Change, and Security Policy in Nigeria (2018); and A Functional Theory of Government, Law, and Institutions (2019). He writes from the United States.

End Notes