Nigeria Has Abundant Resources; Where Are The Proceeds?

by L.Chinedu Arizona-Ogwu

Most of Nigerians live on just a few dollars a day; they experience high levels of inequality.80% of all Nigerian people have no access to health, education and other services. But problems of hunger, malnutrition and disease afflict reign supreme in Nigerian society. Minority citizens are typically marginalized from the affluent political society and have little representation or voice in public and political debates, making it even harder to escape poverty.

It is just the politicians in government corridor, who benefit from Nigeria’s economic or political policies. The amount this government spends on military, financial bailouts and other areas that benefit the wealthy compared to the amount spent to address the daily crisis of poverty and related problems are often staggering. If poverty is a predicament blamed for being lazy, making poor decisions, and unkempt responsible to attend to things at the rightful opportunity, why has this government chose to “go slow” on issues that requires urgent attention like the power sector, the petroleum distribution sector and the manpower development and job creation pressing needs..

Nigerian leaders had learned to plunder the Nigerian society ever since they have been caught in the trap of those unequal trades. Once unequal trades were in place, restructuring to equal trade would mean the severing of arteries of commerce which provide the higher standard of living for the dominant society and collapse of those living standards would almost certainly trigger open revolt. The world is trapped in that pattern of unequal trades yet today.

While it is recognized that FEELING GOVERNEMT, accommodates a functioning and non-corrupt democracy, an impartial media, equitable distribution of land and a well structured judicial system (and other such factors), etc. to help in realizing a successful nation and society, a lack of any of these things can lead to a marginalization of a sector of people. Often, it can be a very large sector. For example; those likely to lose out in such an equalizing effect are the rich, elite power holders.

It appears that Nigeria’s government fond themselves in pursuing policies that actually harm Nigeria’s successful development; the resultant poverty and inequality are no doubt real. Behind the increasing interconnectedness promised by globalization are global decisions, policies, and practices. These are typically influenced, driven, or formulated by the rich and powerful. These can be leaders of rich countries or other global actors such as multinational corporations, institutions, and influential people.

While poverty alleviation is important, so to is tackling inequality. Inequality is relative to poverty, and opposed to absolute poverty. Even in the wealthiest countries, the poor may not be in absolute poverty (the most basic of provisions may be obtainable for many) or their level of poverty may be a lot higher than those in developing countries, but in terms of their standing in society, their relative poverty can also have serious consequences such as deteriorating social cohesion, increasing crime and violence, and poorer health. Some of these things are hard to measure, such as social cohesion and the level of trust and comfort that Nigerian people will have in interacting with one another in this country. Numerous studies have shown that sometimes the poor in wealthy countries can be unhappier or finding it harder to cope than poor people in poorer countries.

Cutbacks in health, education and other vital social services in Nigeria have resulted from structural adjustment policies prescribed by the IBB regime in 1986; as conditions for embezzling unpaid IMF loans. In addition, this government should open the economies to compete with each other and with more powerful and established industrialized nations. To attract investment, Nigeria entered a spiraling race to the bottom to see who can provide lower standards, reduced wages and cheaper resources. This has increased poverty and inequality for most Nigerian people. It also forms a backbone to what we today call globalization. As a result, it maintains the historic unequal rules of trade.

Corruption is both a major cause and a result of poverty around in Nigeria. It occurs at all levels , from local, States and Federal governments, civil society, judiciary functions, large and small businesses, military and other services and so on. The impact of corruption on poverty is the effects of inequalities that are structured into law, such as unequal trade agreements, structural adjustment policies, and so-called “free” trade agreements and so on. It is easier to see corruption. It is harder to see these other more formal, even legal forms of “corruption.” It is easy to assume that these are not even issues because they are part of the laws and institutions that govern national and international communities and many of us will be accustomed to it—it is how it works, so to speak. Those deeper aspects are discussed in other parts of this web site’s section on trade, economy, & related issues.

Many Western covert and overt military operations were motivated, in part at least, by the view, which may have been fearfully exaggerated, that the West’s supplies of raw materials and oil were threatened by tyrant intrusion into Nigeria. A feeling of vulnerability was understandable. Nigeria… was largely self-sufficient …; the West, in need of increasing supplies for its growing industrial production, depended heavily on imports from neighbouring West African countries…. Western governments used diplomacy plus overt and covert military operations to counter the Nigeria system. Meanwhile western firms paid military rulers to obtain concessions to extract oil and minerals.

The business of obtaining oil and mineral concessions has always been conducive to the use of bribes, omissions, gifts, and favors, and remains so since there are huge “rents” (i.e. windfall profits) to be shared by the parties to a deal…. Nigerian governments rarely use auctions [for concession, which, when done honestly, removes the opportunity for buyers to bribe sellers]. They commonly sell concessions by negotiation. For which there are some good reasons. It is often necessary for the foreign company that buys a concession to build infrastructure, such as ports, pipelines, roads and dormitory towns for their staff; to make this worthwhile, a whole oil field or major mineral deposit has to be given to one foreign company, rather than split between many competitors; and that one company, which will become the source of a significant, perhaps dominant, part of the nation’s revenue, will acquire substantial economic power vis-à-vis the government.

Hence strategic and diplomatic consideration enter the calculation: the government will want to give the concession to a company backed by a government which it believes will be helpful to it in its international relations—and in supplying it with arms and mercenaries. But …, there is the prospect of bribes. Those who run a government that has a concession to sell will know that negotiation creates a strong incentive to the potential buyers to offer them bribes: they will know this from the point of view of the buyers, a sum that will only add a small percentage to, say, a billion dollar deal, will be worth paying in order to win the concession. Once negotiation is adopted as the means of allocating concessions, the dominant incentive is for bidders to engage competitively in the bribery of local rulers and fixers.

For multinationals, bribery enables companies to gain contracts (particularly for public works and military equipment) or concessions which they would not otherwise have won, or to do so on more favorable terms. Every year, Western business activities pay huge amounts of money in bribes to win friends, influence and contracts in Nigeria. These bribes are conservatively esti

mated to run to billion of dollars a year—roughly the amount that the UN believes is needed to eradicate the country’s poverty.

Import Bans for certain objects in the manufacturing and mining sectors were prominent in Nigeria’s trading policy. Nigeria has been participating in a multilateral trading system but its protectionist trade regime has hindered its progress. The WTO suggests that a “liberalization of Nigeria’s trade regime, through the simplification of its tariff structure and the removal of import prohibitions, would promote better allocation of resources.” In 2006, Nigeria revised their list of banned products and goods such as, baby products, bicycle rims and furniture, are allowed in the country. Recently, Nigeria has agreed to allow India to mine minerals and export them back to India. “Industries in coal, gold, iron ore, chrome ore, lead and other minerals” are being set up in Nigeria with the Nigerian government’s encouragement.

To increase revenue and exportation, Yar’Adua government should decide on many new ventures. After the Trans-Sahara gas pipeline expected to handle gas exported from Nigeria thru Algeria, and Niger to Europe, our exporting plans should look up. Renegotiating contracts between Nigeria and foreign oil companies will increase this government’s share of oil revenue. Energy profits should be invested in Nigeria. Governors and political office-holders should be dissuaded from running foreign accounts.

Nigeria, often described as “developing” country lacks material wealth that cannot prove that the country is resource-deprived. Since a strong economy in a developed nation doesn’t mean much when a significant percentage (even a majority) of the population is struggling to survive; this government needs to improve the living standards of our people, mend access to all basic needs such that an underprivileged Nigeria person has enough food, water, shelter, clothing, health, education, etc, a stable political, social and economic environment, with associated political, social and economic freedoms, such as (though not limited to) equitable ownership of land and property, make free and informed choices that are not coerced, participate in a democratic environment with the ability to dictate the right future of every Nigerian, and to have the full potential for what the United Nations calls Human Development.

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