Fighting Corruption in Nigeria (Your Uncle is a Crook!)


This approach to fighting corruption goes against the lessons in Peter Ekeh’s delineation between “primordial” and “civic” publics in Nigeria. According to Ekeh one’s uncle may be corrupt in the civic public, but as long as he provides benefits and adequately “shares” in the primordial public he can remain in good standing within his community.

That said, the strategy might work if every Nigerian credibly promises to expose their uncle who’s corrupt but pretends to be an international businessman. The Nigerian government could nudge Nigerians in the right direction by actually prosecuting and jailing the country’s corrupt uncles and aunts.

Africa’s looming debt crises

The 1980s are calling. According to Bloomberg:

Zambia’s kwacha fell the most on record after Moody’s Investors Service cut the credit rating of Africa’s second-biggest copper producer, a move the government rejected and told investors to ignore…..

Zambia’s economy faces “a perfect storm” of plunging prices for the copper it relies on for 70 percent of export earnings at the same time as its worst power shortage, Ronak Gopaldas, a credit risk analyst at Rand Merchant Bank in Johannesburg, said by phone. Growth will slow to 3.4 percent in 2015, missing the government’s revised target of 5 percent, Barclays Plc said in a note last week. That would be the most sluggish pace since 2001.

The looming debt crisis will hit Zambia and other commodity exporters hard. As I noted two years ago, the vast majority of the African countries that have floated dollar-denominated bonds are heavily dependent on commodity exports. Many of them are already experiencing fiscal blues on account of the global commodity slump (see for example Angola, Zambia and Ghana). This will probably get worse. And the double whammy of plummeting currencies and reduced commodity exports will increase the real cost of external debt (on top of fueling domestic inflation). I do not envy African central bankers.

Making sure that the looming debt crises do not result in a disastrous retrenchment of the state in Africa, like happened in the 1980s and 1990s, is perhaps the biggest development challenge of our time. Too bad all the attention within the development community is focused elsewhere.

How Goodluck Jonathan Lost the Nigerian Election

The Guardian reports:

Previous Nigerian presidents were too cynical to expose themselves to the unpredictable risk of a fair election. The election victories of PDP presidents during the past 16 years have been partially “assisted” by electoral malpractice. That changed when Jonathan nominated Professor Attahiru Jega as the chairman of the Independent National Electoral Commission (Inec) in 2010. Jega vowed to reform Nigeria’s electoral process to ensure free and fair elections.

The former university lecturer exuded calm authority and integrity. He has painstakingly prepared for the task over the past four years by studying the rigging methods used in previous elections, implementing an elaborate system of voter registration, training thousands of electoral staff, and introducing biometric readers to identify voters by reading their thumbprint.

Jonathan created the environment for the emergence of these changes and gave Jega the freedom and authority to conduct reforms that led to a credible election. But by giving Jega a free hand to play fair, he allowed Jega to craft the weapons that were used to oust him from power.

If Nigeria stays on the path towards greater democratic consolidation, Jonathan’s “accidental presidency” will forever remain as one of the variables in the process.

Africa’s First City

National Geographic has a fascinating take on Lagos. And since we are just under two months to the next Nigerian elections, here is my favorite paragraph:

When I asked Kola Karim if the federal government’s sorry reputation made Western investors wary of doing business in Lagos, the worldly CEO elaborately dismissed it as a nonissue. Companies partnered with companies, not with bureaucrats, he maintained. “What does government do for you anyway, apart from charging you more taxes?” he said. “Look, it’s not about who rules anymore. Lagos is a train that has left the station. And you can only slow it down—you can’t stop it. So it doesn’t matter who comes next. This is the fun of democracy! It’s not about [President] Goodluck Jonathan! It’s about progress! Forget politics!” [More here]

From a political economy standpoint, one of the most fascinating things to happen in Africa over the last decade or so has been the quiet property rights revolution. In Nigeria, and a few other African countries, millionaires and billionaires have come out of the woodwork, willing to have their estimated net worth published in Forbes and other similar magazines for all to see. Very few of them have been politicians. Yes, many made their money in no small measure because of their political connections. But the fact that they no longer feel the need to hide their wealth from the ever changing political class means a lot.

It means that entrepreneurship and politics are getting decoupled in Africa’s biggest and most important economies. This transition is important because it will allow the magic of specialization to flourish. For instance, Dangote must be a savvy entrepreneur. But I doubt that he would have created as many jobs across the Continent if he also had to worry about running Abuja.

Also, it matters that Forbes’ Africa list is increasingly dominated by politically relevant high net worth individuals, as opposed to “apolitical” migrant businesspeople. Dangote is Nigerian “through and through.” When the going gets tough, he is more likely to voice his concerns than simply exit. The chaps in Abuja can’t simply revoke his visa or work permit. His political views therefore matter a lot.

One hopes that at some point Nigeria’s Dangotes will start investing in higher quality political talent to ease the cost of doing business and improve human welfare through greater investment in public goods.  But of course there is another possible equilibrium path in which they decide that low quality political talent is what’s best for their business prospects.

Either way I hope to visit Lagos soon.

All politics is local, and more

Many have seen the BBC map below of the outcome of the just-concluded Nigerian presidential elections. The south voted for incumbent Jonathan while the north went for Buhari.

The state elections were a different kettle of fish. In these elections the president’s party – the PDP – held its own in the north. Available results show that PDP candidates won in Bauchi, Kaduna, Niger, Gombe, Kebbi, Jigawa, Kano and Buhari’s home state Katsina – in total eight out of the 12 states shaded blue in the picture above.

How is this possible, given the clear north-south divide in the presidential vote?

The answer to this question is threefold (and is here).

First, all politics is local. Given that both the PDP and CPC rode on personality politics with little ideological differentiation, once the presidential race was settled the game reverted back to local personality politics. PDP bigwigs could therefore hold their own in most of these states based on their own local connections.

Second, it could be due to the sequencing of Nigerian elections. In Nigeria, the gubernatorial elections take place weeks after the presidential election. Because patronage politics is the only real game in town, the rational thing for voters to do is pick the president’s man for governorship. This way one can increase the probability that pork will flow to one’s state when President Jonathan sets out to reward those who voted for him and the PDP.

Third, Jonathan might have panicked about having lost the north in the presidential election and therefore put extra effort into winning as many gubernatorial races as he could in the north in order to guarantee his administration a sense of national legitimacy.

In a sense the gubernatorial results are encouraging. It is calming to know that there are powerful local elites in northern Nigeria who are willing and able to work with Jonathan to help Nigeria realize its potential.

goodluck jonathan poised to win nigeria’s election

The Daily Nation reports:

Nigerian President Goodluck Jonathan has taken a wide lead in elections in Africa’s most populous nation, results showed today, putting him on a possible course for a first-round victory.

Millions of voters turned out for Saturday’s election as Africa’s most populous country bid to put years of rigging and badly flawed ballots behind it and hold the cleanest polls for head of state in nearly two decades.

Observers gave the polls an initial thumbs up, but concerns were raised over regional divisions, a scenario many analysts had hoped to avoid in a country as fractious as Nigeria, roughly split between Christians and Muslims.

Results from 30 states showed Jonathan had won 20, while ex-military ruler Muhammadu Buhari had nine and the former head of the anti-graft agency, Nuhu Ribadu, had one state.

Mr. Jonathan’s cross-national victories are a good omen for Nigerian unity moving forward. Now the big question is how Mr. Jonathan and the PDP will govern. Top on the agenda will be Nigeria’s energy problems. Sub Saharan Africa’s largest oil producer also happens to be one of its biggest importers of refined oil products. No new refineries have been built in the country in ages. The country also suffers frequent power outages despite the fact that millions of cubic metres of gas get flared in its oil fields daily. About 23 billion cubic metres get flared annually in Nigeria (second only to Russia).

That is 23 billion cubic metres of gas that can be harnessed for power production or LPG.