Several depressing accounts of the massive looting of Nigeria’s resources by the ruling elite since independence tell a heartbreaking story of a country in an urgent need of economic, political and moral rebirth. The greed of the ruling class, who unrepentantly have stolen the country blind, paints a picture of a prodigal nation now at a crossroads. This systemic corruption is the genesis of indebtedness, poverty and underdevelopment in the country today.
While the revelations of the systemic heist are contained in local and international documents, one of such reports will suffice for this discourse.
In 2013, the United Nations Office on Drugs and Crime had put the estimated amount of looted funds from the Nigerian treasury at $400bn between independence and 1999. The report further explained that “since Independence, unscrupulous leaders pilfered the national coffers and stashed away billions of dollars in foreign bank accounts. By some estimates, close to $400 billion was stolen between 1960 and 1999. Sani Abacha alone is estimated to have stolen the equivalent of three -three per cent of the country’s GDP for every year that he was President.” That is a staggering – almost ‘astronomical’ – amount of money because if you were to put $400b bills end-to-end, you could make 75 round trips to the moon! “Concretely, those $400bn could have translated into millions of vaccinations for children; thousands of kilometres of roads; hundreds of schools, hospitals and water treatment facilities that never came to be,’’ the report had concluded.
A former World Bank President, Paul Wolfowitz, had noted that due to endemic corruption “about 75 per cent of Nigerians live on less than one dollar per day, yet over the past 40 years, about $300bn oil wealth has disappeared from the country.” Wolfowitz was saddened that “Nigeria presents a classical example of how people in a resource rich country could wallow in abject poverty.”
I have cited the above to show how systemic corruption has brought Nigeria to its present situation. The present economic crisis is nothing new. But Nigeria’s prodigal leaders, unlike the biblical prodigal son, are blind to the lessons of history. Every time we have experienced a period of prosperity due to proceeds from oil wealth, our ruling elite would go on a spending and stealing binge only to leave the country reeling in debt and economic collapse.
The present crisis evokes a déjà vu. The global energy crisis of 1973, for example, saw the rise in oil price from $3 to $12 per barrel, which caused a windfall. Nigerians nostalgically now refer to that period as the oil boom years. But as we have seen in subsequent years, the oil windfall was mismanaged. It was at this time that the military head of state, Gen. Yakubu Gowon, made his now famous statement that “Nigeria’s problem is not money but how to spend it.”
Before the oil boom years, Nigeria’s foreign exchange earnings came from agriculture. The oil boom led to the decline of this sector. Specifically, in 1971, the share of agriculture to the GDP stood at 48.23 per cent. By 1977, it had declined to almost 21 per cent. Agricultural exports, as a percentage of total exports, which was 20.7 per cent in 1971, reduced to 5.71 per cent in 1977. The oil boom affected the agricultural sector adversely. The economy became heavily dependent on oil. By this time, oil revenue represented almost 90 per cent of foreign exchange earnings and about 85 per cent of total exports. While the boom afforded the government the much needed revenue, agriculture was neglected. Just as we have seen in the last 16 years, primitive accumulation by the country’s ruling elite intensified. Corruption, theft and outright looting of government treasury and other fraudulent practices prevailed.
The gap between the rich and the poor widened considerably. Ad hoc and ill-conceived government policies exacerbated the problem. For example, the 100 per cent salary increase of 1975, tagged the Udoji Salary Award, was disastrous to the economy as prices increased by more than 100 per cent. The payment of a year’s arrears of the increase in salaries further worsened the situation.
The exchange rate regime encouraged imports. The economy was heavily dependent on imports; almost everything was imported, from toothpicks to toothpaste. There was no serious attempt to invest the windfall from oil in viable projects. Except for the huge expenditures on education and construction of a few dual carriage highways in some parts of the country, Nigeria would have had nothing to show from the oil boom era. The existing macroeconomic policies continued to encourage consumption rather than production. The economy was consuming what she was not producing.
The second oil crisis of 1979 also led to another windfall as the country expanded oil production due to the shortfall in global supply which had been hampered by the crisis in the Middle East. But the ruling elite under the Second Republic administration of former President Shehu Shagari mismanaged the resources in one of the most brazen acts of corruption by any government in Nigeria’s history.
The politicians of that era were particularly reckless. One had champagne branded in his name. It was during the Shagari era that corruption in Nigerian governance reached its zenith and capital flight peaked. At the time, records showed that oil-generated revenues attained an all-time climax of $24.9bn. But all was stolen until the military took over.
After the four disastrous years of the Second Republic, Nigeria was saddled with a crushingly large international debt. This was because, despite the over $101bn generated by the oil industry between 1958 and 1983, nearly all of these funds were siphoned into the private bank accounts of the prodigal ruling elite and their cronies. Had the mindless looting of Nigeria’s resources by the ruling elite happened in another country with half of our resources, such a country would have been completely obliterated from the face of the earth.
But the saving grace has always been the unpredictable nature of oil which often comes to bail Nigeria out of recession. It happened again. After the looting and debt crisis of the 1980s, oil prices jumped again in the international market due to the Gulf war in 1990. Fortune had smiled on Nigeria again. But till date, the Ibrahim Babangida regime still cannot explain how a whopping $12.5bn in revenues from oil disappeared. It has been said that successive military regimes between 1988 and 1994 siphoned about $12.2bn into private accounts. At the turn of the millennium, Nigeria had been the beneficiary of two energy crises. But these windfalls were largely mismanaged by subsequent civilian administration. The story of the Fourth Republic, for example, is synonymous with corruption. It is the reason we are in this mess. Sometimes, I wonder if we are not incurably jinxed. If not, how do we explain a situation where one set of leaders struggle to outdo another in stealing?
The solution to our problem is not rocket science. This present system sustains and feeds the greed of the elite. It must be dismantled along with the lopsided federal structure that encourages waste. Nigeria’s leaders must learn from history or we will eternally be condemned to repeating the mistakes of the past.
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