Its economy may be booming, but Nigeria is convulsed by a personality clash between its old president and his successorby Jonathan Power / July 26, 2008 / Leave a comment
Published in July 2008 issue of Prospect Magazine
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Nigeria contains one quarter of the world’s black population. So it is not surprising that—apart from being crazy about Barack Obama—they tend to think the world begins and ends with their country.
But this inward focus seems to have produced results. In the eight years of the last administration of Olusegun Obasanjo, who stepped down as president last May, Nigeria paid off its huge debt, stabilised its currency, cut inflation and established effective macroeconomic and fiscal policies. Economic growth is now at 9 per cent a year. I have been a frequent visitor to Nigeria over the last decade, usually meeting up with Obasanjo, a long-time friend of mine, and seen it change for the better myself.
Outsiders often chide Nigeria for being an oil economy, with all that implies: inflationary spending, corruption, misallocation of resources and so on. But it’s not as simple as that. Following the Norwegian example, a high proportion of oil revenues has been set aside for future generations or for emergency use should oil prices drop dramatically.
Agriculture has upped its share of national income in recent years and is growing. Manufacturing, in contrast, remains sluggish, held back by power shortages—although there is promising interest in foreign investment, particularly from India, China and South Korea.