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The Lowdown Hub

Dysfunctional politics blights Nigeria’s prospects The country’s vast oil wealth has been absorbed

Muhammadu Buhari, Nigeria’s president since 2015, will step down in February 2023 © Kola Sulaimon/AFP/Getty

The idea that government is the problem, not the solution, is well ingrained in Nigeria — a state whose presidential and federal system is largely based on the US, and seems to share some of that country’s libertarian tendencies, too.

Even Bismarck Rewane, an economist and businessman who has advised the administration of Muhammadu Buhari on economic policy, argues that the government’s best course of action is sometimes to get out of the way. If a private equity company ran Nigeria and stripped it of its inefficiencies, he says, “this country would be a wealth-creation machine.”

Successive governments — military and, since 1999, civilian — have failed to turn Nigeria’s vast oil wealth into the prerequisites for sustainable growth. They have not provided the levels of health, education and infrastructure needed to catapult the country to the next stage of development. Instead, government has become a patronage machine to collect and distribute oil revenues and to subsidise parts of the economy, according to economists and political scientists.

Politics is often seen as the quickest way to make money, says Dimieari Von Kemedi, an environmental activist, former presidential adviser, and agricultural entrepreneur.

“Youth don’t talk about business because the opportunities are so few,” he says, adding that the commercial openings that do exist often involve extracting “rent” from government.

At federal level, most of the roughly $30bn budget goes on recurrent expenditure — paying salaries, the bureaucracy and servicing debt. That leaves little left for capital expenditure or long-term investment in Nigeria’s people.

According to the OECD, Nigeria’s tax to GDP ratio is among the lowest in the world at 6 per cent — less than half the level of Kenya’s — and an indication of how little faith there is in the government’s capacity to spend wisely — or honestly. “Trust is really broken,” says Abubakar Suleiman, chief executive of Sterling Bank.

Nigeria’s best hope, says Suleiman, is to c