NIGERIA

COUNTRY OVERVIEW

LOCATION AND SIZE.

Nigeria is located in Western Africa, and borders the Gulf of Guinea, between Benin on the west and Cameroon on the east. It has a compact area of 923,768 square kilometers (356,376 square miles). The country's land mass extends from the Gulf of Guinea in the south to the Sahel (the shore of the Sahara Desert) in the north. Comparatively, Nigeria is slightly more than twice the size of California, or the size of California, Nevada, and Arizona combined. Abuja, the capital city of the Federal Republic of Nigeria, replaced the former capital city, Lagos, in December 1991, because of its more central location, among other reasons. Lagos remains Nigeria's commercial capital. Other major Nigerian cities include Ibadan, Kaduna, Kano, Maid-uquri, Jos, Port Harcourt, Enugu, Calabar, and Aba.

POPULATION.

Accurate population counts for Nigeria are difficult to obtain because such figures are tied directly to representation in the National Assembly and distribution of national wealth; therefore, they are often skewed by groups vying for political or economic advantage. In the absence of an accurate census, it is impossible to determine how many people live in Nigeria beyond rough estimates. The population of Africa's largest country was estimated at 123,337,822 in 2000. This figure represents an increase of 39.36 percent over the 1991 population census figure of 88.5 million, which was hotly debated and widely believed to have been an undercount. In the year 2000, the birth rate was estimated at 40.12 per 1,000, while the death rate was estimated at 13.72 per 1,000. With a projected annual population growth rate of 2.67 percent between 2000 and 2015, Nigeria's population is expected to increase to 156,269,020 in the year 2015. Excess mortality due to AIDS, lower life expectancy, and higher infant mortality and death rates might reduce this projected figure.

The density of population in Nigeria is among the highest in Africa. It ranges from 100 persons per square kilometer in the northeastern and west-central regions to more than 500 persons per square kilometer in the south and northwestern regions. The population is largely young. According to a 2000 estimate of the age structure, the largest segment of the population (53 percent) comprised individuals who are between 15 and 64 years old. This percentage included 33,475,794 males and 32,337,193 females. The second largest segment (44 percent) were between 0 and 14 years old and included 27,181,020 males and 26,872,317 females. The smallest segment (3 percent) were individuals 65 years and older, including 1,729,149 males and 1,722,349 females. The estimated sex ratio of the total population in 2000 was 1.02 males to 1 female while life expectancy at birth for the total population was 51.56 years: 51.58 years for males, and 51.55 years for females. The government hopes that the expansion of education, especially among women, and the availability of birth control information, including family planning, will help to control the population growth. Nigeria has received assistance from the United States Agency for International Development (USAID) to develop and implement its programs on family planning and child survival. In 1992, Nigeria added an HIV/AIDS prevention and control program to its existing health activities.

Nigeria is a plural or multinational state, with 250 ethnic or nationality groups. The most populous and politically influential of the nationality groups include the Hausa-Fulani (29 percent) in the north, the Yoruba (21 percent) in the southwest, the Igbo (18 percent) in the southeast, and the Ijaw (10 percent) in the Niger Delta. This characteristic ethnic composition gives Nigeria a rich diversity in customs, languages, religious and cultural traditions. It also compounds Nigeria's political and economic problems. Although the people are primarily rural dwellers, Nigeria, like other post-colonial African countries, has been urbanizing rapidly. In the year 2000, nearly 25 percent of the Nigerian population were urban dwellers. At least 24 cities have populations of more than 100,000. Lagos, the largest city, had a population of 9.8 million in 1995, 12.5 million in 2000, and is projected to have a population of 25 million in 2015.

OVERVIEW OF ECONOMY

As of 2001, the most conspicuous fact about Nigeria's economy is that the corruption and mismanagement of its post-colonial governments has prevented the channeling of the country's abundant natural and human resources—especially its wealth in crude oil—into lasting improvements in infrastructure and the construction of a sound base for self-sustaining economic development. Thus, despite its abundant resources, Nigeria is poorer today than it was at independence in 1960. Still one of the less developed and poorer countries of the world, it has the potential to become a major economic power if the leaders resolve to learn from past mistakes and to harness the country's rich natural and human resources for a productive and sustained effort to promote economic development.

Before the country was colonized by Britain, during the second half of the 19th century, the various nationality groups that currently make up Nigeria were largely an agricultural people. They were food self-sufficient and produced a variety of commodities that were exported overseas. British colonial administrators amalgamated (joined together) the nationality groups in 1914 into a larger economy for exploitation for the benefit of British industrial classes. Under colonial rule, Nigeria remained an agricultural country, exporting raw materials to Britain and importing from it finished goods. Therein lay the origins of the dependence of Nigerian economy on commodity markets of the industrialized Western world for its foreign exchange. While the industrialization of the country was discouraged, rudimentary foundations for a modern Nigerian economy, however, were laid. Colonial economic policies shaped future independent Nigeria's economy, particularly in marketing, labor supply, and investment. The process of colonial rule and formal economic exploitation ended in 1960 but left Nigeria a relatively strong but undiversified economy. Thereafter, Nigerians were poised to remedy this defect and to build a self-sustaining Nigerian economy comprising agricultural, industrial, and service sectors.

From independence in 1960, the state took up the direction and planning of economic growth and development. Education was progressively expanded at all levels to reduce the rate of illiteracy and to provide the requisite skills and labor force for development. Infrastructure of roads and communication networks were constructed far beyond what was inherited from colonial rule. Hydroelectric dams were built to generate electricity. Secondary industries and automobile assembly plants were established to create more employment opportunities. Because of the paucity (small number) of indigenous (native or local) private capital, these activities were undertaken and financed by the government, often with foreign assistance from such countries as Britain and the United States. Foreign oil companies, such as Shell-BP, Exxon-Mobil, Chevron, Agip, and Texaco, operate in partnership with the government in the oil sector, the mainstay of Nigeria's economy. The capital-intensive oil sector provides 95 percent of Nigeria's foreign exchange earnings and about 65 percent of its budgetary revenues.

Because the established, government-owned industries and businesses were often inefficient and corrupt, productivity was low at best. In particular, mismanagement and corruption were endemic (characteristic of) in the successive governments and throughout the nation. However, the gravest problem was caused by the government's decision to stress the industrial sector above all others. Caught in a web of competing demands for scarce resources, the officials took the path of rapid, large-scale industrialization at the expense of the agricultural sector, as well as light manufacturing. They directed the bulk of investment capital towards the promotion of what Western advisers captioned "industrial take off." This decision to abandon the known—agriculture—for the unknown—rapid large-scale industrialization—was a fundamental error. The capital and the skill needed for rapid, large-scale industrialization were not sufficiently available. Thus, an unskilled workforce and insufficient funds severely handicapped the industrial sector. Also, Nigeria's neglect of the agricultural sector aggravated already problematic food shortages. Nigeria had raised enough food to meet domestic needs during its colonial period and in the decade following independence. However, it experienced food shortages in the 1970s and 1980s, which necessitated the importation of food from foreign countries. Among the imports were palm oil (from Malaysia), of which Nigeria had been the world's largest producer and exporter, and rice (from the United States) which was considered less nutritious than Nigerian brown rice. Once Africa's largest poultry producer, Nigeria lost that status because of inefficient corn production and a ban on the importation of corn. Furthermore, it is no longer a major exporter of cocoa, peanuts, and rubber.

Several forces compounded the problems of the agricultural sector. The migration of labor from the rural areas to the urban centers reduced the traditional agricultural labor force. Ecological constraints such as poor soil, erosion, drought, and the absence of agricultural research added to the problem. Other constraints on agricultural production include the use of antiquated technology due to a lack of capital, the low status given to agriculture in the education of the youth, inefficient marketing, an inadequate transportation infrastructure, lack of refrigeration, trade restrictions, under-investment due to unavailability of credit, low prices, and unstable pricing policies which resulted in farmers literally subsidizing urban dwellers and other sectors of the economy. In addition to these handicaps, import constraints limit the availability of many agricultural and food-processing plants. In general, land tenure discourages long-term investment in technology and modern production techniques.

The problem of food shortages and imports was addressed in the late 1970s and early 1980s. In the late 1970s the military government of Olusegun Obasanjo embarked upon "Operation Feed the Nation." His civilian successor, President Shehu Shagari, continued the program as the "Green Revolution." Both programs encouraged Nigerians to grow more food, and urged unemployed urban dwellers to return to the rural areas to grow food crops. The government provided farmers with fertilizers and loans from the World Bank. The food situation has stabilized, although Nigeria still imports food. A related problem which has not been completely resolved is the pollution of water in the Delta region and Ogoniland by oil companies. Water pollution disrupts farming efforts and has been a source of friction between farmers on one side and the national government and the oil companies on the other.

The oil boom which Nigeria experienced in the 1970s helped the nation to recover rapidly from its civil war and at the same time gave great impetus to the government's program of rapid industrialization. Many manufacturing industries sprang up and the economy experienced a rapid growth of about 8 percent per year that made Nigeria, by 1980, the largest economy in Africa. The growth, however, was not sustained. The new oil wealth did little to reverse widespread poverty and the collapse of even basic infrastructure and social services. The iron and steel industry, started with the help of the Soviet Union, still has not achieved a satisfactory level of production. The oil boom also provoked a shortage of labor in the agricultural sector as members of the rural workforce migrated to jobs in the urban construction boom and a growing informal sector. When the price of crude oil fell and corruption and mismanagement still prevailed at all levels, the economy became severely depressed. The urban unemployment rate rose to 28 percent in 1992, and crime also increased as 31.4 percent of the population lived below the poverty line.

Nigeria's debts mounted as administrators engaged in external borrowing and subsidized food and rice imports and gasoline prices. In the 1980s, economic realities forced Ibrahim Babangida's military regime to negotiate a loan with the World Bank and to reschedule Nigeria's external debts. His regime undertook an economic structural adjustment program (ESAP) to reduce Nigeria's dependence on oil and to create a basis for sustainable non-inflationary growth. However, external borrowing to shore up the economy created more problems than it alleviated. Much of the borrowed money never reached Nigeria. The portion that reached the country often went towards abandoned or nonperforming public sector projects. External loans escalated Nigeria's debts to US$30 billion during the Babangida regime and consumed external earnings in debt servicing. Similarly, the ESAP prescribed by the International Monetary Fund (IMF) failed to advance the economy, and aggravated the problems of inflation and unemployment. It caused a reduction of state spending on education and health care. Continuing political instability due to Babangida's annulment of the presidential election results in June 1993 and the subsequent authoritarian rule of Sani Abacha (1993 to 1998) made the general economic situation worse. The gross corruption by the Abacha regime and its violations of people's fundamental rights turned Nigeria into an international pariah for 6 years, and thus discouraged foreign investment in the economy. Many industries and manufacturing companies could not obtain raw materials and closed down. Others operated under severe handicaps, including rampant power outages and refined petroleum scarcity. Not enough had been done in the years of plenty to diversify the economy or to sustain the development. Military coups (military overthrow of civilian governments) and political instability worsened the situation.

There was considerable optimism in May 1999 when Oluseguan Obasanjo became Nigeria's civilian president. Many hoped that he would lift Nigeria from the verge of economic bankruptcy. One of Obasanjo's objectives to that purpose was to secure debt relief from Nigeria's foreign creditors. However, these creditors insisted that Nigeria's wealth of untapped resources provided the means for the country to pay off its debts, and refused to cancel its debts of US$30 billion.

In spite of some opposition, Obasanjo embarked upon a program of privatizing some parastatals in order to reduce corruption, promote efficiency, and raise productivity. He introduced an anti-corruption bill which passed through the legislature, and recovered some of the revenues that had been stolen from the country and deposited in Western banks. The inflation rate, which was estimated at 12.5 percent at the start of his administration, was estimated at 6.6 percent in 2000. Significant exports of liquified natural gas started in 1999, and increased crude oil prices in 2000 provided his administration with additional revenues. So far, however, he has been unable to bring about economic recovery. Industrial capacity utilization appears to have diminished. Worse still, infrastructural facilities, including the National Electric Power Authority (NEPA), continue to be in a state of disrepair. Expected massive inflow of foreign investment, on which the government had hinged its economic revival program, failed to materialize. This is in part because of the high cost of doing business in Nigeria and a lack of transparency in economic decision-making in the country. In addition to these realities, the unemployment situation in the country remains unchanged months after the restoration of civilian government. In fact, it has worsened among university graduates and ranged from 30 to 40 percent in 2000. Political uncertainties due to ethnic and religious conflicts between Muslims and Christians, and constant feuding between the president and the legislators aggravate the economic climate. Widespread armed robbery and a crime syndicate known locally as 419 prey on foreign nationals, further hindering foreign investment and tourism. The country's economy needs the collective efforts of the president and the National Assembly as well as more definite measures to address its ills in order to foster its recovery and growth. Currently, funds available to the government are insufficient to meet the needs of all sectors of the economy at once. External investors can contribute through long-term investment and joint ventures in Nigeria's large national market. Crude oil, the price of which rose sharply recently, remains a very considerable asset. Properly managed, it could provide a solid platform for more sustained Nigerian development and prosperity in the 21st century and beyond.

POLITICS, GOVERNMENT, AND TAXATION

Nigeria is a federal republic currently under a strong presidential administration, a National Assembly made up of 2 chambers—a Senate and a House of Representatives—and a judiciary. It has 36 administrative divisions known as states. Each of the states is divided into local governments. Thus, Nigeria has 3 tiers of government: national, state, and local.

Nigeria emerged from British colonial rule with a multi-party system deemed essential to democratic governance. However, those political parties were not differentiated or distinguished from each other by any political or economic ideology. Rather, they were essentially ethnic and regionally based, and were preoccupied with promoting ethnic and regional interests. Two of the largest parties, the Northern Peoples Congress (NPC) and the Northern Elements Progressive Union (NEPU), represented and championed the interests of the predominantly Muslim Northern Nigeria. The other leading parties, the National Council of Nigerian Citizens (NCNC) and the Action Group (AG), pursued the interests of the southeast and southwest where they were respectively based. The primary interest of the political parties was thus to use Nigeria's constitutional set up, together with the country's national wealth and power, to promote ethnic and regional security and well-being rather than a national end. Thus, upon independence from Britain in 1960, the 4 leading political parties preoccupied themselves with acquiring control of Nigeria's national wealth and power rather than distributing the nation's power and resources equitably among its nationality groups. This issue continues to dominate Nigerian politics in spite of the formation of more comprehensive national parties in the late 1970s and early 1990s.

The politics of ethnic and regional security play a key role in Nigeria's political and economic development as well as its role in Africa and the world in general. It is the major source of growing political crisis in Nigeria. It undermines the selection of responsible and responsive national leadership by politicizing ethnicity. National leaders are recruited on the basis of their ethnicity and region, rather than their ability, experience, and vision. Hence, Nigeria's political and economic performance falls below par in comparison with other countries of comparable size and resources. The primacy of ethnicity has resulted in periodic outbreaks of violence between Nigerian people groups; this violence, in turn, supports military governments that rule with an iron fist in order to maintain order in Nigeria's tense political climate. Census enumeration for economic planning and electoral representation has fallen victim to the same ethnic politics as people groups claim bloated population numbers in order to secure more government funding and representation. It is also often the factor that determines the location of industries and development projects rather than feasibility studies or viability of the location.

Nigeria has been under 3 civilian administrations and 7 military regimes since its political independence from Britain in 1960. After the independence elections in 1959, an NPC-NCNC coalition ruled the country with Sir Abubakar Tafawa Balewa of the NPC (the senior partner) as the prime minister. In mid-January 1966, Sir Abubakar and a few of his associates were killed in a poorly executed but popular military coup after a succession of political crises, violence, and repression which Sir Abubakar could not or refused to stop. The leader of the coup, Major Kaduna Nzeogwnu, portrayed the deposed leaders as corrupt individuals who sought to keep Nigeria permanently divided so they could remain in office.

The 15 January 1966 military coup established Nigeria's first military government under General John T.U. Aguiyi-Ironsi. Like most of the leaders of the coup that overthrew Abubakar's government, Aguiyi-Ironsi was an Igbo from southeastern Nigeria, which immediately raised the suspicions of the Muslim leaders and soldiers of northern Nigeria. They saw the coup as a plot to impose Igbo-domination on Nigeria, and resentment in northern Nigeria against Aguiyi-Ironsi grew fast. His corrective policy of centralization of power became an excuse for a counter-coup by northern soldiers that put a northerner, Yakubu Gowon, in power on 29 July 1966. Initially, Gowon's regime was uncertain and unstable. It witnessed an orgy of ethnic bloodletting in which about 30,000 Igbo residents in northern Nigeria were slaughtered. Attempts to restructure Nigeria into a confederation failed. In May 1967 as Colonel Obumegwu Ojukwu, governor of Eastern Nigeria, contemplated the breakaway of the region, Gowon issued a decree dividing Nigeria into 12 states—6 in the North, 3 in the East, and 3 in the West and Midwest. On 30 May 1967 Ojukwu declared the Eastern region the Sovereign Republic of Biafra. Consequently, a 30-month Nigeria-Biafra War began in July 1967. The war ended in January 1970 when Nigeria forced Biafra's surrender.

Achievement of post-war reconciliation and reconstruction goals was remarkably smooth, facilitated by the oil boom of the early 1970s. However, Gowon suspended the country's normal political activities beyond his promises and the expectations of eager politicians. In addition, he was unable to curb widespread corruption as well as a scandalous and excessive import of cement that clogged the port of Lagos (then Nigeria's capital). Consequently, he was overthrown in a bloodless coup on 29 July 1975 by General Murtala Muhammad.

In February 1976 Muhammad, who had already initiated a plan for a return to civilian rule over a period of 4 years, was himself assassinated in an attempted coup later that year. He was succeeded by his second-in-command, General Olusegun Obasanjo. In the same year, 7 additional states were created, bringing the total to 19. By 1996, 17 others were carved out. Meanwhile, Obasanjo strictly observed the set schedule for a return to civilian rule. An assembly elected to draft a new constitution completed the task in 1978. The constitution was published on 21 September 1978. On the same day the ban on political activity was lifted, leading to the formation of 5 political parties. In 1979, the political parties competed in a series of elections for state and national offices. Shehu Shagari, a northern Muslim and member of the National Party of Nigeria (NPN), was elected as president. Thus, after a transition period of 3 years Obasanjo transferred political power in October 1979 to a civilian administration led by Alhaji Shehu Shagari.

President Shagari's administration marked the beginning of Nigeria's Second Republic. His administration was a coalition of 2 political parties—the National Party of Nigeria (NPN, senior partner) and the Nigerian Peoples Party (NPP). Under the administration, the characteristic politics of ethnic and regional security that ruined the First Republic re-emerged. The coalition collapsed in 1981. Internal dissension, corruption, and abuse of power by the administration became manifest and weakened the moral authority of the government.

Senior military officers overthrew Shagari's government on 31 December 1983. The officers accused the government of widespread corruption, waste, and mismanagement of the economy, making Nigeria a "beggar nation." From 1984 to 1998, Nigeria experienced socioeconomic and political subjugation under 3 successive military dictators: Muhammadu Buhari (1984 to 1985), Ibrahim Badamosi Babangida (1985 to 1993), and Sani Abacha (1993 to 1998). The series of dictators caused further decline in the Nigerian economy as unprincipled, unproductive, corrupt, and weak political elites partnered with the military to smother any opposition and banish all democratic liberties and opportunities in the country. A planned return to civilian government in 1993 did not take place. On 23 June 1993 Babangida nullified the election of Moshood Abiola, a Yoruba businessman from southwest Nigeria as president on 12 June. Faced with riots, in which 100 people were killed, and lack of support from the military, Babangida stepped down on 26 August and installed a military-backed interim government headed by another southwestern Nigerian businessman, Ernest Shonekan. Shonekan, who received little or no public support because he was perceived as a strategic tool of the military, was to rule until new elections, scheduled for 1994. He was unable to deal with Nigeria's ever-growing economic problems and was removed on 17 November 1993 by Sani Abacha, who then assumed full political authority.

Abacha quickly dissolved all democratic political institutions and replaced all elected governors with military officers. He promised to return the government to civilian rule but refused to disclose a timetable. Faced with domestic and external criticism for his measures, Abacha called for elections for delegates to a Constitutional Conference. Most Nigerians boycotted the elections which were held in May 1994. Leaders of the major opposition group, the National Democratic Coalition (NADECO), were arrested when they attempted to reactivate disbanded democratic institutions. In 1997 Abacha inaugurated a period of transition to civilian rule and promoted the emergence of 5 political parties. Soon, however, he decided instead on a program of self-succession; he created and financed a youth movement and other paid political sycophants (flatterers) to advocate his self-succession. He manipulated the 5 political parties to adopt him as their candidate for the presidency. Thus, the national election that had been planned for August 1998 was to become a referendum (a decision by the general population) on Abacha's self-succession. Every measure of opposition against the plan was foiled, while lavish national resources were spent to promote it. The referendum on Abacha's self-succession did not take place, however. On 7 June 1998, Abacha died suddenly, the nation was told, from natural causes. While he ruled, Abacha had committed human rights abuses, significantly impaired the authority and independence of the judiciary, imprisoned his critics, looted the national treasury, and failed to tackle the nation's economic problems.

Upon Abacha's death, General Abdulsalami Abubakar was selected by the military leadership to succeed him. Abubakar worked to calm the tempers of an agitated nation and promised to end military dictatorship through a genuine transition to civilian rule by the end of May 1999. He proceeded to release Abacha's political prisoners, including journalists and human rights activists. He reached an understanding to release Moshood Abiola—the presumed winner of the 12 June 1993 presidential election annulled by Babangida—from detention. However, Abiola died of a heart attack in August before he could be released. In a further move, Abubakar dissolved the 5 Abacha-regime political parties. In their place emerged 15 others, only 3 of which—People's Democratic Party (PDP), All People's Party (APP), and the Alliance for Democracy—were certified to contest the elections at local, state, and national levels. The elections were completed at all levels by February 1999. The PDP won a majority of the seats in both chambers of the National Assembly as well as 21 of the country's 36 governorships. Olusegun Obasanjo, a former military head of state and a PDP candidate, won the presidential election. On 5 May 1999, Abubakar proclaimed by decree a constitution which went into effect on 29 May 1999. On the same day Obasanjo was inaugurated as the president of the Third Republic of Nigeria.

His administration faces formidable political and economic problems. Leaders of the southern states persistently demand a sovereign national conference to restructure the federation. The governors, especially those of the oil-producing states, demand a new formula for revenue allocation. Leaders of the northern states complain of neglect and inadequate allocation of resources and national offices to their region. Infrastructure of roads, especially in the south, is in disrepair. There is a growing income disparity, and a constant shortage of electricity and gasoline. Lax security and widespread armed robbery have triggered demands for regional control of security and resources. Ethnic and religious clashes discourage foreign investment and worsen the enormous rate of unemployment. Critics have described Obasanjo's government as unimaginative in dealing with these issues.

From independence in 1960 to the present, Nigerian governments, whether civilian or military, have not differed substantially on their economic policy. Each supported the concept of a mixed economy—a public sector controlled by the state and a private sector or free enterprise—and state intervention in such social sectors as education and health. This was in accord with the system of economy inherited at independence from Britain. In 1962, 2 years after independence, Sir Abubakar's government inaugurated a 6-year development plan. The plan mapped Nigeria's transition from an agricultural economy to a mixed economy whose bases were agricultural expansion and limited industrial growth.

Broad in its scope, the economic development plan sought to achieve national economic objectives, such as faster growth and higher levels of average material welfare. The plan included economic forecasts, policies towards the private sector, and a list of proposed public expenditures. Nigerian political leaders determined the general objectives and priorities of the plan, but the main authors of the actual document were foreign (Western) economists. The national government became heavily involved in carrying out the plan because it was unable to generate local private investment to raise sufficient capital for development. The Western advisors discouraged increased taxes on the wealthy and called for foreign assistance—about 50 percent of the public-sector investment—in carrying out the plan.

After the civil war, the military regime of Yakubu Gowon instituted a second development plan for the years 1970 to 1975. The plan sought to promote reconstruction after the civil war, to restore the nation's productive capacity, and to achieve a measurable degree of self-reliance. In 1972 the government issued the first of Nigeria's indigenization decrees that forbade aliens to invest in specified enterprises and reserved participation in certain trades to Nigerian citizens. At that time, about 70 percent of commercial firms operating in Nigeria were foreign-owned. In 1975, as a follow-up to the indigenization decree, the federal government bought 60 percent of the equity in the marketing operations of the major oil companies in Nigeria. It rejected full nationalization as a means of promoting its program of indigenization. After the overthrow of Gowon in 1975, a third development plan (1975 to 1980) was begun. Stimulated by the oil boom of 1974, the plan sought to expand agriculture, industry, transport, housing, education, health facilities, water supply, rural electrification, and community development. These objectives were not fully achieved because of inflation in minimum wage and administrative salaries awarded by the Udorji Commission and decline in projected oil revenue.

The slump in oil revenue caused the civilian administration of Shehu Shagari to delay the start of the fourth development plan (1981 to 1985). Falling oil revenues, cost of increased food imports, and the inability of the local governments to carry out their responsibilities threatened and undermined the plan. The overthrow of the civilian government of Shagari by Muhammadu Buhari in 1985 delayed the fifth development plan. In 1989, General Babangida, who had overthrown Buhari in 1985, abandoned the idea of a 5-year national development plan. In its place he introduced a 3-year "rolling plan" between 1990 and 1992, anticipating a more comprehensive 15-to 20-year plan. Because of rapid change and economic uncertainty, such rolling plans were to be revised at the end of each year and new estimates, targets, and projects were to be added. Babangida's rolling plan sought to reduce inflation and naira exchange rate instability, achieve food self-sufficiency, maintain infrastructure, and reduce the adverse effects of economic structural adjustment he had imposed on the nation. His rolling plan did no better than previous 5-year plans to promote Nigeria's economic development. The current civilian administration of Obasanjo is emphasizing a private-sector-led economy and "market oriented" economy. So far, it has done little to create a solid enabling environment in spite of its anti-corruption campaign aimed at injecting transparency and accountability into economic decision-making.

Nigeria derives its budgetary revenues primarily from petroleum profit taxation, import and excise duties, and mining rents and royalties. Petroleum taxation accounts for 65 percent of the budgetary revenues. As of May 2000 the tax rate for assessable petroleum profit was 85 percent. In March 1995, the government established a new tariff structure levying taxes on imported goods, ranging from 5 to 60 percent. Import tax is non-preferential and applies equally to all countries. Import duties are either specific or ad valorem ( value-added tax, VAT) depending on the commodity. In 2000 the VAT rate was 5 percent. Import duties are collected by the Nigerian Customs Service in association with government-appointed accounting/auditing firms and paid into the federal treasury through selected banks, such as First Bank of Nigeria, Public Limited Company (PLC); Union Bank of Nigeria, PLC; and United Bank for Africa, PLC.

Other sources of revenue include: companies' income tax (30 percent of assessable profit), capital gains tax (10 percent of capital gains), various types of licenses, and personal income tax. Employees "pay as they earn." Such taxes are deducted at monthly pay periods by employers for the federal treasury. In 2000 the tax rate varied from 5 to 25 percent of cumulative or total taxable income. Prior to the 1970s, self-employed people, including well-to-do traders and business people, paid virtually no income taxes. The government sought to collect the taxes by introducing tax clearance certificates. Individuals had to produce such certificates, proving that they had paid their taxes, before receiving government benefits, holding public office, or receiving passports for foreign travel.

INFRASTRUCTURE, POWER, AND COMMUNICATIONS

Nigeria has a fairly extensive infrastructure of roads, railroads, airports, and communication networks. The road system is by far the most important element in the country's transportation network, carrying about 95 percent of all the nation's goods and passengers. Currently, many of the roads are in disrepair because of poor maintenance and years of heavy traffic.

ROADS. The road system was started in the early 1900s under British colonial rule essentially as a feeder network for newly completed railroads. Two trunk roads running from Lagos (southwest) and Port Harcourt (southeast) to Kano (north central) were built. These were followed by the construction of several east-west roads, 2 north and 2 south of the natural division created by the Niger and Benue Rivers. The major purpose was to transport goods from the interior to the coast for export.

After independence in 1960, expansion of the road system to facilitate access to state capitals and large towns became one of the major areas of government investment. In 1978, an expressway was constructed from Lagos to Ibadan. Later, a branch of the Lagos-Ibadan expressway was extended to Benin City. By 1980 another express-way connected Port Harcourt to Enugu. Similar express-ways connected major cities and commercial centers in the north. Thus, by 1990 Nigeria had 108,000 kilometers (67,112 miles) of roads. Of this total, 30,000 kilometers (18,642 miles) were paved, 25,000 kilometers (15,535 miles) were gravel, and 53,000 kilometers (32,935 miles) were unimproved earth.

Much of the road system is in disrepair and barely useable. Massive traffic jams are very common in the large cities. There are also long delays in the movement of goods. Highway accidents and deaths are frequent, and number more than 30,000 and 8,000, respectively.

RAILROADS. Railroads provide Nigeria's second means of transportation. The rail system consists of 3,500 kilometers (2,175 miles) route of 1.067 meters (3.5 feet)

gauge. Two main lines of the single-track railroad system connect the coast with the interior. One line runs from Lagos (southwest) to Kano (north). The Lagos-Kano line was extended to Nguru, a cattle-raising region, in 1930. The other line runs from Port Harcourt (south-east) to Kaduna (north). A branch line runs from Zaria to Kaura Namoda, an important agricultural area in the northwest. The Port Harcourt-Kaduna line was extended to Maiduguri (northeast) in 1964. The rail system is operated by the Nigeria Railway Corporation. The system suffered a progressive decline because of inadequate funding, poor maintenance, and declining profit.

INLAND WATERWAYS.

Inland waterways totaling 8,575 kilometers, (5,329 miles) and consisting of Niger and Benue Rivers and smaller rivers and creeks, provide Nigeria's third internal transportation network. Water transportation of goods and services using boats and canoes is essential and common in riverine areas of Nigeria where road construction is difficult. In the 1980s the government invested funds in building river ports, hoping that increased passenger traffic on the nation's inland waterways would relieve the strained highway system. A major problem involves the fluctuations in the water level during the dry season, which hinder the movement of canoes.

PORTS.

Ports provide facilities for exports and imports. The port in Lagos handles the majority of cargo flowing in and out of the country by ship; other important ports include Port Harcourt, Calabar, and the delta port complex of Warri, Sapele, Koko, and Alesa Eleme. In addition to these port complexes, 2 specialized tanker terminals at Bonny, near Port Harcourt, and Burutu, near Warri, handle crude oil exports.

AIR TRAVEL.

Nigeria has 72 (1998 estimate) airports, 36 of which have paved runways. Three major international airports—Murtala Muhammad International at Lagos, Aminu Kano International at Kano, and another at Port Harcourt—offer regularly scheduled international flights. Nigeria Airport Authority manages the airports. Nigeria Airways provides domestic service between the international airports and other Nigerian cities. On 26 August 2000, Nigeria and the United States signed an "Open Skies Agreement" to expand and enhance the overall aviation partnership between the 2 countries. Among others, the agreement provides for a direct flight between Lagos and John F. Kennedy Airport in New York. It is hoped that the direct flight will boost Nigeria's tourism sector and develop Lagos as a gateway to Africa.

ELECTRICAL POWER.

Electrical power for industrial and household purposes is supplied by Nigeria's National Electric Power Authority (NEPA). The state-owned corporation, nicknamed "Never Expect Power Always" by Nigerians, is very unreliable, with daily shortages and blackouts. In 1998 its production of 14.75 billion kilowatts from fossil fuel (61.69 percent) and hydropower (38.31 percent) was highly inadequate to meet the nation's industrial and household needs. As a consequence, businesses and manufacturers operate well below capacity, while thousands of Nigerians in urban centers and rural areas buy their own power generators.

TELECOMMUNICATIONS.

Telecommunications services provide high quality links internally and to the rest of the world. The government is pursuing an ambitious telecommunications expansion program. It plans to increase Nigeria's mobile and wire lines from year 2000 numbers of 700,000 to over 4 million functional telephone lines by 2002. Nigerian Telecommunications Limited (NITEL) was the nation's sole carrier until 1993 when 8 private firms were approved to be connected to its switching system so as to provide services to various Nigerian zones.

Virtually all Nigerian localities receive broadcasts from one of 65 AM radio stations, and more than a dozen cities from FM radio stations. Shortwave broadcasts from overseas and 6 local transmitters are received throughout the country. Television services are available to most urban areas as well as rural areas with rural electrification. According to World Development Indicators (2000), 223 per 1,000 Nigerians owned radios (1997), while 66 per 1,000 owned television sets (1998). While there were 5 Internet service providers, less than 20 percent of the Nigerian urban population used the Internet in 1999.

ECONOMIC SECTORS

Despite the availability of natural resources, population, and domestic markets, all sectors of the Nigerian economy performed below their potential during the nation's first 40 years of independence. The structure of the economy remained stagnant (unchanged) and over-dependent on the oil sector. The largely subsistent agricultural sector failed to keep up with rapid population growth, forcing the one-time food exporter to import food. Inter-sectoral linkages remain weak, and the rate of unemployment remains high and problematic.

Most observers of the Nigerian scene—domestic as well as foreign—attribute the poor performance and the over-reliance on the oil sector to a variety of reasons, including political instability, prolonged authoritarian rule by the military, poor macroeconomic management, inadequate infrastructure, and external financing. In November 1996, the military ruler Abacha set up the VISION 2010 Committee which looked into the general situation and recommended targets for year 2010. No tangible progress has so far been made.

The civilian administration of Obasanjo has proposed substantial reform in its economic policy for 1999 to 2003. The main thrust of the reform is to deregulate the economy and to disengage the state from activities which are private-sector oriented, leaving the state to act as a facilitator. The plan also concentrates on the provision of incentives, policy, and infrastructure essential to the private sector's role as the engine of growth. The administration's industrial policy seeks to generate productive employment and raise productivity, increase export of locally manufactured goods, create a wider geographical dispersal of industries, attract foreign investment, and increase private sector participation. The policy places highest priority on the agricultural sector— to achieve both poverty reduction, especially in rural areas, and sufficiency in food production and surplus for use as industrial raw materials for export. Other areas of high priority include manufacturing industries, solid minerals, oil and gas, small and medium enterprises, and tourism. Also, the industrial policy includes partial privatization of government-owned enterprises in such sectors as telecommunications, electricity generation and distribution, petroleum refining, coal and bitumen production, and tourism, in which citizens as well as foreigners may freely participate.

AGRICULTURE

Although it depends heavily on the oil industry for its budgetary revenues, Nigeria is predominantly still an agricultural society. Approximately 70 percent of the population engages in agricultural production at a subsistence level. Agricultural holdings are generally small and scattered. Agriculture provided 41 percent of Nigeria's total gross domestic product (GDP) in 1999. This percentage represented a normal decrease of 24.7 percent from its contribution of 65.7 percent to the GDP in 1957. The decrease will continue because, as economic development occurs, the relative size of the agricultural sector usually decreases.

Nigeria's wide range of climate variations allows it to produce a variety of food and cash crops. The staple food crops include cassava, yams, corn, coco-yams, cow-peas, beans, sweet potatoes, millet, plantains, bananas, rice, sorghum, and a variety of fruits and vegetables. The leading cash crops are cocoa, citrus, cotton, groundnuts (peanuts), palm oil, palm kernel, benniseed, and rubber. They were also Nigeria's major exports in the 1960s and early 1970s until petroleum surpassed them in the 1970s. Chief among the export destinations for Nigerian agricultural exports are Britain, the United States, Canada, France, and Germany.

A significant portion of the agricultural sector in Nigeria involves cattle herding, fishing, poultry, and lumbering, which contributed more than 2 percent to the GDP in the 1980s. According to the UN Food and Agriculture Organization 1987 estimate, there were 12.2 million cattle, 13.2 million sheep, 26.0 million goats, 1.3 million pigs, 700,000 donkeys, 250,000 horses, and 18,000 camels, mostly in northern Nigeria, and owned mostly by rural dwellers rather than by commercial companies. Fisheries output ranged from 600,000 to 700,000 tons annually in the 1970s. Estimates indicate that the output had fallen to 120,000 tons of fish per year by 1990. This was partly due to environmental degradation and water pollution in Ogoniland and the Delta region in general by the oil companies.

Decline in agricultural production in Nigeria began with the advent of the petroleum boom in the early 1970s. The boom in the oil sector brought about a distortion of the labor market. The distortion in turn produced adverse effects on the production levels of both food and cash crops. Governments had paid farmers low prices over the years on food for the domestic market in order to satisfy urban demands for cheap basic food products. This policy, in turn, progressively made agricultural work unattractive and enhanced the lure of the cities for farm workers. Collectively, these developments worsened the low productivity, both per unit of land and per worker, due to several factors: inadequate technology, acts of nature such as drought, poor transportation and infrastructure, and trade restrictions.

As food production could not keep pace with its increasing population, Nigeria began to import food. It also lost its status as a net exporter of such cash crops as cocoa, palm oil, and groundnuts. According to U.S. Department of State FY2001 Country Commercial Guide, Nigeria's total food and agricultural imports are valued at approximately US__BODY__.6 billion per year. Among the major imports from the United States are wheat, sugar, milk powder, and consumer-ready food products.

Efforts since the late 1970s to revitalize agriculture in order to make Nigeria food self-sufficient again and to increase the export of agricultural products have produced only modest results. The Obasanjo administration, however, has made agriculture the highest priority of its economic policy.

INDUSTRY

MINING.

The oil industry dominates Nigeria's mineral development, making petroleum the most important sector of the Nigerian economy. Nigeria produces 2.3 million barrels of crude oil per day (2000). It is Africa's largest oil producer, contributing 3.0 percent to the global production, and is the world's sixth largest oil exporter. Its proven reserves are estimated at 20 billion barrels, enough to last 40 years at the current rate of production. Continuing exploration is expected to raise the total to more than 25 billion. Nigeria is a member of the Organization of Petroleum Exporting Countries (OPEC).

The state-owned Nigerian National Petroleum Corporation (NNPC) cooperates with foreign oil companies such as Shell, Mobil, Elf, Agip, Chevron, and BP in its oil industry. The parastatal was recently restructured as part of a general policy to commercialize state concerns and encourage private-sector participation in them.

Crude oil (11 percent of production) is refined in Nigeria in 4 refineries which seldom meet the country's demands. Hence, there is constant shortage of fuel. Crude oil is also the nation's largest export to such countries as the United States and Japan. Petroleum products accounted for two-thirds of Nigeria's energy consumption in the 1990s. Domestic consumption of crude oil was 250,000 barrels per day.

During the process of oil exploration, vast reserves of natural gas—estimated at 100 billion standard cubic feet—were discovered. They are the largest reserves found so far in Africa. In 1988, Nigeria produced 21.2 billion cubic meters per day with 2.9 billion cubic meters used by National Electric Power Authority and other domestic customers, 2.6 billion cubic meters used by foreign oil companies, and 15.7 billion cubic meters wasted through flaring. In 2000 Nigeria began to export Liquefied Natural Gas (LNG), an increasingly important sector which is expected at some point to surpass oil as the nation's major source of revenue. Nigerian Liquefied Natural Gas Ltd., a subsidiary of the NNPC, had signed agreements in 1992 with 4 countries—United States, France, Italy, and Spain—for supplies of LNG.

Nigeria's emphasis on the oil industry resulted in the neglect of other sectors of the mining industry. Recently, however, interest has rekindled in solid minerals such as coal, tin, iron, columbine, gold, uranium, tantalum, marble, and phosphates. Many other commercially-viable solid minerals have yet to be exploited. All solid minerals are owned by the federal government. Prospecting licenses, mining leases, quarrying licenses, and leases are granted by the Ministry of Solid Minerals Development, established early in 1995 to boost non-oil exports. The National Fertilizer Company of Nigeria operates a fertilizer complex at Onne (Rivers State). Coal production had declined as industries and trains shifted to the use of oil, gasoline, and diesel, but in 1991 2 joint ventures began operations for its mining and export. A total of 60,000 tons were exported to England in 1991. The solid minerals are attracting foreign interest for potential exploitation. In addition to the development of the solid minerals noted, Nigeria engages in processing industries for such products as palm oil, peanuts, rubber, wood, hides, and skins.

MANUFACTURING.

The manufacturing sector in the Nigerian economy is dominated by import substitution —light industries designed to produce goods that previously had been imported. The Nigerian Enterprises Promotion decrees (1972, 1977, and 1981) shifted the manufacturing sector from foreign majority ownership in the 1960s to indigenous (local) majority ownership in the mid-to-late 1970s by limiting foreign ownership shares in various industries. As a result, a few civil servants, military leaders, business people, and professionals became considerably wealthy through the purchase of the relinquished foreign-owned shares. The third development plan (1975 to 1980) envisaged a rapid phase of industrialization, emphasizing heavy industries such as iron, steel, and petrochemicals, as well as such consumer durables as automobiles. Automobile assembly plants were established in 1978 by Leyland, Peaugeot, Volkswagen, Fiat, and Daimler-Benz. Major industrial projects during the third development plan included 3 new oil refineries, 2 pulp and paper mills, an iron and steel complex, 2 liquefied natural gas plants, 3 sugar refineries, and 3 new cement factories. Their productivity was low. The iron and steel complex remained incomplete.

The fourth development plan (1981 to 1985) placed high priority on the manufacturing sector in order to promote rapid development and transformation of the economy. The extant manufacturing industries concentrated on consumer goods: food products, mineral distillation and beer brewing, textiles, cement, building materials, glass, footwear, furniture, chemical products, ceramics, and small appliances. They produced a range of goods but did not substantially increase employment or industrial growth.

Manufacturing industries are among the Obasanjo administration's priority areas of industrial investment. The administration favors industries which can rapidly be supported by locally-produced raw materials. The government also hopes to support food-production programs through local manufacture of chemicals, equipment, and light commercial vehicles. It will also focus on industries with multiplier effect such as flat-sheet mills and machine tools industry, including foundries and engineering industries for spare-parts production. The administration invites local and foreign investors in the priority areas.

The manufacturing sector suffers from a number of constraints including low demand for locally-made goods such as textiles and footwear, and the poor state of social and economic infrastructure typified by power and water shortages. However, Nigeria's manufacturing capacity utilization rose from 34 percent in 1998 to 36 percent in 1999.

SERVICES

TOURISM.

Tourism in Nigeria is highly undeveloped, considering the West African nation's available tourist resources: land, climate, vegetation, people and their festivals, abundant art treasures, national monuments, ports, traditional sports, and music. Recognizing the potential revenue the nation could generate from tourism, the government decided in 1991 to develop and promote tourism into an economically viable industry. The thrust of its policy was to "make Nigeria a prominent tourism destination in Africa, generate foreign exchange, encourage even development, promote tourism-based rural enterprises, and generate employment."

An institutional framework was put in place, namely the Federal Ministry of Commerce and Tourism, to pursue the objectives and maintain links with the state governments on funding and monitoring of a nation-wide tourism infrastructure. The government provided incentives to encourage domestic and foreign investors to participate in the venture. For example, the sector was accorded preferred-sector status, qualifying it for tax holidays and import-duty exemption on tourism-related equipment. Upon the inauguration of the Third Republic, President Obasanjo accorded the industry an additional boost by creating a separate Ministry of Tourism and Culture with Chief Ojo Madueke as its minister.

The boost notwithstanding, many impediments stand in the way of a tourist industry in Nigeria. Warnings issued by foreign governments on the dangers of travel to Nigeria scare tourists. Violent crime by individuals in police and military uniforms, as well as by ordinary criminals, is an acute and constant problem. Frequently, harassment and shakedowns of foreigners and Nigerians by uniformed personnel and others occur throughout the federation. Fake business and other advance-fee scams target foreigners worldwide and pose dangers of financial loss and potential physical harm. Other barriers to a successful tourist industry include inconsistent regulations, widespread corruption and crime, crumbling roads and bridges, erratic telephone service, frequent shortages of fuel, electricity and water, and social unrest in some parts of the country.

FINANCIAL SERVICES.

Regular banking services in Nigeria began in 1892 when the country's first bank was established. By 1952 there were 3 foreign-owned banks (the Bank of British West Africa, Barclays Bank, and the British and French Bank) and 2 indigenous banks (the National Bank of Nigeria and the African Continental Bank). A central bank, demanded by members of the Nigerian Federal House of Assembly in 1952 to help promote economic development, was established and operational on 1 July 1959. Similar to central banks in Western Europe and North America, the Central Bank of Nigeria establishes the Nigerian currency, controls and regulates the banking system, serves as banker to other banks in Nigeria, and carries out the government's economic policy in the monetary field.

Despite the tendency of Nigerians to prefer cash to checks for business and debt settlements, the banking system has expanded to include 90 banks in 2000 in 3 categories: commercial, merchant, and industrial or development banks. In addition to these categories, there are many mortgage and community banks, insurance companies, pension funds, and finance and leasing companies active in Nigeria. A drastic decline in the number of financial houses, commercial banks, and mortgage and community banks began in 1995 because of distress in the financial sector.

RETAIL.

Nigeria has one of the best-developed and most extensive retail industrial sectors in sub-Saharan Africa. This is due to its large population located in many large commercial centers, such as Lagos, Ibadan, Kano, Port Harcourt, Aba, and Onitsha, in addition to hundreds of smaller towns with more than 200,000 inhabitants. There are also hundreds of trading corporations, financial institutions, and a great variety of small business enterprises, many in the informal sector, along with thousands of large market (and roadside stands) in urban as well as rural areas.

The commercial centers house a variety of retail stores, restaurants, and secular and Christian bookshops that cater to the commercial and household needs of traders and residents. Nigerians now dominate the wholesale and retail trade which in colonial days had been virtually controlled by foreign companies from metropolitan Western Europe, Lebanon, Syria, and India. Nigerian women are playing an increasing role in the retail and distribution sector.

INTERNATIONAL TRADE

Nigeria exports primarily petroleum and other raw materials such as cocoa, rubber, palm kernels, organic oils, and fats. It imports secondary products such as chemicals, machinery, transport equipment, manufactured goods, food, and animals. The dependence on oil and a few other commodities for export caused Nigeria to become especially vulnerable to world oil price fluctuations.

During the colonial years, Britain was Nigeria's leading trading partner. After independence, Nigeria diversified its trading partners. It now trades worldwide with about 100 countries. The United States replaced Britain as the primary trading partner in the 1970s. However, Britain remains Nigeria's leading vendor, selling the former colony more than 14 percent of its imports in the 1990s. Other major trading partners are Germany, France, the Netherlands, Canada, Japan, Italy, and Spain. Nigeria's meager trade with Eastern Europe and the former Soviet Union declined even further after the collapse of Euro- Communism and the breakup of the Soviet Union in the early 1990s. Nigeria's trade with sister African countries—mainly with other West African members of the Economic Community of West Africa (ECOWAS,

created in 1975)—was only about 4 percent of its total trade in 1990.

Prior to 1966, Nigeria had a persistent trade deficit. The rapid growth of petroleum as an export commodity reversed the trend between 1966 and 1977. Sluggish international demand for Nigerian crude oil renewed the trade deficit from 1978 to 1983. Severe import restrictions and an economic structural adjustment program (ESAP) adopted to address the economic breakdown brought about trade surpluses from 1984 to 1986, and again in 1990. Monies sent home by Nigerian residents overseas helped to cushion the drastic effects of the deficit and the ESAP-induced decreased government spending on the population.

MONEY

The naira, Nigeria's currency, declined rapidly after the military deposed the civilian administration of Shehu Shagari on 31 December 1983 at the time of depressed oil prices. In 1981 N1.00 was worth US__BODY__.67. By 1986 the value of N1.00 had tumbled to US__BODY__.64 (N1.56 equals US__BODY__.00). It declined further in 1987 and has continued a downward spiral. In 1995, under the Babangida regime's policy of "guided deregulation" of the foreign exchange market, the official rate—N22.00 to US__BODY__.00—became available only to the government. All individuals and organizations had to meet their foreign exchange needs from an Autonomous Foreign Exchange Market (AFEM).

The prevailing AFEM rate in 1999 was N100.00 to US__BODY__.00. Obasanjo abolished the parallel official rate of N22.00 to US__BODY__.00 upon his inauguration in May 1999. Since then the exchange rate has risen to N120.00 to US__BODY__.00 (October 2000).

POVERTY AND WEALTH

Despite Nigeria's enormous resources and potential, poverty is widespread throughout the nation. Its basic indicators place it among the 20 poorest countries of the

world. Nigeria has been in stagnation and relative decline since 1981, from a per capita GDP of US__BODY__,200 in 1981 to about US$300 in 2000. In 1992, 34.1 percent of the population was below the poverty line, according to the CIA World Factbook 2000; about 70 percent fell below that line in 2000, according to the World Bank.

For many Nigerians the quality of life has declined rather than improved since independence 40 years ago. By contrast, the standard of living for a few privileged Nigerians—military officers and their civilian associates, corrupt politicians, and big contractors—has improved substantially. The average salaried worker cannot earn enough to support a family because of inflation and rises in food prices and transportation costs. The national minimum wage of N5,500 (about US$55.00) per month, adopted by the federal government but rejected by most of the states, falls far short of what is needed to cover housing, food, education, health care and transportation. The material condition of women, who comprise 50 percent of the population, is even worse than that of men because the welfare of women in general, including education, political participation, and workforce, had been neglected over the years until recently. The incidence of prostitution of Nigerian women within and outside the country has therefore increased. It is no wonder, given these prevailing conditions, that hypertension has become a major sickness among Nigerians since the 1980s.

Housing and living facilities for the wealthy are very similar to those available to their counterparts in countries of the western world. Middle and lower-level income groups in the urban and rural areas live in individual houses or crowded flats (apartments). Rural dwellers live in cement or mud block houses with tin or thatched roofs, and have no running water for the most part. Water and electricity services in the major cities are erratic. Water supplies in many rural areas are infested with disease-carrying worms, while electricity services, under government auspices, are seldom available.

There is, therefore, much despair throughout Nigeria, a situation that has led to a "brain drain" from the country to other nations of the world. Much of the despair can be linked to the abysmal quality of life of the average Nigerian, and also to the huge income disparity between the poverty-stricken masses and the few well-to-do Nigerians. Mismanagement and corruption on the part of the government squandered the nation's wealth, and fostered an atmosphere of violence and instability that makes it very difficult to attract foreign investors. Unfortunately, the legislative and executive arms of the present civilian rule include leaders from the corrupt and wasteful regimes of Babangida and Abacha who helped create that climate. Their presence casts doubt over the

nation's ability to rise above its tumultuous past into a brighter future.

The economic situation—the abject poverty and the high rate of unemployment especially—has not improved since Obasanjo became president in May 1999, despite his administration's Poverty Alleviation Program. His critics argue that the program consists merely of direct cash transfer to politically selected beneficiaries. The gap between the rich and the poor continues to widen. Segments of the nation continue to complain about their marginalization (being left at the margin or neglected), while others are favored. Armed robbery and wide-spread insecurity persist.

WORKING CONDITIONS

Nigeria had an estimated labor force of 42.844 million in 1999. Women comprised 36 percent of that force, which included talented and well-educated entrepreneurs. The estimated unemployment rate in 1992 was 28 percent. In 2000 the estimated unemployment rate increased to 32 percent. Secondary school graduates and women make up the largest proportion of the unemployed. The unemployment rate among the urban youth had hovered around 40 percent since the 1990s. Many college graduates have remained without full employment since the late 1980s. The government, including federal, state, and local units, is the largest employer outside the agricultural sector.

With the exception of employees classified as essential—members of the armed services, the police force, firefighters, Central Bank employees, and customs and excise staff—Nigerian workers may form or join trade or labor unions. They may strike to obtain improved working conditions and benefits and bargain collectively for higher wages. In 1999 about 3.5 million non-agricultural workers belonged to 42 recognized trade unions under a single national labor federation.

The first labor union—the civil service union— emerged in 1912. By 1950 the number had grown to 144 with more than 144,000 members, and 300,000 in 1963 affiliated with 5 central labor associations. Because of a series of labor problems and the meddling of politicians between 1963 and 1975, the military government dissolved the central unions and decreed only 1 central unit, the Nigerian Labor Congress, in 1976. In 1977 11 labor union leaders were banned from further union activity. A 1978 labor decree amendment reorganized more than 1,000 previously existing unions into 70 registered industrial unions under the Nigerian Labor Congress. In addition to the recognized trade unions, women's organizations, mostly professional and social clubs, collectively seek to improve women's conditions and participation in the economic and political life of the nation. Journalists, university professors, and students have their own organizations also as interest groups.

Nigerian labor laws prohibit forced or compulsory labor. They also prohibit the employment of children under 15 years of age in commerce and industry and restrict other child labor to domestic or agricultural work. Many children, however, hawk goods in markets and junctions of major roads and streets in the cities and assist their parents in trade and commerce. In 1974 the military government changed the work week from 35 to 40 hours by decree and stipulated payment for extra work done over the legal limit. Employers are required by law to compensate employees injured at work and dependent survivors of those who died in industrial accidents.

Strikes or industrial actions by workers tend to be frequent in Nigeria. Although plagued by leadership struggles, ideological differences, and regional ethnic conflicts, the Nigerian Labor Congress has been able to organize or threaten nationwide workers' strikes, demanding the retention of government subsidies on petroleum products, minimum wages, and improved working conditions. Public health doctors organized in 1985; several labor unions in 1998 protested the austerity measures of the Structural Adjustment Program. Similar actions were taken by the Academic Staff Union of Nigerian Universities (1986, 1988), the National Union of Nigerian Students (1986, 1989, 1990s), and the National Union of Petroleum and Natural Gas Workers (1997).

Conditions for workers in Nigeria are far from ideal. Civil servants and employees of private companies (foreign) have relatively good offices and facilities, health care, and wages, but that is not the case for most of the others. Conditions in the pre-collegiate schools and the universities have deteriorated markedly because of repression, underfunding, and irregular payment of salaries. Protests or industrial actions by trade union leaders often resulted in detention. A number of university students were killed by the police, and the universities shut down following students' protests and riots. Some doctors and professors lost their jobs because of industrial action. In addition, income inequalities between the rulers and bureaucrats on the one hand and masses of workers on the other, poor wages, and late payment of salaries demoralize workers. Furthermore, they adversely affect their standard of living, health, and work productivity. The poor conditions contribute to the pervasive corruption in Nigeria and the use of the country as a conduit for drug trafficking.

COUNTRY HISTORY AND ECONOMIC DEVELOPMENT

1861. King Dosumu of Lagos cedes the territory to Britain which becomes a British Crown colony.

1865. The British establish a consulate at Lokoja.

1887-1900. Various parts of what later became Nigeria are brought under British colonial rule as protectorates of Southern Nigeria and Northern Nigeria.

1903. The Sokoto-based Fulani Empire becomes part of the British Protectorate of Northern Nigeria.

1906. The colony of Lagos merges with the Protectorate of Southern Nigeria.

1914. For budgetary and administrative convenience, the Colony of Lagos and Protectorate of Southern Nigeria are merged with the Protectorate of Northern Nigeria as the Colony and Protectorate of Nigeria.

1922. The Clifford Constitution allows for Africans to be elected into the Legislative Council in Lagos.

1936. Nigerian Youth Movement emerges as precursor of political parties.

1937. Shell Oil Company begins oil exploration in Nigeria.

1939. Governor Bourdillion divides Southern Nigeria into Eastern and Western provinces, later to become Eastern and Western regions.

1944. The National Council of Nigeria and Cameroon emerges (becomes National Council of Nigerian Citizens in 1961).

1946. Sir Arthur Richards' Constitution goes into effect.

1949. The Northern People's Congress is formed.

1950. The Action Group (Party) is formed.

1951. Macpherson Constitution goes into effect.

1954. The Lyttleton Constitution, establishing Nigeria as a federation of 3 regions—Eastern, Western, and Northern—goes into effect.

1959. Elections, in preparation for independence, are held; an NPC-NCNC coalition government is formed with Sir Abubakar as prime minister.

1960. Nigeria becomes independent (1 October).

1963. Nigeria becomes a republic (1 October).

1966. Military overthrows Abubakar government. Major-General Ironsi is installed and is later assassinated and succeeded by Lt. Colonel Yakubu Gowon.

1966-79. Military rule; Gowon (overthrown 29 July 1975), Murtala Muhammed (assassinated 1976), succeeded by Olusegun Obasanjo.

1967-70. Eastern Region declares independence as Republic of Biafra, precipitating Nigeria-Biafra War which ends January 1970 with the defeat of Biafra.

1979-83. Second Republic with civilian rule under Shehu Shagari.

1983-93. Prolonged military rule; Muhammed Buhari overthrows the Shagari administration; is ousted (1985) by Ibrahim Babangida.

1993. Presidential election (won by M.K.O. Abiola) is annulled by Babangida (23 June) who retires and appoints businessman Shonekan as interim ruler. Abacha ousts Shonekan (17 November) and inaugurates a brutal regime.

1998. Abacha dies of natural causes. His successor, General Abubakar, inaugurates transition to civilian rule. Local government elections are held.

1999. Gubernatorial elections are held 9 January, National Assembly elections are held 20 January, and presidential elections follow 27 February. Obasanjo is inaugurated 29 May as president of the Third Republic.

FUTURE TRENDS

Nigeria's prospects for sustainable economic growth are mixed. Despite current hardships, Nigeria represents an important market in Africa with its vast human and natural resources. Its revenues from both the recent and ongoing recovery in oil prices and the export of liquified natural gas should help to rebuild the nation's shattered socio-economic infrastructure. The anti-corruption legislation, rigorously enforced, should help to restore transparency and accountability into economic decisions, which would boost national and international investor confidence in the nation. The liberalized rules for foreign investment and initiatives by the Obasanjo government to privatize some state-owned enterprises and promote tourism should help the nation move steadily towards targeted growth.

Nigeria has many impediments on its road to sustainable development. Earnings from non-oil exports are unlikely to improve significantly because of the high cost of production. Acrimony between the executive and legislative arms of the government continue relentlessly to the detriment of collective and decisive action. Painful and costly fuel shortages, caused by the inability of Nigeria's dilapidated refineries to produce anywhere near capacity, immobilize the nation. Inter-ethnic and religious conflicts continue to take their tolls in human lives and physical assets of the nation. Unemployment, especially among college graduates, has reached intolerable levels. Armed robbery and crime constitute a present danger to the economy. These impediments must be more determinedly addressed to enhance Nigeria's chances for growth and development.

DEPENDENCIES

Nigeria has no territories or colonies.

BIBLIOGRAPHY

Aborisade, Oladimeji, and Robert J. Mundt. Politics in Nigeria. New York: Longman, 1999.

Achebe, Chinua. The Trouble with Nigeria. London: Heinemann,1983.

Adejumobi, Said, and Abubakar Momoh, editors. The Political Economy of Nigeria Under Military Rule: 1984-1993. Harare: Sape Books, 1995.

Forrest, Tom. Politics and Economic Development in Nigeria. Updated edition. Boulder, CO: Westview, 1994.

Ihonvbere, Julius. Nigeria: The Politics of Adjustment and Democracy. New Brunswick, NJ: Transaction Books, 1994.

Library of Congress. Nigeria: A Country Study. <http://memory.loc.gov/frd/cs/ngtoc.html>. Accessed August 2001.

Oyewole, Anthony, and John Lucas. Historical Dictionary of Nigeria. Second edition. London: Scarecrow, 2000.

Palmer, Monte. Comparative Politics: Political Economy, Political Culture, and Political Independence. Itasca, IL: E.E. Peacock, 1997.

Soyinka, Wole. The Open Sore of a Continent: A Personal Narrative of the Nigerian Crisis. New York: Oxford Univ., 1996.

Theen, Rolf H.W., and Frank L. Wilson. Comparative Politics: An Introduction to Seven Countries. Fourth edition. Upper Saddle River, NJ: Prentice Hall, 2001.

U.S. Central Intelligence Agency. World Factbook 2000. <http://www.odci.gov/cia/publications/factbook/index.html>. Accessed August 2001.

U.S. Department of State. FY 2001 Country Commercial Guide: Nigeria. <http://www.state.gov/www/about_state/business/com_guides/2001/africa/nigeria_ccg2001.pdf>. Accessed August 2001.

—F. Ugboaja Ohaegbulam

CAPITAL:

Abuja.

MONETARY UNIT:

Naira (N). 1 naira equals 100 kobo. Coins in denominations of 1, 5, 10, 25, and 50 kobo, and notes in denominations of 5, 10, 20, and 50 naira are issued.

CHIEF EXPORTS:

Petroleum and petroleum products, cocoa, rubber, lumber, and peanuts.

CHIEF IMPORTS:

Machinery, chemicals, transport and electronic equipment, manufactured goods, food, and live animals.

GROSS DOMESTIC PRODUCT:

US$110.5 billion (purchasing power parity, 1999 est.).

BALANCE OF TRADE:

Exports: US$13.1 billion (f.o.b., 1999). Imports: US$10 billion (f.o.b., 1999).