John Campbell

Africa in Transition

Campbell tracks political and security developments across sub-Saharan Africa.

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Guest Post: Nigeria Hit by Domestic, Regional, and Global Headwinds

by Guest Blogger for John Campbell
June 13, 2012

A view of the trading floor at the Nigerian Stock Exchange (NSE) at the end of trading hours in Lagos April 24, 2012. (Akintunde Akinleye/Courtesy Reuters) A view of the trading floor at the Nigerian Stock Exchange (NSE) at the end of trading hours in Lagos April 24, 2012. (Akintunde Akinleye/Courtesy Reuters)

This is a guest post by Jim Sanders, a career, now retired, West Africa watcher for various federal agencies. The views expressed below are his personal views and do not reflect those of his former employers.

Last month at the World Economic Forum on Africa in Addis Ababa, Ethiopia, the Africa Progress Panel’s 2012 Africa Progress Report highlighted the threat to Africa of “rising inequality and the marginalization of whole sections of societies.”  Experts warned that “inequality in sub-Saharan Africa could threaten political stability and growth after a decade of rapid economic expansion.”

While inequality is rising, the movement of money out of emerging markets bodes ill for Africa.  Michael Aronstein of Marketfield Asset Management told me that even though Wall Street continues to make emerging market investments (because of recent success,) the big emerging markets—Brazil, Russia, India, and China—have had a bad eighteen months, and their fundamentals are shakier than previously realized.  Their GDP levels alone do not tell the whole story, Aronstein advises. These countries are important investors in Africa.  Similarly, as Rob Arnott (chairman of Research Affiliates and manager of Pimco’s All Asset Fund) explained to Fortune magazine: “Everyone sees emerging markets as the growth engine for the world economy.  If so, why are they trading at a big discount to the parts of the world that are not the growth engine?”

For Nigeria, such trends could make a bad situation worse.  A confluence of political-class infighting, (most recently, it appears, over the independence of the central bank) substantially lower oil prices, (Brent dipped below $100/bbl recently), a tragic airplane crash, which drew attention to systemic governance failures, and an ongoing insurgency in the North, portend more disorder, not less.

Regional developments are also inauspicious. The real threat posed by Mali to Nigeria may not be so much one of terrorist contagion, although it is receiving much attention in the international press.  Instead, it may be that Boko Haram insurgents may draw strength from the example of the collapse of an ineffective civilian government run by entrenched political elites, disconnected from the realities faced by ordinary people, and increase their efforts.  While, on the other hand, ordinary Nigerians, particularly youth, may begin to act on their frustrations in a more organized way, a la Mali’s Collectif Action Verite and its billboard campaign.

Globally, democracy is at risk.  Arguably, that of Greece has collapsed.  West Africa is not immune.

Post a Comment 3 Comments

  • Posted by Lawan

    i cannot agree with you more.The Nigerian situation better imagined than experienced. The middle class is virtually eliminated.Its either you have it or you do not. Those that have monthly wages can hardly meet their basic needs for a month.Take about a monthly take-home pay that will take you no were.The govt has refused to address the main issues that will create the kind of self belonging that people need to dissipate the negative energy now viciously in circulation all across the country.They have also added salt to injury by creating another political monster .while it was agreed to by Jonathan and co at the beginning ,they decide to jettison it as it suites them in return it has made the polity unstable and without uncertainty .All these and many other govt in competencies have succeeded in making things worse and frankly speaking i see no light at the end of the tunnel.The worse thing is that Nigeria has a great population and its trouble can ripple to a great part of the sub-region.

  • Posted by Chike Chukudebelu

    There is nothing happening in Nigeria today that hasn’t happened before (except probably Boko Haram).

    Boko Haram is real threat because if current trends continue, we are only a few months away from a full blown, widespread Christian retaliation.

    We really need to reach out to the Christian community in Nigeria to calm them down, tempers are boiling.

    Nigeria is presently in an unstable equilibrium. Something has to give and hopefully a new Nigeria or a new set of Nigerias will be born when the dust is settled.

  • Posted by Franklin Nnebe

    To me the great danger of Nigeria is not rising inequality which was always there even during military rule (and probably more so than today) but rising urban poverty.

    Today half of Nigerians live in urban places and this is a very different scenario from living in rural areas. In urban areas, many things that were near free in the rural setting have a price tag attached. Things like food, housing, water, transport.

    It creates a situation where an urban resident has to make ends meet by hook or by crook. In a country where government corruption and bad governance has practically destroyed whatever incentives for creating industry (lack of power, roads) it has meant cities teeming with people hustling for a living and any hiccup in growth will mean an explosion in urban unrest.

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