Tag Archives: history

Exploring the Creation of the Nigerian State

Where does Nigeria fit into a discussion of how states are made? It is weak by nearly all measurements, and Foreign Policy magazine even labeled it a “failed state” based on its poverty and governance in 2010. To answer the Nigeria question, we might look to the institutional approach of state theory. It asserts that institutions—the way societies are organized—are the fundamental cause of countries’ underdevelopment. This traditional institutional explanation, built mainly on case studies in European countries, offers a helpful but incomplete framework for analyzing current conditions in Nigeria. It is deficient due to Nigeria’s unique human geography, colonial history, and resource endowment.

To remedy this weakness in institutional models, Jeffrey Herbst makes two key arguments about African state formation. First, he identifies population density as the causal factor behind institution building and a source of institutional comparative statics, not institutions themselves. His story is that Europe was scarce in land and high in population, whereas Africa had abundant land and fell short in population. This meant that Africans did not have to wage wars of land seizure or land defense that led to state-making and institution building, alá Charles Tilly. Furthermore, colonization in the name of resource plunder replaced the phase when institution building should have taken place. Colonization was followed by the Cold War in which the Western and Soviet powers were vying for allies in African countries, and this Western or Soviet financial support also replaced what would have been a period of institution building.

In Robert Bates’ state-centric mixed method analysis, he argues that the collapse of the state causes war and then violent political disorder, and not vice versa. The author focuses on what he identifies as the three keys to state failure in Africa aside from the destructive force of colonialism.  The first is ethnic tensions, which are the result of state failure and not of ancient hatreds, and the second is natural resources, which he finds to be a correlate but not a cause of war (as opposed to Collier and Hoeffler, or Fearon and Laitin).  The third cause for failure is a lack of strong democracy, and he maintains that competitive parties are required but not sufficient for order. Lastly, he concludes that public revenues matter more than private income, which is essentially an issue of poverty levels (Bates 2008). Bates and Barzel both think that strongly democratic states have greater productivity because individuals enjoy residual claims, thus giving individuals an incentive to be efficient (Barzel 2002).  Conversely, without rule of law the government keeps residual resources for itself, giving individuals no incentive to be efficient. Propositions by the two can aptly be applied to a reading of Nigeria.

Nigeria’s current economic, political and social conditions are best explained by research on oil politics specifically. For one, the stimied capacity of the state to raise revenues and its growing reliance on powerful interest groups conspire to limit the range of policy choices open to the government, paralyzing the process of institutional development. Thus, most extractive states like Nigeria develop similar institutional frameworks that encourage political leaders to pursue politically painless policy solutions. The end result is an institutionally weak state reliant on oil rents and beholden to rent seekers (Karl 1997).

Some argue that oil revenues interfere with state evolution—the competition for the survival of the fittest country. Most of Europe’s states did not survive because most of them were weak and unorganized; those that still exist today were simply better than the others.  Conversely, all of Africa’s modern states have survived, even bad ones.  Foreign influences and oil revenues has allowed weak states that should have died out continue on (Herbst 2000). Soares de Oliveira claims that oil may very well be the single factor allowing weak African nations to survive despite failing to meet Weberian criteria for stateness. He calls these “successful failed states” because they have immense amounts of money and can at times use ample force, yet are barely functional (with functionality defined by their institutionalization, legitimacy, and degree of rentierism). Their failure is a continuation of politics by other means (Soares de Oliveira 2007, 56).

Such a portrayal of African oil-rich countries accords with that of Scott, who conceives of the state as being an inherently extractive entity (Scott 2009). He adds to the discussion by describing how countries will use resources, e.g. oil revenues, to invent development schemes that inevitably fail because they ignore the complexity of practices, processes, and relations present in those environments, the value of everyday local knowledge. They continue to push forward these improvement plans because of their ongoing attempts at being more modern, which means greater “stateness” that justifies their own governance (Scott 1998). Oil actually exaggerates the phenomenon that Scott describes by providing almost limited resources. Nigeria has engaged in these modernizing development projects and virtually of them have been a failure.

A very brief chronology of the Nigerian oil economy

English: Flag of the Organization of Petroleum...

A colleague of mine casually asked me yesterday about Nigeria’s oil economy after independence.  Many isolated events and economic explanations came to mind, but I was surprised when I couldn’t give her a succinct chronology. I thought I would write a paragraph or two to remedy this.

More Nigerians slowly moved from subsistence agriculture to private enterprise around independence, and oil, which had been discovered three years earlier, quickly become the basis of economic growth. Shell had been the first to commercially drill in the country, but in 1960 other companies such as Mobil and Agip were competing for their own stake.  Hopes were high. Oil profitability was greatest during the “Golden Decade” of the 1970s, in which Nigeria became the wealthiest country in Africa. Between 1958 and 1974, production rose from just over 5000 to 2.3 million barrels per day and government revenue increased from N200,000 to N3.7 billion. Within two years, state profit increased by almost 50% to an all-time high of N5.3 billion in 1976. Nigeria bolstered profits when it joined OPEC in 1971, an organization which helped to construct the global petroleum scarcity, and thus the massive profitability of fossil fuels at the time. The economic prosperity was short-lived however.


In accordance with the resource curse, the 1970’s oil boom led to a near complete economic crash in the following decade. Nigeria had made an almost total shift away from the traded and diversified agricultural sector to the non-traded sector of petroleum, and projected revenues for petroleum were high. Based on this, President Murtala Mohammed spent and borrowed billions on grand-scale modernization projects.   However, such spending and borrowing in a mono-economy proved highly problematic during the sharp decrease in world oil prices under Babangida in the 1980s. Domestic inflation became so high that even basic food stuffs become too expensive for consumers and Nigeria had to default on numerous debts. To create more jobs for Nigerians, the government forced out the thousands of West African workers who had immigrated to the country to take advantage of the employment in the formerly booming economy.  Rather than take a conditional IMF loan like Ghana did, the government implemented a controversial Structural Adjustment Program (SAP) that proved largely unsuccessful. The economic decline was so severe that by 1989 Nigeria was labeled a low-income country and qualified for World Bank assistance.


Despite a slight revival in the 1990s, the economy has yet to recover to early 1970’s levels of prosperity. Today, ¾ of Nigerians live below the poverty line, in a country that produces around 2.6 billion barrels of oil daily. Petroleum accounts for 80% of budgetary revenues and as a result, high inflation has hurt investments for the average Nigerian and made international investment aside from fossil fuels a near impossibility. Few jobs in the oil sector have been created for Nigerians and wealth distribution is grossly unequal. Robert Bates argues the Nigerian oil crisis and subsequent loss of export taxes is what caused the state to become predatory for its income, thus laying the groundwork for today’s poor and often corrupt governance.


So, there is the short of it, more or less. There was steady growth of the oil sector in the 1960s, a complete boom in the 1970s that created the “oil state” as we know it, a crash in the 1980s, then a slight improvement in oil revenue in the 1990s that leveled out to what we have today.