Tag Archives: Nigeria

Why Nigeria’s Credit Rating Matters More than Oil

How can something intangible (credit) matter more than a real resource (oil)?

I just finished a book that changed, or at least makes more dynamic, the way I view African development, Yuval Noah Harari’s Sapiens. Sometimes we get so ensnared in the details of social analysis that we forget to take a step back and look at the larger picture. Harari’s historical account helps us to do just that. His research deepens our understanding of the complexities of the resource course in oil-rich nations without strong democratic institutions.

He argues that one of the key turning points in human history was when we stopped viewing world resources and money as finite, and instead recognized that trust in imaginary future goods could create infinite economic expansion. These imaginary future goods were represented with a new kind of money: CREDIT.

Although we hear of the dark side of credit often—consumer credit card debt, credit on a loan to buy a home that the consumer could never pay off—credit is actually miraculous. As Harari phrases it, “credit enables us to build the present at the expense of the future.” In it, there is implicit hope that future resources will be more bountiful than current ones. That hope in the hypothetical is just so….human. And it has allowed the world’s per capita production to grow at a staggering rate over the last several centuries.

Although he doesn’t mention Nigeria specifically, a section of the book lucidly argues that a country’s credit rating, or the shared belief that a country will pay back its debts, matters more to its economic development than any other factor—including natural resource endowments.

Here is a grossly over simplified explanation using a feedback loop of why a nation’s healthy credit matters so much:

A) People have faith in the future economy —> B) credit is given out —> C) credit allows us to grow current businesses —> D) this growth is invested in new businesses —> E) businesses create goods that can be sold to pay back loans to creditors —> F) these pay backs fortify faith in the future economy.

And we are now back at the beginning of this cycle.

For those familiar with Nigeria’s economic history, any moment in this cycle can be, and has been, interrupted because of its unhealthy oil economy. In 2004, Nigeria required international debt relief after sovereign defaults on what it owed to the IMF. This was due to “heavy borrowing, rising interest rates, and inefficient trade” (see D). When the country suspended the national fuel subsidy in January 2012, no one wanted to expand their businesses that required gasoline, which is all of them since electricity is unreliable (see D). As I have mentioned in another post, oil can create a dangerous mono-economy in developing countries because it replaces the drive to produce anything aside from the oil itself (see E). Because so much of Nigeria’s economy is based on oil, its unstable pricing erodes the “faith in the future economy” that is the basis of credit extensions at all (see A).

Here is the excerpt of Sapiens that struck me as so pertinent to Nigeria:

A country’s credit rating is far more important to its economic well-being than are its natural resources. Credit ratings indicate the probability that a country will pay its debts. In addition to purely economic data, they take into account political, social and even cultural factors. An oil-rich country cursed with a despotic government, endemic warfare and a corrupt judicial system will usually receive a low credit rating. As a result, it is likely remain relatively poor since it will not be able to raise the necessary capital to make the most of its oil bounty.

Based on the description below, would you trust Nigeria to pay back money you gave it as a loan? Or as a business owner, would you trust its economy to grow, and give you returns on a new business you started with money you got from a creditor? Not many people would.

 

What is a country’s credit rating anyway?

In general, a credit rating is used by sovereign wealth funds, pension funds, and other investors to gauge the credit worthiness of a country—thus having a big impact on the country’s borrowing costs.

Standard & Poor’s credit rating for Nigeria stands at B with stable outlook. Moody’s credit rating for Nigeria was last set at B1 with stable outlook. Fitch’s credit rating for Nigeria was last reported at B+ with negative outlook. Overall, there are 11 ratings of stable, 9 rating of negative, and just rating of positive for Nigeria

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As an aside, anyone who witnessed the 2008 American economic meltdown based on home loans can appreciate that these credit ratings are hypothetical. All of those agencies above, those “experts,” failed to change their credit ratings, would could have helped alleviate the devastating U.S. housing crisis that negatively impacted every country in the world.

So, if Nigerian policy makers are to take Harari’s purely academic arguments to heart, they’ll stop writing checks they can’t cash and pay back creditors.

Trust matters.

What is the Population of Nigeria? Maybe 182 Million, Maybe.

The Economist published a comprehensive and clear piece on Nigeria’s struggles to understand it’s own population numbers. It is a more concise version of my previous post on what even makes Nigeria a state at all. It is something we may not think about often, but an accurate and up-to-date census is vital to a strong democracy.  It helps determine which representatives get power, where social and public services need to be implemented, and, truly, it separates a well-functioning government from the Wild West.

Nobody knows how many Nigerians there are.

No census has yet arrived at an accurate figure.

NIGERIA is Africa’s most populous country, a designation it wears with pride. It had more than 182m citizens in 2015, according to the World Bank, and is poised to have the world’s third-largest population, behind India and China, by 2050. But that figure and the extrapolation are based on Nigeria’s 2006 census, which was probably exaggerated. Parliamentary seats and central government money are handed out to states based on population, giving politicians an incentive to inflate the numbers. In 2013 the head of the National Population Commission (NPC), Festus Odimegwu, said that neither the 2006 census nor any previous one had been accurate. He resigned soon after (the then-government said he was fired).

Counting Nigerians has caused controversy since the colonial era. The country was stitched together from two British colonies: a largely Christian south and a Muslim-dominated north. In the lead-up to independence in 1960, the British were accused by southerners of manufacturing a majority in the north, which they were thought to favour. In 1962 unofficial census figures showed population increases in some south-eastern areas of as high as 200% in a decade. The full data were never published and northern leaders held a recount, which duly showed they had retained their majority (their region had apparently grown by 84%, rather than the originally estimated 30%). This politicking led to coups, the attempted secession of what was then known as the Eastern Region and a civil war.

The north-south divide has remained salient; there is still an unwritten rule that the presidency should alternate between a northerner and a southerner. Allegations that the north has manipulated its way to a majority continue. The censuses of 1973 and 1991 were annulled. In 2006 arguments flared when 9.4m people were counted in the northern state of Kano, compared with just 9m in Lagos, the commercial capital. The Lagos state government conducted its own, technically illegal, census and came up with 17.5m (probably a vast overestimate). A new national census has been repeatedly delayed. It is now scheduled for 2018, but the NPC’s estimate that it will “gulp” 223bn naira ($708m) may mean the count is put off indefinitely.

Even by other methods, Nigeria’s population has proven tricky to pin down. Africapolis, a French-funded research project, used satellite mapping to estimate the population of towns and cities in 2010. It found several cities, mostly in the north, had hundreds of thousands fewer people than the 2006 census counted. But even those data are not entirely trustworthy: it later transpired that the researchers had underestimated urbanisation in the densely populated Niger delta. Until there is an accurate, impartial census it will be impossible to know just how many Nigerians there really are. That means government policy will not be fully anchored in reality and it will not be possible to send resources where they are most needed.

Some Kidnapped Chibok Girls Released by Boko Haram

Last month marked the three-year anniversary of Boko Haram’s kidnapping of 276 girls from a government school in Borno State in northern Nigeria. The Islamic fundamentalists recently released 82 of those girls who have been missing since April 2014, allegedly after the Nigerian government released five of its fighters from prison. There are 113 girls still living among the fighters who haven’t been returned to their families.

 

 

What major news outlets haven’t shown is why rebels take “bush wives” at all. The coverage has tended to portray the kidnapping as a purely political act. However, for my M.A. thesis I researched the role of both female child soldiers and bush wives in West African civil wars. (For a book review I wrote, click here.) I found that kidnapping of girls goes beyond just the political.

bushwives

The civil wars of the 1990s in countries such as Liberia, Sierra Leone, and Ivory Coast saw unprecedented use of child soldiers. While the boys were often trained as fighters, girls fulfilled various support roles.  They cooked and cleaned at rebel camps.  They acted as porters for goods in and out of camps. They engaged in espionage at times. Some researchers pointed out how the girls helped meet the emotional needs of fighters, many barely adults themselves.

They also had children with the fighters, which entrenched a cycle of dependence on their captors. They had little chance of fleeing the camps with a child on their back, or did not want to endanger their child’s well-being (one Chibok girl allegedly chose to stay with her husband and child in Boko Haram). After three years, we now know that many of those girls kidnapped by Boko Haram have also had “bush babies” (the African term).

The humanitarian community now has the chance to apply lessons from the Disarmament, Demobilization, and Reintegration (DDR) programs of the 1990s to the Nigerian situation. Then, kidnapped girls were often given a cursory physical evaluation upon their release or cessation of hostilities, with little follow-up care for their children and absolutely no therapeutic care for their mental health. A significant obstacle for girls of the 1990s was also reintegration back into their home communities. After having conceived children with the enemy, families and neighbors were often hesitant or unwilling to welcome girls home. The International Committee of the Red Cross, a leader in helping care for the Chibok girls, must tend to the social and psychological after-care of today’s Nigerian girls in a way that was overlooked twenty years ago in other West African countries.

However, the situation for the returning Chibok girls is more complex than “us versus them” like in previous conflicts. Most people of Borno state come from a more cohesive ethnic group, the Hausas, and share the religion of Islam. The lines between the rebels and villagers may not be as clear as in West Africa. Also, the international attention on the Chibok case may lend families in their home communities a greater sense of sympathy for the girls’ plight. This sense of sympathy will be much needed in the coming years as they rebuild their lives.

Peace Corps’s Grassroots Diplomacy Done Right in Africa

The above video is an example of the finest of volunteers produced by the U.S. Peace Corps. I served with Baktash Ahadi (Mozambique 2004-2006) and saw him embody the three goals of the organization: to help the people of interested countries in meeting their need for trained men and women, to promote a better understanding of Americans on the part of peoples served, to help promote a better understanding of other peoples on the part of Americans. As his TED Talk demonstrates, Mozambique was a better place, and he was a better person, because he was there. So, why isn’t the program everywhere in Africa?

Although Nigeria has a domestic Peace Corps staffed by young Nigerians, the United States has had a very tenuous relationship regarding PC since the founding of the American program in 1961 under John F. Kennedy. The international outreach program was plagued by a problems in its first year in Nigeria, when anti-colonial sentiment was running high. In the first months, a young volunteer dropped a postcard to her friend describing squalid living conditions there. A fellow student picked it up and upon its release, University of Ibaban students accused the volunteers of being American spies intent on a neocolonial agenda. Such political tensions remained until the program was then closed down in Nigeria in 1976. It again operated briefly from 1992-1995. Since then, there have been no substantive talks to reinstate the volunteer program there.

There are certainly challenges that the Peace Corps faces that must give us pause.  It does not tend to go to the neediest countries, hence its continued programs in Costa Rica, Bulgaria, Romania, etc., and a lack of presence in most of central Africa. Volunteers are young and inexperienced (for who else has the luxury of giving up their entire U.S. life?). I can personally attest to the disappointing medical care available to volunteers. I witnessed volunteers who faced mental health challenges living out in the bush all on their own. (However, admittedly, our 20s are often not the most stable of times anyway, and many a post-graduates in the U.S. faces their own personal stumbling blocks even at home.)

But, ultimately, I do believe the pros outweigh the cons, if only for the immeasurable and profound symbolic force that is the Peace Corps. Development and measurable impact aside, it says an immense amount about the American psyche that we can even produce thousands of young people willing to go live in poverty of their own volition. It says an immense amount about U.S. values that we spend tax money on such a program. I truly believe that Peace Corps helps improve the view of Americans in most countries that it operates in, reducing potential military expenditure based on potential tensions. In Mozambique, it makes rural villagers feel good that they are worthy of a college educated American’s talents and time. It makes them feel they matter.

I have heard the sentiment that Nigeria is too corrupt to host a U.S. Peace Corps program, and that the rate of kidnapping for ransom of foreigners is too high. There is the argument that Nigeria is too far removed from independence, that if the U.S. doesn’t implement a program in the years following independent statehood, then the country becomes intractably entrenched in its ways.

My feeling is that if the Peace Corps doesn’t go exactly where the challenges are, exactly where it is most needed, what is the purpose of the program at all?

 

Nollywood: The Cultural Importance of Nigerian Cinema

*This also appeared in the Language Compass published by the National Language Service Corps. 

I saw the filming of a “Nollywood”, or Nigeria’s highly profitable film industry, movie for the first time a week after moving to eastern Nigeria. I was passing through a neighbor’s grassy yard on my way to a party one evening, and I heard heated yelling that alarmed me. I was surprised to peer around a corner and find a camera crew flooding lights on two young actors filming a dramatic fight scene. As I watched, I was impressed with the innovative electrical set up of the camera crew, attention to detail of the makeup artists, and vibrant energy of the actors. I was in Nigeria to learn a local language and was pleased to overhear that the characters’ names were of that tongue, Igbo.

I gained a greater appreciation for Nollywood during my time in Nigeria. I think it makes the cinematic representation of Nigerian life feel accessible to the audience. Unlike Hollywood, Nollywood movies are made on small budgets, often in people’s homes using amateur actors, and without any visual or special effects. It was easy for me to have friends point out filming scenes to me as we explored Lagos. Also, because of their modest funds, scripts often focus simply on the dynamics of human relationships—marriage, parenting, siblinghood, etc. Although these relationships are highly dramatized in sometimes silly ways, they are still ones that many of us have.

I saw that Nollywood gives Nigerians a way to tell their own stories in their own way. Historically, so much of what the rest of the world has understood about them was narrated by Europeans, by outsiders. This was the basis of my academic research before I arrived. However, these films are a way for Nigerians to be their own storytellers. Then, at the same time that it narrates what West African culture is like, Nollywood also helps create it. Often, the clothes that I saw friends wearing there were fashionable because of a certain Nollywood star, and I heard idiosyncratic phrases in daily conversation that I knew had been popularized by a local movie.

Years later, I still try to watch Nollywood cinema to practice listening to Igbo. I also do so because it reminds of the moment I realized that I was no longer watching Nigerian films from the U.S. as a way to understand a foreign culture, but actually living that culture.

Here is an excellent short documentary on Nollywood:

One of My Presentations on Women’s Protests

Below is an excerpt from part of a talk I gave on women’s role in Nigerian protests against oil extraction. Oil activities are blamed for environmental destruction, police violence, corruption, and lack of economic growth.

One of my research findings on Niger Delta oil politics was what I termed “positional arbitrage.” This means that local chiefs and male elites used their positions to help incite protests against oil companies and the government at times, as they were well positioned to gain from women’s demonstrations.

The talk also covers some other details about the oil reform movement in the region.

Nigeria of Superlatives

At a recent talk I gave on oil protests in the Niger Delta, an audience member asked me about my interest in Nigeria during the question and answer session. More specifically, he asked, “So, why Nigeria?”

If you are fascinated by social science, then a country that embodies the exaggerations of all social phenomenon is nothing short of intriguing. I am fascinated by culture, conflict, power, history, race, gender, and all social dynamics, and Nigeria demonstrates the dramatic extremes of all of these. It is the most and the least, the best and the worse, of so many measurements.

It produced the most victims of the transatlantic slave trade. It is the most populous country in Africa and is the third most ethnically diverse country in the world. Lagos is one of the top ten megacities of the world, and is growing faster than any other in Africa. It produces the most oil and has the fastest growing economy of any country in Africa. Nollywood surpasses Hollywood to be the planet’s second largest movie producer. To get more obscure in the statistics, it has the fifth highest rate of traffic fatalities in the world.  It is even has the world’s largest singing choir. A survey several years ago even ranked it as the happiest country on earth. How could I not want to learn more about a country that is such an amalgamation of fascinating facts?

In short, I love Nigeria because it is a puzzle I can never solve. 

For the PPT of the presentation, click below. Please feel free to contact me for the audio recording.

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Are U.S. border officials really qualified to test IT knowledge?

The following story has just emerged about a Nigerian software engineer who was made to answer computer engineering questions at New York’s JFK airport, as a way of testing the validity of his work visa to enter the U.S. This is a bizarre and untested way of confirming the validity of a visa, a product of the new “Wild West” of U.S. immigration policy.

It is troubling because it targets a highly skilled professional with the ability to fruitfully contribute to the American economy and human capital. To have been hired by this American firm, Celestine Omin must have valuable IT acumen. To impede his work for a U.S. company is a detriment to the American IT sector, the  spread of knowledge across borders, and the millions of consumers who benefit from IT development. The story is below.

                               ____________________________________

US immigration officials force Nigerian software engineer to complete written test to prove his computer knowledge

It looked to him like someone with no technical background Googled something like: ‘Questions to ask a software engineer’

US immigration officials forced a Nigerian software engineer to complete a written test on binary search trees to prove his computer knowledge.

Customs and Border Protection officers, took Celestine Omin, 28, into a room for further

He told them he worked for Andela, a tech start-up with offices in New York, Lagos, Nairobi and San Francisco, which claims to take “the most talented developers on the African continent” and link them with potential US employers.

The firm has offices in Kenya’s capital Nairobi, San Francisco, New York and the Nigerian city of Lagos, which was visited by Facebook founder Mark Zuckerberg.

One of the  officers then presented him with  a piece of paper and a pen and told to answer these two questions to prove he is actually a software engineer:

“Write a function to check if a Binary Search Tree is balanced.”

“What is an abstract class, and why do you need it?”

In computer science, binary search trees are a particular type of data structure that store items such as numbers or names.

Omin told Linkedin that he thought the questions could have multiple answers and looked to him like someone with no technical background Googled something like: “Questions to ask a software engineer.”

After spending about 10 minutes working on them, he handed in his answers only to be told they were wrong.

As time passed, he said that he expected to be sent home to Nigeria, only for the official to let him go.

“He said, ‘Look, I am going to let you go, but you don’t look convincing to me,’” Omin said. “I didn’t say anything back. I just walked out.”

It later emerged that the officers had phoned Andela to verify his story.

Nigeria is not one of the included in US President Donald Trump’s executive order barring travel from seven predominantly Muslim countries.

Ending Child Marriage Step-by-Step

Across sub-Saharan Africa, marriage of minors is still a prevalent problem, particularly among young girls from impoverished families. In Nigeria, the practice is far more common in the Muslim North, where some areas practice Sharia law that allows for child marriage. “The Nigerian government made child marriage illegal in 2003, but according to campaigners from Girls Not Brides, 17% of girls in the country are still married before the age of 15. In the Muslim-dominated northwest, 48% of girls are married by the age of 15 and 78% are married by the time they hit 18.”

This is obviously a challenge for development, as girls who marry young are unlikely to finish schooling or stay within the protective proximity of their parents. There are countless health problems associated with childbearing at a young age, common among child brides. It threatens both the health and human rights of young girls.

For this reason, it was lauded news that “Malawi banned child marriage last week through new legislation that increases the legal age of marriage from 15 to 18, representing a major victory for girls in a country that has one of the highest rates of child marriage in the world.” Malawi could function as a model nation in Africa for reforming the ways marriage and girls’s rights are approached.

Why Bad Leaders Are Inherited, And What We can Do About It

This is an excellent post by a friend that touches upon the lack of women in leadership as a whole, whether it be in the U.S. or Nigeria. I would add that because men have historically held positions of political power, they enjoy the “incumbent advantage,” which is well studied in the U.S. Those (male) politicans currently in office enjoy a more expansive socio-professional network, a potential ability to time elections in their favor, and greater name recognition (regardless of performance). Additionally, incumbents also have easier access to campaign funds and state resources that can be used to bolster their own campaigns, if even indirectly. These dynamics would make for an uphill battle in changing the gender ratios of government seats.

incumbency

How would the incumbent advantage take form in African politics?

ChewyChunks

Sociologists and economists try to explain why the people choose such poor leaders. They argue it’s due to the appeal of the narcissist, or because we’re really not self-aware, or because leaders have always been men and men are just deficient at important leadership qualities. While these all contribute, I think evolution offers the most intriguing insights.

First, let me give these other views a fair hearing.

Groups do tend to choose people who rate high on the narcissist scale, in part because those people are the most aggressive self-promoters, and contend that they are the most qualified of all, a prediction that more competent leaders would be unable to refute. Narcissists to seek leadership positions because they are obsessed with having power. Yet in a variety of studies, narcissistic leaders do no better or worse than any one else as leaders. That helps explain our…

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