Something Had to Give: Nigeria's Coming Crisis

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Something had to give. On 29th June Nigeria's President Goodluck Jonathan, freshly-landed from Rio, announced the dismissal of National Security Advisor Andrew Owoye Azazi, the public face of so-far ineffective efforts to contain the Boko Haram Islamist insurgency. His replacement is retired Colonel Sambo Dasuki, a scion of one of the Sokoto royal families, and former high-flier in the early-1990s military regime of Ibrahim Babangida. Dasuki, a quiet and well-respected negotiator, has already set out on a temperature-taking tour of the most affected states, apparently in order to research what kind of consensus might be built towards stepping-down the intensity of conflict. The appointment of Dasuki represents a reaching-out to two constituencies not hitherto apparently dear to the administration’s heart; the aristocratic establishment of 'old' northern Nigeria, and the legacy of still-influential General Babangida.

The new face therefore does two things; first, to the alienated constituencies in the north, and to Boko Haram itself, it de-ethicises the conflict between the insurgents and the national state – the NSA no longer looks like an agent of a narrow Niger Delta clique commanding the state. Much more importantly, it also signals a long-overdue change from viewing the office of the NSA as a conveniently fungible and non-transparent conduit to loot the state, much as State Governors do the 'security vote' in their budget: Azazi, although a career intelligence specialist, was more importantly a trusted Ijaw fellow-traveller from Peretorugbene in the President's home Bayelsa State. Now government may actually be using the office of National Security Advisor for its stated function - to advise on and coordinate national security. Goodluck, it seems, has finally learned from Obasanjo, who kept that office firmly in the hands of, if not his enemies, then those who knew how to keep an open channel of communication with, and placate, those who could become his enemies.

Yet even if it brings results, this move will struggle to reduce the growing pressure on Jonathan – even the comfortably-insulated political class are beginning to feel the heat generated by public dissatisfaction with the administration on two counts. First is the apparently dangerously out-of-control nature of the Boko Haram threat, and second is the apparently equally out-of-control nature of the eye-wateringly huge corruption scams which are breaking even the sorry records of previous Nigerian administrations.

Much of the most vocal public anger on the Boko Haram issue comes from Christian leaders, nationally, from the south and also within the north, who openly question the ability of a President – whose election many of them supported, partly on identity grounds – to protect them, as horrific attacks on churches weekly point out. Equally, Muslim and secular leaders in the north, who also bear the brunt of attacks taking place in the heart of their communities, increasingly feel abandoned and question whether this administration is a national or simply a sectional government. Moreover, across the country, Nigerians of all social classes, are having their legendary ability to live with hardship tested past its usual breaking point by having to get used to the wholly unheralded phenomenon of running a daily gauntlet of bombs and gun attacks in public places; the extraordinary and unthinkable has now become ordinary, and Nigerians have begun to pessimistically bandy about the word 'Somalia'.

If Boko Haram is a concern, corruption is a provocation. Put on the public agenda in no uncertain terms by the 'Occupy Nigeria' movement in January’s civil strikes against fuel subsidy removal, the issue of high-level graft exploded with the House of Representatives’ shocking disclosures over the scams that had been run under the cover of fuel importation since the tenure of late President Yar'Adua. Just to recap, the amount missing was US$7.6 billion – 25% of Nigeria's budget – a scam globally dwarfed in recent history only by Iraq's oil-for-food scandals. The huge pressure from internal constituencies, civil society and external partners pressure to implement the report's investigative and punitive recommendations, has so far yielded only three outcomes: The first two are minor - sacking of the auditing firms, and change at the top of the notoriously murky state oil company NNPC, in which an insider was replaced with another insider. The third was a conveniently-timed corruption sting in which Farouk Lawan, the firebrand drafter and champion of the report, was bribed to relieve the pressure on two firms owned by Femi Otedola, one of Nigeria's most state-connected comprador oligarchs, who then, we are supposed to believe, had an attack of patriotic conscience and voluntarily reported the whole thing to the anti-corruption authorities. Lawan has been arrested and suspended; the end result is likely to his removal and thus the kicking of the entire investigative agenda into the long grass of bureaucratic procedure and eventually, history.

This may seem an incredibly cynical and spineless response to a major national crisis, but perhaps Goodluck doesn't see much of a choice. The fact is that the fuel subsidy scam was intimately connected to the patronage logic of the regime in which he served as Vice-President, and was further and more strongly reconnected by the process of his seeking support to run for election in 2011. Not only did fuel marketers expect to recoup the 'voluntary' campaign contributions rumoured to have been levied upon them in return for being allowed to carry on their lucrative business, but it seems that a much wider variety of players were allowed access to the cash pot under the supervision of Petroleum Products Pricing Regulatory Agency (PPPRA) chair Ahmadu Ali, who had previously served as the chair of the national ruling People’s Democratic Party. It is not news that the PDP is basically itself a scam which now commands the host – the public exchequer - upon which it parasites. But the documented and intimate connections of this scam to the heights of power are as explosive as any Boko Haram bomb. Given that, many of the beneficiaries, if not themselves protected from prosecution, are just waiting for their day in court in order to reveal exactly how and why their own role was authorised. Hard then to see much enthusiasm for prosecution under those conditions.

That much is clear to everyone across the country. But in northern Nigeria, the Jonathan administration faces a particular challenge. The Goodluck administration basically lost the north – in the sense of the limited hold on public sentiment he may have been able to secure there – right at the outset. The numbers which gave his Presidential bid the required minimum 25% of the vote in states in which he lost (most of the north) were some of the most obviously suspect of a poll which, while being much cleaner than 2007's, was by no means faultless. The region's youth, who overwhelmingly supported the CPC's Buhari, running on a probity-first campaign, reacted by burning down homes of the region's political bosses, and from then on the alienation went from bad to worse.

The Goodluck administration might even possibly have stemmed this downward spiral by retaining the allegiance of the region's elites through old-fashioned cake-cutting patronage; but the other signature marker of this administration has been the circulation of wealth-accumulation opportunities through a very narrow circle. Talk of a 'Niger Delta' clique is too broad – in reality the kingpins are drawn from not much outside of a narrow Ijaw ascendancy, which concentrates and controls power in the Presidency and oil ministry. Beneficiaries may point to the Harvard, Oxford, and Sandhurst educations of the sons and daughters of previous cliques, and claim with some justification that it is 'their turn to eat'; and perhaps under previous rulers more money did vanish (as a proportion of available national wealth, if not in absolute cash terms) – but the fragile elite kleptocracy was kept balanced by clever circulation of opportunity between carefully-judged constituencies, which does not seem to be the case with today’s narrow power-base and the many disgruntled interests left outside it.

The major crisis has not happened yet, but it is imminent. By the end of this year, Nigeria's much-abused public purse will run out of money. In fact, it has already started.

It was inevitable, really. With limited 'trickle-down', and no real attempt to move from rent to growth, combined with the widening poverty gap between an elite few and the majority of Nigeria’s growing population, a crisis of sustainability was always on the cards for the patrimonial system. The 2000's oil-price boom simply plastered over the cracks and gave it a decade on life-support. But if the reasons why it has hit are in the end structural, and created by successive past failures of leadership; the Jonathan administration is certainly culpable when it comes to why it has hit now.

Securing the party nomination and support for the polls in 2011 against the ethno-regional algebra which had 'zoned' the position to the north cost the administration dearly in cheques which must be cashed on the public purse. Too many promises were made to too many constituencies; in a hurried and charged market, a very high price was paid to manufacture consensus and support. Even that might have been reparable, but the continued delay in passing – or indeed agreeing on a realistic and acceptable draft of – the Petroleum Industry Bill has put most major new industry developments (and thus new cashflows) on ice until investors are reassured about the regulatory environment. Inaction has thus performed the singular feat of making Nigeria's easy-to-drill, easy-to-refine, easy-to-transport oil look unattractive in an energy-hungry world, and thus government is starving itself.

So what options does the administration have to free up some much-needed cash?

There are some creative deals which bear juicy fruit, such as the US$1 billion extracted from Shell and ENI in a leveraged buyout settlement of a long-running case over deepwater oil block OPL 245 (officially the money was paid by government to the block's nominal owner, former Oil Minister Dan Etete). But in the medium-term, more reliable sources need to be found. Loans from traditional international partners are off the menu – even if there were abundant cash in the international system, which there isn’t – Nigeria has already undergone a debt relief and restructuring package, which, combined with the lack of confidence public financial management currently inspires (despite the best efforts of Lamido Sanusi at the Central Bank and Ngozi Okonjo-Iweala at the Finance Ministry) renders it basically ineligible for further such assistance. Other African nations have looked to China as the alternative – but while the Chinese are happy to work in and with Nigeria on infrastructure and trade deals, they would be reluctant to increase their exposure having had their fingers burnt in planned oil-sector deals under Obasanjo and Yar'Adua. There may be some short-term leverage in mortgaging future oil production, but to a limited extent. That means that the cash must be found at home.

One way would be limiting leaks and wastage in the governmental system itself. But civil servants are themselves one of the constituencies which the government needs to avoid alienating, and they would be unlikely to give up the perks of office for an administration of politicians who are manifestly not making the same commitment. Another would be to lean more heavily on the 36 constituent States of the federation. Federal government has already launched a bill to take control of the finances of Local Government Councils – the third tier of territorial administration – out of the hands of the states through which they currently flow, into its direct purview. Optimists point to the end of state Governors' arbitrary deductions from the Local Governments; it is naïve in the extreme to think that would easily happen without being replaced by an equivalent process at the Federal level.

The final option is to lean more heavily on Nigeria's long-suffering public; more ways must be found to deliver even less than at present to citizens. The biggest and most obvious place to start is with the remaining fuel subsidy – eliminating the gap between the market price and January’s agreed compromise.

In fact, the process of cutting and shuffling has already started. Some of Nigeria's constituent states have not received their Federal Allocation – their budgetary disbursement from the national treasury – since April. In a few richer states who can tap their own internal resources, such as Lagos, this loss can be cushioned. But many are 80-90% reliant on the allocation to pay salaries. And in areas of Plateau State and elsewhere under direct emergency rule from the Federal level, as a result of conflict, salaries have not been paid at all in months. This has underlined to any states which did not already get the message that further fiscal dependence on the centre is not to be relied upon, and this will accelerate the turn 'inwards' to rely on their own resources. In other areas too, the states are making their presence felt; demanding state police (previously only a demand of opposition states) to better protect themselves from terrorism and insecurity. The weakened centre may not be able to stop a gradual ebbing-way of such powers, and more functional devolution in Nigeria may be a good thing.

Fuel subsidy removal, however, is likely to be much more of a headache for everyone. Trying to revisit this extremely emotive issue - at base about the economic viability of everyday life - without having addressed any of the public concerns about public-sector wastage, would be provocative and foolhardy in the extreme. And yet it seems inevitable that that is exactly what is going to happen. When it comes, expect fireworks, or a pre-emptive crackdown by central government, or most likely, both at once. The question is more what longer-term effects it is likely to have.

All of these factors inevitably raise the question of the current administration's competence to govern. President Goodluck Jonathan came to office on a general public sentiment of 'wait-and-see'. Conscious of this, he kicked off with a strong drive to improve electricity supply, which had it worked would have bought a huge aount of public acclaim, as well as economic growth, and thus public legitimacy which may well have eased his way to a second term. It is not the President's fault that it has not transpired, although the blame for policy derailment lies perhaps as much in the contradictions of the administration's own political structures than in the often-blamed Boko Haram insurgency. His room for manoeuvre seems constrained; the trip to Rio accompanied by an entourage of 116 persons showed he has not been either able or willing to deliver on the least of January's commitments, to cut government travel wastage. In a 24th June question-and-answer, asked about assets declaration, an issue on which the government had recently made commitments with the US, the President shot back that he 'didn't give a damn' about declaring his assets. The Abuja rumour-mill whispers that the President is often 'tired and emotional’ by early in the working day. Whether grounded or not, such rumours reflect the way Nigerians picture their leader. We should have sympathy for someone who perhaps was cornered into a job they did not originally expect to have: handpicked as a VP to Yar'Adua by Obasanjo, Jonathan perhaps felt the hot breath of militants on his neck too warmly to feel free to refuse the honour of the highest position when the opportunity came. And, it seems, he may have to deal with similar constraints when considering the elections due in 2015. Although suggestions of a constitutional reform to allow him a single seven-year term seem to have been quietly dropped, there are many regime insiders keen to renew their jobs in less than three years' time.

From the outside however, the current administration does not look in good enough shape to make it that far, let alone win another election. Political commentators speculate whether a different head of state would be able to do better, perhaps another Niger Deltan or a northerner. To attempt to remove a serving President would be unprecedented, would cause a constitutional crisis, and would doubtless provoke a strong reaction from Ijaw militants in oil-producing areas; if Jonathan does not regain the initiative, however, establishment insiders may give their thoughts to alternative prospects for stability.

So the political atmosphere is beginning to manifest nerves much like the bomb-vulnerable public, and the effects are telling; demonstrations banned, homes of civil society activists broken into. Nigeria has been in these uncharted waters before, the last time during the odious dictatorship of late General Sani Abacha; but in that case the story was suddenly terminated by an act of god. This time, under a civilian dispensation, no-one is sure how events will unfold.

For additional reading on this topic please see:
Boko Haram and the Resilience of Militant Islam in Northern Nigeria
Nigeria: The Generic Context of the Boko Haram Violence
Nigeria: Keystone of Africa