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Chapter 8 Predatory Rule, Transition, and Malaise in Nigeria Nigeria’s political and economic conditions in the late 1990s differed substantially from those of Indonesia. In marked contrast to Indonesia’s decades of growth and economic diversi‹cation, Nigeria developed an oil monoculture in which virtually all foreign exchange, and the preponderance of government revenues, were derived from crude oil exports.1 In consequence , the political economy was overwhelmingly concentrated on the distribution of rents from the central state. Debt pressures and plummeting oil prices induced military rulers to experiment with structural reforms in the late 1980s, though General Ibrahim Babangida pursued erratic policies, and his adjustment program collapsed after 1990. General Sani Abacha, drawing upon the practices of his predecessor, created a predatory regime based upon the personal accumulation of power, wholesale plunder of public revenues, and monopolization of outlets for seizing rents. General Abacha’s surprising death in June 1998 capped nearly a decade of declining governance and economic performance. Under the rule of Babangida and Abacha, power was increasingly concentrated by the head of state and a small inner circle, in contrast to more collegial governing structures under preceding military regimes. The personalization of authority fostered a degeneration of institutions. Although the Nigerian state had long-standing institutional de‹cits, the 1990s saw a period of accelerated decline in structures of rule and the provision of public goods.2 These rulers purposely weakened central state institutions including the peak agencies of economic management, crucial regulatory agencies, the judiciary, the civil service, local governments, and the military itself. Fiscal 1. Michael Watts, “Agriculture and Oil-Based Accumulation: Stagnation or Transfomation ?” in Michael Watts, ed., State, Oil, and Agriculture in Nigeria (Berkeley: Institute of International Studies, 1987), 64–66; Peter Lewis, “Economic Statism, Private Capital, and the Dilemmas of Accumulation in Nigeria,” World Development 22, no. 3 (1994): 443. 2. Eghosa E. Osaghae, Crippled Giant: Nigeria since Independence (Bloomington: Indiana University Press, 1998), 312. shortfalls and calculated neglect led to a deterioration of education and health services, along with key elements of infrastructure including electricity , telecommunications, and domestic fuel supply. While promising democratic reform, both leaders prolonged their transition schedules and methodically undermined the institutions of civilian rule including elections , political parties, and constitutional provisions. The state was hollowed out by the lack of resources and the accumulation of personal power by autocratic rulers.3 Economic governance steadily deteriorated during this period.4 Babangida’s early focus on arresting the decline of the economy fostered cooperation with the multilateral ‹nancial institutions, which encouraged efforts toward orthodox economic reform.5 After a few years of tentative stabilization, however, ‹scal and monetary management became increasingly capricious, and the policy regime broke down. Institutional reforms including privatization and banking liberalization were politicized and captured by clientelist pressures.6 Babangida did not install a capable economic team, and he weakened the Ministry of Finance and the Central Bank. He intensi‹ed the plunder of the treasury, shifting huge categories of expenditure off-budget and diverting resources to service his core support network. Abacha exacerbated these problems. His economic policies veered between populist programs and a cautious return to some elements of stabilization. Off-budget spending and outright embezzlement reached unprecedented proportions, siphoning as much as a ‹fth of oil revenues to the regime’s discretionary purposes in some years.7 Policy inconsistency, stupendous corruption, and collapsing institutions virtually choked off nonoil investment and rendered Nigeria a pariah in most global markets. The resulting economic stagnation affected patronage structures and rent distribution. As economic prospects diminished in the real economy, there was an increasing premium on rent-based income arising from government contracts, licenses, arbitrage on controlled prices, and other politically regulated gains.8 Babangida sought a fairly broad distribution of Predatory Rule, Transition, and Malaise in Nigeria 239 3. William Reno, Warlord Politics and African States (Boulder: Lynne Rienner, 1999). 4. Peter Lewis, “From Prebendalism to Predation: The Political Economy of Decline in Nigeria,” Journal of Modern African Studies 34, no. 1 (1996): 91–94. 5. Thomas Callaghy, “Lost between State and Market: The Politics of Economic Adjustment in Ghana, Zambia, and Nigeria,” in Joan Nelson, ed., Economic Crisis and Policy Choice (Princeton: Princeton University Press, 1990), 305–7. 6. Peter Lewis and Howard Stein, “Shifting Fortunes: The Political Economy of Financial Liberalization in Nigeria,” World Development 25, no. 1 (1997): 5–22. 7. Tom Forrest, Politics and Economic Development in Nigeria, 2d ed. (Boulder: Westview, 1995), 246–47. 8. Lewis, “Economic Statism...

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