Nigeria’s Imperilled Potential

Nigeria has problems. The country – probably Africa’s biggest economy – also has a lot of potential. Matt Egan reported for CNN Money: “Nigeria has been one of the hottest destinations for foreign investment in the developing world in recent years. Big companies and investors have been attracted to the country's booming economy, abundant natural resources and rapidly-expanding middle class.”

But the fact that militants from Boko Haram were able to carry out their brazen attack on a boarding school could scare away Western investors. Clearly, security is still a real threat.

The focus on Nigeria was emphasized by the meeting of the World Economic Forum in Lagos in early May. Fox News’ Perry Chiaramonte wrote that President Goodluck “Jonathan administration's apparent bungling of the kidnappings, only the latest in a long series of atrocities committed by Boko Haram, runs counter to the image of competence Nigeria desperately seeks to portray to the international community.”

“The country is the world's eighth-largest oil exporter, and almost 90 percent of its export earnings are tied to oil. Sixty percent of the population lives in extreme poverty, youth unemployment is close to 80 percent, and on top of that there is the almost daily violence in the north, where rebel group Boko Haram is fighting for a state governed by sharia law,” noted Aljazeera.

There are chronic power shortages, which can increase the cost of doing business in the country by up to 40 percent. The entire national grid only delivers as much electricity as Qatar, which is not nearly as big or populous a country. And for a country with great oil wealth, there is the mysterious issue of falling oil revenues. This is the case of Lamido Sanusi, the central bank governor, who was suspended after blowing the whistle on a $20bn hole in the accounts of the state oil company.

There are also monetary policy problems facing the country as it seeks to conserve the profits from the oil industry. Augustine Aminu wrote in Nigeria’s Daily Times: “The Acting Governor of the Central Bank of Nigeria (CBN), Dr Sarah Alade, says it is important for Nigeria to have reserves to ensure effective monetary policy and economic growth....The governor said the reserves could be either in the form of excess crude account or sovereign wealth fund. She said that though the country had cash reserves, it was not enough compared to what the country was making from oil.”

Tragically, the security of the country’s considerable assets and the safety of its inquiring young women are endangered by an incompetent and too often corrupt government.