This post looks at the effects of the Nigerian economy in the rise and sustainability of Boko Haram. You can learn more about Boko Haram with full fact sheets, timelines, backgrounders and history here.
The Dominance of Oil in the Nigerian Economy
Nigeria’s largest export and the core of its economy is the abundant gas and oil reserves that make it Africa’s largest oil exporter and among the top five oil exporting nations globally. This dominant resource has contributed to the rise of Nigeria on the global stage but also the rise of corruption domestically.
In 2013, it was estimated that 10% of the country’s oil production was lost to theft. Nigeria’s economy remains susceptible to volatility in the oil market with this representing 96% of its export markets.
This volatility has helped to stir up domestic unrest with Boko Haram being the latest manifestation and also emphasizes the serious problem of government corruption in the country. The recent downturn in the global oil markets suggest a further strain on President Buhari’s government and efforts to combat Boko Haram and the grievances of those sympathetic to the organization.
If you are enjoying this Boko Haram Explainer and Backgrounder on the Nigerian economy you might also enjoy my Boko Haram Intelligence Brief available at Amazon.
There Are Other Options for the Nigerian Economy
Nigeria has the capacity for a far stronger agricultural sector with suitable climate and soil but so far lacks the political leadership and stability to implement growth and development here. The nation’s second largest export to oil is cocoa but the gap between the two is a reflection of the fundamental flaws in Nigeria’s economy and political system. Cocoa makes up only .7% of Nigeria’s exports.
The location of the bulk of Nigeria’s oil reserves being off the coast in the southern part of the country also adds to the understanding of how the deprived and poverty stricken north fostered the growth of a group like Boko Haram.
Thirty years ago the northern region of Nigeria was experiencing a boom in manufacturing. A study by the United Nations reported that 100,000 people in Kano alone were employed through this. This shifted in 1995 when the country joined the World Trade Organization. Tariffs and quotas that had protected local manufacturing were removed and Chinese imports flooded the markets effectively devastating the north. Today Kano has had to pass anti-panhandling laws to control begging. As rising poverty rates and a failing education system in the north collided together in northern Nigeria, extremist groups like Boko Haram could be seen as an inevitability.
Meanwhile, as Boko Haram has grown and become a greater threat to Nigeria and a greater outrage to the world, the nation has been pressured to pour money not into alleviating poverty or establishing economic reforms and strength but to fighting this consequence of prior failures.
In 2012 military spending was up 30% over the prior year in Nigeria and that number has continued to increase all the way to the present.