"Reforming The Rentier State: The Challenges of Governance Reforms in Nigeria," by Paul G. Adogamhe

THE JOURNAL OF ENERGY
AND DEVELOPMENT
Paul G. Adogamhe,
“Reforming the Rentier State:
The Challenges of Governance Reform in Nigeria,”
Volume 34, Number 2
Copyright 2011
REFORMING THE RENTIER STATE: THE
CHALLENGES OF GOVERNANCE
REFORMS IN NIGERIA
Paul G. Adogamhe*
Introduction
N igeria has abundant mineral resources with crude oil exports alone accounting
for 95 percent of the nation’s foreign-exchange earnings. The federal govern-
ment bureaucracy has expanded significantly to meet the increasing federal gov-
ernment intervention in the economy. The share of the government’s participation in
the economy has grown significantly, with consolidated expenditures rising from 29
percent of the gross domestic product (GDP) in 1997 to 50 percent in 2001.1 When
Nigeria gained its independence in 1960, the federal bureaucracy consisted of 72,000
employees; 40 years later (2000), this bureaucracy has increased to a work force of
1.2 million, consisting of 26 ministries and about 400 extra-ministerial departments.2
The federal government bureaucracy is now the chief employer in Nigeria, bogging
down the budget with recurrent expenditures on bureaucratic structures and per-
sonnel salaries. Consequently, the federal government capital project expenditures on
health care, education, communication networks, and social security suffer financial
insolvency. In an era of capitalistic democracy, Nigeria finds itself held hostage by
big government, corruption, and poor governance.
*Paul G. Adogamhe is currently an Associate Professor of Political Science in the Department of

Political Science at the University of Wisconsin-Whitewater. He holds M. Phil/Ph.D. degrees in
international relations from the Graduate Center of the City University of New York; his doctoral
dissertation was on Nigeria/OPEC relations. The author also earned a M.A. degree in international
political economy and development from Fordham University. His articles have been published in
The Nigerian Journal of International Affairs (NJIA), African Integration Review, Poverty and
Public Policy, Journal of Development Alternatives and Area Studies, among others.
The Journal of Energy and Development, Vol. 34, Nos. 1 and 2

Copyright Ó 2011 by the International Research Center for Energy and Economic Development
(ICEED). All rights reserved.
227
228 THE JOURNAL OF ENERGY AND DEVELOPMENT
The independence of the Public Service Commission, which is supposed to

insulate the public service from politics and to maintain neutrality and objectivity
in the activities of the civil service, was compromised through undue political
interference. The result has been the appointment or promotion of staff with in-
appropriate qualifications for the job in the public service system. The affirmative
action policy of maintaining the federal character in the Nigerian civil service
has introduced ethnic considerations in the appointment and promotion of civil
servants to senior management positions in government agencies. The negative
consequence of this political interference is that it has led, in some cases, to the
appointment of incompetent and mediocre staff to senior management positions in
the name of maintaining ethnic balance. This results in the inability of staff to
carry out the duties of their positions, which has affected the quality of perfor-
mance and the delivery of services to the people. At his inauguration in 1999,
President Obasanjo advocated for public service reforms:
Our public offices have too long been showcases for the combined evils of inefficiency and
corruption, whilst being impediments to effective implementation of government policies,
3
Nigerians deserve better. And we will ensure they get what is better.
Therefore, one of the priorities of President Obasanjo’s administration was to

embark on a series of reforms to reinvigorate and streamline this unwieldy federal
bureaucracy and to make it more responsive, efficient, and cost-effective. In 2004,
President Obasanjo formally launched the reform manifesto entitled the National
Economic Empowerment and Development Strategy (NEEDS). The series of
political and economic reform initiatives were conceived as a medium-term
blueprint for dealing with the structural and institutional dimensions of Nigeria’s
developmental crisis from 2004-2007. This paper is an attempt to examine the
proposed reforms vis-à-vis the ‘‘rentier’’ status of Nigeria.
Nigeria: A Classic Rentier State
H. Beblawi identifies four essential characteristics that would determine a rentier

state: (1) if rent situations predominate; (2) if the economy relies on a substantial
external rent and, therefore, does not require a strong domestic productive sector; (3)
if only a small proportion of the working population is actually involved in the
generation of the rent; and, perhaps most importantly, (4) that the state’s government
is the principal recipient of the external rent.4 Nowhere are all these characteristics
associated with a ‘‘rentier state’’ as clearly manifested as in Nigeria, a fact that has
complicated the economic and administrative reforms championed by the Nigerian
government.5 As A. Harneit-Sievers correctly observes,
. . . a rentier state is a state whose major source of revenue does not arise from taxation on
productive activities—agriculture, industry, services—undertaken by its economically active
REFORMING THE RENTIER STATE: NIGERIA 229
population. Instead, the rentier state lives by collecting a convenient income from sources into
which it invests little or nothing. Rent comes in without opportunity costs, and if it comes in as
centralized as in the case of oil, it is even more convenient, from the treasury’s point of view.
Nigeria is a drastic case—perhaps the most drastic among the populous nations of the
6
world—of a rent-based economy and it has suffered heavily from it.
The emerging paradigm of rentier political ecology places emphasis on the ‘‘rentier
space,’’ which tends to deal exclusively with activities related to ‘‘the acquisition,
control, disposition of oil and oil-related resources, including the financial benefits
derived from them,’’ with the rentier state serving as the epicenter of coveted space.7
The economic behavior of a ‘‘rentier state,’’ according to D. Yates, ‘‘embodies a break
in the work-reward causation. . . . [r]ewards of income and wealth for the rentier do not
come as result of work but rather are the result of chance or situation.’’8 During the time
of an oil boom, the government has windfall profits that can lead to massive spending
schemes, including for nonproductive investments, and that can promote corrupt
practices, in turn undermining transparency and accountability in the public sector.9
This social epidemic of the rentier state also involves a widespread behavior and often
a mentality among the population. For example, most Nigerian citizens tend to see the
oil revenue that pours into state coffers as something of a dichotomy—it is everyone’s
and no one’s—so individuals clamor for a share of the ‘‘national cake’’ rather than earn
an income largely generated through employment. With this weakening of the re-
lationship between effort and reward, the federal government of Nigeria is perceived as
a revenue distributive organ of the rentier state. This situation is described by T. L. Karl:
Because ‘‘petrodollars’’ are not ‘‘their’’ money, citizens are not motivated to ensure that state
revenues are well spent; they are not engaged; and they seldom demand better monitoring of
the utilization of revenues. Like their rulers, they too often become addicted to their share of
10
oil rents even as a type of permanent disconnect between the state and its subjects sets in.
H. Mahdavy, who first popularized the concept of the rentier state, argues that
resource rents make state officials both myopic and risk-averse: upon receiving
large windfalls from oil, the government grows irrationally optimistic about future
revenues and ‘‘devotes the greater part of the resources to jealously guarding the
status quo’’ instead of promoting long-term development.11 The rentier states tend
to promote weak political and economic development and, instead of creating an
efficient and responsive public sector, they create a corrupt and irresponsible
one.12 More specifically, these states fail
to develop a robust central bureaucracy because their ability to rely on external revenue source
engenders rigid and myopic decision-making. This includes. . . the failure to build a viable tax
regime because they do not feel compelled to extract revenue from domestic sources to fill
13
their coffers.
For instance, available statistics indicate that the federal government of Nigeria
in the last ten years (1999-2009) generated about the sum of 34 trillion naira in
revenue. Proceeds from taxes accounted for 17 trillion naira. However, much of
this amount was proceeds from oil taxes because nonoil tax proceeds contributed
as little as 3 trillion naira during the period under review.14 This has presented
a difficult situation for the government’s plan to de-emphasize the over-
dependence on oil revenue to fund the budget. The dependence on external rent
not only frees the state from the need to extract taxes from the domestic economy
for wealth creation but also ‘‘unwittingly diminishes its own administrative ca-
pacity.’’15 According to Hilary Benn, ‘‘the tax system is crucial for accountability
. . . .when citizens pay tax, they demand services back.’’16 Taxation can become
a powerful incentive for the Nigerians to demand accountability from the federal
government. If domestic tax proceeds are not channeled to the provision of the
public good, the Nigerian taxpayers are most likely to resist the federal govern-
ment’s efforts to impose taxes. The fact that the federal government is less likely
to rely on their citizens for financial support has resulted in weak linkages between
the government and citizens. When citizens are untaxed they sometimes have less
information about state activities and the public, in turn, is less likely to demand
government accountability.17
Fluctuations in the oil market prices often create macroeconomic instability
and, as a result, the government is plagued with inconsistent policies and service
deliveries due to budgetary shortfalls. The federal government’s budget is almost
entirely based on rentier income, causing Nigeria’s economic and political de-
velopment to be held hostage to the volatility of the world’s oil markets. It makes
a pretense of federal government budgetary debate. The Nigerian oil industry, like
that in virtually all major oil-exporters, is not labor-intensive. Therefore, it em-
ploys only a few unskilled workers since Nigerian technology is far behind the
industrialized countries. As a result, the oil industry, which accounts for at least 80
percent of the Nigerian GDP, is also responsible in part for high rates of un-
employment in Nigeria. Thus, the Nigerian working population consists mainly of
foreigners employed in the oil industry and the civil servants who work for the
federal and state governments. The rest of the Nigerian population, which is able
to work, largely remains either underemployed or unemployed. The oil industry
has consumed the cottage industries (such as groundnut pyramids, cotton, hide and
skins, rubber, cocoa, and palm oil industries) that once bankrolled the Nigerian
economy in the early 1960s. These cottage industries were owned and managed by
Nigerians in the private sector rather than by the federal government.
Thus, despite record-high oil prices and unprecedented inflows of oil revenues,
Nigeria is rated as among the 15 poorest countries in the world.18 The military
dictators mortgaged Nigerian oil as collateral for borrowing billions of dollars
from foreign banks at exorbitant interest rates. Until recently, the Nigerian na-
tional debt stood at $35 billion. The problems of excruciating poverty, ecological
degradation, and underdevelopment have contributed to violent resource-based,
religious, and ethnic conflicts throughout the country.19 Thus, the disruptive
violence prevalent in many parts of Nigeria has diminished the government’s

capacity to govern the country effectively.
GDP per capita is $400 per year, 60 percent of the population lives on the less than $2 per day,
78 out of every 1,000 infants dies at birth, 35 percent of the population under five years of age
is malnourished, barely 50 percent of the adult female population is literate and so on . . . . The
record is dismal, yet over the past 35 years, oil rents accruing to Nigeria have amounted to an
estimated $300 billion. Nigeria, however, is not unique. Its experience is replicated
throughout African oil-producing countries and in other regions of the world where there is
20
similar dependence on oil and gas.
While the institutional overhang of the rentier state continues to serve the in-
terest of ruling elites and oil multinationals, rentier money continues to impede the
type of reform policies that would lead to the better governance and effectiveness
of the Nigerian state.21 Therefore, Nigeria must transform from its rentier status to
deal with the crisis of economic stagnation as well as achieving a level of effective
public governance. Some of the recent scholarly literature also have shown evi-
dence that the quality of a country’s institutions and governance structures can
explain variances in economic outcomes across natural-resource-abundant coun-
tries.22 The issues of fiscal federalism, for instance, are at the forefront of many
socioeconomic and political challenges in Nigeria, including matters of service
delivery, accountability, macroeconomic stability, balanced growth, and the
strengthening of its fledgling democracy in general. The practice of true fiscal
federalism therefore would create a legal, political, and economic environment
required to restore professional ethos and integrity that will ensure both the ef-
fectiveness of the public service as well as the legitimacy of the Nigerian state.
The Governance Reforms in Nigeria
The proposed agenda for reform in Nigeria are:
to right-size the economy and eliminate ghost workers, and re-professionalize the public
service, rationalize, re-structure and strengthen institutions, privatization and liberalization
program, tackling corruption, and improving transparency in government accounts, reduce
23
waste and improve efficiency of government expenditure.
The government also established several anti-corruption agencies including the

Independent Corrupt Practices and Related Offences Commission, the Economic
and Financial Crimes Commission (EFCC), the Cyber-Crime Commission, and
the Code of Conduct Bureau. These agencies have the power to investigate alle-
gations of corruption against public officials and bring charges against them. This
has sometimes led to the arrest, prosecution, and conviction or dismissal of highly
placed public officials who abused their offices.
The federal government has introduced a series of reforms to achieve a bal-

anced budget, transparency in accounting for oil revenue, public procurement, and
contract awards.24 The government adopted the 2004 oil-price-based fiscal rule,
a fiscal framework that delinks oil revenue flows from government expenditure
and thus helps to protect macroeconomic stability. The Fiscal Responsibility Act
to achieve fiscal discipline finally was passed and signed into law in 2007. Further,
the reform program has emphasized the need for resource enhancement through
greater prudence and efficiency in the use of public funds, a freeze of payments on
extra-budgetary commitments, reduction and elimination of waste in the system,
and greater efficiency in the collection of government revenue. Some of the other
innovations in the management style proposed by the reform include: (1) the es-
tablishment of an independent monitoring framework that will involve a broad
spectrum of stakeholders; (2) the establishment of a Peer Review Mechanism that
will provide an avenue for former heads of government of the federation to review
progress and problems, and learn from the experiences of one another; and, (3)
special focus is also being placed on the need to gather adequate statistics and
strengthen analytical work as key instruments for assisting the government in
monitoring and evaluating projects.
Budgetary and public financial management processes and systems have been
reformed, which has impacted positively on some aspects of funds management. The
procedure for awarding contracts has been redesigned to conform to international
standards and practices, with emphasis on transparency, competition, and value for
money. The oversight role of the Due Process Office has been formally established in
the Bureau of Public Procurement, following the passage of the 2007 Public Pro-
curement Act. The Public Procurement Act was put in place to guarantee fair play in
the award of government contracts. For this reason, specially trained procurement
cadres have been entrusted with the responsibility of handling government contracts
to ensure the efficient implementation of the Public Procurement Act. An efficient
procurement system is a vital instrument for expenditure management, which will
ultimately lead to an effective delivery of public services, promoting economic
growth, and development.25 There has been some improvement in the areas of public
recurrent expenditure management, government procurement, and the accounting
system, thus curtailing some of the waste in the public service.26
Nigeria has successfully enacted into law the Nigerian Extractive Industries
Transparency Initiative (NEITI) bill in May 2007. NEITI was derived from
Nigeria’s participation in the international reform effort known as the Extractive
Industries Transparency Initiative (EITI), which is to enhance transparency and
accountability in the oil and gas industry. When NEITI was passed by the Nigerian
Assembly it became the first EITI-implementing country with a statutory backing
for implementing EITI in the world. The government also has made efforts to
collaborate with civil society organizations and other stakeholders by initiating
efforts that will bring them into consultations on budgetary matters. However, this
practice has yet to take firm root in Nigeria as there are many instances where
these stakeholders were not consulted or their views were not taken into account in
policy formulation. Nigeria paid its $30 billion external bilateral debt owed to the
Paris Club of official creditors in April 2006.27 It also has exited its London Club
obligations and, as of mid-June 2007, Nigeria’s external debts stood at about 3
percent of GDP, most of this being multilateral debt. This, in turn, has had
a beneficial impact on investment and economic growth in Nigeria.
The Nigerian Public Service Reform Program
The highlight of the reform agenda was to create

a public service that is performance and result-oriented, customer-driven, investor-friendly,
professional, technically sensitive, accountable, fostering partnerships with all stakeholders
and committed to a continuous improvement in government business and the enhancement of
28
overall national productivity.
Hence, the Bureau of Public Service Reforms was established on February 4,

2004 and given the following terms of reference: to initiate an Action Plan on the
reform at different levels for attention of the Steering Committee; to elucidate
government policy on reform; to coordinate, monitor, and evaluate reform im-
plementation activities; to conduct research on implementation efforts and pres-
ent best practices models; to provide advisory and technical support services to
change management teams; to engender an environment of learning among
ministries, departments, and agencies; to disseminate information on all aspects of
reforms; and to submit quarterly progress reports on reform activities.
The goal of public service reform was to reduce the size of the Nigerian federal
bureaucracy. Each ministry, department, or agency of the federal government was
required to initiate and conduct its institutional reform based on its core mandate
while the cross-cutting reform issues, such as budget/financial management,
common resources management systems, procurement, policy management, and
the like, are handled centrally by appropriate agencies. By the end of 2007, 12
ministries were completely overhauled by the government: the Federal Capital
Administration, Federal Ministry of Finance, National Planning Commission,
State House, Federal Ministries of Transportation, Health, Foreign Affairs, In-
ternal Affairs, Science and Technology, Commerce, Solid Minerals, and Educa-
tion. The government has reduced the number of ministries by merging some of
them and has been employing the organizational and management structures.
Some ministries also have endeavored to computerize their payroll and conduct an
audit-and-pay verification exercise to weed out ghost workers. The Bureau of
Public Service Reform co-opted other relevant federal agencies to address the
following reforms: performance management system, including target setting and
performance assessment at individual, departmental, and organizational levels;

review of rules, regulations, and procedures; review professionalization of staff
cadres and the pool system; review of central personnel management; de-
velopment of a training and capacity building systems; information technology-
enabled payroll/personnel record system; other e-government implementation;
pay reform; and, redundancy management.
The Public Enterprises Act of 1999 empowered the formation of the National
Council on Privatization and the Bureau of Public Enterprises as the Secretariat of
the Council. It has enabled the privatization of public enterprises in the key
economic sectors through the sale of government-held equity stakes, which has
drastically reduced the size of the federal bureaucracy. The privatization of some
of the public enterprises has led to the disengagement of an additional 32,240
workers from the public sector. The deregulation of the telecommunication sector
has been particularly successful, resulting in an increase of foreign investment in
the country.29 However, the growth potential in this sector has been due to pent-up
demand and a willingness on the part of the Nigerian consumers to bear higher
cost. While local participation has remained a priority of the government since
2005, the implementation of the privatization program has been hampered by
controversies and accusations of political favoritism, weak capital markets, and an
inappropriate regulatory framework.
The Public Service Commission was charged with the responsibility of hiring
and firing civil service officials. The federal government has introduced in-service
training programs for civil servants and a new salary scale has been put in place to
reward better performance. The Pension Reform Act was enacted in 2004 to en-
sure that the civil servants have good retirement benefits and those let go from the
civil service were given severance benefits and training for a smooth transition to
post-retirement life. The current pension scheme is a radical departure from the
former pay-as-you-go-system and is meant to provide a pool of funds to boost the
economy through savings and capital formation. In addition, ‘‘the Service Com-
pact with all Nigerians’’ has been introduced to encourage integrity among civil
servants and effective public-service delivery. The expensive and wasteful prac-
tice of providing houses, cars, telephones, electricity, cooking gas, water, free
furniture, and medical services for the upper echelon of the civil service has been
stopped. The reform has ‘‘monetized fringe benefits for all categories of public
servants.’’30 Consequently, the fleets of government cars and houses were sold in
a public auction and the revenue was paid to the Central Bank.
The Challenges to Good Governance in Nigeria
The term ‘‘good governance,’’ according to the International Monetary Fund

(IMF) and World Bank, consists of a wish-list of reforms, practices, and outcomes
that are generally associated with the spread of democracy, the rule of law, effi-
cient bureaucracies, accountability and transparency, free market economies, and
independent judiciary.31 However, the concept has undergone recent modification
by emphasizing democracy’s needs for supportive institutions and processes such
as impartial judiciaries, transparent public agencies, and meaningful citizen par-
ticipation.32 Therefore, good governance implies effective political institutions
and responsible use of political power and management of public resources by the
state. The United Nations Development Program defines governance as ‘‘the
exercise of political, economic and administrative authority to manage nation’s
affairs at all levels.’’33
The various attempts to measure the quality of governance indicators continue
to face conceptual and ideological challenges.34 The World Bank categorized six
measured indices of good governance as follows: (1) voice and accountability; (2)
political stability and lack of violence; (3) government effectiveness; (4) regula-
tory quality; (5) rule of law; and (6) control of corruption.35 But has the Nigerian
reform agenda resulted in a more efficient, cost-effective, and responsive public
service? While opinions are divided among commentators on the impact of the
Nigerian reforms, it is fair to say that Nigerian public service reforms have been
partially successful, especially in the area of financial regulatory reforms. The
Nigerian government has introduced a series of innovations in the procurement
process to make it more transparent and cost-effective. But the key question still
remains whether Nigeria’s financial corruption vis-à-vis rentier money will be
overhauled by these reforms. On paper the reforms appear appropriate but, con-
sidering how deeply corruption is entrenched in Nigeria, one remains somewhat
skeptical. One of the challenges facing the federal government is whether it can
implement and enforce its own reforms.
Despite the public service reforms, the Nigerian government continues to be
ranked low on the ‘‘good governance’’ index in relation to other sub-Saharan
African countries.36 This is critical as the poor grade on ‘‘good governance,’’
which Nigeria continues to receive, reflects the magnitude of the empirical
challenges facing the Nigerian government in its efforts to reform the federal
bureaucracy. The quality of Nigeria’s public institutions is ranked low in-
ternationally, and the bureaucratic inefficiency still remains a major deterrent to
investment and growth.37 The process of implementing the reform program has
generated several policy inconsistencies and contradictions that have continued to
undermine the achievement of optimal performance and productivity in the
Nigerian public sector. Since the governance problems are massive and en-
trenched, Nigeria still lacks a democratically accountable executive branch, an
independent judiciary, a functional legislature, active and informed civic societies,
an effective civil service, and open and transparent policy-making processes. The
changing of the attitudes of public personnel is also the most difficult aspect of this
reform process because of entrenched political and social interests. Part of this
difficulty has been attributed to the fact that, while the public servants are the
target of the reform in terms of social dislocations, loss of privileges, and jobs,
they also are expected to serve as the agents of the reforms.
What has become obvious is that the military government, which was supposed
to be a corrective regime, failed catastrophically to stamp out financial corruption.
As a matter of fact, it plunged Nigeria further into a rentier-state economy. The
present reform program is under the auspices of a so-called democratic form of
government. Therefore, the fledgling democratic system of government in Nigeria
requires time to mature. What Nigeria needs now is time and the right ideas that
can be enacted into laws and put into practice. Nigeria already has undertaken the
heavy lifting by constitutionally replacing the military government with a demo-
cratic one. With this in mind, there is hope that, with time, Nigeria will be a truly
democratic state and shed its rentier status. President Jonathan reiterated this point
during his address to the nation on the occasion of Nigeria’s golden jubilee cel-
ebration when he stated that,
‘‘. . . in midst of these challenges facing the country, it is easy to forget our unusual cir-
cumstances. We have actually been moving from one political instability to the other such that
we have barely been able to plan long-term and implement policies on a fairly consistent
basis. This instability has also impacted negatively on institutional development, which is
necessary for advancement. The structures of governance had barely been developed when we
ran into a series of political obstacles shortly after independence. . . . One of the greatest
achievements of our union these past 50 years is our togetherness,’’ said the president who
38
declared that ‘‘a new Nigeria is [a project] in the making. . . .’’
Thus, it would be naive to think Nigeria, after only 12 years of embracing

democracy and only two democratic elections, is capable of enforcing all the
democratic reforms.
Problems of Corruption, Clientelism, and Political Elites in Nigeria: In Nigeria

there is a strong partnership between the multinational oil companies and the
federal government in the exploitation of petroleum resources. The underlining
logic of governance is that the allocation of resources and opportunities is done in such ways
as to strengthen the position of those in power. Such a system, operating over decades creates
wealth and influence which depend on these distributional patterns for their continued
39
existence.
Consequently, ‘‘corruption in resource-rich countries is often political and

bureaucratic in nature, involving both abuse of office on the part of key decision-
makers and corrupt acts among lower-level officials tasked with policy imple-
mentation.’’40 The track records of most Nigerian military, politicians, and
bureaucrats demonstrate the misuse of the government oil revenues and the state-
owned enterprises for political patronage and cronyism. They use the oil money
to maintain themselves in power. They siphon the rentier funds into private ac-
counts in Swiss banks, buy elections, build up their clienteles, and waste much of
the rest on bogus projects. This seems to be the case in Nigeria. In 2003 President
Obasanjo decried this endemic corruption:
Until 1999, Nigeria had practically institutionalized corruption as the foundation of gover-
nance. Hence institutions of society easily decayed to unprecedented proportions as oppor-
tunities were privatized by the powerful. This process was accompanied, as to be expected, by
the intimidation of the judiciary, the subversion of due process, the manipulation of existing
laws and regulations, the suffocation of civil society, and the containment of democratic
values and institutions. Power became nothing but a means of accumulation and subversion as
productive initiatives were abandoned for purely administrative and transactional activities.
The legitimacy and stability of the state became compromised as citizens began to devise
extra-legal and informal ways of survival. All this made room for corruption.41
The deeply entrenched neopatrimonial institutions and systemic corruption are

central to understanding the Nigerian government’s resolve to change its gov-
ernment for the better. Neopatimonial rule undermines formal rules and in-
stitutions of governance by using it for systematic patronage and clienteles as
a means of maintaining political order.42 As Richard Sklar and his colleagues
asserted,
Neopatrimonialism is bad for Nigeria, as for other countries, because power is excessively
personalized while national policy is driven by elite relationships rather than by public needs.
Neopatrimonialism may randomly allow more enlightened rulers to govern and even to install
some reforms for a time, but these inevitably come second to the unending need to service the
43
expensive elite relationships that keep one in power.
The Nigerian government’s passage of the Extractive Industries Transparency

Initiative (EITI) into law in 2004 has provided the legal basis for collecting and
publishing oil and gas revenue data and thus opening up oil rents to greater
scrutiny. The public disclosure of oil contracts is intended to ensure the integrity of
the bidding process and negotiations as well as guarantee transparency of gov-
ernment contract awards. However, there have been allegations of corruption or
that Obasanjo hand-picked the civil society representatives on the stakeholders
committee overseeing the NEITI process. This committee has met irregularly,
fueling the perceptions that civil society is being manipulated or marginalized.44
This legal instrument is only a partial solution to the problem. The application of
legal policy instruments as universal norms for controlling corruption is very
much dependent upon effective implementation and on the close monitoring by
activists of civil societies, parliamentary communities, and the international
community.45 The prospects for effective bargaining between the Nigerian gov-
ernment and the general public is still very weak, because civil society lacks the
capacity and resources it needs to truly influence government policy, programs,
and legislation. Therefore, the ruling elites are relatively unrestrained by orga-
nized societal interests. The federal government needs independent civil society
groups to put government excesses in check.
While it is true that Nigeria has improved slightly its corruption perception
rating index, much remains to be done to fully overcome the rampant corruption.46
In support of this, the former World Bank Representative in Nigeria, Dr. Hafeex
Ghanem, in his valedictory speech in 2007 in Abuja, cautioned Nigeria not to
claim victory over corruption yet because the country still had numerous chal-
lenges on the enforcement front. The oil windfall has enabled the Nigerian gov-
ernment to increase its expenditures through the offering of public-sector inflated
contracts and thus provide increased opportunity for kickbacks or other avenues
for siphoning off public funds. According to the Nigerian government’s own as-
sessment, the country has been plagued by ‘‘a rent-seeking and unproductive
culture of over-dependence on government patronage and contracts, with little
value added.’’47 Although a nation may transit from authoritarian rule to a demo-
cratic system of government, according to Peter Lewis that does not necessarily
mean neopatrimonialism has disintegrated in the process. Instead, as evidenced in
most African countries, it has been ‘‘reconfigured rather than displaced by the new
democratic structures. Many elected presidents have adapted to patronage struc-
tures, cultivating crony relationships with key notables and marginalizing political
rivals or opponents.’’48
Although the oil industry was governed by a number of public-sector in-
stitutions, it is the President and his closest advisers, along with the top leadership
of the Nigerian National Petroleum Cooperation (NNPC), who manage the pe-
troleum industry. In addition, President Obasanjo virtually served as the Minister
for Petroleum during his administration, with very little influence from his junior
Minister of State for Petroleum. This did not augur well for transparency as
Nigeria’s principal source of rentier money was almost entirely in the personal
control of the President. As Minister of Petroleum, he awarded contracts in the oil
industry to transnational oil companies. It is through the contracting procedures
that corruption and bribery infiltrate the Nigerian oil sector as these contracts did
not follow due process. This makes it difficult to assess their contracts, know what
revenues actually accrue to the government from the petroleum industry, and hold
government accountable for their revenue management. For example, between
1994 and 2004, the officials of Halliburton, an American company, admitted to
funneling millions of dollars to top Nigerian government officials in what turned
out to be a monumental corruption scheme, in return for multibillion dollar con-
tracts to build the Nigerian Liquefied Natural Gas (LNG) facility in Bonny.
While the National Economic Empowerment and Development Strategy may
clearly recognize that ‘‘a key aspect of the institutional reforms is to fight cor-
ruption,’’ the current piecemeal approach by the government anti-corruption
agencies may amount to too little, too late. The irony of the anti-corruption
crusade in Nigeria is that the anti-corruption agencies called upon to help eradicate
corruption have themselves become agents of mass corruption. This has enabled
the new actors to enrich themselves at society’s expense and thus reinforces the
image of Nigeria as a ‘‘prismatic society.’’49 To make matters worse, the anti-
corruption crusade in Nigeria is profiling certain members of the public service
who are considered opponents of the government and ignoring those wealthy and
powerful enough who can buy their way through the legal system.50 These anti-
corruption agencies have become toothless bulldogs because they also lack the
power to deal aggressively with the endemic corruption in government. Their
terms of reference only empower them to investigate, bring charges, and prosecute
offenders in the courts, which have already proved to be ineffective in aggres-
sively dealing with these corrupt public officials. The Transparency International
Report stated that Nigeria has an impressive array of structures, institutions, and
laws aimed at combating corruption but still falls short of the standards and re-
quirements of an effective anti-corruption regime as demanded by the conventions
against corruption.
The irony of democratic politics in Nigeria is that it disregards democratic
political culture. The general elections of 2003 and 2007 were marred by what
international and domestic observers characterized as massive fraud and serious
irregularities, including vote rigging and political violence. The flawed elections
have provoked widespread outrage among the Nigerian public, who have called
for electoral reforms and demonstrated a disturbing evidence of popular disen-
gagement from the democratic process. In fact, despite the glaring cases of fraud at
the elections, which necessitated the nullifications and cancellations of some of
the results, not a single perpetrator has either been apprehended or prosecuted.
While there have been spate reversals of electoral mandates by the election tri-
bunals, the NEPAD-APRM Nigeria: Country Self-Assessment Report: Executive
Summary stated that political corruption continues to remain a major challenge to
progressive politics in Nigeria.
. . . of all forms of corruption, political corruption has remained a major obstacle to national
progress in Nigeria. The current democratic regime has put in place mechanisms that can
prosecute the war against corruption, while there is improved awareness on the part of the
citizenry regarding the imperative of exorcising the ghost of corruption. . . But not much
appreciable progress has been made in coming to terms with political corruption expressed in
electoral fraud and vote buying as demonstrated by the 2003 and 2007 elections. In general,
51
there is a challenge to check the excessive use of money in politics.
In 2007, the late Nigerian President Mr. Umaru Musa Yar’Adua lamented that
corruption is the most worrisome problem of public life in the country. Corruption,
he regretted, had eaten deep into the fabric of the society and polluted even the
most sacred and sacrosanct institutions of Nigerian national life over the years. He
pointed out that corruption is massive, extensive, endemic, and pervasive at all
levels of the government and the society, and no noble policy of government or
any laudable program stood the chance of success if public resources were ha-
bitually and brazenly frittered away by those entrusted with them. The late
president observed that corruption has distorted planning and implementation of
policies, prevented equitable and even distribution of opportunities and resources,
hampered economic growth and development, and had given Nigeria a tarnished
image globally.52
Problem of Weak Institutional Capacity in Nigeria: Corruption, according to the

World Bank, often flourishes where institutions are weak, where the rule of law
and formal rules are not rigorously observed, where political patronage is rife,
where the independence and professionalism of the public sector have been
eroded, and where civil society lacks the means to generate public pressure.53 The
difficulty in managing oil revenues in most oil-exporting countries has been at-
tributed to weak political and administrative capacity and to the lack of public
participation necessary for counteracting rent-seeking behavior.54 Therefore, it is
assumed that the implementation of good governance and institutional changes
can address the paradox of plenty and thus argue for the need to build competent
and capable state institutions that can promote good governance, economic
growth, and reduce poverty. But despite the rhetoric of adopting governance re-
forms by the Nigerian government, the problem is that their prescriptions for
administrative reforms have not taken into serious account the many insights of
the new trends in public administration.
Since the early 1990s, the paradigm shift toward new public management has
called for performance orientation toward increased technical efficiency, flexi-
bility, and accountability among both developed and developing nations. The
model has provided a critique of the traditional model of public administration by
accepting the weakness of traditional measures of personnel management in the
face of hierarchy, the development of powerful institutional cultures, and their
resistance to change. With respect to administrative reforms, the new public
management model stresses the need for public choice, the separation of policy-
making and policy implementation, and ‘‘the use of market mechanisms to address
public sector problems.’’55 It emphasizes the importance of radically altering the
structure of administrative agencies to overcome the problems of bureaucratic
hierarchy, with managers clearly taking greater responsibility.
The Nigerian reformers are still entrenched in the standard prescriptions of
old-line public administration, especially their lack of a full commitment to
decentralization as advocated by the donor community because of the nation’s
dependence of rentier money. The process of devolution of power and
responsibilities in Nigeria has proven to be very difficult in most cases and has
remained an ideal rather than a reality. Can Nigeria, a classic case of a rentier state,
truly reform itself and break away from the shackles of dependence on rentier
money? Judging from the proposed current reform under way, the answer is no.
The current public-sector reform is not intended to radically dismantle the pa-
thologies of the rentier statehood, which has swallowed the Nigerian democratic
governance.56 Rather it is an attempt to reform the bureaucratic apparatus of the
Nigerian state. Brian Levy cautioned us to learn from the lesson of experience of
the past bureaucratic reform efforts in Africa:
. . . a principal reason for the limited success of the first round of efforts to build state capacity
was the implicit presumption that the weakness of public administration was managerial and
could be remedied in a straightforward manner through a combination of organizational
overhaul and financial support to procure the requisite specialist technical advice, training,
and hardware. By contrast, a central lesson of experience. . . is that public administrations are
embedded in a complex, interdependent system. This system incorporates not only the bu-
reaucratic apparatus as a whole, but also political institutions and social, economic, and po-
57
litical interests more broadly.
Pierre Englebert also has reviewed this type of public-sector management re-
forms and the consequence for governance reforms in Africa:
Patterns of bureaucratic inefficiency, corruption, delinquent rule of law, and the like answer to
a political logic and are consequences of the dichotomization between statehood and power in
African non-legitimate states. It is hard to see how public sector management programs ad-
dress these deeper issues. They may provide temporary Bands-Aids, but they are unlikely to
bring about lasting improvements.58
The weakness of the Nigeria reform agenda is that it views its political and
economic woes solely on the malfunctioning of the bureaucracy. An improved
governance reform agenda in Nigeria will require the radical transformation of
Nigeria from a rentier state to a more modern and democratic one. This means
creating democratic governance with strong, efficient, and effective institutions
that can foster a culture of accountability and transparency. For such a trans-
formation to take place, the reforms must be embedded within the broader socio-
economic, political, and constitutional frameworks of the country, ‘‘a product of
deliberate policies, which require all institutions to function in accordance with
. . . a country’s constitutional provisions of the rule of law, due process of law,
cultures and traditions.’’59 J. Robinson et al. argue that the key to avoiding the
‘‘resource curse’’ is institutions that limit the ability of governments to distribute
public-sector positions to political supporters, which distorts the allocation of
resources in the economy.60 ‘‘Good governance depends on the qualities of the
men and women that deal with governance. It is institutions that guarantee good
governance.’’61
However, Nigeria’s reliance on a rentier political economy has adverse effects
on the development of democratic institutions and consolidation.62 With the failure
of parliamentary democracy in 1966, Nigeria was ruled for decades by decrees
rather than by the constitution, which prevented democratic political culture from
firmly taking root in Nigeria. Upon assuming power, the military junta ensured
that they purged the Nigerian armed forces and the civil service of all elements
they considered a potential threat to their regime. They also banned political
parties, marginalized civil society organizations, undermined the judiciary,
threatened the media, stifled private-sector initiative, and created an atmosphere of
fear and submission. The long military rule in Nigeria has left in its wake a tra-
dition that has institutionalized or reinforced opportunities for corruption and rent-
seeking behavior. The present presidential democracy is plagued by an ill-defined
constitution, weak political institutions, an inefficient bureaucracy, a delinquent
judiciary, and a presidential power monopoly—some of the characteristics of the
previous military regime. In such circumstances, the stakes are huge for the
governing elites, who seek access to the Nigerian rentier state because it is per-
ceived as a means of rent accumulation rather than a catalyst for sustainable
development.
What Nigeria needs is a competitive political system in which alternation of
power exists among political parties through a credible and transparent electoral
system. Such a system will provide an increase in the quality of governance by
strengthening mechanisms of both horizontal and vertical accountability as well as
a strong independent judiciary to protect the interests of those out of power. But
what we have is a multi-party democracy in which politics is still characterized by
personal rule and oligarchic control by the dominant political party, the People’s
Democratic Party. The opposition has little or no influence on government poli-
cies, programs, and legislations. The Nigerian political leaders distribute rentier
money to co-opt the opposition parties to ensure their patronage in maintaining the
status quo and thus avoid having to relinquish power through competitive elec-
tions. The fledgling democratic rule is only 12 years old and is marked by flawed
elections, financial embezzlements, a compromised judiciary, and a dysfunctional
social system. Many of the formal democratic institutions still lack the autonomy
and resources needed to successfully carry out their assigned tasks. There is
a desperate need for political decentralization of powers as outlined in the
Nigerian constitution.63
Obasanjo’s presidency dominated the other branches of government and
treated them as appendages of the executive branch rather than independent
branches. In a situation of relatively weak opposition parties, President Obasanjo
often attempted to manipulate the other democratic institutions in order to bolster
his power beyond formal constitutional control. This was evident in the attempt to
extend his presidential tenure limits, a reflection of executive ambition and dis-
regard for the constitutional authority. The independent roles of the legislative and
judicial branches of government to check the monopoly power of the executive
branch was virtually non-existent in Nigeria in part due to the overdependence on
rentier money, making the presidency almost an absolute monarchy. The president
governs by trying to centralize absolute power in the presidency. There is a crucial

need for a delicate balance of power in a democracy with legislative, judicial, and
executive branches of government, particularly as Nigeria has been under military
rule for the majority of time since it gained its national independence. The
Nigerian legislature should play a more dynamic role in developing national
policy, controlling the budget, and monitoring of project implementation. This
would foster greater openness, accountability, and transparency in the country.
Despite constitutional guarantees, the general perception of the average
Nigerian is that the nation’s judiciary is poorly administered, corrupt, and only
partially independent. The judiciary is weakened by undue pressure from political
and economic lobbyists. Bribery of judges sometimes influences the outcomes in
the courts. Judicial investigations are often slow and prejudicial. The shortage of
judges and their poor service conditions further contribute to noticeable delays in
settling cases. The judicial reforms under way fall short of adequately addressing
the weak judicial system in Nigeria. Nigeria needs to re-build its judicial capacity
by improving the underlying conditions of service for judges and supporting
personnel, promoting judicial independence, and nurturing impartial dispute res-
olution by judges.
Problem of a Militarized Bureaucracy in Nigeria: One of the legacies of the

military regime has been its strong influence in the development of the bureau-
cracy in Nigeria. The military regime did not appreciate the professionalism of the
Nigerian bureaucrat. The due process principle was disregarded as too slow for the
military approach. There was no room for discussion, dialogue, or negotiation.
The military government frequently was resistant to suggestions from civil ser-
vants and disdainful of time-tested principles of public administration. Over the
years, the civil servants serving under the military administration abandoned some
of the better qualities that existed in the bureaucracy and replaced them with more
authoritarian methods as an approach to public service. Even when an order was
deemed contradictory, the military boss told the civil servant to make it work.
Consequently, the civil service protocol and professionalism were compromised
for a period of about 30 years, thus leading to the public service’s un-
responsiveness to the citizens. A large credibility gap grew with the public. The
close collaboration of the public servants with the military ruling class further
engrained an environment of corruption, elitism, and patronage, which led to the
deterioration of the public service values of loyalty to the state. Loyalty to the
ruling elite replaced state loyalty, and there was no one to protect the ‘‘national
interest.’’64 As A. Mukoro correctly observed:
The experience of Nigeria is such that the administrative state allows a clique of public of-
ficials, the military and politicians to accumulate wealth, get away with it and leave the system
to suffer for it. The effect of this and other constellating factors earlier mentioned render
public administration ineffective, ineffectual and corrupt. Administrators support whatever

65
government is in power and end up becoming part of the rot.
The introduction of the Structural Adjustment Program (SAP) by the military

in the 1980s and 1990s was a major departure from the public-sector-led de-
velopment strategy. Since then, the Nigerian economy has been driven by fiscal
crises, and as a result, the focus of the reform process has been on cost-cutting at
the expense of improvement in public-sector effectiveness.66 The argument was
that the public sector’s expenditure had grown too high and, therefore, there was
urgent need for staff rationing in government agencies. The strategy, which was
recommended by the IMF and World Bank, has been to reduce the dominance of
the public sector in the economy and develop the work force levels that will en-
hance the competitive advantage of the state in the global marketplace. The extent
to which the work force in the civil service has been reduced and the extent to
which public enterprises have been commercialized becomes the measurement
criteria instead of efficiency and effectiveness as the main factors in assessing the
success of the reform. SAP undermined effective wage incentives for civil service
employees and, as a consequence of its austerity measures, resources allocated for
training programs of public officials and staffing of training centers have been
drastically reduced. The various measures taken by the government have failed to
have an effect on employment generation, performance, or productivity in the
country. What seems to be evident is that there is a prevalence of capacity deficits
in the public service.
It is important to distinguish between state scope and state strength. Scope refers to the range
of activities pursued by the state. Strength refers to how effective the state is in pursuing its
activities. Public sector reforms attempted to restrict the scope of state activity, but the main
obstacle to modernization in developing states is a lack of state strength. As a result, the
reforms often proved to be tragically inappropriate to developing states. The pressing need in
many developing states is to establish bureaucratic institutions with clear lines of account-
67
ability, impartial officials, and abstract rules to guide them.
The unintended consequences of this policy of retrenchment and retirement of

employees in the public sector is that it has exacerbated the already high rate of
unemployment in the present Nigerian economy, creating social dislocations and
loss of jobs among those groups without adequate social safety nets. The re-
ductions in the overall level of public-sector employment have not been accom-
panied by increases in the private-sector job market in Nigeria. The weakness of
this strategy thus calls for a rethinking of the management framework within
which this policy is formulated and implemented and the need to consider other
alternative policy development and management frameworks.68 The policy of
downsizing not only contradicts one of the NEEDS’ basic objectives of employ-
ment generation, but it also has not improved the quality of public services. In
spite of the government’s best intentions for the discharged officials in terms of
transition to productive post-retirement life, it clearly has added to the large

armies of unemployed, which continues to be a major national problem in both
the public and private sectors. The social repercussions of the high level of
unemployment have been manifested in the rise of poverty, crime, delinquent
and anti-social behaviors, and a general state of insecurity about life and
property in the country.
While the current bureaucratic reform initiatives may have introduced some
cosmetic changes in Nigeria’s public-sector management, the sustainability of
these reforms over a longer term remains very much uncertain because of the
problem of declining institutional capacity, poor motivation, low wages/salaries,
and popular dissatisfaction—all of which have been exacerbated by the declining
economic fortunes of the country.69 The federal government bureaucracy is still
plagued by absenteeism, lateness, idleness, endemic corruption, and low morale.70
The militarization of the federal bureaucracy has done a great disservice to the
once highly efficient administrative machine, which has shown progressive signs
of decline, especially in the areas of technological and knowledge-based man-
agement and administration. More importantly, some senior elements of the public
service have not only been resistant to complex governance reform programs
being introduced by the government, but they also lack the suitable skills and
expertise required to operate in an age of high-tech and information technology.
The short in-service training and other professional development opportunities
have not been able to fill this deficiency.71 Consequently, the quality of gover-
nance and public service has declined in every sphere of government endeavor,
such as economic management, the health-care delivery system, education, and
social services provision.
The poor performance and low productivity is clearly evidenced in the mis-
management of governmental ministries and parastatals, for example, in the
Power Holding Company of Nigeria. The state-owned utility has continued its
inadequate production of electricity, making industrial development difficult and
leaving the demand for business and residential electrical needs unfulfilled. The
House of Representatives recently concluded an investigation into the alleged $16
billion spent on the rehabilitation of the power supply infrastructure in the country
between 1999 and 2007. The investigation was undermined and no prosecutions
resulted. For Nigeria to achieve accelerated economic growth and development,
rapid progress is needed in improving the quality and quantity of electric power in
the country. Most small and all medium to heavy machinery requires electricity to
function. An uninterrupted power supply will improve industrial production and
the domestic services so badly needed. The IMF correctly observed that a deficient
power infrastructure dampens economic growth and weakens competitiveness,
with detrimental effects on productivity. In fact, the power sector remained an
immediate priority if the Nigerian Government’s Vision 2020 to become an in-
dustrialized nation is to be realized.
Conclusion and Policy Recommendations

The overwhelming concentration of political and economic power in the ex-
ecutive branch, operating over decades of undemocratic governance, steered
Nigeria into rentier statehood and the practice of predatory political economy.
President Obasanjo’s regime (1999-2007), which promised a new era of good
governance by eliminating corruption and poverty through the privatization of
public enterprises, and in theory freeing the government to concentrate on gov-
erning, failed to meet expectations.72 It appears that as long as Nigeria continues to
depend on rentier funds to meet most of its budgetary needs, Nigeria will continue
to be plagued by the limitations of rentier statehood. Whatever the short-term
successes that may be achieved from the present reforms, they are likely to be
slowed—if not prevented—by Nigeria’s well-established governance problems
such as personal rule, clientelism, patronage, and corruption. Thus, there is an
urgent need to counteract the rentier incentive structures by strengthening the
democratic institutions to provide a check on extra-legal activities by political
interests as well as to govern the bureaucracy in ways that hold them accountable
for achieving public ends. A sure path to good governance and sustainable de-
velopment in Nigeria is through the establishment and promotion of effective
democratic governance, in particular, institutionalized democratic mechanisms for
increased accountability, transparency and oversight in order to curb arbitrariness
and rent-seeking behavior in all government operations.
It is necessary, therefore, to align the mission and vision of the public-service
reforms with the imperatives of sustainable democracy, a dynamic market economy,
and a vibrant private sector. By law, the federal government owns the oil and natural
gas resources of Nigeria. As a result, the federal government has relied more on oil
money to meet its financial needs, thus giving the federal government financial in-
dependence from its citizens; in short, it is not a government by the people and for the
people. Privatization of public utilities is a step in the right direction. Were the federal
government to recognize and hand over a greater proportion of the oil wealth to the
local community, Nigeria would weaken the rentier state. Instead of spending vast
time and human resources on the exploitation, management, and distribution of oil
resources, the federal government could focus on oversight, monitoring, regulatory,
and strategic functions. Somewhat like corporate governance, where the role of the
‘‘Board of Directors’’ is used to maintain order between the firm’s stakeholders and
its top managers, the role of the federal government could help to enforce the con-
tractual obligations of all the parties involved in the oil commercial transactions. This
is the type of reform that Nigeria needs to stimulate healthy competition among the
federating states and diversify the tax base for government revenue in order to reduce
the country’s dependence solely on oil rents.
In practice, this also would mean creating a highly robust fiscal federalism in
which the federating units, with major responsibility, contribute to the common
pool of the federation on the basis of an agreed upon principle or pay prescribed
taxes to the federal government.73 The decentralization and devolution of power
and responsibilities will not only empower the local communities’ participation in
the fiscal management but also will facilitate the right incentives for governance
that are currently missing. This would allow expenditures and tax decision making
to be aligned more closely, thus improving prudent fiscal management that will
help to mitigate rent-seeking behavior and to deal with the dilemmas of the rentier
state. It could further ensure the flow of wealth from the source (local commu-
nities) through the state government to the federal government and better integrate
the local institutions into the sub-national governance system, thereby enhancing
their capacity, accountability, and performance. It would encourage a participa-
tory and open budgetary process. However, a renewed commitment by the civil
society groups to increased public oversight activities as related to tracking and
monitoring of budget implementation should be encouraged and supported in
order to monitor resource flows to oil–producing states and local government
areas. This is to ensure that funds allocated to them do not end up in the foreign
bank accounts of corrupt local elites and thus contribute to the process of trans-
parency and accountability, which is intrinsic to good democratic governance in
Nigeria.
NOTES
1
Federal Government of Nigeria (The NEEDS Secretariat), Meeting Everyone’s Needs: National
Economic Empowerment and Development Strategy (NEEDS) (Abuja, Nigeria: Nigerian National
Planning Commission, March 2004), p. 63.
2
Ahmed Al-Gazali, ‘‘The Role of Civil Service in National Development,’’ paper presented at
the Participants of National Defense College Course One, Abuja, Nigeria, October 30, 2007, p. 4.
3
O. Obasanjo, Inaugural Speech Delivered to the National Assembly, Abuja, Nigeria, 1999,
quoted from Abdullah A. Sheikh, ‘‘The Civil Service Reforms,’’ in Nigeria’s Reform Programme:
Issues and Challenges, eds. Hassan Saliu, Ebele Amali, and Raphael Olawepo (Ibadan, Nigeria:
Vantage Publishers, 2007), p. 349.
4
H. Beblawi, ‘‘The Rentier State in the Arab World,’’ in The Arab State, eds. H. Beblawi and
G. Luciani (New York: Croom Helm, 1987), p. 85.
5
See Axel Harneit-Sievers, ‘‘Reforming the Rentier State: Some Thoughts on NEEDS,’’ in
Contexting NEEDS Economic/Political Reform in Nigeria, eds. Sam Amadi and Frances Ogwo
(Lagos, Nigeria: Hurilaws & CPPR, 2004).
6
Ibid., p. xiii.
7
Kenneth Omeje, ‘‘Oil Conflict and Accumulation Politics in Nigeria,’’ Environmental Change
and Security Project Report. No. 12 (Washington, D.C.: Woodrow Wilson International Center for
Scholars, 2007), pp. 46-47.
8
D. A. Yates, The Rentier State in Africa: Oil Rent Dependency and Neocolonialism in the
Republic of Gabon (Trenton, New Jersey: African World Press, 1996), pp. 21-22.
9
See Daniel J. Smith, The Culture of Corruption: Everyday Deception and Popular Discontent
in Nigeria (Princeton: Princeton University Press, 2007).
10
T. L. Karl, ‘‘Ensuring Fairness: The Case for a Transparent Fiscal Social Contract’’ in Es-
caping The Resource Curse, eds. Macartan Humphreys, Jeffrey D. Sachs, and Joseph E. Stiglitz
(New York: Columbia University Press, 2008), p. 264.
11
H. Mahdavy, ‘‘The Patterns and Problems of Economic Development in Rentier States: The
Case of Iran,’’ in Studies in the Economic History of the Middle East, ed. M. A. Cook (Oxford:
Oxford University Press, 1970), p. 443.
12
See H. Beblawi, op. cit., and Michael L. Ross, ‘‘Does Oil Hinder Democracy?’’ World Pol-
itics, April 2001, p. 330.
13
Erika Weinthal and Pauline Jones Luong, ‘‘Combating the Resource Curse: An Alternative
Solution to Managing Mineral Wealth,’’ Perspectives on Politics, March 2006, p. 36.
14
Mathias Okwe, ‘‘Taxation as a Springboard towards Economic Development,’’ The Guardian
Newspaper, October 20, 2010.
15
D. A. Yates, op. cit., p. 33.
16
U.K. Department for International Development (DFID), ‘‘Eliminating World Poverty:
Making Governance Work for the Poor,’’ White Paper on International Development (London: Her
Majesty’s Stationery Office, 2006), available at http://www.dfid.gov.uk/wp2006/.
17
M. Humphreys et al., op. cit., p. 11.
18
The World Bank, Where is the Wealth of Nations? (Washington, D.C.: The World Bank,
2006), p. 65.
19
Kenneth Omeje, High Stakes and Stakeholders: Conflict and Security in Nigeria (Aldershot,
United Kingdom: Ashgate, 2006) and ed., Extractive Economies and Conflicts in the Global South:
Multi-Regional Perspectives on Rentier Politics (Aldershot, United Kingdom: Ashgate, 2008).
20
Charles McPherson and Stephen Macsearraigh, ‘‘Corruption in the Petroleum Sector,’’ in The
Many Faces of Corruption: Tracking Vulnerabilities at the Sector Level, eds. J. Edgardo Campos
and Sanjay Pradhan (Washington, D.C.: The World Bank, 2007), p. 192.
21
For effective states in the various manifestations, see Mick Moore, ‘‘Revenues, State For-
mation, and the Quality of Governance in the Developing Countries,’’ International Political
Science Review, July 2004, pp. 297-319.
22
See H. Mehlum, K. Moene, and R. Torvik, ‘‘Institutions and the Resource Curse,’’ The
Economic Journal, January 2006, pp.1-20; I. Korhonen, ‘‘Does Democracy Cure a Resource
Curse?’’ Discussion Paper No. 18 (Helsinki: Bank of Finland Institute for Economies in Transition,
2004), available at http://www.bof.fi/boft/eng/6dp/04abs/pdf/dp1804.pdf; and Paul J. Stevens, ‘‘The
Resource Curse and How to Avoid It,’’ The Journal of Energy and Development, autumn 2005, pp.
1-19.
23
Federal Government of Nigeria, Meeting Everyone’s Needs: National Economic Empower-
ment and Development Strategy (NEEDS).
24
Ibid., pp. 44-53.
25
In 2001, the federal government issued new policy guidelines for procurement and award of
contracts in government ministries/parastatals (Circular F. 15775 of June 27, 2001). See The
Obasanjo Reforms: Due Process Mechanism (Abuja, Nigeria: Federal Ministry of Information and
National Orientation Publication, 2007).
26
See O. Obasanjo, ‘‘Due Process Saves Nigeria N102bn,’’ ThisDay, July 13, 2004; S. O.
Akande and Ade S. Olomola, eds., Consolidating and Sustaining the Gains of Reforms in Nigeria:
Proceeding of a Workshop (Ibadan: Nigerian Institute of Social and Economic Research, 2007), pp.
5-6; and Richard L. Sklar, Ebere Onwudiwe, and Darren Kew, ‘‘Nigeria: Completing Obasanjo’s
Legacy,’’ Journal of Democracy, July 2006, p. 112.
27
N. Okonj-Iweala and P. Osafo-Kwaako, ‘‘Point of View: Nigeria’s Shot at Redemption,’’
Finance and Development, December 2008.
28
ment and Development Strategy (NEEDS).
29
N. Okonj-Iweala and P. Osafo-Kwaako, Nigeria’s Economic Reforms: Progress and Chal-
lenges (Washington, D.C.: The Brookings Institution, 2007), p. 13, also available at http://
www.brookings.edu/papers/2007/0323globaleconomics_okonjo-iweala.aspx.
30
ment and Development Strategy (NEEDS), p. 92.
31
Mark Bevir, Key Concepts in Governance (Thousand Oaks, California: Sage Publications,
2009), pp. 92-93.
32
Thomas Weiss, ‘‘Governance, Good Governance, and Global Governance: Conceptual and
Actual Challenges,’’ Third World Quarterly, October 2000, pp. 795-814.
33
United Nations Development Program (UNDP), Corruption and Good Governance. Discus-
sion Paper 3 (New York: UNDP, 1997), pp. 2-3.
34
See Christiane Arndt, ‘‘Politics of Governance Ratings,’’ International Public Management
Journal, July 2008, pp. 275-97. Also see World Bank, ‘‘Measuring the Quality of Governance,’’
Development News, July 14, 2003; Daniel Kaufmann, Aart Kraay, and Pablo Zoido-Lobató,
‘‘Aggregating Governance Indicators,’’ Policy Research Working Paper no. 2195 (Washington,
D.C.: World Bank, 1999); and, R. I. Rotberg and R. M. Gisselquist, Strengthening African
Governance—the Ibrahim Index of African Governance: Result and Rankings 2008 (Cambridge,
Massachusetts: Program on Intrastate Conflict, Harvard University, 2008).
35
Daniel Kaufmann et al., op. cit.
36
World Bank and the U.K. Department of International Development (DFID), Country Part-
nership for the Federal Republic of Nigeria, 2005-9 (London: DFID, 2005). Nigeria was ranked
40th out of 53 countries surveyed in the 2010 Mo Ibrahim Index of African Governance, a drop
from 35th position in 2009. The index ranks countries based on the 88 indicators related to eco-
nomic and political governance and scores them on a scale of zero to 100. Nigeria scored 42.65 out
of 100 against 2009’s 46.5 (Sun News Publishing, October 20, 2010). In 2009, Nigeria also was
ranked low in budget transparency by the influential International Budget Partnership and was
among 25 countries in the 85 countries studied that provide scant or no budget information to
enable the public to hold the government accountable for managing their money. See ‘‘Nigeria
Ranks Low in Budget Transparency,’’ ThisDay, February 4, 2009.
37
See Samuel Famakinwa, ‘‘Nigeria’s Anti-Graft War Weak, Says Transparency International
(IT),’’ ThisDay, April 19, 2007.
38
The Guardian Newspaper, October 2, 2010.
39
Alexandra Gillies, ‘‘Reforming Corruption Out of Nigerian Oil,’’ U4 Brief February 2009
(Bergen: CMI Chr. Michelsen Institute, 2009), available at www.u4.no/themes/natural-resources/.
40
I. Kolstad and Wiig Arne, ‘‘Transparency in Oil Rich Economies,’’ U4 Issue 2 (Bergen: CMI
Chr. Michelsen Institute, 2007), available at www.u4.no/themes/natural-resources/.
41
O. Obasanjo, ‘‘Nigeria: From Pond of Corruption to Island of Integrity,’’ Lecture delivered to
the 10th Anniversary of Transparency International, Berlin, November 7, 2003, p. 1.
42
Neopatrimonial is a form of political order based on the fusion of personal rule and legal-
rational institutions but private interests are pursued within a political structure that is ordered less
by institutions than by personal authority and power. Variously described as clientelistic, corrupt, or
predatory, neopatrimonial states may use the rhetoric of development, but often merely to mask
their real intent—to use the state resources for personal benefit or for the benefit of personal
associates. Michael Bratton and Nicolas Van de Walle, Democratic Experiments in Africa: Regime
Transitions in Comparative Perspective (Cambridge: University of Cambridge, 1997); Richard
Joseph, Democracy and Prebendal Politics in Nigeria: The Rise and Fall of Second Republic
(Cambridge: University of Cambridge Press, 1987); and Peter Lewis, ‘‘Economic Reforms and
Political Transitions in Africa: the Questions for Politics of Development,’’ World Politics, October
1996, pp. 92-129
43
Richard L. Sklar et al., op. cit., p. 107.
44
Publish What You Pay/Revenue Watch Institute, Eye on EITI: Civil Society Perspectives and
Recommendations on the Extractive Industries Transparency Initiative (New York: Revenue Watch
Institute, October 2006), available at http://www.revenuewatch.org/files/EyeonEITIReport.pdf.
45
J. McCoy and H. Heckel, ‘‘The Emergence of Global Anticorruption Norm,’’ International
Politics, March 2001, pp. 65-90.
46
In 2008, the Transparency International (TI) Corruption Perception Index (CPI), ranked
Nigeria 121 out of 180 countries assessed by the organization, a marked improvement over the
previous years’ scores. In The Africa Competitiveness Report, Nigeria’s public institutions—
measured by degree of corruption and rules of contract and law—ranked next to last of the 21
African countries assessed, and third to last out of the 80 countries assessed globally. See Ernesto
Hernández-Catá, Klaus Schwab, and Augusto Lopez-Claros, The Africa Competitiveness Report,
2004 (Geneva, Switzerland: The World Economic Forum, 2004).
47
ment and Development Strategy (NEEDS), p. 63.
48
Peter Lewis, ‘‘Growth without Prosperity in Africa,’’ Journal of Democracy, March 2008,
pp. 101-02.
49
The model of ‘‘prismatic society’’ is where the traditional and modern values and behaviors
coexist in the same organization. For negative effects on public administration in the developing
countries, see Fred Riggs, Administration in the Developing Countries: The Theory of Prismatic
Society (Boston: Houghton Mifflin, 1964), pp. 227, 423-24, 426-27.
50
See Ben Rawlence and Chris Albin-Lackey, ‘‘Indicting the Opposition: Nigeria’s War on
Corruption Seems to be Turning into a Political Witch Hunt,’’ The Guardian, March 22, 2007,
available at http://www.guardian.co.uk/commentisfree/2007/mar/23/despiteeightyearsofcivilia.
51
NEPAD-African Peer Review Mechanism (APRM) Nigerian Secretariat, NEPAD-APRM
Nigeria: Country Self-Assessment Report (CSAR), Executive Summary (Abuja, Nigeria: Govern-
ment Printing Press, May 2007), available at http://www.nepadaprmnigeria.org.
52
Nigerian Tribune, November 28, 2007.
53 st
The World Bank, Can Africa Claim the 21 Century? (Washington, D.C.: The World Bank,
2000), p. 74.
54
Xavier Sala-i-Martain and Arvind Subramanian, ‘‘Addressing the Natural Resources Curse:
An Illustration from Nigeria,’’ Working Paper WP/03/139, Washington, D.C., International Mon-
etary Fund, May 2003.
55
Tom Christensen and Per Laegred, New Public Management: The Transformation of Ideas
and Practice (Aldershot, United Kingdom: Ashgate Publications, 2001).
56
For a more detail discussion of the seven pathologies of the rentier state, see Mick Moore, op.
cit., pp. 306-08.
57
Brian Levy, ‘‘Governance and Economic Development in Africa: Meeting the Challenge of
Capacity Building,’’ in Building State Capacity in Africa: New Approaches, Emerging Lessons, eds.
B. Levy and S. Kpundeh (Washington, D.C.: World Bank Institute, 2006), p. 11.
58
Pierre Englebert, State Legitimacy and Development in Africa (London: Lynne Rienner
Publisher, 2002), p. 180.
59
United Nations Economic Commission for Africa (UNECA), Governance Report (Addis
Ababa: UNECA, 2005), p. 197.
60
J. Robinson, R. Toorvik, and T. Verdier, ‘‘Political Foundations of the Resource Curse,’’
Journal of Development Economics, February 2006, pp. 447-68.
61
High Level Panel of the African Union, Audit of the African Union (Addis Ababa: African
Union, December 18, 2007), p. 23.
62
M. Ross, 2001, op. cit., and M. Ross, ‘‘Does Taxation lead to Representation?’’ British
Journal of Political Science,’’ March 2004, pp. 229-49.
63
The Nigerian Constitution is based on the doctrine of separation of powers, which implies that
there are three branches of government (the legislature, executive, and judiciary), and which should
be separated from one another in functions and composition of their respective members while, at
the same time, each branch should be able to check the other from oppressive and arbitrary rule. In
practice, this is only partially true in Nigeria.
64
S. O. Akande and Ade S. Olomola, op. cit., p. 11.
65
Akomuvire Mukoro, ‘‘The Impact of the Environment of Nigeria’s Public Administration,’’
Journal of Human Ecology, February 2005, p. 121.
66
Adebayo O. Olukoshi, The Elusive Prince of Denmark: Structural Adjustment and the Crisis
of Governance in Africa (Uppsala: Academic Literature, Nordic Africa Institute, 1998), and M.
Minogue, ‘‘Changing the State: Concepts and Practice in the Reform of the Public Sector,’’ in
Beyond the New Public Management: Changing Ideas and Practices in Governance, eds. M.
Minogue, C. Polidano, and D. Hulme (Cheltenham, United Kingdom: Edward Elgar, 1998), p. 33.
67
Mark Bevir, op. cit., p. 95.
68
Sam Agere and Ibbo Mandaza, Rethinking Policy Analysis: Enhancing Public Development
and Management in the Public Service (Toronto: University of Toronto Press Inc., 1999).
69
See Brian Levy, ‘‘Are African Economic Reforms Sustainable? Bringing Governance Back
In,’’ in Democratic Reform in Africa: Its Impact on Governance and Poverty Alleviation, ed. Muna
Ndulu (Athens, Ohio: The Ohio University Press, 2006).
70
Mohammed Salisu, ‘‘Incentive Structure, Civil Service Efficiency and the Hidden Economy in
Nigeria,’’ in Reforming Africa’s Institutions: Ownership, Incentives, and Capabilities, ed. Steve
Kayizzi-Mugerwan (New York: United Nations University Press, 2003).
71
The late President Yar’Adua’s administration clearly acknowledged some of these de-
ficiencies in the public service management. See The Guardian Newspaper, December 18, 2008.
72
Afrobarometer Survey of March 14, 2006, had reported that the overwhelming majority of
Nigerians preferred democratic governance than any other form of government. It also noted that
there is a yawning gap between popular expectations of good governance in a democratic system
and the unsatisfying reality of broken promises since the transition in 1999 to civilian rule. See
http://www.afrobarometer.org/results/PressReleaseNigeriatermLimits3.pdf.
73
It was the Federal Military Government’s enactment of Decree 51 (Petroleum Decree) in 1969
that dispossessed all regional and state governments of any share in revenue from oil. The 13
percent that is currently allotted to derivation is much lower than the 50 percent that existed in the
pre-civil war period. This may explain the current agitation for resource control by some of the oil-
producing areas.

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THE JOURNAL OF ENERGY

“Reforming the Rentier State:

The Challenges of Governance Reform in Nigeria,”

Volume 34, Number 2

*Paul G. Adogamhe is currently an Associate Professor of Political Science in the Department of

The Journal of Energy and Development, Vol. 34, Nos. 1 and 2

The independence of the Public Service Commission, which is supposed to

Therefore, one of the priorities of President Obasanjo’s administration was to

Nigeria: A Classic Rentier State

H. Beblawi identifies four essential characteristics that would determine a rentier

violence prevalent in many parts of Nigeria has diminished the government’s

The Governance Reforms in Nigeria

The proposed agenda for reform in Nigeria are:

The government also established several anti-corruption agencies including the

The federal government has introduced a series of reforms to achieve a bal-

The Nigerian Public Service Reform Program

The highlight of the reform agenda was to create

Hence, the Bureau of Public Service Reforms was established on February 4,

performance assessment at individual, departmental, and organizational levels;

The Challenges to Good Governance in Nigeria

The term ‘‘good governance,’’ according to the International Monetary Fund

Thus, it would be naive to think Nigeria, after only 12 years of embracing

Problems of Corruption, Clientelism, and Political Elites in Nigeria: In Nigeria

Consequently, ‘‘corruption in resource-rich countries is often political and

The deeply entrenched neopatrimonial institutions and systemic corruption are

The Nigerian government’s passage of the Extractive Industries Transparency

Problem of Weak Institutional Capacity in Nigeria: Corruption, according to the

governs by trying to centralize absolute power in the presidency. There is a crucial

Problem of a Militarized Bureaucracy in Nigeria: One of the legacies of the

public administration ineffective, ineffectual and corrupt. Administrators support whatever

The introduction of the Structural Adjustment Program (SAP) by the military

The unintended consequences of this policy of retrenchment and retirement of

transition to productive post-retirement life, it clearly has added to the large

Conclusion and Policy Recommendations

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