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1 AN ANALYSIS OF NIGERIA- US RELATIONS, 1999-2009 BY Ogbodo Stephen. PG/MSC/08/ 50180 A PROJECT REPORT SUBMITTED TO THE DEPARTMENT OF POLITICAL SCIENCE UNIVERSITY OF NIGERIA NSUKKA, IN PARTIAL FULFILLMENT OF THE REQUIREMENT FOR THE AWARD OF MASTER OF SCIENCE DEGREE (MSC) IN POLITICAL SCIENCE (Political Economy) JUNE, 2012

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AN ANALYSIS OF NIGERIA- US RELATIONS, 1999-2009

BY

Ogbodo Stephen.

PG/MSC/08/ 50180

A PROJECT REPORT SUBMITTED TO THE DEPARTMENT OF POLITICAL

SCIENCE UNIVERSITY OF NIGERIA NSUKKA, IN PARTIAL FULFILLMENT OF

THE REQUIREMENT FOR THE AWARD OF MASTER OF SCIENCE DEGREE

(MSC) IN POLITICAL SCIENCE (Political Economy)

JUNE, 2012

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TITLE PAGE

AN ANALYSIS OF NIGERIA- US RELATIONS, 1999-2009

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APPROVAL PAGE

This Project report is original and has been approved by the Department of Political Science,

University of Nigeria Nsukka for the award of Master of Science.

_________________________ _____________________

Dr. Aloysius – Michaels Okolie Date

(Supervisor)

Professor, Obasi Igwe _____________________

(Heads of Department) Date

Professor, E. O. Ezeani _______________________

(Dean of Faculty) Date

_______________________________

External Examiner

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DEDICATION

This project report is dedicated to God Almighty.

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ACKNOWLEDGEMENT

I am ever indebted to God Almighty for his goodness to my family and my well

wishers. In the same light I am grateful to my supervisor Dr. Aloysius -Michaels Okolie, for

his guidance and commitment to research.

To all my lecturers most worthy of mention here are Professor Miriam Ikejiani- Clark,

Professor J Onuoha, Dr. K Ifesinachi and Ezeibe Christian; you were outstanding and more

dedicated than I thought. My special thanks goes to my brother for his moral support and

encouragement. To all my siblings, I love you all.

Finally, I appreciate all my colleagues who have contributed in one way or the other to

make this programme a success.

Ogbodo Stephen

Department of Political Science

University of Nigeria Nsukka.

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TABLE OF CONTENTS

Title Page………………………………………………………………………….ii

Approval Page……………………………………………………………………...iii

Dedication…………………………………………………………………….……iv

Acknowledgement………..…………………………………………………………v

Table of Contents…………………………………………………………………..vi

List of Tables………………………………………………………… …………viii

Abstract……………………………………………………………………………ix

CHAPTER ONE: INTRODUCTION - - - - 1

1.1 Background of the Study - - - - - - 1

1.2 Statement of the Problem - - - - - - 4

1.3 Objective of the study - - - - - -- 6

1.4 Significance of the study - - - - - - 7

1.5 Literature review - - - - - - - 7

1.6 Theoretical Framework - - - - - - - 15

1.7 Hypotheses - -- - - - - - - 18

1.8 Method of Data Collection/ Analysis - - - - - 19

CHAPTER TWO: OVERVIEW OF NIGERIA- UNITED STATES ECONOMIC

RELATION - - - - - - - - - 20

2.1 First era (1960-1967): The Era of Emerging Economic Alliance -- 20

2.2 Second Era. (1967-1970): Era of Nigerian Civil War - - 21

2.3 Third Era (1970-1983) Era of Oil Boom - - 22

2.4 Fourth Era (1983-1993) Era of Structural - - - 24

2.5 Fifth Era: (1993-1999) Era of Embargo on Nigeria oil - 25

2.6 Sixth era: (1999-2006) The Contemporary Era - - 26

CHAPTER THREE:OIL AS THE CENTRE- PIECE OF NIGERIA-UNITED

STATES ECONOMIC RELATION - - - - - - -28

3.1 Dependency in Oil as source of revenue - - - - 28

3.2 US Oil Investments in Nigeria - - - - - - 29

3.3 US-Nigeria trade relation from 1999-2009 -- - - 31

3.4 US response to conflicts in Nigeria: Variations in Oil related

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and non-Oil related - - - - - - - 32

3.5 Linking Oil and US- Nigeria bilateral military ties - - - 36

3.6 Nigeria’s Investment on the Military/Security in readiness to Protect

the oil region - - - - - 38

CHAPTER FOUR: NIGERIA - US ECONOMIC RELATIONS AND ECONOMIC

DEVELOPMENT IN NIGERIA - - - - - - - 42

4.1 Issues of Domination - -- - -- -- - 42

4.2 Issues of Security - - - - - - 43

4.3 Issues of dependency - - - - - 44

4.4 Issues of Foreign Direct Investment and technology transfer - -45

4.5 Issues of Terms of Trade - - - - - 46

4.6 Issues of repatriation of looted funds - - - - 56

4.7 Issues of environmental crimes of oil transnational corporation

in the Niger Delta - - - - - - - - 57

CHAPTER FIVE: SUMMARY AND CONCLUSION -- - - - 64

5.1 Summary - - - - - - - 64

5.2 Conclusion - -- - - - - - - 64

5.3 Recommendations - - - - - - 65

BIBLOGRAPHY - - - - - - - - 70

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LIST OF CHARTS AND TABLES

Chart 3.1: Nigeria‘s Export to US 1999- 2006 - - - - 32

Chart 4.2: Nigeria-US Trade 1999- 2006 - - - 48

Table 4.1 : 2011 : U.S. trade in goods with Nigeria - - - 48

Table 4.2 :2010 : U.S. trade in goods with Nigeria -- - - 49

Table 4.3 :2009 : U.S. trade in goods with Nigeria - - 49

Table 4.4 :2008 : U.S. trade in goods with Nigeria - - 50

Table 4.5 :2007 : U.S. trade in goods with Nigeria - - - 50

Table 4.6 :2006 : U.S. trade in goods with Nigeria - - - 51

Table 4.7 :2005 : U.S. trade in goods with Nigeria - - - 51

Table 4.8 :2004 : U.S. trade in goods with Nigeria - - - 52

Table 4.9: 2003 : U.S. trade in goods with Nigeria - - - 52

Table 4.10: 2002 : U.S. trade in goods with Nigeria - - - 53

Table 4.11: 2001 : U.S. trade in goods with Nigeria - - - -53

Table 4.12: 2000 : U.S. trade in goods with Nigeria - - - 54

Table 4.13: 1999 : U.S. trade in goods with Nigeria - - - 54

Table 4.14: 1998 : U.S. trade in goods with Nigeria - - - 55

Table 4.15 Population living under poverty in Nigeria 1980-2010 - -57

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ABSTRACT

This study examines the political economy of Nigeria –United States relations between 1999

and 2009. This study has both broad and specific objectives. The broad objective of this study

is to examine the political economy of Nigeria –United States relations between 1999 and

2009. The specific objectives are as follows: To ascertain whether oil is the centerpiece of

Nigeria –United States economic relation between 1999 and 2009; To find out if Nigeria –

United States economic relations enhanced economic development in Nigeria within the

periods under study. Though political economic framework could explain almost every situation

in interaction of states, the theoretical framework for the analysis of Nigeria - US economic

relations between 1999 and 2009 will be rooted on the dependency theory. This is because it

enables us capture at a glance the dependent status of Nigeria in her economic relation with US.

We validated the following hypotheses Oil is the centerpiece of Nigeria –United States

economic relation between 1999 and 2009; Nigeria –United States economic relations has not

enhanced economic development in Nigeria within the periods under study. The method of data

collection for this study is observation of documentary evidence that deals with Nigeria –US

relations. We heavily relied on secondary sources such as books, journals, articles, periodical,

government reports and publications, magazines, unpublished manuscript, commentaries, and

conference papers. Other data were collected through electronic sources such as television news

broadcasting and radio news broadcasting and Internet materials. Again, we relied essentially on

descriptive qualitative method as our methods of data analysis in this study. We also use simple

percentages and tables graphs to buttress the arguments in this study.

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CHAPTER ONE

INTRODUCTION

1.6 Background of Study

Nigeria-United States relations remain a critical aspect of Nigerian foreign policy. The

demands, challenges and competition of this 21st century have made it pertinent that Nigeria

review her relation with United States in order to benefit maximally from their relation. One

would have thought that Nigeria-US economic relation since 1960 would have moved Nigeria

from being a Third world nation to at least a Second world nation but like the story of any other

developing economy dealing with developed economy, Nigeria has remained the same if not

worst. Nigeria has remained just a market for the U.S. to buy her crude oil and sell her

manufactured goods.

United States, adopted the policy of globalization, democratization, free market and

liberalism. However one may say that the reason behind US democracy in Africa is to create

“FREE ATMOSPHERE” for the implementation of International Monetary Fund and World

Bank inspired Adjustment programmes, thereby reinvigorating the type of market, which made

Europe prosperous. Expediently, one can say that the free market/free trade they implement is

only free movement of capital and not free movement of labour... (Ezea 2005)

Now, wouldn‟t it be appropriate to say that more than 47 years Nigeria-United States

economic relation has not enhanced Nigeria economic development and that instead it has

plunged Nigeria deeper into the role of a mere primary producer of raw materials. Nigeria -US

economic relation has only strengthened Nigeria‟s market economy instituted by the colonial

masters.

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As soon as Nigeria got her independence and needed economic aid, US was all over her

with fund. According to Chiaka (1989), when the balance of cold-war interests shifted from

Europe to the Third world in 50s, the policy of containment embodied in the United States aid

programmes dictated a shift in emphasis towards political, economic and military support for

“friendly” less developed nations, especially those considered geographically strategic.

According to Michael Todaro (1982), most aid programmes to the third world, therefore were

oriented more towards purchasing their security and propping up their sometimes-shaky

regimes than promoting long-term social and economic development. Certainly, the United

States/Soviet competition for Third world affection had a positive impact on decolonization and

it may well have kept economic aid at higher levels than it otherwise might have been.

Unknown to Nigeria, definite benefit accrue to donor countries as a result of their aid

programmes. Typically, Nigeria believed US was a very bighearted friend but as one former

United States AID official candidly put it:

The biggest single misconception about aid programs is

that we send money abroad. We don‟t. Aid consists of

American equipment, raw materials, expert service and

food –all provided for specific development projects, which

we ourselves review and approve. Ninety-three percent of

aid fund are spend directly in the United States to pay for

these things. Just last year, some 4,000 American firms in

50 states received $1.3 billion in aid funds for products

supplied as part of the foreign aid program (Gaud 1968:8).

Correspondently, Dean Acheson, former United States Secretary of State, once said,

when he was referring to the motive for American aid to the Third world, that “It is not

philanthropy that motivates us. But there is a hard- headed self-interest in this program”

(Department of State bulletin, Feb.4, 1952). This of course substantiates that capital aid and

technical assistance, which characterized the Nigeria-United States bilateral relation between

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1960 and 1967, was just serving more of America‟s interest than Nigeria. Remember, aid is not

a donation; it is a loan to be repaid with interest.

Nigeria civil war interrupted a steady growth in the bilateral ties between the two

countries. But between 1970 and 1983, during the oil boom, Nigeria oil became the centerpiece

of her relation with the US. It was more of a relation of interdependence than dependence until

the sharp fall in Oil price, which affected Nigeria‟s monoculture economy and plunged it back

to aids recipient. Nigeria also found herself in the position of debtor in the international

financial circles. The story of IMF and Structural Adjustment Programmes followed suit with its

adverse effect on Nigeria economy.

Since the late 1990‟s and particularly after the 9/11 hijackings in the United States, there

has been a resurgence of global strategic interest in West Africa. In spite of the seeming

leverage given by the terrorist threat to the US‟s current security cooperation in West Africa, it

should be noted that the picture is incomplete if it is not emphasized that American oil interests

are central in the US presence in a region that was described at the end of the cold war to have

fallen off the world‟s strategic map. US oil companies are at the forefront of the “new scramble

for Africa‟s oil” Obi (2005) The US is in competition against Britain, France and China in the

new scramble for West Africa‟s oil (AOPIG 2002;Leigh and Pallister 2005)

The findings between 1999 and 2006 reveals that though US offered economic

assistance to Nigeria, oil seem to be the center piece of the bilateral relation between both

countries. The amazing thing is that the buyer determines the price of oil just as they determine

the price of their manufactured goods sold in Nigeria.

Evaluating whether Nigeria has benefited economically from this relation, we hear of

foreign American foreign investments that come in the form of Multinational Corporations. The

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impact of MNC on national industries and the capital flight they engender cannot be over

emphasized neither can the obsolete technology they transfer be overemphasized. What about

the capital-intensive investment they embark on?

Until Nigeria understands that US only intervenes where she has interest and intervenes

solely to serve that interest, Nigeria can never benefit from her economic relation with US. In

essence it is pertinent for Nigeria to revisit her national interest and constantly project it in her

relation with the US. By so doing there will be a meeting point that will benefit both countries.

This study examines the political economy of Nigeria –United States relations between 1999

and 2009.

1.2 Statement of Problem

According to United States information agency report (1985), Nigeria and United

States have enjoyed increasingly active trade since Nigeria‟s independence. Currently, the US

investment in Nigeria is larger than any other African country. The United States has remained

a major investor in Nigeria‟s oil sector with ExxonMobil, Texaco, and Chevron etc as key

players. Yet, the Nigeria -United States ties were almost negligible up till 1960. This

relationship is essential to demonstrate that the current dependence of Nigeria on the Western

capitalist economy of which the United States is its leader has its root on the pattern of political

economic links established during the colonial period. The Nigeria market was preserved for the

colonialist though there were attempts by the other European powers and United States to break

this monopoly through competition and price wars.

Between 1960 and 1970, Nigeria government attempted to diversify her economic

relation away from narrow dependence on Britain to a multilateral dependence on both Britain

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and United States. This explained why between 1961 and 1965, United States emerged as the

largest source of capital aid to Nigeria apart from United Nations and her agencies. In spite of

the decline in the political and economic relation during the civil war years, the United States

had surpassed Britain as Nigeria‟s dominant bilateral partner in important respects like Oil and

Agricultural products. Between 1967 and 1970, the period of Nigeria- Biafra civil war, Nigeria -

US relation deteriorated. Again in 1990s, Nigeria -US relation deteriorated following the

annulment of June 12, 1993 presidential election.

It is important to state that Nigeria‟s relation with the United States has been conditioned

by the oil factor that is why the United States had maintained the policy of not intervening in

Nigeria‟s domestic crisis if such crisis does not disrupt the flow of oil. More so, Nigeria-United

States relation since Nigeria‟s independence has been raised on a tripod of democracy, trade and

foreign investment. Nigeria ranks second only to Saudi Arabia as the most important supplier of

petroleum to the United States which buys over one million barrels a day of the highly desirable

light low sulphur sweet crude. Nigeria provides about 10 percent of the US oil imports. Annual

trade amounts to US$6 billion and US companies have about US$ 7billion investment in the

country (Onuoha, 2001).

All the former colonial powers are today reliable allies of the US in the postcolonial

Africa countries including Nigeria. The US role in Africa has effectively secured the continent

for expanded penetration of Euro-American Transnational Corporation. The new unipolar world

of globalization has perfected the conditions of that penetration. The real issue from a US global

security perspective is how to ensure control over the oil-wealth in West Africa (Krueger 2002)

In the global economy, the use of technology, trade, investment, aid etc to influence the course

of events in the international system has been an important reason nations engage in

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international economic relation. In this relation the weaker nations especially those like Nigeria

are usually subjected to manipulation by the stronger nations like US. This means that the so

called mutuality of interests of Nigeria and US has constantly depended on the preservation of

the structural conditions where the US is a dominant industrial power and Nigeria, a safe raw

material supplier and subordinate ally.

Some scholars like Agada (2003) and Agbu (2000) have argued that Nigeria -US

relation has greatly undermined Nigeria national economic development and strengthened her

dependency structure since Nigeria‟s independence. They noted that President Olesugun

Obasanjo‟s administration under the democratic dispensation since 1999 maintained Nigeria –

US relation in trade, investments and military. Meanwhile it appears scholars have not

determined whether oil remained the centre piece of Nigeria –US relations between 1999 and

2009. Again, scholars appear to have not satisfactorily determined the import of Nigeria –US

relation on Nigeria‟s development. Against this background, this study seeks to provide answers

to the following questions:

1. Is there any link between crude oil endowment and intensification of economic

relation between Nigeria –United States within the period of study.

2. Has Nigeria –United States economic relations enhanced economic development in

Nigeria within the periods under study.

1.7 Objective of study

This study has both broad and specific objectives. The broad objective of this study is to

examine the political economy of Nigeria –United States relations between 1999 and 2009.

The specific objectives are as follows;

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1. To ascertain whether there is any link between crude oil endowment and intensification of

economic relation between Nigeria –United States within the period of study.

2. To find out if Nigeria –United States economic relations enhanced economic development

in Nigeria within the periods under study.

1.4 Significance of study

This study is theoretically and practically significant. Theoretically, understanding the

nature of cooperation between both countries will greatly enhance efforts at further improving

economic relations between them. A recent review of the Nigeria –U.S. economic relation

reveals that as the US expands her economy, Nigerian comprador bourgeoisie collaborate with

US to exploit Nigerian economy. It will lead to the understanding of the place of oil in the

Nigeria –US economic relation within the period under study. The study will also unravel the

effect of the Nigeria –US economic relation on the Nigeria‟s development. The study will be

valuable to scholars and future researchers, as it will serve as a source of secondary data.

Practically, the study will suggest and advise Nigerian policy makers on steps they

should take in order to maximize their benefits from their relation with U.S.

1.5 Literature review

Available literatures on the subject matter have either taken economic or political

worldview in understanding of Nigeria US economic relation. Considering this thrust, it will be

essential to review this work under the following sub headings namely:

A. Oil and Nigeria US economic relations.

B. Nigeria- United States economic relation and Nigerian Development.

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A. Oil and Nigeria US Economic Relations

Agada (2003) in his contribution in the discourse on oil and Nigeria US relation

highlighted that following the discovery of larger quantity of oil within the Niger Delta in 1970,

Nigeria –U.S. relations improved. According to him, Nigeria has depended on American

companies for the development of the petroleum industry. Apart from Shell (which is a British

oil Multinational Corporation) the rest of the oil Multinationals involved in oil exploration in

Nigeria are American companies. Nigeria and the United States found a mutual interest in

cooperation in economic matters. From this period, the United States became more involved in

Nigeria‟s economic issues.

Implicitly, Agada further claimed that the United States is Nigeria's largest trading

partner after the United Kingdom. The stock of US investment is nearly $7 billion, mostly in the

energy sector. Exxon-Mobil and Chevron are the two largest US corporate players in offshore

oil and gas production. Significant exports of liquefied natural gas started in late 1999 and are

slated to expand as Nigeria seeks to eliminate gas flaring by 2008. Oil dependency, and the

allure it generated inflated government contracts and spawned other economic distortions. The

country's high propensity to import means roughly 80% of government expenditures is recycled

into foreign exchange Agada (2003).

Agbu (2000) commenting on the centrality of oil in Nigeria –US economic relation

remarked that under Sani Abacha‟s era (1993-1998), Nigeria relations with the United States

was very lukewarm with both countries barely tolerating each other but that is not to say that

both countries have not been cooperating on many other fronts. Indeed, their cooperation on the

drug/money laundering problem is quite commendable. He concluded that American companies

like Texaco, Mobil and Chevron have been operating successfully in Nigeria for years.

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Therefore this is one area that, that is, the oil industry that the U. S. government is very much

interested in. In fact, a glance at the Balance of Trade between Nigeria and the United States is

quite revealing. In 1999, the US imported goods worth $4.4 billion from Nigeria, the 99 percent

of this consisting of petroleum and petroleum products. The same year, Nigeria imported goods

worth 600 million from the U. S. made up mostly of food and live animals.

Congruously, Akinyemi et al (1989) argued that relations between Nigeria and the

United States are basically conditioned by the oil factor. He asserted that the United States have

shown much concern toward friendly relation with Nigeria as demonstrated in various bilateral

agreements between both countries. Confirming this he stated that economic relations between

Nigeria –US did not necessarily provoke political understanding and cooperation. In fact the

very condition that necessitated intense economic intercourse also necessitated some

misunderstanding of policies and politics. Though political relation between Nigeria and US

continued to be uneasy, and remained at the lowest ebb level, economic intercourse even

intensified. To demonstrate U S displeasure at Nigeria‟ s position, President Nixon refused to

receive Gowon at the White house in October 1973.

And this was exactly the period when trade in crude oil blossomed between Nigeria and

US. The Nigeria- US economic relation though it deteriorated during the civil war did not

completely rule out their economic relation.

Similarly, Onuoha (2005) argued that Nigeria relation with the US has been conditioned

by the oil factor. According to him, the United States, which has not been significant Nigeria‟s,

trading partner until 1960 became by 1970 the major consumer of Nigeria‟s oil. He summarized

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that United States had maintained the policy of not intervening in Nigeria‟s domestic crisis if

such crisis does not disrupt the flow of oil Onuoha .

He also has noted that the US interest in Nigeria is centered on trade in crude petroleum.

According to him, Nigeria sells 40 percent of its oil to United States and Nigeria crude oil

export as well as related products makes up about 10 percent of total annual US imports. Ate

affirmed that American private investment in Nigeria is concentrated in the oil sector and

telecommunications .He further stated that American multinational oil companies like Chevron,

Mobil and Texaco have a great stake in economic growth, environmental well-being and

political stability of Nigeria especially in the Niger-Delta Ate (2000).

In the publication of the United States embassy in Abuja, it was confirmed that Nigeria

is the largest US trading partner in sub-Saharan Africa, based mainly on the high level of

petroleum imports from Nigeria. Total two-way trade was valued at $30.8 billion in 2006, a

19% increase over 2005. Leading U.S. exports to Nigeria were machinery, wheat, and motor

vehicles. Leading US imports from Nigeria were oil and rubber products. Nigerian exports to

the United State under the African Growth and Opportunity Act (AGOA), including its

Generalized System of Preferences (GSP) provisions, were valued at $25.8 billion during 2006,

a 15% increase over 2005, due to an increase in oil exports. Non-oil AGOA trade (leather

products, species, cassava, yams, beans, and wood products) totaled $1.4 million in 2006,

almost double the amount in 2005. The United States is the largest foreign investor in Nigeria.

The stock of US foreign direct investment (FDI) in Nigeria in 2005 was $874 million, down

from $2.0 billion in 2004. US FDI in Nigeria is concentrated largely in the mining and

wholesale trade sectors (http://abuja.usembassy.gov/). According to This Day

Newspaper of Monday July 8, 2002, Nigeria supplies United States about 900,000 barrels of oil

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per day and hope to double its import from this figure to 1.8 million barrels per day. Asserting

this, Walter Kanstenier III US Assistant Secretary of State stated that “Africa oil is critical to us

and it will increase and become more important as we go forward (Quoted in AOPIG 2002).

A great deal of excitement has been generated by some think-tank in the US as well as

among leading American policy makers as to the prospect of maximizing their gains in the new

scramble for West Africa oil. They point to the fact that West Africa currently provides 15 per

cent of US oil (of which 10 per cent comes from Nigeria) and the figure is expected to rise to 25

per cent by 2020 Obi (2005). The implication of all this is that US interest in Nigeria be it

economic, political or military has an oil underpinning which mastermind it.

B. Nigeria- United States Economic Relation and Nigerian Development

Integration into the global economy according to a publication of USAID in

March 2003 publication titled “Building Trade Capacity in the Developing World” can be a

powerful force for economic growth and poverty reduction. Furthermore in its recent National

Security Strategy, the Bush administration established the goal of igniting a new era of global

economic growth through free markets and free trade. Trade and investment are the principal

mechanisms through which global market forces, competition, human resource development,

technology transfer, and technological innovation generate growth in developing and developed

countries. During the 1990s, developing countries that successfully integrated into the global

economy enjoyed per capita income increases averaging 5 percent annually.

The publication however, observed that countries that limited their participation

in the global economy saw their economies decline. Developing countries‟ overall share of

global trade is increasing, and the flow of foreign direct investment to poor countries has grown

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rapidly. But this growth is concentrated in a few countries, and many of the poorest developing

countries remain on the sidelines because those countries protected their domestic markets with

tariff barriers and other measures that limited their participation in the global economy.

But has this integration of Nigeria into the global economy enhanced the overall development of

Nigeria before and between 1999-2006 even as they enjoyed increasing association and

collaboration with the US? Nigeria scholars like Ake (1981), Nnoli (1981), Offiong (1980),

Chiaka (1989) to mention but a few have in their various works argued that the development of

Nigeria is assured only on the basis of their „break away‟ from the advanced capitalist countries,

United States included. They think that Nigeria increasingly collaboration with the United

States especially in trade of raw materials and exchange of manufactured goods between 1999-

2006 would spell more underdevelopment for Nigeria. To these scholars therefore, Nigeria

United States economic relation will only enhance Nigeria underdevelopment and dependency.

As noted, sometime in history, Japan was forced to close-up its economy or

protected their domestic markets with tariff barriers and other measures that limited their

participation in the global economy in order to be self-sufficient and hasn‟t that benefited Japan

today? Why will African countries that choose to do the same be considered poor according to

the USAID publication?

President George W. Bush in his November Presidential address pointed out that developing

countries receive $50 billion a year in aid, while foreign investment inflows total almost $200

billion and annual earnings from exports exceed $2.4 trillion. The president also noted that, in

2001, trade opportunities created by the African Growth and Opportunity Act (AGOA) alone

boosted African exports to the United States by more than 1,000 percent, generated nearly $1

billion in investment, and created thousands of jobs.

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The dilemma with this type of analysis is that if it is devoid of bias (which is

always unusual), the indices used in this analysis are simply kept secret if at all there is any.

Armchair theorizing is another expression of this type of analysis whereby foreign

officials/researchers analyze situations in their office or by mere television or newspaper report

without really involving themselves in any fieldwork. For all I care the US president might just

be making exaggerations to serve their interest.

USAID major program areas in Nigeria when it resumed its operation under the

democratic dispensation in 1999 include Transition to Democratic Civilian Governance

Sustained, Strengthen Institutional Capacity for Economic Reform and Enhance Capacity to

Revive Agricultural Growth: Develop the Foundation for Education Reform, Increased Use of

Maternal and Child Health/HIV Services and Preventive Measures within a Supportive Policy

Environment, while other program areas are: Economic Support Fund (ESF)was established to

promote economic and political stability in strategically important regions where the United

States has special security interests.

In addition, ESF has been used to support USAID's economic growth objectives,

particularly in the area of privatization of state-owned enterprises, micro-enterprise

development, and anti-corruption efforts. Democracy and Human Rights Fund (DHRF), Public-

Private Alliance (PPA): is USAID's business model for the 21st century-our commitment to

change the way we implement our assistance mandate. PPA in Nigeria supports the

development of agricultural partnerships to increase productivity, marketing and export of

crops, e.g. gum Arabic, cocoa, cassava. Also, PPA supports a new information technology

project that disseminates agriculture-marketing information to producers and many other

programs.

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Agada contributing to the debate asserted that on Nigeria‟s economic development,

USAID is helping Nigeria towards economic reforms and agricultural growth. He went further

to say that USAID is doing this by strengthening government‟s economic management capacity

and promoting private sector participation particularly in Agriculture. USAID assistance to him

is focused on economic management and reforms, including the budget process and design and

implementation of key policies, such as the on-going privatization, export promotion,

technology and commercialization, rural sector development and micro-enterprise development.

Apart from the fact that these values being upheld by America which are liberal

economic values are more beneficial to the US than Nigeria, it remains a question of whether or

not this USAID programs have enhanced Nigeria development because when these USAID

programs are not fostering and instituting agricultural sector to the cheer detriment of industrial

sectors, it up holds welfare issues, encourages loan lending or more accessibility of the

Nigeria‟s market to the US.

Some scholars like Akinyemi (1989); Agada (2003); Agbu (2000) and Onuoha (2005)

have established that oil is at the centre piece of Nigeria US relations since the discovery of oil

in Nigeria, none of these scholars appeared to have updated this information to determine

whether oil has continued to be at the centre of the relation between the two countries. Again,

Agada (2003) and Agbu (2000) argued that Nigeria -US relation has greatly undermined

Nigeria national economic development and strengthened her dependency structure since

Nigeria‟s independence. Yet it appears they have not satisfactorily determined the import of

Nigeria –US relation on Nigeria‟s development. It is this gap that this study seeks to fill.

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1.6 Theoretical Framework

Though political economic framework could explain almost every situation in

interaction of states, the theoretical framework for the analysis of Nigeria - US economic

relations between 1999 and 2009 will be rooted on the dependency theory. This is because it

enables us capture at a glance the dependent status of Nigeria in her economic relation with US.

Dependency theory addresses the problems of poverty and economic underdevelopment

throughout the world. Dependency theorists argue that dependence upon foreign capital, foreign

trade, technology, and expertise impedes economic development in developing countries.

Scholars associated with this theory include Baran, Cockrosft, Theotonio Dos Santos, etc (Ojo

et al 1985)

Latin American scholar propounded dependency theory to explain the inability of Latin

American countries to attain a high level of economic and industrial development after years of

independence. According to Paul Conklin, Dependency theorists believe that poverty and

underdevelopment in developing nations is a result of those nations' historical and ongoing

dependence on wealthier, Western countries for foreign trade and investment. Dependency

theorists are disenchanted with modernization theorists Microsoft Encarta, 2005.

According to Gilpin, (1979) dependency means a situation in which the economy of certain

countries is conditioned by the development and expansion of another economy to which the

former is subjected. The relation of interdependence between two or more economies, assumes

the form of dependency when countries (i.e. the dominant ones) can expand and be self

sustaining, while other countries (the dependent ones) can do this only as a reflection of that

expansion, which can have either a positive or a negative effect on their immediate development

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Dependency theorists argued that former colonial nations were underdeveloped because

of their dependence on Western industrialized nations in the areas of foreign trade and

investment. Rather than benefiting, the relationships stunted their development. Drawing upon

various Marxist ideas, dependency theorists observed that economic development and

underdevelopment were not simply different stages in the same linear march toward progress

(see Karl Marx). They argued that colonial domination had produced relationships between the

developed and the developing world that were inherently unequal.

Johan Galtung (1979) adopted the model of Centre-Periphery to explain this relationship

between developed and underdeveloped countries. As the name suggests, the model of centre-

periphery implies the division of the world into global centre and global periphery. It suggests

the extension of capital principally from the center of capitalist nations of west Europe and

North America (USA) to other parts of the world in the periphery (Nigeria).

At the economic level, the periphery is incorporated into the global capitalist system of

division of labour in a subordinate status. Consequently, the centre expropriates and

appropriates surplus value from the periphery. Meanwhile, the economy of the periphery is

export or externally oriented and disarticulated such that there is no link between the industrial

and agricultural sectors or rural and urban areas.

This incorporation into the global capitalist system as explained by Rodney (1972) is

such that the Developed capitalist countries dictate or determine the direction of change. As

such, the third world is just as their mercy. This is because the developed capitalist countries are

technologically more advanced than the underdeveloped countries. In other words, (within

certain limits) it is the technologically advanced metropoles (USA) who can decide when to end

their dependence on the colonies in a particular sphere and when that happens, it is the colonies

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or neo colony (Nigeria) that goes begging cap in hand for a reprieve and a new quota. It is for

this reason that a formerly colonized nation has no hope of developing until it breaks effectively

with the vicious circles of dependence, which characterizes imperialism.

The dependency theory is very relevant in this work because it explains blatantly the

economic relationship between Nigeria and US. Nigeria depends so much on the US to sell her

oil. Ordinarily, without the purchase of this oil by US, Nigeria is going to be placed on the

verge of starvation. Why? Firstly, oil constitute about 90 percent of Nigerian foreign revenue

and about 70 percent of Nigeria‟s national income. Oil production revenue provides about 72

percent of the GDP, and has continued to provide more that 94 percent of exports Ukwu (2000).

Technologically, Nigeria is still an infant to consume the enormous oil it produces. US

understand this and they explore it to their advantage. They decide the price to buy the oil and if

Nigeria ever disagrees, they look elsewhere for other willing sellers.

Again, like Rodney rightly said, the pace of change is being dictated by the developed

capitalist nations. In the 60s, the developed countries demanded agricultural exports and Nigeria

supplied this enormously. In the 70s, crude oil became the other of the day and Nigeria

abandoned Agriculture in order to produce and sell oil. The effect of this was so great that

Nigeria had to import more than 70 percent of her food from the US. US supply Nigeria with

100 per cent of wheat.

The US dependence on Nigerian oil will end when US finds a supplement for crude oil

just like the westerners dependence on Africa‟s fabric ended when they discovered they could

make fabric through synthetic materials. Nigeria is only relevant to the US because the oil is

relevant to the US. For certainly power over the world‟s oil reserves is the ultimate symbol of

US global military might.

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No matter how dependency theory is explained, the core message of this work remains

that Nigeria is a peripheral nation and therefore structurally dependent on US and other

developed capitalist nations in the areas of trade, direct foreign investment, science and

technology. And in the words of Rodney (1972) dependent nations can never be considered

developed. Though modern conditions force all countries to be mutually interdependent in order

to satisfy the needs of their citizens, it is not incompatible with economic independence because

economic independence does not mean isolation instead it requires that a nation‟s growth at

some point become self reliant and self-sustaining.

Today, Nigeria as a peripheral nation depends on US the center nation for economic,

political and socio cultural assistance. There has been an established link between the economic

dominant class in both US and Nigeria. This is because the economic dominant classes in the

two nations under study depend on the mutual exploitation of the non-dominant class.

What more, the International division of labour has assigned the function of

manufacturing of products to US and the rest of the advanced countries while Nigeria produces

the required raw materials like oil. Within this framework we hope to examine Nigeria -US

economic relation between 1999-2009.

1.7 Hypotheses

In the light of the research questions and review of related literature, the following

hypotheses will be tested:

1. There is a link between crude oil endowment and intensification of economic

relation between Nigeria –United States within the period of study.

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2. Nigeria –United States economic relations has not enhanced economic development in

Nigeria within the periods under study.

1.8 Method of Data Collection/ Analysis

The method of data collection for this study is observation of documentary evidence that

deals with Nigeria –US relations. We heavily relied on secondary sources such as books,

journals, articles, periodical, government reports and publications, magazines, unpublished

manuscript, commentaries, and conference papers. Other data were collected through electronic

sources such as television news broadcasting and radio news broadcasting and Internet

materials.

Again, we relied essentially on descriptive qualitative method as our methods of data

analysis in this study. We also use simple percentages and tables graphs to buttress the

arguments in this study.

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CHAPTER TWO

OVERVIEW OF NIGERIA- UNITED STATES ECONOMIC RELATION

To understand the trend of Nigeria- US economic relations, one must begin with the

inception of the Nigeria- US economic relation. For easier understanding, this has been

periodized. Nigeria though an independent country but a former colony of Britain, has

economic ties with the major market-economy countries and this ties has been critical in her

economic development strategy and political process. In recent years, the strategic role of these

countries and their financial institution has become greatly emphasized.

The period of Nigeria‟s economic relations with the United States, for the purpose of

analysis, is divided into six eras. These are 1960-1967, 1967-1970, 1970-1983, 1983-1993,

1993-1999 and 1999-2006. The differences do not necessarily suggest any fundamental

structural discontinuities from one era to the next. However, each era was distinct by a

characteristic pattern within the broad structure of Nigeria-US economic relations.

2.2 First era (1960-1967): The Era of Emerging Economic Alliance.

The year 1961 was the landmark for in the development of Nigeria-US economic and

political ties. On December 12, 1961, President John F. Kennedy pledged a long-term aid

package of $222 million for Nigeria. The aid offer was in support of Nigeria‟s first independent

National Development Plan (1962-1968) the economic purpose of this act had a particular

significance Ate (1988).

The implementation of the aid offer, which proceeded howbeit unevenly until the

outbreak of the civil war, laid the foundation for the later expansion in Nigeria-US economic

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relations. The execution of USAID projects in the country, in the framework of the six-year

development plan, served as a momentum for increased trade ties; it also provided the avenue

for the great influx of American technical assistance personnel into Nigeria, while at the same

time stimulating the interest of American companies concerning investment prospects in the

country. The pioneering and pivotal role of USAID and consequently of foreign aid, in the

development of the foundation of Nigeria-US economic ties in the period is thus underscored

Ate (1988)

The implication was that by 1966, the US had established an impressive presence in

Nigeria‟s economic development, even compared to Britain with its colonial advantage.

In summary, capital aid and technical assistance was the centerpiece of Nigeria-US

economic ties in the first phase of their relation.

2.2 Second Era. (1967-1970): Era of Nigerian Civil War

Between 1967 and 1970, which was the period of Nigeria-Biafra war, Nigeria- US

relation deteriorated. General Gowon in charge of the Nigeria Federal Government had

requested weapons from the US to prosecute the war. The United States refused to honor the

request, probably because the super power was not sure how the war would end, bearing in

mind her interest in the oil rich Biafra. The United States instead of obliging to this request gave

humanitarian assistance to Biafra in form of relief materials. Thus, from 1966 to 1970s, the

United States provided more than $600 million financial aids to provide relief material to

Biafra, eradication of small pox and control measles in Nigeria (Howard Cincott,1985).

Consequently, there was an abrupt decline in the economic ties between the two

countries in foreign trade, foreign investment and capital aid. According to Ate (1988), US

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Nigeria total imports dropped from 16.2 percent to 12.8 in the first quarter of 1968, there was no

new investment by American companies during the war period and the work of USAID

virtually came to a standstill.

With the end of the war in 1970, three new trends have become apparent in the Nigeria

foreign policy. The Federal Government attempted an indigenisation of the national

economy,(American companies included), placed restrictions on the extent of external financial

input for the public sector expenditure and cultivation of economic with the Soviet Union and

her allies .This new ties between Nigeria and Soviet Union might be related to the military

assistance of the Soviet Union to the Nigeria government when US let down Nigeria. In this era,

Nigeria diversified her sphere of influence following US betrayal yet sales of oil blossomed.

2.3 Third Era (1970-1983) Era of Oil Boom.

According to Ate (1988), two facts about Nigeria‟s economic relations with the United

States and its enormous significance in this period deserved to be stressed. First, the United

States overtook Britain as the major recipient of Nigeria‟s export by 1973. Secondly, Nigeria‟s

exports to the United States were dominated by crude oil.

Relatedly, Nigeria became the second most important supplier of crude oil to the United

States in a period of critical demand for oil in the world market.

Correspondently, there was expansion of the United States investment presence in the

Nigerian economy though most of this investment was in the oil sector by American companies

such as Phillips, Exxon Mobil, Gulf, etc.

Nigeria- US relation in much of the period under review, especially in the Gowon and

Mohammed regimes, were characterized by a discernible paradox. On the one hand the two

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countries seem to enjoy a close partnership in the economic sphere while on the other hand a

persistent friction marked their political relations especially in foreign affairs. The changed

psychology could be illustrated by two specific acts of the Nigerian government. One was the

single-minded prosecution of the program of indegenization over United States protest, the

other was the prompt payment of compensation to US oil, banking and other company

following the policy of partial nationalization and state participation carried out between 1971

and 1977. Following a sharp fall in the price of crude oil in the world market and gigantic

corruption and wastage of state funds during Shagari regime, Nigeria began to experience some

financial hardship. Nigeria being a monoculture economy whose chief means of fund come

through the sale of oil was worst hit.

The effect of this crisis on Nigeria-US bilateral economic relations was negative for

Nigeria. Firstly, Nigerian oil became overpriced in the American market. Perhaps for this reason

or partly for geopolitical reasons, American companies began to patronize British, Mexican,

Canadian and Saudi-Arabian oil at the expense of Nigerian oil. Thus Nigeria was pushed from

the second position to the seventh as a major oil supplier of the United States at a time she could

least exploit alternative markets. Secondly, the trade balance which in the past had

progressively favoured Nigeria become unfavourable by 1982.Worst of all, Nigeria found

herself in the position of a debtor country in the international financial circle, unable to meet

even her short term credit obligation to her foreign trading partner (Ate). Also Nigeria found

herself dependent on large-scale importation of basic food items, mainly from the United States.

This era was centered on dependence on oil and neglect of Agricultural sector by Nigeria.

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2.4 Fourth Era (1983-1993) Era of Structural

Adjustment Dependence.

Buhari justified his coup and subsequent actions by citing lapses of the Second Republic

and the declining economy in 1983 and 1984 but when this action was extended to journalists

and others not responsible for the social decay and economic problems, the government's

popularity began to wane. Ibrahim Babangida assumed power following a bloodless coup in

August 1985.From June 1986 SAP became the focus of Nigeria –US bilateral economic

diplomacy, thus putting an end to the ambivalence that marked their relations under Shagari and

Buhari regimes.

The highlight of bilateral cooperation between Nigeria and the United States during

Babangida‟s regime was the N488.1 million debt forgiveness that the United States extended to

Nigeria as part of President Bush pledge to provide $1billion development assistance to 16

African countries though the debt forgiveness did not include interests on those loans. The

United States ambassador to Nigeria said that the action was prompted by the Nigeria‟s embrace

of the Structural adjustment policy with its emphasis on an open market. Olukotun (1990).

The SAP policy of Babangida administration, with the Second tier Foreign Exchange

Market (SFEM) as its nucleus, was in fact, an IMF agenda, which the US government had

consistently recommended for Nigeria‟s recovery Ate (1988). The US., since 1981 had been

reluctant to support Nigeria‟s application to the IMF for a standby until Nigeria accepted the

Fund‟s conditionalities, the most important being the devaluation of the Naira. But with the

introduction of SFEM, the Naira was effectively devalued by between 66 and 75 per cent.

Then, how is the US relevant in the execution of the SAP? Specifically, both Nigerian

and United States authorities expect that the US could be relevant in three basic ways. First,

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Nigeria expected the United States to encourage its foreign creditors to negotiate a rescheduling

of its huge debt in order to quickly restore the country‟s credit worthiness and allow the

resumption of essential imports. On its part, United States rescheduled all of Nigeria official

debts on terms requested by Nigeria. United States is, moreover relevant in liaising with the

World Bank to provide funds in support of the SPEM operation. Clearly, the bilateral structure

is one of dominance and dependence. Ate (1988).

Apart from the aid mentioned above, the United States promised 100 million dollars

assistance over 5 years as well as another 11 million dollars to help the balance of payment

position as well as primary health care in 1989. That same year, US pledged aid to the tune

25million dollars donor conference, which discussed Nigeria debt crisis. Nigeria supplied 50.1

percent and 53.8 percent of its oil to United States in 1988 and 1989 respectively and imported

goods worth about N3, 140 million from the U.S. Olukotun (1990). Implicitly, this period was

characterized by debt forgiveness, adoption of SAP and receipt of aids.

2.5 Fifth Era: (1993-1999) Era of Embargo on Nigeria oil

The Nigeria US diplomatic relation during this period was dampened following the annulment

of the June 12, 1993 election. In the wake of the transition stalemate, Nigeria's relations with

Britain and the United States cooled considerably. Each announced severe cutbacks in aid and

an end to further military assistance. Both countries reduced their diplomatic staff in Nigeria,

and the Nigerian military attaché in Washington, DC, was expelled.

The United States also curtailed direct commercial flights to Nigeria and suspended some of its

cultural and intellectual exchanges the United States and other nations imposed various

sanctions on Nigeria, including restrictions on travel by government officials and their families

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and suspension of arms sales and military assistance. Additional sanctions were imposed as a

result of Nigeria's failure to gain full certification for its counter-narcotics efforts. Though this

affected Nigeria‟s status as a loan seeking nation, trade in oil between both countries continued

to blossom. A slack oil market further depressed export earnings in 1993.

By 1995 an outpouring of international appeals for leniency failed to move Abacha hence the

Nigerian government appeared impervious to global censure, especially in the absence of

measures toward an embargo on the country's Nigeria oil. Only days after the executions Shell

Oil and a consortium of other investors concluded a $3.8 billion deal to build a natural gas

complex. In 1997, Nigeria made little progress in polishing its much-tarnished international

reputation to no avail. In 1998 following the death of Abacha and enthronement of Abubakar,

US embargo on oil was lifted as Abubakar‟s government completed the transition Programme,

which ushered in the Obasanjo‟s administration, which has a very high record of US trade

relation with Nigeria since 1960.

2.6 Sixth era: (1999-2006) The Contemporary Era

This era as will be shown in the subsequent chapter is characterized by extensive trade in crude

oil between Nigeria and United States and activation of USAID and their various programs in

health sector, agricultural sector, education sector etcetera. IMF, World Bank and United States

forgave some of Nigeria debt as a result of United States renewed affiliation with Nigeria and

Nigeria‟s embracement of IMF reform policies. This period is characterized by the centrality of

oil in Nigeria- US economic relation. This tend to be related to US increased dependence on

foreign oil and ensuring the stability as well as increase in its supplies which has become a

matter of „US national strategic interest‟.

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Having traced the history of Nigeria-US economic relation from 1960 to 2006,

one has a better understanding of why Nigeria is at this state and level of relation with the US

today. This also provides answer as to Nigeria‟s dependence on US to purchase her oil and the

plight of Nigeria should this oil remain unsold. Oil as already noted provides about 90 per cent

of Nigeria national revenue and apart from the sales of this oil, it is almost useless to Nigerian

who lacks the technology and expertise to harness and use it. The implication of this is

Nigeria‟s total reliance on the West especially the US to buy it, hence dependency.

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CHAPTER THREE

OIL AS THE CENTRE- PIECE OF NIGERIA-UNITED STATES ECONOMIC

RELATION

This chapter seeks to prove that there is a link between crude oil endowment and intensification

of economic relation between Nigeria –United States within the period of study. To illustrate

that oil is the centre-piece of Nigeria- US economic relation, one must be acquainted with the

relevance of oil in the political economy of Nigeria. For it is only when it is shown that Nigeria

mono cultural economy is dominated by production of oil that one can link US economic ties

with Nigeria. This tie is exemplified in the large US oil investments in the Niger Delta region

and the trade relation between Nigeria and US of which over 90 per cent of what was purchased

by US was oil while the remaining percentage was rubber. In order to preserve her source of oil,

US interference in oil related issues as contrasted with non-oil related issues are exposed. The

Nigeria -US military ties are also investigated in order to establish a link between US military

assistance to Nigeria and Nigeria‟s oil. The investments on security by Nigeria within that

period also buttress the already known fact.

3.1 Dependency in Oil as source of revenue

The oil boom of the 1970s led Nigeria to neglect its strong agricultural and light manufacturing

bases in favor of an unhealthy dependence on crude oil. In 2002 oil and gas exports accounted

for more than 98% of export earnings and about 83% of federal government revenue. New oil

wealth, the concurrent decline of other economic sectors, and a lurch toward a statist economic

model fueled massive migration to the cities and led to increasingly widespread poverty,

especially in rural areas. A collapse of basic infrastructure and social services since the early

1980s accompanied this trend. By 2002 Nigeria's per capita income had plunged to about one-

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quarter of its mid-1970s high, below the level at independence. Alongside endemic malaise of

Nigeria's non-oil sectors, the economy continues to witness enormous growth of "informal

sector" economic activities, estimated by some to be as high as 75% of the total economy

(http://www.state.gov).

Nigeria's proven oil reserves are estimated to be 36 billion barrels; natural gas reserves

are well over 100 trillion cubic feet. Nigeria is a member of the Organization of Petroleum

Exporting Countries (OPEC), and in 2006 its crude oil production averaged around two million

barrels per day. Poor corporate relations with indigenous communities, vandalism of oil

infrastructure, severe ecological damage, and personal security problems throughout the Niger

Delta oil-producing region continue to plague Nigeria's oil sector. In the absence of coherent

government programs, the major multinational oil companies have launched their own

community development programs. The Niger Delta Development Commission (NDDC) was

created to help catalyze economic and social development in the region, but it is widely

perceived to be ineffective and opaque.

Oil dependency, and the allure it generated of great wealth through government

contracts, spawned other economic distortions. The country's high propensity to import means

roughly 80% of government expenditures is recycled into foreign exchange.

3.2 US Oil Investments in Nigeria

Since the late 1990‟s and particularly after the 9/11 hijackings in the United States, there

has been a resurgence of global strategic interest in West Africa. In spite of the seeming

leverage given by the terrorist threat to the US‟s current security cooperation in West Africa, it

should be noted that the picture is incomplete if it is not emphasized that American oil interests

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are central in the US presence in a region that was described at the end of the cold war to have

fallen off the world‟s strategic map. US oil companies are at the forefront of the “new scramble

for Africa‟s oil” Obi (2005) The US is in competition against Britain, France and China in the

new scramble for West Africa‟s oil (AOPIG 2002;Leigh and Pallister 2005)

The United States was the largest foreign investor in Nigeria. According to Nwoke

(2000) there are over 300 US firms operating in Nigerian economy and US private foreign

investment in Nigeria is concentrated in the oil and communication sector. United States has the

highest oil investment in Nigeria. The stock of US investment is nearly $7 billion, mostly in the

energy sector. Exxon-Mobil and Chevron are the two largest US corporate players in offshore

oil and gas production in Nigeria. Chevron Texaco also invested billions of dollars in Nigeria,

Africa‟s largest oil producer and the fifth largest exporter to the US, and new oil field in

Equatorial Guinea. Exxon Mobil is also in charge of the West Africa Gas Pipeline Project

valued at $500 million and expected to ferry gas from the Niger Delta in Nigeria to Benin, Togo

and Ghana Obi (2005). It is worthy of note that the concentration of US investment in Africa

lies in West Africa, Nigeria of which lies highest US oil investment. That is why US is

particularly anxious about Nigeria, a regional strategic partner and producer of 2.5 millions

barrels of oil per day and 10 percent of US oil import, that is poised to become a major

international exporter of Liquefied Natural Gas (in partnership with oil multinationals)(0bi

2005)

The stock of US foreign direct investment (FDI) in Nigeria in 2005 was $874 million,

down from $2.0 billion in 2004. US FDI in Nigeria is concentrated largely in the mining and

wholesale trade sectors.

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3.3 US-Nigeria trade relation from 1999-2009

Nigeria is the largest US trading partner in sub-Saharan Africa, based mainly on the high

level of petroleum imports from Nigeria. United States, which has not been significant Nigeria‟s

trading partner until 1960 became by 1970 the major consumer of Nigeria‟s oil Jonah (2001).

United States is Nigeria's largest trading partner after the United Kingdom. The United States

remains Nigeria's largest customer for crude oil, accounting for 40% of the country's total oil

exports. Nigeria provides about 11% of overall US oil imports and ranks as the fifth-largest

source for US imported oil. Significant exports of liquefied natural gas started in late 1999 and

are slated to expand as Nigeria seeks to eliminate gas flaring by 2008.

Total two-way trade was valued at $30.8 billion in 2006, a 19% increase over 2005.

Leading US exports to Nigeria were machinery, wheat, and motor vehicles. Leading US imports

from Nigeria were oil and rubber products. Nigerian exports to the United State under the

African Growth and Opportunity Act (AGOA), including its Generalized System of Preferences

(GSP) provisions, were valued at $25.8 billion during 2006, a 15% increase over 2005, due to

an increase in oil exports. Non-oil AGOA trade (leather products, species, cassava, yams, beans,

and wood products) totaled $1.4 million in 2006, almost double the amount in 2005. Large

portion of US exports to Nigeria is believed to enter the country outside of the Nigerian

Government's official statistics, due to importers seeking to avoid Nigeria's excessive tariffs.

The table below shows the increase in trade between the two countries as from 1999-

2006. In the entire history of Nigeria, such enormous export has never been made and as

targeted by the US whose about 10 per cent oil importation comes from Nigeria, the figure is

expected to double in 2020. No wonder Onuoha (2005) argued that Nigeria- US relation is has

been conditioned on the oil factor. Significantly, more than 90% of Nigeria‟s trade with the US

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is centered on oil.

Chart 3.1: Nigeria„s Export to US 1999- 2006

The graph above shows the rise in the production and sales of oil in order to meet their demand

for oil. We are convinced from the foregoing that if it weren‟t mainly for oil that US would not

have any business in Nigeria except to sell her goods.

3.4 US response to conflicts in Nigeria: Variations in Oil related and non-Oil related

Problems of communal violence have confronted the Obasanjo government since

its inception. In May 1999 violence erupted in Kaduna State over the succession of an Emir,

resulting in more than 100 deaths. In November 1999, the army destroyed the town of Odi in

Bayelsa State and killed scores of civilians in retaliation for the murder of 12 policemen by a

local gang. In Kaduna in February-May 2000 over 1,000 people died in rioting over the

introduction of criminal Shar'ia in the state. Hundreds of ethnic Hausa were killed in reprisal

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attacks in southeastern Nigeria. In September 2001, over 2,000 people were killed in inter-

religious rioting in Jos. In October 2001, hundreds were killed and thousands displaced in

communal violence that spread across the Middle-Belt states of Benue, Taraba, and Nasarawa.

Continuously, in 2006, over 200 Christians (predominantly South Easterners) were killed in the

Northern Nigeria over the cartoon of Muhammed in one foreign magazine. Hundreds of ethnic

Hausa were killed in reprisal attack in the southeastern Nigeria. That same year over 200

Christians were killed in Northern Nigeria over the controversial statement made by the Pope in

Rome concerning the Moslems.

All these problems and more did not catch the interest of US government, even when

thousands of lives and properties were being lost. The only time US became interested was

when the flow of oil was threatened. This led Onuoha (2005) to conclude that Nigeria‟s relation

with US has been conditioned by the oil factor. Interestingly, this phenomenon has continued to

the present. The United States significantly became Nigeria‟s trading partner in the 1970s,

thereby being the major consumer of Nigeria oil. Thus the United States had upheld the policy

of not intervening in Nigeria domestic crisis, if such crisis does not disrupt the flow of oil.

Neither did the crisis generated by Isaac Adaka Boro the leader of Niger Delta Volunteer

Service (NDVS), when he declared the “Republic of Niger Delta” in 1966 did not attract US

attention nor even the Nigerian civil war that lasted through 1967 to 1970 affected the flow of

oil and so US chose the policy non interventionism and Neutrality respectively.

No doubt, Omeje (2005) mentioned that the volatile security situation in Niger Delta and

Nigeria in general characterized by the spate of violence and reactions by the three major parties

in the oil conflict (Trans National Oil Companies, oil bearing communities and the State)

though it has left much of Niger Delta a security disaster, has not deterred TNOCs from doing

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business and prospering in the region. In other words, they have learnt to mind and focus on

their business, which is drilling oil as opposed to other on goings in their environment.

Curiously, in 2004, the threat of bombing of oil installations by Dokubo Asari the leader

of Niger- Delta Peoples Volunteer Force (NDPVF), which he codenamed “Operation Locust

Feast”, changed the indifferent or non-interventionist stance of the US. President Bush

persuaded the Nigerian leaders to negotiate with the rebels in order to find a lasting solution in

the recurrent Niger Delta region. How did this happen? It was when President Obasanjo

attended the meeting of the United Nations General Assembly in September. There, according

to (Insider Weekly, No.12 October 2001) President Bush informed Obasanjo about the deep

interest United States has in the region and advised him to avoid a replay of what happened in

the in Iraq where oil supply to the West was adversely affected. This threat of attacking flow

stations, rigs and production platforms belonging to oil companies in the Niger Delta from

NDPVF according to Onuoha (2005) had immediate impact on the International system. World

oil price rose to more than 50 dollar per barrel.

The NDPVF, which asserts to be a voluntary organization, fights for the interest of the

Ijaw ethnic group for which it demands autonomy and control over the region oil wealth. Its

formation marked the climax of the Niger Delta crisis. This force has kept the region under

immense tensions through killings, kidnapping, vandalization of oil pipeline and outright

stealing of crude and refined oil. According to The Financial Times of London, the theft is

estimated at about $4 billion yearly. (The News vol.23, 2004)

Therefore, President Bush of United States of America intervened in the Dokubo-

Obasanjo face off because of huge America investment in the Niger Delta region and probable

disrupt of crude oil supply to the United States. As soon as President Obasanjo came back, he

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ordered the withdrawal of his authority to River state empowering him to deploy troops to the

troubled areas. He directed intensification of discussion with the rebels. When Dokubo agreed

to honor the President‟s invitation for a negotiation on the issue, the president gladly approved

his Presidential fleet to air him and some of his commanders to Abuja.

To sustain Nigeria –United States relation and keep crude oil supply open, Obasanjo

negotiated with a rebel thereby enduring his excesses and yielding to some of his demand.

Consequently Obasanjo convened the Political reform conference though Dokubo refused to

attend. On the other hand, the United States in order to safe guard its interest has sent her Naval

Task Force, consisting of an air craft carrier, guided missiles cruiser, two guided missile

destroyers, an attack submarine and a supply ship last August passed through the Gulf of

Guinea as part of its strategy to fight terrorism anywhere in Africa.

In reaction to the fragile truce between Nigeria‟s central government and another Niger Delta

militia called Movement for the Emancipation of the Niger Delta (MEND) in April 2006, which

jerked to a bloody halt on 20th August when soldiers of the Joint Task Force, a contingent of

the Nigerian Army, Navy and Air Force deployed by the government to enforce its authority on

the restive oil-bearing Niger Delta, ambushed fifteen members of the MEND militia in the

creeks of western delta and murdered them, Nigerian government publicly announced in late

August that it was now collaborating closely with the US and British governments to deploy

more naval personnel and new hardware to “root out oil rustlers, kidnappers and other

undesirable elements from the Niger Delta and the wider Gulf of Guinea.” Ezigbo (2006)

Some scholars might want to argue that US seeks to respect the sovereignty of Nigeria

by not interfering in every of its crises but following US invasion of Iraq and constant violation

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of UN charter by the US, it is doubtful if respecting Nigeria‟s sovereignty will obstruct US from

securing its interests.

3.5 Linking Oil and US- Nigeria bilateral military ties

Since the inauguration of President Obasanjo‟s administration in 29th May 1999, the US

government has assigned the Nigeria government to reorganize and re-orientate the Nigerian

military establishment on its future constituent role. This role as perceived by America should

be to serve the new civilian government, provide security for all Nigerians and continue to

prevent conflict and ensure peace building in West Africa.

Under this arrangement, the greatest beneficiaries have been the army and the air force. Apart

from training some battalion of the army, the US has repaired some of the C-130 of the Nigerian

air force. According to Peters (2000) programme benefits US to the extent that it will help to

advance its link with the Nigerian military. This has also been very advantageous the Nigerian

military professionally and technologically.

This new relation is far deeper than the previous attempt since 1960. Nigeria had

stronger bilateral relations with the British and Indian military even the German military helped

in the establishment of Nigerian air force. The Nigeria military has very little links with the US

military. But between 1975 and the oil boom period in Nigeria, Nigeria US military relation saw

new light. Some of the military equipment Nigeria bought with this period was from America.

Therefore, it is only when we take oil into account that we can understand US commitment in

training and retraining US military.

Even so, West Africa has recently become one of the most important regions to be

incorporated into the United States‟ Global War on Terror (GWOT). This development is linked

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to the real or imagined existence of terrorist cells connected to al-Qaeda in the predominantly

Muslim Saharan and Sahelian Belts of the region, and its vulnerability given its open nature,

and alleged inability of the weak, „failed‟ or „failing states‟ in the region to police effectively

borders, maintain law and order and *protect Western strategic and economic interests. The

US-West Africa anti-terrorist regional security partnership has largely been framed at the

multilateral and bilateral level. At the operational level, the US European Command (EUCOM)

has been the key player in the partnership Obi (2005)

Concurrently, Obi continued that under the 2005 Trans Sahara Counter Terrorism

Initiative (TSTI), which seek to partner with, and train African military forces from nine

countries Nigeria inclusive is expected that the average of US$100 million have been budgeted

per year for next five years on the programme. Other programmes are framed under the

International Military Education and Training Programme (IMET), and the African

Contingency Operations and Assistance Programme (ACOTA) etc. Underlying these

programmes is the quest of the US for operational base either in the Gulf of Guinea or West

Africa. It should be noted that in its security partnership with West Africa, the US provides the

funds, military technology and hardware, and the training organized by EUCOM, US Special

forces, or US private security Firm‟s (PSF) or security consultants. To a large extent their

programmes are linked to US perception of threat in West Africa Obi (2005)

As at 2005, American government has invested roughly $900 million in attempts to

retrain Nigerian army not only to shun military coup but also be combat ready principally to

protect American vital interest in Nigeria particularly the Niger Delta oil Onuoha (2005). US

diplomat has increasingly resorted to claiming that Nigeria-US military partnership was to safe

guard Nigeria nascent democracy but it is equally arguable that safeguarding Nigeria nascent

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democracy is only incidental to the protection of US oil wells in the Niger delta region of

Nigeria.

It is only logical to assume that since 10 percent of the 15 per cent West Africa oil

import to US comes from Nigeria and since Nigeria is US largest trading partner in Africa that

most of these military trainings, investment and bilateral agreement centers around Nigeria. Still

following that assumption already aware of the huge US oil investment in Nigeria and US deep

interest in Nigeria oil, wouldn‟t we logically conclude that the heart of this military relations lie

in protecting solely the oil interest of the US and the West generally which is already perceived

to be threatened.

This obviously elucidates the defiant, militaristic posture; the Nigerian government has

taken by publicly announcing in August 2006, that it was now collaborating closely with the US

and British governments to deploy more naval personnel and new hardware to “root out oil

rustlers, kidnappers and other undesirable elements from the Niger Delta and the wider Gulf of

Guinea.” Ezigbo (2006).

The donor- recipient relationship in the context of asymmetrical relationships between

US and West Africa and Nigeria specifically has far-reaching implication for the region‟s

development as shall be made clear in the subsequent chapter.

Emphasis is mine.

3.6 Nigeria’s Investment on the Military/Security in readiness to Protect the oil region

The Vice President Atiku Abubakar jolted the nation especially the military and

unsettled people in the Niger-Delta area when he accused the President of spending $2 billion or

N 260 billion on arms to crush the insurgents in the area. Tell Magazine 26th

February 2007

insists that there is a modicum of truth in Atiku‟s claim as close source to Aso rock says that the

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decision to fortify security in the Niger delta was given serious thought three years ago. The

Chief of Defense Staff General Azazi maintained that “…by normal calculation when you

have the type of assets in the Niger delta, you should have military presence…”

The joint requirement from the Army, Navy and Police were pegged at about $3 billion and

another N22 billion for logistics supports in the Niger delta. President Obasanjo was also

alleged to have requested and authorized NNPC to fund the military presence in the oil region.

The company also received a contract of the supply of arms and ammunition of about $10

million. According to General Azazi re-arming the military was not meant to crush the Niger

delta people rather it was for the benefit of the Niger delta people.

Generally, it is interesting to note that in both 2001 and 2002 the country spent 13 per

cent more on security related sectors. These facts are interesting because this pattern occurs in

peacetime under a civilian government. So that for every Naira spent on women and youth

development in 2001, it spent one Naira maintaining the Presidency, and also spent one Naira

on the office of the National Security Adviser. And for every two Naira it spent on health, it

spent five on defence Ibeanu (2005).

The foregoing expressed the huge amount of dollars the Obasanjo‟s government spent

on security agents in the Niger delta area to protect the oil companies of the advanced capitalist

states in Nigeria particularly the US but why Nigeria will spend so much to protect the oil

investment of foreign nations bothers me? Does this mean that the security of the western

MNCs particularly America‟s have superseded that of Nigerians especially the security of Niger

Deltans. This army of the military has a close relation with President Obasanjo‟s order in 1999

that “trouble makers should be shot at sight” (Ibeanu 2005). Systematically, state violence is

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used against individual opponents and targeted groups, which are defined as constituting a

threat to state security.

Some might want to argue that the President is securing and preserving the nations source of

income or petrobusiness. Even if that is so, will it be at the extermination of the people of Niger

Delta who are already relatively deprived? Why shouldn‟t the huge sum of money invested in

security be channeled into the development of the Niger Delta? Don‟t you see the link between

Nigeria- US relation and this new interest in arming the military? It is worthy of note too that

the US marines are also in Nigeria high sea also protecting US oil investments. In the case of

Niger Deltans uprisings, demonstrations (whether peaceful or not) or rebellion or any real or

perceived threat to the oil investments, who will the Nigerian army and US marine attack?

Nigerians! Reason? To protect the US oil investments in the Niger Delta region.

Following the sharp rise in trade between US and Nigeria, the size of US oil investment

in Nigeria, US intervention in Nigeria‟s (oil) domestic politics and subsequent US investment in

Nigerian military, you will not need much persuasion to see that Nigeria-US economic relation

bothers solely on oil and secondarily on Nigeria‟s market (due to Nigeria‟s large population) for

US products. Central to this development is the threat posed to oil exports by protesting oil

communities, youth militia, and armed bands of young people (cults) affiliated to militia groups

(Best and Kemedi 2005), whose activities disrupt the flow of oil by forcing shut ins, or as a

result of illegal bunkering, the theft of crude oil from oil pipelines, both a source of corruption

and violence from turf wars fought by well armed gangs (Peel 2005; Obi 2004)

Indeed, there have been calls within the US for action directed at protecting Western oil

interest in the region from criminal and terrorist groups (Cesarz et al, 2003). Even though the

protests in the Niger Delta are not anti-American, they have been seen by the oil companies and

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US policy establishment as an increasing threat to US energy security owing to the disruptions

in oil supplies when companies suspend production due to communal clash as happened in

Warri in 2003 or hike in International oil prices as a result of Asari Dokubo‟s threat to expel oil

companies from the region or bomb oil installations.

US is also concerned about the fragility of the Nigerian Petro-state, particularly in the

face growing demands for the decentralization of the highly centralized federation, political

violence and instability. The decentralization of power over oil and the crises of state building

in Nigeria also pose threats to long-term US interests in having unimpeded access to the

countries oil (Obi 2005)

Both the US and Nigerian government have channeled money to security more than to

meeting the demands of the people of Niger Delta. The indigenes bear the brunt of the

government even when they have been violated by the oil multinational constant pollution of

their environment. In a pure democratic dispensation, people have the right to demonstrate or

protest when they feel their rights are being violated yet a civilian government invests so much

on security hence very militarist. The US a disciple of liberal democracy yet it condones the

human right abuse meted out at Niger Delta indigenes by the government and the MNCs. These

marginalized people just like in the US should be allowed to control their resources.

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CHAPTER FOUR

NIGERIA - US ECONOMIC RELATIONS AND ECONOMIC

DEVELOPMENT IN NIGERIA

In this chapter we tried to prove that Nigeria - U.S economic relations have not

enhanced Nigeria economic development. This chapter tends to observe the following issues as

proof that Nigeria-US economic relation has not ensured Nigeria‟s development.

4.1 Issues of Domination

The global project of securing West Africa and Nigeria specifically is directed at controlling

both the territorial state and the resources within it. As such, it masks a new continuity in the

subordination of the region to the interest of the world‟s sole super power and it allies. It so

happens that the strategic commodity, oil, the lynchpin of global capitalism and military power,

is found in abundance here, at a time where the global oil has peaked and talk of a post

petroleum economy has begun in earnest Klare and Voleman (2004).

Experience has shown in the cases of Nigeria and other West Africa that the inflow of

Petro-dollar did not necessarily translate into economic growth or life more abundant for the

masses. It only encouraged a militarist drive to the securing of the subordination of Nigeria‟s oil

resources to the demands of the global oil market. No wonder, Gary and Karl (2003), asserted

that the new oil boom in the post adjustment Africa would paradoxically produce poverty more

abundant for the masses and more riches for the ruling class and their international partners Obi

(2005).

So long as Nigeria state continues to come by Petro dollar that are invested largely in

reinforcing the ruling class, tightening its grip on the state, acquiring more weapons and

ammunition for security purposes and forcing through policies that favour external

constituencies such as donors, foreign investors and international financial institution, so long

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will Nigeria continue to be dominated two ways first by the West specifically US and the

Nigerian ruling class and hence development will be marginalized by primitive accumulation,

so long will authoritarian liberalism which is antithetical to development continue to sap the

resources and energies of the people, so long will the purpose of Nigeria US economic relation

be bypassed.

4.2 Issues of Security

In relation to the balance of power between the West and West Africa, security

cooperation in the context of Global War On Terror (GWOT) and Globalization suggest that the

impetus for development that lies within the region is subjected to external security priorities

and pressures. This makes it difficult for the people of the region to seize the developmental

initiative particularly in the face of a global policy framework that is centred upon market forces

and opening up West Africa‟s battered economies to foreign investors. Worse, the kind of

developmental states that are so critical to the rebuilding of the battered and abused economies

of the region will be hard pressed to come to life or survive in the emerging policy and security

framework that is integrating West Africa in a weak(er) appendage of emerging hegemonic

global order Obi (2005)

Rather than the urgent needs to address the historical socio-economic and global roots of

violence in Nigeria, the new thrust of regional security particularly by partnering with the

world‟s super power also raises the critical issues of the feasibility of the militarist zero sum

approaches to anticipating averting and counteracting terrorist threat. Popular form of

democracy that can really address issues of social inequality, injustice, freedom and the release

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of the creative power of the people that can drive a massive impulse of energy is neglected at

the expense of the new notion of state and global security.

Any terrorist person or group particularly does not threaten Nigeria though the

properties or investments of the West as they already perceive or imagine might be threatened

and so Nigeria through its involvement with American or EU securities is drawn into the new

cold war (a scene it has no stake in). Hence, the security of Africans are jeopardised because

American investments are located in their lands and US marines ply their high sea and gives

their youths military training. The environment just like in the Niger Delta is tensed, the people

are afraid of the unknown and in their mind they wonder what these military training are for.

This negates social and human security and is entirely against development, economic or

otherwise.

4.3 Issues of dependency

Obviously Nigeria has remained a sole exporter of raw materials personalized in their

item of crude oil, which is the main source of national income and foreign exchange on one

hand and chief importer of manufactured goods from Western economies particularly United

States on the other hand. It is doubtful if a nation can develop when it is dependent on other

nations to buy her raw materials and supply her with manufactured goods, where the raw

material in question is of little significance to the needs of the people.

Nigeria just as is the case with every other third world nations, Nigeria has remained a price

taker for her raw materials and the manufactured goods, which she imports. Nigeria economic

relation with the United States has been a trade relation from the out stead of their bilateral

relation. International competition might never allow US to transfer her technology to Nigeria

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thereby moving Nigeria from the status of mere supplier of raw material to the status of

manufacturer.

Nigeria is largely dependent on the US and other countries for her food; more than 90 per cent

of wheat consumed in Nigeria is imported from the US. This rising trend in Nigeria‟s imports

from US has deepened Nigeria‟s dependence on United States and a highly consumerist society;

consuming what it doesn‟t produce and producing what you doesn‟t consume. The economy is

also export or externally oriented and disarticulated such that there is no link between the

industrial and agricultural sectors or rural and urban areas.

Hence, Nigeria continual dependence on US not only to buy her oil but to provide her

with food too and as major source of national income. United States understands this and uses it

to her advantage. The US trade deficit with Nigeria was $25.7 billion in 2006, an increase of $3

billion from $22.6 billion in 2005. US goods exports to Nigeria in 2006 were $2.2 billion, up

38% from the previous year. Apparently, this type of relation hinders development.

4.4 Issues of Foreign Direct Investment and technology transfer.

The majority of the American owned MNCs operating in Nigeria are in the mining or

the extractive sector. American companies like Texaco, Mobil and Chevron have been operating

successfully in Nigeria and are the centre of Niger Delta crises. According to Nwoke (2000)

there are over 300 US firms operating in Nigerian economy and US private foreign investment

in Nigeria is concentrated in the oil and communication sector. America is not interested in

industrial sectors of the Nigerian economy rather she is interested in mining sectors particularly

oil. Main activities of American MNCs are carried out in the Niger delta where oil is located.

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Figure 4.1 FDI in Nigeria Oil and Gas Sector1999-2006

Pie Chart of the US and Other nations FDI in Nigerian oil and

gas sector 1999-2006.

The chart shows that 66.638 per cent of FDI made in Nigeria between 1999- 2006,

comes from US while 33.362 per cent comes from other nations. Hence the type of technology

and investments it transfers is predicated on its oil interest. Capital flight as the case with

multinationals is against the interest of development. The gains of investment instead of being

reinvested are transported outside that same economy that yielded it.

4.5 Issues of Terms of Trade

The price gap between manufactured goods and primary materials is at the root of the disparity

that the poor countries suffer. The authors of a United Nations study argue that the

underdeveloped countries helped to maintain, in the price which they pay for their imported

manufactures relative to those which they obtained for their own primary products, arising

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standard of living in the industrialized countries, without receiving, in the price of their own

products, a corresponding equivalent contribution towards their own standard of living

(Chinweizu, 1978). He continued to state that the poor subsidize the rich merely by trading with

them and that attempts to force more favorable terms of trade, so that primary products can buy

more capital goods, have repeatedly failed. The amount of Nigeria‟s oil export to the US

between 1999-2006 is $9785.8 while Nigeria‟s import from US costs $108440.8. Hence $-

98655 trade deficit for Nigeria. Isn‟t it surprising that twenty-two years later that, Nwoke said

the same thing and barely six years after that, I am still stating the same fact?

According to Nwoke (2000) Nigeria is basically a price taker for both her exports and

imports principally because the price of her exports and imports are determined from abroad.

The result is that the value received by Nigeria per unit of her exports has always been lower

than the value paid per unit of her imports. Consequently, in order to be able to pay for a given

quantity of imports, she has to export more of her primary resources. It is estimated that the

Third world countries receives a mere $30 billion of the $200 billion that consumers pay for

products that originate in the Third world countries (Harrington 1977). Little has changed since

Harrington made this analysis. There has continually been a marked deterioration and

unfavourable rate of exchange for primary product.

The Nigeria-U.S. economic relation viewed from their trade perspective has shown that

Nigeria imports more than she exports and hence trade deficit. The US trade deficit with Nigeria

was $25.7 billion in 2006, an increase of $3 billion from $22.6 billion in 2005. US goods

exports to Nigeria in 2006 were $2.2 billion, up 38% from the previous year. US imports from

Nigeria were $27.9 billion in 2006, up from 15% from 2005. Nigeria is currently the 50th-

largest export market for US goods yet he trade deficit keeps rising.

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Chart 4.2: Nigeria-US Trade 1999- 2006

Tables from 4.1 to 4.14 below show the trade patterns between Nigeria and US between 1998

and 2011.

Table 4.1 : 2011 : U.S. trade in goods with Nigeria

NOTE: All figures are in millions of U.S. dollars on a nominal basis, not seasonally adjusted unless otherwise

specified. Details may not equal totals due to rounding.

Month Exports Imports Balance

January 2011 268.6 3,144.7 -2,876.1

February 2011 331.4 2,859.3 -2,527.9

March 2011 489.0 2,972.1 -2,483.1

April 2011 397.1 2,944.2 -2,547.1

May 2011 504.3 2,801.6 -2,297.3

June 2011 365.1 3,325.7 -2,960.6

July 2011 380.1 3,225.2 -2,845.1

August 2011 387.5 3,374.5 -2,987.0

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TOTAL 2011 3,123.1 24,647.4 -21,524.2

Table 4.2 :2010 : U.S. trade in goods with Nigeria

Month Exports Imports Balance

January 2010 215.9 2,313.4 -2,097.6

February 2010 310.1 2,058.7 -1,748.7

March 2010 494.5 2,728.9 -2,234.3

April 2010 323.5 2,560.4 -2,236.9

May 2010 381.8 2,512.6 -2,130.8

June 2010 301.1 2,653.8 -2,352.7

July 2010 296.8 2,700.4 -2,403.6

August 2010 287.9 2,951.1 -2,663.3

September 2010 349.9 2,808.6 -2,458.7

October 2010 349.5 2,209.3 -1,859.8

November 2010 380.2 2,116.4 -1,736.2

December 2010 376.6 2,902.4 -2,525.8

TOTAL 2010 4,067.7 30,515.9 -26,448.3

Table 4.3 :2009 : U.S. trade in goods with Nigeria

Month Exports Imports Balance

January 2009 277.2 692.4 -415.2

February 2009 241.1 692.1 -450.9

March 2009 327.2 1,254.0 -926.9

April 2009 342.0 1,049.8 -707.7

May 2009 249.9 1,074.8 -825.0

June 2009 346.6 1,608.2 -1,261.6

July 2009 325.3 1,974.4 -1,649.2

August 2009 363.7 2,028.4 -1,664.7

September 2009 264.0 2,172.0 -1,908.0

October 2009 320.4 1,711.8 -1,391.5

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November 2009 334.0 2,399.3 -2,065.2

December 2009 295.8 2,471.0 -2,175.2

TOTAL 2009 3,687.1 19,128.2 -15,441.1

Table 4.4 :2008 : U.S. trade in goods with Nigeria

Month Exports Imports Balance

January 2008 235.7 3,801.8 -3,566.1

February 2008 352.7 3,063.9 -2,711.2

March 2008 245.1 3,630.9 -3,385.8

April 2008 239.9 3,742.1 -3,502.3

May 2008 336.6 3,448.0 -3,111.4

June 2008 376.7 3,962.1 -3,585.4

July 2008 459.1 3,936.7 -3,477.6

August 2008 482.8 3,982.9 -3,500.2

September 2008 311.0 2,514.6 -2,203.6

October 2008 387.5 2,766.7 -2,379.2

November 2008 408.5 1,756.6 -1,348.1

December 2008 266.9 1,461.8 -1,194.9

TOTAL 2008 4,102.4 38,068.0 -33,965.6

Table 4.5 :2007 : U.S. trade in goods with Nigeria

Month Exports Imports Balance

January 2007 167.4 2,160.0 -1,992.6

February 2007 207.6 2,079.9 -1,872.3

March 2007 220.0 2,632.3 -2,412.3

April 2007 198.8 2,178.2 -1,979.5

May 2007 165.0 2,555.0 -2,390.0

June 2007 260.9 2,332.3 -2,071.4

July 2007 246.8 2,653.0 -2,406.1

August 2007 231.3 2,878.1 -2,646.8

September 2007 258.8 2,659.3 -2,400.5

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October 2007 235.0 3,249.5 -3,014.5

November 2007 295.5 3,709.9 -3,414.4

December 2007 290.9 3,682.8 -3,392.0

TOTAL 2007 2,777.9 32,770.2 -29,992.3

Table 4.6 :2006 : U.S. trade in goods with Nigeria

Month Exports Imports Balance

January 2006 139.0 2,543.3 -2,404.4

February 2006 129.1 2,332.7 -2,203.6

March 2006 170.5 2,094.8 -1,924.3

April 2006 188.0 2,172.0 -1,984.0

May 2006 148.4 2,851.6 -2,703.2

June 2006 223.4 2,428.3 -2,204.9

July 2006 209.4 2,667.3 -2,457.9

August 2006 163.9 2,387.0 -2,223.1

September 2006 271.3 2,277.1 -2,005.9

October 2006 210.1 2,016.3 -1,806.2

November 2006 198.6 1,883.4 -1,684.8

December 2006 181.9 2,209.3 -2,027.4

TOTAL 2006 2,233.5 27,863.1 -25,629.7

Table 4.7 :2005 : U.S. trade in goods with Nigeria

Month Exports Imports Balance

January 2005 93.3 1,624.9 -1,531.6

February 2005 104.5 1,530.4 -1,425.9

March 2005 121.8 1,773.7 -1,651.9

April 2005 109.6 2,079.5 -1,970.0

May 2005 121.7 1,903.1 -1,781.4

June 2005 160.9 1,637.1 -1,476.2

July 2005 186.2 2,181.0 -1,994.7

August 2005 135.8 2,411.9 -2,276.0

September 2005 127.6 1,989.5 -1,861.9

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October 2005 195.8 2,433.8 -2,238.0

November 2005 128.3 2,289.6 -2,161.3

December 2005 134.1 2,384.9 -2,250.7

TOTAL 2005 1,619.8 24,239.4 -22,619.6

Table 4.8 :2004 : U.S. trade in goods with Nigeria

Month Exports Imports Balance

January 2004 114.3 882.2 -767.8

February 2004 94.9 1,177.6 -1,082.7

March 2004 119.5 1,334.3 -1,214.8

April 2004 103.5 1,246.5 -1,143.0

May 2004 103.6 1,328.1 -1,224.5

June 2004 118.0 1,525.1 -1,407.1

July 2004 110.6 1,284.1 -1,173.6

August 2004 133.3 1,571.2 -1,437.9

September 2004 130.6 1,328.3 -1,197.7

October 2004 286.6 1,595.5 -1,308.8

November 2004 113.6 1,570.3 -1,456.7

December 2004 125.7 1,405.2 -1,279.6

TOTAL 2004 1,554.3 16,248.5 -14,694.2

Table 4.9: 2003 : U.S. trade in goods with Nigeria

Month Exports Imports Balance

January 2003 72.1 855.4 -783.3

February 2003 65.5 697.4 -632.0

March 2003 68.8 1,098.5 -1,029.8

April 2003 105.0 773.6 -668.7

May 2003 76.9 927.6 -850.7

June 2003 95.9 677.7 -581.8

July 2003 81.8 895.5 -813.7

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August 2003 100.3 998.5 -898.2

September 2003 111.3 824.6 -713.3

October 2003 82.4 983.1 -900.7

November 2003 83.3 584.2 -500.9

December 2003 73.5 1,077.3 -1,003.8

TOTAL 2003 1,016.9 10,393.6 -9,376.7

Table 4.10: 2002 : U.S. trade in goods with Nigeria

Month Exports Imports Balance

January 2002 115.4 328.5 -213.1

February 2002 83.4 292.3 -208.9

March 2002 78.4 426.1 -347.7

April 2002 98.2 516.7 -418.5

May 2002 82.9 512.1 -429.2

June 2002 88.8 561.2 -472.4

July 2002 107.5 430.5 -323.0

August 2002 92.2 703.3 -611.1

September 2002 80.7 487.2 -406.5

October 2002 90.0 544.1 -454.1

November 2002 75.1 569.2 -494.1

December 2002 65.1 574.1 -509.0

TOTAL 2002 1,057.7 5,945.3 -4,887.6

Table 4.11: 2001 : U.S. trade in goods with Nigeria

Month Exports Imports Balance

January 2001 65.9 846.4 -780.5

February 2001 101.6 657.3 -555.7

March 2001 74.0 1,027.3 -953.3

April 2001 79.5 925.1 -845.6

May 2001 71.5 924.0 -852.5

June 2001 91.9 717.2 -625.3

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July 2001 73.3 870.5 -797.2

August 2001 76.3 527.1 -450.8

September 2001 67.6 826.2 -758.6

October 2001 82.0 663.2 -581.2

November 2001 72.9 388.9 -316.0

December 2001 98.6 401.7 -303.1

TOTAL 2001 955.1 8,774.9 -7,819.8

Table 4.12: 2000 : U.S. trade in goods with Nigeria

Month Exports Imports Balance

January 2000 136.5 436.3 -299.8

February 2000 75.6 648.4 -572.8

March 2000 44.0 985.7 -941.7

April 2000 37.5 871.8 -834.3

May 2000 32.8 745.7 -712.9

June 2000 46.7 1,168.4 -1,121.7

July 2000 49.6 1,018.9 -969.3

August 2000 50.3 1,102.3 -1,052.0

September 2000 45.0 932.3 -887.3

October 2000 71.9 1,006.1 -934.2

November 2000 72.5 866.6 -794.1

December 2000 59.5 755.1 -695.6

TOTAL 2000 721.9 10,537.6 -9,815.7

Table 4.13: 1999 : U.S. trade in goods with Nigeria

Month Exports Imports Balance

January 1999 87.4 287.9 -200.5

February 1999 56.1 210.7 -154.6

March 1999 45.0 328.7 -283.7

April 1999 47.4 369.5 -322.1

May 1999 40.1 349.4 -309.3

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June 1999 57.7 380.8 -323.1

July 1999 61.4 333.8 -272.4

August 1999 47.8 528.8 -481.0

September 1999 57.3 433.0 -375.7

October 1999 37.4 356.7 -319.3

November 1999 40.6 448.9 -408.3

December 1999 49.7 356.9 -307.2

TOTAL 1999 627.9 4,385.1 -3,757.2

Table 4.14: 1998 : U.S. trade in goods with Nigeria

Month Exports Imports Balance

January 1998 65.0 414.2 -349.2

February 1998 65.1 300.8 -235.7

March 1998 91.7 449.1 -357.4

April 1998 48.4 463.3 -414.9

May 1998 51.6 474.1 -422.5

June 1998 70.6 388.0 -317.4

July 1998 63.0 339.1 -276.1

August 1998 70.8 343.3 -272.5

September 1998 60.7 253.0 -192.3

October 1998 104.1 294.7 -190.6

November 1998 56.4 279.4 -223.0

December 1998 69.3 195.0 -125.7

TOTAL 1998 816.7 4,194.0 -3,377.3

Note

Table reflects only those months for which there was trade.

Contact the Data Dissemination Branch of the Foreign Trade Division with any

questions or for additional information.

For information on data sources and methodology, check out the Information on the

Collection and Publication of Trade Statistics.

SOURCE: U.S. Census Bureau, Foreign Trade,2011

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The tables revealed that Nigeria‟s imports from US was far greater than her exports to US and

an import dependent economy cannot guarantee economic development.

4.6 Issues of repatriation of looted funds

President Olusegun Obasanjo challenged western nations saying that the experience of

some countries where Nigerian‟s looted funds have been traced has been of lukewarm

cooperation. "Our partners of the great banking nations should recognize that it is contradictory

to condemn corruption on the one hand, and on the-other, hinder us in the recovery of the

plundered fund (Vanguard September 24, 2003). Even though a few countries such as

Switzerland have cooperated with Nigeria towards repatriation of looted funds, one has a

feeling that lots need to be done. Despite recent pledges by US and some other western Nations,

it is doubtful that they will go out their way to assist Nigeria recover all the loot. Tony Blair‟s

government in Britain is still playing the politics of legalism and has not done any thing to help.

While Bill Clinton did nothing in his last days in office to assist Nigeria in this regard, George

Bush administration overlook or better still pay lip service to repatriation of Nigeria‟s looted

funds. These looted funds if repatriated, can be channeled into development programs but even

the Nigeria- U.S. relations have not achieved this.

4.7 Issues of environmental crimes of oil transnational corporation in the Niger Delta

The enormity of the atrocious environmental crimes of western oil Transnational cooperation

particularly US oil companies in the Niger Delta area of Nigeria for decades cannot be over

emphasized. Surely, their parent countries would not condone these irresponsible acts of the oil

TNCs. That is why Chiaka (1989) insisted that abundant resources, cheap labour, weak or non-

existent labour unions, ineffective environmental laws ...provide a fertile climate for (MNC)

corporate growth. Despite all the local and international accolades, environmental issues remain

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a principal source of Chevron‟s troubled operations in the Niger Delta region and the company

does not seem to be oblivious of this fact Omeje (2006). The apparent portrayal of ecological

insensitivity by Chevron in the Niger Delta region wouldn‟t have been possible in its America

home base. All these militias formation emerging from Niger Delta region is a direct

consequence of the environmental degradation and pollution of these oil companies and their

effects on the shelter, farmland, drinking water and aquatic lives of the society. US understand

this; the parent oil companies in the US observe the environmental laws yet US despite her

blossoming economic relation with Nigeria has not been able to bring its companies to order.

All it does is to care about the security of its investment to the total negligence of the security of

the oil communities. The “securitization” of Niger Delta both by the Nigerian government and

the US poses threat to the survival of the communities just as the numerous lands, water and air

pollution not excluding countless fire outbreak wastes our human resources. Preserving Nigeria

human resources is pertinent for enhancing development. US tend to be oblivious of this fact.

Unemployment has been a major problem for most countries across the world. The USA for

example has increased from 5% in 2007 to 9% so far in 2011. Spain has increased from 8.6% to

21.52%; UK from 5.3 to 8.1%. Ireland currently stands at 14.3% from 4.8%, Latvia from

5.4% to 16.5%, Greece from 8.07% to 18.4% and Italy from 6.7% to 8.3%. The average for the

Euro area is 10.7%. Even within the African continent, unemployment has risen with South

Africa, Africa‟s largest economy having a higher rate than Nigeria at 25%, Angola at 25%,

Botswana at 17.5%, Egypt at 11.8%, Kenya at 11.7% (Bureau of Statistics, 2011). Poverty rate

in Nigeria is on the rise. Table 4.15 below is indicative

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Table 4.15 Population living under poverty in Nigeria 1980-2010

Headcount from

1980-2010 Year

Poverty Incidence (%)

Estimated Population (Million)

Population in poverty (Million)

1980 27.2 65 17.1 1985 46.3 75 34.7 1992 42.7 91.5 39.2 1996 65.6 102.3 67.1 2004 54.4 126.3 68.7 2010 69.0 163 112.47

In conclusion of this, chapter we have examined whether the Nigeria-US economic relation has

enhanced Nigeria‟s economic development and found that it has not.. It has shown that the

donor-recipient relationship in the context of asymmetrical relations between Nigeria and US

has far reaching implication for Nigeria‟s development.

Since the inauguration of President Obasanjo in May 1999, the US Agency for International

Development (USAID) has returned to working directly with the Nigerian government after a

five-year lull. The target of USAID's strategy is to assist Nigeria's transition to economic, social

and political stability, and to help restore public confidence in civilian-led democratic

governance. USAID and a multi-agency team are implementing strategies and programs

developed by an inter-agency assessment in 1999.

The United States and the rest of the members of the G8 have been credited for granting Nigeria

debt relief in 2006. Obviously, the Nigerian citizens has also benefited from America

Multinational Corporations in terms of employment, the Nigerian army too benefited from the

various training and financial support of the America government and other USAID‟s programs

but it is doubtful if these benefits can be measured in terms of development. It is arguable that

these benefits are just incidental to Nigeria as a result of US interest in her oil.

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Perhaps the government's biggest macroeconomic achievement as a result of her relation with

US has been the sharp reduction in its external debt, which declined from 36% of GDP in 2004

to less than 4% of GDP in 2007. In October 2005, the International Monetary Fund (IMF)

approved its first ever Policy Support Instrument for Nigeria. On December 17, the United

States and seven other Paris Club nations signed debt reduction agreements with Nigeria for $18

billion in debt reduction, with the proviso that Nigeria pays back its remaining $12 billion in

debt by March 2006. The United States was one of the smaller creditors, and received about

$356 million from Nigeria in return for over $600 million of debt reduction. Merrill Lynch has

won the right to take on $509 million of Nigeria's promissory debt (accrued since 1984) to the

"London Club" of private creditors. This arrangement saved Nigeria about $34 million over a

simple prepayment of the notes. Nigeria owes some bilateral loans and multilateral institutions

over $101 million in oil warrant instrumental debts, which soon might be redeemed via a cash

tender offer (http://abuja.usembassy.gov/).

The period 1975-1979 laid the foundation for an active Nigeria-US relation. During this period

there were more publications on Nigeria-US relations than the previous year. According to

Robert (1991) Nigeria, Africa and the United States: from Kennedy to Reagan, prior to 1995

Nigeria has never exercised any significant degree of control over its neighbours; it has never

played a decisive role in the affairs of any other state; it has never played a dominant role in any

international issue area; and, with the exception of a few extremely minor skirmishes on its

borders, it has never used military force against another state… Nigeria did play an important

role in mobilizing support for popular movement for the liberation of Angola in 1975.

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Robert presents a true picture of Nigeria‟s presence in the international community prior to the

period of our study. It means therefore that apart from the Nigerian Civil War which generated

hot debate from around the world, no other period prior to 1975 received more attention in

Nigeria-US relations than from 1975 to 1979. Robert‟s work makes a good introduction to

Nigeria-US relations and will be useful to this study in the area of Nigeria‟s policy towards the

United States between 1975 and 1979.

Another important work is Nathaniel Davies (1978) The Angolan Decision of 1975: A personal

Memoir. This work provides a detailed information on Nigeria-US perception. Bassey Ate

(1987) Decolonization and Dependence: The Development of Nigeria-US Relations, 1960-1984

is a good contribution to the study. The work systematically analyses the development of the

relationship between Nigeria and the US during the dynamic era of decolonization. This study

serves as a basis for analyzing Nigeria‟s stand on some key issues with the United States within

the period of our study. Although, Bassey attempted to present a decolonizing history of

Nigeria‟s foreign policy, his work paid little attention to Nigeria-US relations between 1975 and

1979 on the country‟s power status in Africa. Nevertheless, Bassey succeeded in linking strong

economic bilateral relations between Nigeria and the US despite their disagreement on regional

issue in Africa in 1975.

Alaba Ogunsanwo‟s (1980) “Nigerian military and foreign policy 1975-1979” focused on

Nigerian military leaders: The Mohammed/ Obasanjo regime and discussed the foreign policies

pursued during 1975-1979 military government. This work will be useful to this present study

because the personality of the people involved in foreign policy formulation were analysed by

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the scholar. Although, Ogunsanwo did not compare the best policies pursued by Mohammed

and Obasanjo towards the US government, he however, made a concrete analysis of the policies

sought after by the heads of states of these two countries.

Ray Ofoegbu‟s (1979) Foreign Policy and Military Rule x-rayed three military governments in

Nigeria and played much emphasis on the third Military Government (1975-1979). To Ofoegbu,

it was the third Military Government first led by General Murtala Mohammed that brought

radicalism into Nigeria‟s foreign policy. The radicalism which was introduced into Nigeria‟s

foreign policy led to confrontation with major powers which invariably caused diplomatic

conflict especially with the United States in 1975. From 1977, the relationship began to

normalize. Lieutenant General Olusegun Obasanjo, being the new leader of Nigeria, renewed

Nigeria‟s radical foreign policy and once again, began to make close ties with President Jimmy

Carter of the United States. Ofoegbu‟s work will be of immense value to this study. Although, it

did not give a comprehensive review of Nigeria-US relations, it however laid much emphasis on

the domestic policies under the Mohammed-Obasanjo military government that affected

Nigeria‟s relation with the United States.

Nigeria, like most nations, has had its share of internal issues. We can all agree that this is not

unusual for a country in our state of development. However, few will deny that we made

relative, if even major, progress in the past decade. Much of this progress was made possible

through a strong relationship with the United States. Sadly, in the short period since May 2007

when President Yar „Adua came to office, much of these gains were lost through ill-advised

policy reversals and entrenchment of corrupt persons in strategic positions.

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This abuse of office and arrogance of power are emblematic of President Yar‟ Adua‟s

governing style during his tenure in office. Nigeria‟s precipitous retreat from the reform gains

made during former administration is due to the lack of preparation, vision and the unbridled

self-interest of many of the people Yar‟Adua surrounded himself with. The story is now widely

known that last November, President Yar Adua left the country for medical treatment, and,

typical of his administrations, left no one in charge of the affairs of the state. Naturally, the

situation got worse. But fortunately for our country the Nigerian Senate acted prudently this

month, recognizing Vice President Goodluck Jonathan as acting president.

Upon taking office, Acting President Jonathan signaled his desire for meaningful reform by

immediately removing the controversial Attorney General and Minister of Justice Michael

Andoakaa, affirming his commitment to electoral reform, re-engaging the Niger Delta militants

and taking steps to improve power generation and distribution. While this development

presented us with the opportunity for change, it came loaded with the challenge for the

democratic, legal and peaceful resolution of our situation. True, the major challenge is ours. Yet

the international community, and the U.S. in particular, must play a crucial role in ensuring that

Nigeria seizes the opportunity of this moment to get back on track.

Oil provides most of the Nigerian state's formal revenue. Under current agreements, nearly all

of Nigeria's oil and gas is produced through joint ventures between the Nigerian National

Petroleum Company (NNPC) and the major international oil companies. The federal

government collects more than 90 percent of the profits from oil and natural gas and, in turn,

redistributes about half of this revenue to state and local governments throughout the country by

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a complex allocation formula. Especially at the lower levels of government, lack of

transparency facilitates Nigeria's notorious corruption. Competition for access to oil money is at

the center of Nigeria's patronage politics. In that sense, oil is the glue that holds Nigeria

together, and changes in the petroleum regime have significant political ramifications, with

winners and losers.

Minister of Petroleum Rilwanu Lukman's Petroleum Industry Bill (PIB) would rationalize the

complex relationship among the federal government, the national oil company and international

investors to increase production and ensure maximum revenue for the state. He wants to

transform the national petroleum corporation into a profit-driven national oil company such as

those in Brazil, Saudi Arabia or Malaysia. However, the devil is in the details.

Despite Nigeria -US economic relation, Nigeria has remained a raw material supplier and a less

dependent economy, the bilateral agreement between both countries always make Nigeria more

subordinated than before, American Multinational Corporations has invested solely in the

mining sector, the environmental crimes of oil transnational corporation in the Niger Delta

remains neglected, issues of protectionism, repatriation of Nigeria‟s looted funds banked in the

US is slow, the balance and terms of trade has not benefited Nigeria and poverty in Nigeria has

become more compelling because the people are dominated externally and internally.

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CHAPTER FIVE

Summary and Conclusion

5.1 Summary

This study examines the political economy of Nigeria –United States relations between

1999 and 2009. We examined two key questions namely:

1) Is oil the centerpiece of Nigeria -US economic relation between 1999- 2009?

2) Has the Nigeria -US economic relation enhanced economic development in Nigeria in the

period under study?

We used dependency theory as enunciated by such Scholars as Baran, Cockrosft and

Dos Santos to explain the phenomenon. Data were collected mainly from secondary sources

such as text books, Magazines, newspapers, academic journals and unpublished materials.

Descriptive qualitative method of analysis was used in this work. So, we formulated the

following hypotheses:

1. Is oil the centerpiece of Nigeria –United States economic relation

between 1999 and 2009.

2. Has Nigeria –United States economic relations enhanced economic

development in Nigeria within the periods under study.

5.2 Conclusion

This study has therefore not only traced Nigeria US economic relation from Nigeria

independence to 2006, but has shown that oil was not only the centerpiece of Nigeria-U.S.

economic relation but also that the relation has not enhanced economic development of Nigeria

in the period under study.

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Findings between 1999 and 2009, shows that though US offered various form of

economic assistance to Nigeria, oil seem to be the center piece of the bilateral relation between

both countries. It is astonishing that the buyer determines the price of oil just as they determine

the price of their manufactured goods sold in Nigeria. And to secure this oil for the United

States who is her largest consumer and protect American oil investment, while America has

hijacked Nigeria military, training them and financing their activities, the Nigerian government

has embarked on not only making massive investments in arms, allocating huge sum of money

on security but is also ready to destroy the entire population of the Niger Delta just like its agent

wiped out the entire town of Odi in Bayelsa state.

Courageously, the Nigerian government publicly announced in late August 2006 that it

was now collaborating closely with the US and British governments to deploy more naval

personnel and new hardware to “root out oil rustlers, kidnappers and other undesirable elements

from the Niger Delta and the wider Gulf of Guinea Ezigbo (2006). This goes a long way to

show how desperate Nigeria has become in order to secure US investments and maintain their

trade relation. Yet, US is not convinced for if they were, US marines wouldn‟t be on the Nigeria

high sea personally securing her oil investment.

5.3 Recommendations

In this 21st century, it is necessary that nations interact in order to meet the new realities of the

century. But this interaction must be scrutinized properly before embarked on. If this interaction

benefits both countries then, it could be sustained, if not, it should not be embarked on or if

already embarked on, such interaction such be discontinued. The gains and sacrifices should

also be weighed and when the gains outgrow the losses, such interaction should be embarked

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on. This is particularly imperative for underdeveloped countries that through their interaction

with the developed economy want to transform their own economy. Such a relation must, of

course be enthroned on shared interest and goals even if the key factor is the advancement of the

national interest. Just like the US, Nigeria should always project its interest and when it is not

met, should bark out of the agreement.

The crucial goal of Nigeria bilateral relation economic partnership with the US should not

merely be the exchange primary commodities for industrial goods or seek foreign loans, as has

been the case. The focal point should be to acquire skills, technologies and investment capital

for economic transformation. US should be treated as a means to acquiring and indegenizing

new technology. Proceeds from oil sales should be invested properly and converted into means

of for researching and developing or advancing already existing technology to stimulate

industrial growth instead of acquiring more and more of new technology. MNCs must also be

encouraged or compelled to invest in other sectors of the economy apart from the mining sector.

The policy makers should make friendly policies that will encourage the indigenes to also

invest in the nation instead of banking and investing abroad. These indigenes can set up

indigenous industries, which will not only consume some percentage of the oil but also re-invest

and employ more people. This will go a long way to generate employment and settle the

restiveness in the society.

Nigeria government should embark on industrialization. The industries when set up

should not only consume the oil but also generate wealth and employment for the populace

instead of over-reliance on the US and the West to purchase the oil.

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The Government should borrow from foreign technology in order to create or even

advance indigenous technology. After all, Malaysia at one time in history borrowed the act of

producing palm oil from Nigeria and now among world largest producer of palm oil.

The government should be compelled to de-militarize the Niger Delta and channel some

of the amount of money it spends on security to meeting the welfare of the people. These restive

youths in the Niger Delta if occupied with jobs, will be detracted from kidnapping,

vandalization and theft of oil workers and installations. The government instead of reacting to

people‟s protest with force should reform the condition of Niger Delta.

The numerous laws against environmental pollutions in Nigeria should not only be

revisited and modified to meet the demands of civility but also be made enforceable. Any oil

MNC that violates it and refuses to face the sanction must be asked to depart from the country.

We must show these MNCs that we value our populace before compelling them to do so.

Therefore, the government should revisit the land laws in Nigeria and inculcate the consultation

of the indigenes as well as their consent before these companies are located on their lands.

America‟s assistance is needed in restoring law and order to Nigeria and Nigeria should focus

on the following areas:

1. Insisting on constitutional and legal continuity;

2. Restarting the fight against corruption; and

3. Ensuring free and fair elections in 2011.

First, the Department of Justice, the FBI and SEC need to continue the prosecution of cases we

tirelessly worked on together. We have thousands of pages of detailed evidence and intelligence on

corrupt officials which are sitting, waiting to be used. I am overjoyed to hear that in the United

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Kingdom, the Metropolitan Police is continuing with its case against former Governor James Ibori. It

will give most Nigerians cause to cheer that the U.S. also does the same and continue their cases.

Second, expand on the Foreign Corrupt Practices Act. The FCPA allowed for the prosecution

of a number of corrupt businesses and sent a wave of panic among those who were previously able

to get away with their corruption. This line of action can be furthered if you include foreign nationals

among those who can be prosecuted on U.S. soil. It is important to include those who accept the

bribes and use your financial institutions to hide or launder these funds. Corrupt Nigerians fear the

reach of U.S. law into their illicit activities. Start acting upon that fear.

Third, it is time to deploy the powers already available in your instruments. You can encourage

the administration to use existing powers under Proclamation 7750 by issuing travel bans against

those known to be corrupt. The United States can also cooperate in the creation of Interpol red

notices; confiscate stolen assets found on U.S. soil; and insist on the extradition of corrupt foreign

nationals. You must continue to name and shame those who do not fear justice at home.

President Jonathan‟s emergence provides the United States with a second chance to

purposefully reinvigorate the fight against corruption in places like Nigeria. These three broad acts

are vital steps towards positively turning the situation in Nigeria around and can also be applied to

the rest. WASHINGTON - Nigerian President Umaru Yar'Adua's efforts to reform the oil and gas

industry have the potential to upset the fragile Nigerian internal political balance among the regions,

ethnic and religious groups, and patronage networks.

U.S.-Nigeria Bi-national Commission was established in April 2010 as a high-level mechanism

to address issues surrounding governance, transparency, (including preparations for Nigeria‟s

upcoming elections), energy and power, food security and regional security. The United States has

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also signed similar agreements with Angola and South Africa, all in an effort to engage emerging

and existing African powers in strategic dialogue. He further said the BNC is chaired by Nigeria‟s

Foreign Affairs Minister and the U.S. Secretary of State. The Commission is meant to expand

cooperation and strengthen the bilateral relationship across a broad range of issues because it sort of

establishes the framework for some of the mutual goals that the United States has with Nigeria. On

the key areas of U.S. development assistance to the country, the U.S. diplomat said that Nigeria is a

beneficiary of “Feed the Future” program. In 2009, President Obama announced a $3 Billion U.S.

contribution in support of the World Bank‟s global agriculture and food security initiative. Nigeria

is also a major beneficiary of the U.S. Global Health Initiative (GHI), which builds on the progress

and successes of the President‟s Emergency Plan for AIDS Relief (PEPFAR), the largest U.S.

assistance program to Nigeria. President Obama announced a six-year, $63 billion Global Health

Initiative in May 2009, and this past year, the U.S. spent over half a billion dollars fighting

HIV/AIDS in Nigeria.

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