Nigeria: Oil Deal Renegotiations Expose Weak Institutions

Published on 5th January 2010

The uncertainty clouding Nigeria, Africa’s most populous nation as a result of President Umaru Yar’Adua’s absence on grounds of poor health brings to the fore weak institutional frameworks in Africa as two of the country’s principal oil partners, Chevron and Royal Dutch Shell allegedly renegotiate terms with the government. 

In most African countries, politicians, especially the president, determine the fate of the whole country. If the head of state passes on; leaves power or his party fails; everything goes with him. When general elections are held, businesses come to a standstill. When a new leader assumes power, everybody has to start negotiating again. 

Although this works well for rogue donors and multinational corporations (as they feel cutting deals with institutions would probe their special interest) it is very expensive for Africa. Africa ought to build an institutional way of working so that the entire nation is not held hostage to an individual. Through institutions, to do business will not entail one having lunch with the president. Cutting deals will not be a matter of who has the power. 

While we wish Yar’Adua quick recovery, this is the time that Nigerians should exercise great restraint, sobriety and guard against forces that will undermine achievements already attained in the past years.

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