Economic consequences of the Nigerian Peace?

At a fundamental level, the Nigerian political problem is straightforward but possibly insoluble. In the 1960’s and 1970’s the politicians showed such graft that the population revolted. The concept of governance was conceived as relatively straightforward. There was an existing economic and foreign policy consensus. This allowed the military to intervene. When the military played along with the consensus they had consent. When they went away from the consensus and ceased to build a consensus they began to rely on force and power. This was the beginning of the end and a turn to dictatorship. Presently, the issue remains the lack of an alternative technocracy that any alternative could rely upon. The leading members of professional class have made themselves completely obedient to the power of the oligarchs. They have shown themselves to be entirely without scruples and solely concerned with cash defalcations. The scale of the concupiscence1  of the Nigerian technical professional class is breathtaking.

This is not to say there are not enormous numbers of technically proficient, dedicated, and honest professionals. But the political system has been sidelining them for years, and this is the apparent major block to radical change.

However, the path forward is one which will self select its leaders.

Nigeria’s political and financial system and culture is focussed on cash. This is not due to personal failing but is the result of the complex environment. Nigeria is a severely traumatised society. When America aligned with Saudi Arabia to collapse the oil price in order to crash Soviet society, Nigeria was collateral damage. In the absence of a sophisticated economic and intellectual elite Nigerians were unaware of this and the common response was to blame ‘the leaders’. The effect on the Soviet Union was a traumatising of society but at least the Soviets/Russians began to recognise what had happened. 

In Russia, there was a fall in life expectancy in this dark period. We do not have good figures for Nigeria  but circumstantial evidence is that similar or worse happened in Nigeria. Many Nigerians who had grown up in Nigeria but had migrated abroad commented with astonishment on returning to Nigeria in 2010’s that their cohorts were no longer there/alive!

Structural adjustment  led to the collapse of the industrial sector. Many industrial collapses involved the suicide of the original enterpreneurs and this scarring is deep in the national psychology. The failure to understand what happened led to complete loss of faith in themselves by the existing political, industrial  and financial elite. A result is the ‘over-learning’ from this experience. Nigerian elite concluded that the way to survive was to focus on:

  1. Immediate cash, primarily from the government
  2. Total pessimism about the future
  3. Total pessimism about the ability of anyone to reform the country
  4. Complete commitment to personal and family security.

Once the financial oligarchy seized control, they discovered that they could get rich by bankrupting the country. Every new international loan meant increased opportunities for mass defalcations and plain ‘in your face’ looting.2

The failure of the military to manage anything resembling a consensus on any issue led to the overthrow of the military regime and a ‘peace ‘ agreement between the political, financial and military and between ethnic sectors3. The approach to a military general of non-Northern heritage at that time held in prison (Gen Obasanjo ), to be offered the position of President confirmed the elements of the ‘peace’ agreement.

Keynes had previously understood the dynamics of this situation:

‘The power to become habituated to his surroundings is a marked characteristic of mankind. Very few of us realize with conviction the intensely unusual, unstable, complicated, unreliable, temporary nature of the economic organization by which (Nigeria ..)  has lived for the last half century. We assume some of the most peculiar and temporary of our late advantages (in terms of oil prices) as natural, permanent, and to be depended on, and we lay our plans accordingly. On this sandy and false foundation we scheme for social improvement and dress our political platforms, pursue our animosities and particular ambitions, and feel ourselves with enough margin in hand to foster, not assuage, civil conflict in the (country ..). Moved by insane delusion and reckless self-regard, the (financial oligarchy …)   overturned the foundations on which we all lived and built. But the spokesmen of ( the new Tinubu regime)…. have run the risk of completing the ruin, which (Buhari…) began, by a (new) Peace which, if it is carried into effect, must impair yet further, when it might have restored, the delicate, complicated organization, already shaken and broken by (economic distress …).’4 

A first step to reform is understanding what happened and why. Once the past is understood, one must understand the scale of severe trauma inflicted upon society. Steps forward need to take this trauma into account, in part seeking to heal and remedy it and accepting the consequences rather than simply blaming the victims.

A further key step to the future is to understand how to cure the trauma at a level of understanding. This is to change the model of wealth acquisition to move from cash to capital value. If Nigeria would move from seeking cash to seeking capital value almost all the negative behaviour would end without any requirement for moral renewal. 

The rate of return given by defalcation is so monstrous that no real investment could possibly achieve that return. Even when obtaining a financial  interest through indigenisation, the Nigerian elite seek a return comparable to defalcation which means that Nigerian shareholders’ involvement in subsidiaries of foreign MNC’s is one of destructive short term behavior fracturing brand value and long-term franchises.

Capital values require a focus on future growth so would immediately align the political and financial class to seek future growth and become the police men against short term defalcations. There is no possibility of a successful long term investment surviving substantial defalcations at the origin of the investment rather than later, once the enterprise has developed.

In a cash-focused society, the prime factor for wealth is government connections and government contracts. This leads to contempt for true management skills. In a capital-value society, management will be highly valued as they will be the custodians of the future growth of capital value. Short-term defalcation will reduce the future growth in capital value, so the shareholders will now become intolerant of management defalcation. Further, cash values are solely personal and so generate a war of each against all as any cash going to X means less available for Y.  Capital values require collective investment psychology  where the rise in capital value benefits all shareholders

It is this fundamental change in the culture and management of Nigeria, the shift from cash values to a growth of capital values of shared investments, that will be the fons et origo of the future revival of Nigerian economy and society.

In seeking a way forward we must nevertheless recognise the complicity of the West in our trauma. As Keynes said: 

‘A policy of reducing (Africa..) to servitude for a (several) generation(s), of degrading the lives of millions of human beings, and of depriving a whole nation of happiness should be abhorrent and detestable—abhorrent and detestable, even if it were possible, even if it enriched ourselves, even if it did not sow the decay of the whole civilized life of (Africa).’5

Martin Sorrell told me at an Insead alumni meeting years ago, that the plans of the West were to starve Africa of capital and wait till it fell apart. After that, the West would swoop in and feed on the resources for next to nothing. He then added: China ruined that plan. What Keynes considered utterly immoral was the West’s standard approach for Africa.

Our lesson here is that there is a way forward. Our issue is whether anyone has an interest in supporting such an initiative.


1.   (kennedy, 2023)

2.   (Ladimeji, 2023)

3.   (Ladimeji, 2023)

4.   (Keynes, 1919 Introduction) miscellaneous edits added.

5.   (Keynes, 1919)


kennedy, J. (2023, December 14). Concupiscence. It’s Not Just About Sex. The Gospel Coalition.

Keynes, J. M. (1919). The Economic Consequences of Peace (2007th ed.). Macmillan.

Ladimeji, O. A. (2023, December 31). Nigerian political elite: Catastrophic failure. African Century Journal.