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Nigeria tries to build no-oil, guns/corruption economy

- Carl Mortishead

(Sunday, November 7, 2004)

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[ Carl Mortishead, Times Online correspondent, reports on the West African state's attempt to harness and control the enthusiasm of its entrepreneurs. ]

A Sentry Box looms over the forecourt of a petrol station on the main road north from the city of Port Harcourt in the Niger Delta. It is an ugly metal crate on stilts with a narrow window, just wide enough to position the barrel of a gun. Fuel is precious and petrol station owners take no chances, the pumps are protected by steel cages. The price of fuel is soaring in Nigeria and its provision is irregular, creating shortages in a region that virtually floats on oil. The Delta produces almost 2.5 million barrels of crude per day, providing the government with a rent that accounts for more than two thirds of its income.

Port Harcourt Nigeria's answer to Houston shows little evidence of the oil money. It is a town of hovels, shacks and shebeens. The roads leaving the city are lined with broken lorries, a queue of hulks that could provide a mill with enough scrap metal to keep Nigeria in steel for years, were there energy to fuel the furnaces. The petrol shortage and stop-start electricity supply is a national scandal and in a desperate and belated attempt to stimulate private investment the Government has raised the price of road fuel by 20 per cent. In protest, the Nigerian Labour Congress has called a nationwide strike to begin on November 16.

The confrontation could be violent and dangerous for the government and ordinary Nigerians. Dangerous stand-offs are not infrequent in this ramshackle country, but this time there is a difference. Nigerians are pointing the usual fingers: the fuel shortage is blamed on political corruption, on the former military government and on shadowy figures, politicians who are said to be profiting from fuel imports and looting the disabled oil refineries. But another mood can also be detected. There is impatience with the slow progress of reform under President Olusegun Obasanjo, Nigeria's first democratic leader since the death of the dictator General Sani Abacha. Nigerians are beginning to see that the solution to the crisis is not in the stuff Shell is pumping out of the ground.

A small but influential and growing band of entrepreneurs is trying to build non-oil businesses. The country has one last chance to catch the development train and citizens are furious that politicians are still creating confusion and delays and extracting bribes from passengers seeking to climb on board. Adenike Ogunlesi runs a textile business in Lagos, employing 60 people in her factory. She makes childrenswear under her own label Ruff 'n Tumble filling a niche market for American-style kids' clothes for middle-class Nigerians. But running a business in Nigeria is an infrastructure nightmare, she explains. Power and water are not provided. Most enterprises invest in generators and even drill bore holes for clean water. In Nigeria, to manage an enterprise of any size is to run a small town. In Aba state, in the Niger Delta, Star Paper Mills is spending $20,000 (10,800) per day on diesel fuel to keep the plant going. "I could build a new factory with the money I spend on fuel," says its chief executive.

Meanwhile, the flaring of billions of cubic metres of natural gas lights up the night sky of the Delta, fuel that could power electricity generators if the state-owned utility were run as a business, rather than a government cash register.

Recruitment is a big headache. "You have to go down to rock bottom and train people to answer the phone," Ogunlesi explains. The education of a generation has been lost as the military government shut down universities and colleges. Teaching salaries are inadequate and Nigerians with means opt for the traditional escape route, which just worsens the problem. "If our leaders could not send their children to school abroad, they would do something," Ogunlesi said. Instead, the government is trying to persuade the children who went abroad to return.

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