Nigeria changes the guard

Business hopes for better days under the new regime, reports Frank Martins from Lagos. But the decay runs deep
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IN THE normal run of things, Nigeria's frequent changes of government are accompanied by pious pledges from the new leadership, inevitably clad in khaki, to restore democracy, boost the economy and banish corruption.

But when a hastily promoted General Abdulsalam Abubakar was sworn in last week, there was no such promise. In an unprecedented turn of events, a sitting head of state, General Sani Abacha, had suddenly died in office - reportedly of natural causes. The new chief, it seemed, had more urgent matters to hand than making yet more promises to the nation.

The uncertainty surrounding the implications of the change of leadership was felt in parts of the commercial capital, Lagos, on Friday, when groups of pro-democracy activists tested the patience of armed police, prompting a brief confrontation and isolated scuffles.

The capital, Abuja, in the centre of Africa's chaotic, most populous nation, was awash with speculation, first as rumours of a new coup were dismissed and then with hints of a release of political prisoners.

For many Nigerians, the most pressing questions remain not the lack of democracy under the military regime, but the country's economic mess. Abroad, General Abacha was constantly reviled for his human rights record - including the jailing of the elected president, and the execution in 1995 of environmentalist and writer Ken Saro-Wiwa and others. In Nigeria itself, however, the general had been reviled most for his failure to arrest the rapid decline of a once booming, oil-rich economy now ranked by the United Nations as among the 20 poorest countries in the world.

Nigeria's football team yesterday wore black armbands in memory of General Abacha for their opening World Cup game against Spain. But few others mourned his loss.

Schools and hospitals are in an abject state of repair, telecommunications are expensive and unreliable, water and electricity supplies erratic. Even petrol, in a country which produces more than two million barrels of oil a day, has been in increasingly short supply.

As legitimate opportunities have dwindled, so it is for corruption, fraud and drug smuggling that Nigeria has become infamous in recent years. In a survey of business perceptions, a German-based organisation, Transparency International, has ranked Nigeria as the most corrupt country in the world in both of the past two years.

Yet according to World Bank figures, despite its poor record on political stability and reputation for being amongst the most hostile business environments in the world, during the Abacha years Nigeria attracted nearly a third of all foreign investment in the continent, and five times as much as South Africa.

Britain alone has more than pounds 3bn in fixed investments, as well as several thousand expatriates. "It can be a nightmare to work here," says one oil executive. "Government officials want to interfere in everything, always looking to take a cut."

But the excellent return oil companies can reap in one of the most prodigious hydrocarbons basins in the world is sufficient to encourage all the main players - including Shell and other major oil companies - to maintain their interest, regardless of such problems or additional pressures from shareholders over environmental pollution and human rights abuses. Despite the current depression in world oil prices, the future appears even more promising, with huge new finds expected in deepwater offshore concessions.

For others, the margins are growing ever tighter. "In Nigeria, when a top civil servant officially earns only $60 a month, you accept corruption as a given at every level of society," says the manager of a soft drinks bottling plant. "But when the economy is so down that a bottle of beer or a pack of cigarettes become middle class products, life becomes very hard for business people."

The degree of decay cannot be blamed entirely on General Abacha. It has its roots in years of neglect and mismanagement stretching back to previous governments, military and civilian alike. Corrective measures are, however, likely to be politic- ally sensitive and few in the business community expect to see the new regime move quickly to adopt reforms which might alienate key constituencies in the conservative north and the army.

"To build transparency, Abubakar has to promote growth in non-oil sectors of the economy which have been in recession for a decade," argues a merchant banker in Lagos. "But that will mean introducing a number of painful changes. I don't think he has the legitimacy or confidence to do anything so bold."

If the overall picture remains gloomy, some at least have cause for cautious hope. British Airways was barred from lucrative Nigerian routes worth some pounds 100m annually in May last year. The dispute began after British concerns over safety standards of Nigerian aircraft were ignored, but quickly took on an overtly political dimension, with General Abacha - regarding the safety issue as a pretext by which the new Labour government in London was seeking to impose sanctions - opting for his own ban.

Despite lengthy and difficult negotiations, the embargo remains in place, highlighting the intimate relationship between business and politics in Nigeria. "A new government is a new opportunity for people like BA," says an Abuja-based diplomat, "but a lot of the people in the Provisional Ruling Council are still lukewarm about Britain and the US. They'll be in no hurry to make life easy."

A week into the life of the new regime, the most fundamental precondition for any easing in the business environment - a stable, accountable political system - appears as elusive as ever.