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Nigeria (Aid)

Volume 448: debated on Wednesday 5 July 2006

It is a pleasure not only to have you in the Chair, Mr. Marshall, but to have a fellow Glaswegian in the Chair.

I am delighted to have the opportunity to speak about Nigeria and, more specifically, about aid. Nigeria deserves greater attention from the international community, especially the UK, and is of critical importance to the stability of west Africa and the African continent as a whole. It is the world’s eighth largest exporter of oil, and the UK is Nigeria’s biggest investor. After South Africa, Nigeria is the UK’s second largest market in sub-Saharan Africa, with exports to it valued at more than £775 million in 2004.

My right hon. Friend the Secretary of State for International Development was right when he said that

“what happens in Nigeria is of huge importance to the future of Africa as a whole.”—[Official Report, Westminster Hall, 7 June 2005; Vol. 434, c. 120WH.]

I am the chairman of the relatively new all-party group on Nigeria, which is dedicated to improving understanding of Nigeria in the UK, and of the UK in Nigeria, and to assisting in any way that it can with enabling human development and improving human security in Nigeria. The group has met many people to talk about issues related to Nigeria, including business people, representatives of non-governmental organisations and the Independent National Electoral Commission of Nigeria. Each of those parties wishes to work with Nigeria and see sustainable development there, but they all know that the country faces a great many challenges—both real and reputational.

In terms of Government revenues, Nigeria is one of Africa’s richest nations, but it is one of its poorest in terms of the number of people whose basic needs are not met. Around 75 million people there live in absolute poverty, and one in five children dies before the age of five. According to UNICEF, 60 per cent. of the population do not have access to clean water, and the United Nations Development Programme reports that approximately 90 per cent. live on less than $2 a day.

I, and many of my colleagues, have been to Nigeria and witnessed the destitution. It was a shock that a nation with such apparent wealth and such potential could be in such a situation. Despite those disturbing statistics, Nigeria receives considerably less aid than other sub-Saharan African countries.

My hon. Friend talks about the recent visit that a number of us made to the southern point of Nigeria, the Niger delta, where we saw at first hand the poverty. We also saw at first hand the corruption, although elements in the Government are trying to clear it up. The most profound statement that I have heard on this issue—I do not know whether my hon. Friend agrees—was to do with the Make Poverty History campaign, when people said that if we make corruption history, it will be far easier to make poverty history.

My hon. Friend makes a good point, to which I shall refer later in my speech, although I shall not use his excellent words.

While Nigeria receives less aid—about $2 per capita per year—the good news is that it seems as though its needs are being recognised. Aid has increased from £35 million in 2003-04 to £70 million in 2005-06. I welcome the increase in aid, which recognises the importance of Nigeria and the G8 promises. I welcome the engagement of the Department for International Development in Nigeria, and I am very pleased that it has opened an office in Kano, a hitherto sadly neglected region in the north of Nigeria, which I hope to visit later this year.

My purpose in speaking here today is to ask my right hon. Friend the Secretary of State about the steps that are being taken to ensure that development projects in Nigeria are sustainable and will be maintained. What is DFID doing about corruption? How does it hope to prevent its projects from becoming part of a system of entrenched corruption? I hope to learn from him how the Department will maintain pressure for the improvement of human rights issues while pursuing its development agenda.

Linked to that, will the Secretary of State say how DFID is preparing for Nigeria’s 2007 elections? Does it know how it will react should the election period be marred by corruption and the threat or use of violence? I very much hope that it will not be. I look forward to hearing his answers on those issues and his ideas on how aid management in Nigeria can be improved to help meet the systemic challenges that face all those working in its development. If we on the all-party group on Nigeria can assist in any way, we would be more than happy to do so.

Nigeria’s economy is dominated by oil. Income from the oil industry accounts for more than three quarters of the Nigerian Government’s revenues. Well over 90 per cent. of its export earnings comes from oil. The neglect of other sectors of the economy that that has caused has led to the extreme impoverishment of so many, and to the political tensions and communal conflict that arise when the wealth of one geographically specific resource is controlled by and concentrated among a few.

I understand that DFID has a joint-country partnership strategy with the World Bank through which it supports the Nigerian Government’s national economy empowerment and development strategy—NEEDS—focusing specifically on promoting non-oil, improving transparency and accountability, and creating conditions to enable human development. I welcome the support of the Nigeria Government’s NEEDS programme. Economic diversification is the key to Nigerian sustainable development.

Will the Secretary of State elaborate on the specific projects that DFID is running in Nigeria to promote non-oil growth? Our main concern is that such projects be sustainable and that sooner rather than later local project workers will be able to take over the management of the projects and will be fully able to rely on domestic resources and expertise. Related to that, will he discuss the extent to which DFID develops projects in consultation with local groups and those at whom projects are targeted? Are the projects formulated mostly in consultation with the Nigerian Government?

I ask for that detail about DFID’s projects because I have seen myself how an apparently well planned and well implemented project can simply go to waste once support stops. On my previous visit to Nigeria, I saw a project run by a local non-governmental organisation. It was a chicken farm, which was very well organised and seemingly thriving. However, when I asked the villagers what they would do and how they would sustain the farm once the money ran out, they had no answers. That was because they had no business plan.

Another example of unsustainable intervention by an NGO is of a project to boost the income of rural communities engaged in harvesting Allanblackia plants, the oil of which can be used as a substitute for palm oil. The market value for the plant is low, as it grows wild. The NGO involved is injecting cash to increase the market price, but that is clearly unsustainable. How does DFID ensure that its own projects are sustainable?

There is certainly vast potential in Nigeria for non-oil growth. Its agricultural sector needs attention; it needs redevelopment. Nigeria was once a major importer of cocoa, groundnuts, rubber and palm oil. Once the biggest poultry producer in Africa, its corporate poultry output has been slashed from 40 million birds annually to about 18 million annually. The Nigerian Government are putting resources into encouraging the local manufacture of finished and semi-finished goods. How is DFID directly supporting the agricultural and manufacturing sectors in Nigeria?

I recently had an instructive meeting with a representative from the Unilever corporation. It is engaged in what it calls a “localisation” programme. It seeks to encourage agricultural development that will additionally provide raw materials that may be used in local manufacturing of Unilever products. It was pointed out to me at the meeting that challenges faced by local manufacturers include the high cost of production and distribution; customs administration and port-related issues; the security of life and property; and the weak legal framework.

That brings me to the next issue on which I seek answers. For me, it is the core issue that prevents Nigeria from becoming the economic power that it deserves to be and one that keeps millions of people trapped in a cycle of poverty, and that will, if not effectively dealt with, render any and all aid to Nigeria unsustainable. The issue is, of course, corruption. The late Professor Peter Bauer described foreign aid as the process by which the

“poor in rich countries subsidise the rich in poor countries”.

Looking at Nigeria’s history and how the gap between the wealthy and the impoverished has evolved, that could almost be said to be true.

The Nigerian Government deserve praise for their efforts in tackling corruption, which I know that the Secretary of State recognises. The economic management team, until recently headed by the former Minister of Finance and the Economy, Ngozi Okonjo-Iweala, supported President Obasanjo in pushing through difficult reforms and was instrumental in getting Nigeria signed on to the extractive industries transparency initiative. Nuhu Ribadu, chair of Nigeria’s Economic and Financial Crimes Commission, faces an uphill struggle in trying to clamp down on corruption at the highest levels. His job is one of trying to challenge what is a fact of life in Nigeria. Tough as the challenge is, work is being done in Nigeria to try to curtail corruption, but like so many things, corruption knows no borders.

I thank my hon. Friend for giving way and for securing this debate. I am sure he agrees that the visit that we made to Nigeria was so very distressing, because some of the things that go on in that country beggar belief. The corruption is so palpable. Is it not the case that children cannot drink clean water and yet a governor can commission his own private jet to go to and from meetings or wherever he so desires? The problem is that the people do not understand that the Government are to blame; the people blame Shell and some of the other oil companies for all that is happening. We need to educate the people about who they should level the blame at for corruption. This is about bringing democracy to the land, as well as stability.

I thank my hon. Friend. She was moved on a number of occasions when we were in Nigeria, particularly when we were dealing with young children and their plight. I am not sure how to put this, but she has great faith that our Government can do something to help.

I believe that the UK has a part in corruption and the struggle against it. Clearly, effective aid delivery and development are of the utmost importance in a country in which unemployment and endemic corruption make it seem as though nothing else is happening. Poverty is the No. 1 blight on Nigerian society, along with corruption. It takes little imagination to believe that capitalist enterprise means big hustle, where gains are ill-gotten, and where the little guy gets ahead only by imitating the big guys. That seems to be the rule that governs what happens in Nigeria.

That aid is sustainable is all the more important. If projects cannot continue without ongoing external assistance, they are vulnerable to continuation through corruption. So I ask the Secretary of State, how is DFID supporting the struggle against corruption both within Nigeria and for Nigeria from within the UK? The fact that there is capital flight from Nigeria to the UK aids people who bring money into the country in suitcases. Such people are basically stealing money from the mouths of the poor. The few who are guilty of obtaining massive wealth through corruption can come to the United Kingdom to spend that money. I therefore urge that more action is taken against corruption in the UK with tighter legislation and a greater willingness to prosecute.

The issue is as much DFID’s concern as any other Department’s. Money that remains in Nigeria can be invested and used for development. Does DFID maintain contact with those agencies that deal with financial crime? How does it intend to ensure that its projects do not fall into the trap of corruption when it is no longer managing them directly? Does it have a monitoring mechanism to check on the progress of projects when it stops playing a central role? What practical steps will be taken by the anti-corruption commission to address the problem in Nigeria?

My final question relates to Nigeria’s coming elections and human rights. The commitments made last year by the G8 to provide increased assistance to Africa were based on a pledge from Africa’s leaders of good governance and transparency, and the Nigerian Government have taken action to justify the support that they are receiving. The period leading up to and following elections is turbulent for any country, and while I hope for peaceful and successful elections in Nigeria I am worried about the potential for irregular elections. Given the level of tension, the proliferation of small arms in the country is a major concern. Will my right hon. Friend explain how DFID Nigeria is preparing for the 2007 elections and how it intends to react should they be irregular or should there be a deterioration in the security situation?

On a related matter, I am concerned about reports from Nigerians on human rights abuse. Thousands have died in communal conflict and law enforcement agencies are known to be involved in abuse. I do not believe that my right hon. Friend is afraid to take an assertive approach to human rights issues and democratisation. I understand that DFID’s objective is poverty alleviation, but that cannot be sustained without human rights. How does DFID maintain pressure for improving the human rights record in Nigeria and what action can DFID Nigeria take on human rights?

I look forward to my right hon. Friend’s response and hope that by working together with not just the all-party group on Nigeria but the rest of Parliament, this country can do something to help Nigeria.

I congratulate my hon. Friend the Member for Glasgow, North-West (John Robertson) on securing the debate and on the work that he and his colleagues on both sides of the House do in the all-party group on Nigeria. They have kept us debating Nigeria. It is a country that, as he said, is vital to what happens in sub-Saharan Africa for the simple reason that its population is 130 million and constitutes one fifth of Africa’s population. Nigeria is a big country and what happens there is crucial if we are to have a chance of achieving the millennium development goals. Some progress has been made but there is a long way to go.

On Nigeria's oil resources, some people have the misconception that because it has a lot of oil it is a fabulously wealthy country. The truth is that its oil revenue amounts to only around 30p per person per day. Nigeria is actually a poor country, particularly when account is taken of the large population where 70 million of the 130 million population live on less than $1 a day. That is the third highest number in the world and shows the scale of the poverty.

As my hon. Friend noted, the social indicators of that poverty are appalling. Colleagues who have visited Nigeria with the all-party group, as I have, know because we have seen it with our own eyes. One in five children die before the age of five—one in five. Seven million children of primary school age are not where they should be—in school. There are 1 million AIDS orphans. Fewer than 30 per cent. of children complete a full course of immunisation. One reason why one in five kids die before they are five is that they have not been vaccinated against the diseases that will claim their lives.

We all know that Nigeria has suffered from monumental bad governance, which has certainly been a major source of the country's troubles. It is also true that with a Government who are committed to reform, as we have seen in recent years, governance in Nigeria is turning a corner. For example, the federal Government, for the first time, has produced a home-grown poverty-reduction plan that gives the Government and the donors who are working with them a framework within which to operate.

That commitment to reform was responsible for the biggest single debt cancellation deal in the history of sub-Saharan Africa. It was agreed last year for Nigeria and its creditors wrote off 60 per cent. of its debt: $18 billion. The UK alone will cancel £2.8 billion. That deal frees up an additional $1 billion a year for Nigeria to spend on a range of things, including the employment of an additional 122,000 teachers and putting 3.5 million children into school. I pay tribute to former Finance Minister Ngozi and to President Obasanjo for having said that they will ring-fence that money in what they have called a virtual poverty fund with oversight, including from non-governmental organisations, so that the public can see the benefit of debt cancellation.

It is fair to say in passing that the UK played an important part in helping Nigeria to achieve that deal, which would not have been possible if people’s perceptions of Nigeria and the fact that there is now the beginning of a process of reform had not made it possible to unlock that arrangement through the Paris Club deal.

DFID is the leading bilateral donor in Nigeria and will spend £80 million this year, rising to £100 million in 2007-08. The help that we are giving is focused on the Nigerian Government’s plan to improve governance and contribute to the millennium development goals. The impact of the Government's reforms and DFID's programme is already being seen.

My hon. Friend asked about non-oil growth. Improving macro-economic stability is essential for sustainable development in Nigeria. We have provided technical assistance and it is worth making the point in passing in view of ActionAid’s report, which was published yesterday and reported in one or two newspapers this morning, that technical assistance of the right sort helps to fight poverty. To describe technical assistance as phantom aid is rubbish and it is important to put that on the record. I am grateful to my hon. Friend for obtaining this debate and giving me the chance to do so emphatically.

My right hon. Friend was right to make the point about the reforms that the Government are trying to introduce, but people are asking whether there are still elements in the Government who are travelling weekly to this country—there is anecdotal evidence of that—to buy property, particularly in London and the south-east, with money taken from people in Nigeria. What are my right hon. Friend’s Department and other Departments doing to scrutinise those people who are coming from Nigeria and buying property in this country at the expense of people in Nigeria?

My hon. Friend raises an important point and if he will bear with me for a moment I will come to it directly when I speak about corruption. I want to finish what I am saying about economic development.

Technical assistance has helped to improve the way in which the federal Government’s budget is managed and the way in which they handle debt. It has created the mechanism to allow the benefit of the deal to be ring-fenced for progress towards millennium development goals. It is also worth saying that a fiscal responsibility Bill will come before Parliament shortly and covers the way in which oil revenues should be used. One of Nigeria’s problems is that when oil revenues go up it spends the extra money, but when the revenue falls it has a problem in sustaining that level of expenditure because it does not have quite as much money as it had previously. Legislation to impose discipline on boom-bust expenditure is important and the world, including people in Nigeria, will look at that to assure themselves that the commitment to reform is continuing in the country.

We are increasingly focusing on non-oil growth. We have launched the PrOpCom programme—Promoting Pro-poor Opportunities through Commodity and Service Markets. That is a bit of a mouthful, but the programme is trying to look at improvements in Nigeria’s agricultural market system, to which my hon. Friend referred, so that it works better for small producers. One of the things it is doing to start with is asking what are the obstacles to more rice being grown, and what are the problems that get in the way of transporting that rice, because Nigeria is a rice importer. If more rice could be grown it would be good for those who are growing it and good for those who buy it.

The shared growth framework is looking at the regulatory and legal environment for business. State-level investment climate surveys are being done, asking the question, “What is it like if you want to invest in a business here,” and if it is not good and people are investing elsewhere, asking what we can do to change it, because that is the best way to secure investment from within Nigeria and Africa and from outside.

We have also given a bit of support through. A report in the newspapers recently said that it was shocking that CDC is spending money on building a shopping centre in Nigeria. But let us pause for a moment and ask, is that really shocking? The answer is that it provided jobs for Nigerians. Who will work in the shopping centre? The answer is that people will work serving the public, who will buy things in the shopping centre. That is an example of economic development that in time helps people to have a better life.

I turn now to the subject of governance. Although there has been progress in the fight against corruption and in promoting improved accountability, we have a long way to go. My hon. Friends the Members for Glasgow, North-West and for Paisley and Renfrewshire, North (Jim Sheridan) made very important points.

The progress that has been made in auditing Nigeria’s oil and gas revenues under the extractive industries transparency initiative has been significant; for the first time this year figures were published and openly debated. If one clarifies the oil revenues that the Government are receiving and people can see it they can ask the important question, “What have you done with the money, and are you going to spend more of it in my community?” A process can then start. First, we are introducing a Bill that will institutionalise the EITI principles, with regular auditing to show how the money flows. I very much hope that it will be enacted.

Secondly, we are working very closely with the Economic and Financial Crimes Commission —Mr. Ribadu is doing a magnificent job—and there have been prosecutions. However, it would be helpful if Nigeria were to lift the bar on serving state governors being prosecuted for corruption, which is, frankly, extraordinary. Despite the position we hold, if any of us behaved in a corrupt way and there was evidence we would be charged, and prosecuted. What justification is there for having immunity from prosecution just because one happens to occupy a certain position?

That is another example of a further step that Nigeria itself could take to help in the fight against corruption. However, the former inspector-general of police was convicted and imprisoned and the former governor of Bayelsa state, who is now facing prosecution for corruption, was impeached, because that was the only way to get to him.

We have worked with the Nigerians on the reform of the payroll. One way of improving public financial management is to ensure that one does not pay ghost civil servants, something to which Finance Minister Ngosi was very committed.

My hon. Friend the Member for Paisley and Renfrewshire, North asked what we could do to play our part. We have ratified the United Nations convention on corruption which allows us more effectively to freeze, confiscate and return the proceeds of corruption. We are establishing the new unit with the Metropolitan police and the City of London police, and the Department for International Development is helping to pay for it. Why? Because it is a really good use of aid money. If we can be more effective in finding the proceeds of corruption and giving it back to the people from whom it was stolen in the first place it helps development, and it is right and proper that we should support the work in that way.

We also have money laundering legislation. In answer to the specific question asked by my hon. Friend the Member for Paisley and Renfrewshire, North, those who run money transfer companies and banks are now under a clear legal obligation. If the cash that comes into an account is not consistent with what they know about that person’s business activities and they have concerns in that respect, they should report it.

Finally, we take the issue of human rights extremely seriously. We have a security and justice programme which has funded research on women’s rights in northern Nigeria. We are also supporting a widowhood rights initiative and citizens rights.

We are funding a £7 million elections programme to ensure that Nigerians’ right to participate in the elections next year is as free and fair as possible. We have also been supporting the census financially, because that helps people to be counted and therefore to be registered to vote.

We are investing in a very big way in improving access to health care, education and water services. My hon. Friend the Member for East Lothian (Anne Moffat) mentioned people not having clean water. Another reason why one in five children die before the age of five is because they drink dirty water, get diarrhoeal diseases and die. Clean water really would make a difference.