Project Description

CHAPTER ONE

1.1 INTRODUCTION

            The economic diplomacy of President Obasanjo between 1999 and 2003 was dictated by the mood of the international community and the general state of African economies. President Obasanjo’s economic programmes are hinged on the neo-liberal theoretical framework. This is evident from the economic path he has been traveling on since he took over. All his programmes have the nuances of Structural Adjustment Programme (SAP). When Obasanjo took over from the military junta of General Abdulsalami Abubakar on May 29 1999, Nigeria was more or less a pariah nation with negative and offensive international media attention. Transparency International consistently rated Nigeria as most corrupt nation on earth. In 1998, out of 85 nations surveyed in its corruption perception index, Nigeria was rated 81. This deteriorated in 1999 when out of 99 nations surveyed, Nigeria was rated 98 (www.transparencyinternational.org). This negative rating affected the influx of Foreign Direct Investment (FDI) as most foreigners were wary and indeed reluctant to invest in such insecure environment. The response of President Obasanjo, which was aimed at reassuring the international community, was the signing into law of an anti-corruption law in 2000. This law gave the President the impetus to go round the world and preach to perspective foreign investors to come to Nigeria and invest. Events after four years of promulgating this law have shown that is a toothless bulldog and tool of witch hunting the enemies of the president. Between 2000 and 2003 the rating of Nigeria by Transparency International has nit got better.

Nigeria is a goldmine waiting for the right combination of the necessary ingredients of leadership and policies to transform the vast and breath-taking resources entrenched on its soil to achieve a better life for its citizens and befitting position in the comity of nations. It is regrettable that in spite of the country’s huge natural resources, 70 percent of its over 130 million people live below poverty level, that is, less than a dollar per day. Nigeria’s seemingly intractable developmental conditions are confounding. The data of Nigeria’s resources are intimidating and impressive. In 1991, the estimated proven reserves of crude oil in sub Sahara Africa were 21.7 billion barrels or 2.2% of world reserves. About 79% is located in Nigeria. By 1992, Nigeria had seven sedimentary basins, 880 oil fields already discovered, whereas only 180 had been developed. In addition, there are several underdeveloped marginal fields and large tar sands (bitumen) deposits, estimated at over two billion barrels (This Day, 20/10/2004:48).

Also in the gas sector, natural gas deposits outweigh oil by far. Nigeria has an estimated 120 trillion cubic feet of gas; about three times the size of oil reserves.

Other areas like the solid mineral sub-sector and agriculture have already been unexplored. In the face of this plenty, Nigerians wallow in the most obscene and scandalous poverty. According to United Nations Development Programme (UNDP) Report of 2003 about 70% of Nigerians live in abject poverty (www.undp.orgng/docs/POVERTY-PSI.doc). Regrettably, this state of affairs was superintended and sustained by the nation’s successive leaders who were part and parcel of the United Nations conventions on development.

Presidents Obasanjo, as part of his strategies to attract foreign inflow of capital intensified the privatization programme by divesting government interest in various state enterprises and deregulating the economy. The deregulation policy impacted positively on the economy in the area of the telecommunication. The dismantling of the monopoly of NITEL (Nigeria Telecommunication Plc) brought in its heels other operators and new technologies into the telecommunication sector. Prior to deregulation, NITEL had about 700,000 lines with a tele-density that was far below the International Telecommunication Union (ITU) level but after deregulation in 2001, the combined telephone line from all operators including the GSM operators jumped to over five million in three years. The Minister of Communication Chief Cornelius Adebayo said that the worth of foreign direct investment in the Telecommunication sector as at 2004 was in the neighborhood 0f $4.1 billion (Vanguard 11/10/2004:34).

The Achilles heel of the deregulation policy of Obasanjo’s regime is the downstream sector if the oil industry. While the government has withdrawn all the subsides, if any, in this sector, it has failed to put the necessary structure in place. The current deregulation in the oil sector has merely dismantled the monopoly of oil importation by the Nigerian Petroleum Corporation (NNPC). Importation of refined petroleum products is an open sesame as any person or company with the wherewithal can engage in it. The aspect of opening up the area of domestic refining has been in abeyance. The three refineries in Warri, Port Harcourt and Kaduna, which are in various stages of moribund, have not been able to meet any significant percentage of local petroleum products demand. The result is the dependence of the economy on imported fuel. This would not have been much of a problem but that the domestic market now responds to the vagaries of the international oil prices. The effect on the economy has been spiral inflation and pauperization of the masses.

The Obasanjo regime has also channeled its energies towards the reduction of the debt profile of Nigeria. President Obasanjo in championing this cause has combined his presidency with other African leaders like Thabo Mbeki of South Africa, Abdulazeez Bouteflika of Algeria and Abdoulaye Wade of Senegal to form the New Partnership of African Development (NEPAD).

Although Obasanjo has traveled the industrial world times, he has not succeeded in convincing the creditor-nations to reduce the volume of Nigeria’s debt either bilaterally or multilaterally through Nigeria’s inclusion in the Heavily Indebted Poor Countries (HIPC) Initiatives. As Obasanjo himself acknowledged, “in three years, I went round the countries in Europe twice over, I went to Japan, to America, to Canada and got good words….but no action at all (Gani Fawehimni, “The Absentee President of Nigeria”, quoted in Financial Times, 2002).

Obasanjo’s economic diplomacy especially as encapsulated in his global leadership of G77 is enshrined in timidity and good boy disposition. Rice (2000) reports that G77 Chairman President Obasanjo “ruled out a joint decision by poor countries to suspend debt payment, saying that it would interfere with aid transfers that some nations depend upon for part of their domestic budgets”. The implication of this is that Obasanjo does not contemplate a radical solution to debt burden of Nigeria. Indeed, he preaches subservience as a tool to obtaining debt relief and this underscores his economic diplomacy on this major determinant of the economic trajectory of the Nigerian state.

As part of his effort to tackle corruption and other economic and financial crimes necessary to attract foreign investors, Obasanjo has taken certain domestic steps. He strengthened existing agencies and promulgated laws establishing new ones, of which the Economic and Financial Crimes Commission (EFCC) is one.

This work is thus, divided into five chapters which look into the various aspects of the economic diplomacy of Obasanjo’s regime in his first four years (1999-2003) in office.

1.2 STATEMENT OF PROBLEM 

Nigeria became independent on October 1, 1960 on a high note of great expectations of living in prosperity ever after. The first Prime Minister of Nigeria, Sir Abubakar Tafawa Belewa in an address to the United Nations General Assembly on the occasion of Nigeria’s first independence celebration on October 1, 1960 set the tone of Nigeria’s foreign policy. Although there was no clear-cut guideline on economic diplomacy, it was stated that Nigeria would use its abundant human and material resources in its interaction with the world especially in the context of creating “the necessary economic, political, social and cultural conditions to ensure the independence of Nigeria…” (Epelle 1964:63).

The reality of Nigeria’s economy is a testimony that successive regimes after the Balewa government were hypocritical about creating the economic conditions to ensure the entrenchment of Nigeria’s independence.

In 1973/74, there was a massive increase in the global price of crude oil. Overnight Nigeria became a “mega-buck” earner. Rather than consolidation, Nigerian government from Gowon upwards pursued the hedonistic option of dissipation. The end result was in no time Nigeria “prodigalistacally” frittered away this rare opportunity to kick-start the nation on the path of genuine industrialization.

By the 1980s when the cyclical depression of the cyclical depression of the capitalist system reared its head, Nigeria could not sustain the artificial life style mindless importation it cultivated in the hey days of high-level income from crude oil sales. It tethered on the brink of collapse and only sustained itself by borrowing from European market in 1977 and 1978 (Aluko-Olokun 1989: 198-199). The bad run for Nigeria persisted attracting such economic measures as the Stabilization Act (1982), Austerity Measures and finally Structural Adjustment Programme (SAP) in 1986. All these measures did not pull Nigeria out of the woods. In fact, by a combination of lack of commitment, ineptitude, corruption, and economic mismanagement, Nigeria was mired deeply into the mud of economic hopelessness.

By the time Obasanjo took over on May 29, 1999 Nigeria was practically on its knees, rejected by friends and cajoled by foes. Over sixteen years of unbroken military dictatorship had put the Nigerian economy at the precipice of total collapse. Nigeria was a pariah nation, suspended from the Commonwealth and sanctioned by the United Nations. Its debt burden was excruciating and multilateral institutions of the International Monetary Fund (IMF) and the World Bank were less disposed to evolving a debt relief package to enable it meet debt service obligations. Also the incentives for foreign investment were lacking. Indeed such factors as political instability, civil unrest, unstable economic programmes, policy somersault and decaying infrastructure made some companies to close shops and effectively dissuaded prospective investors from investing in Nigeria.

President Obasanjo has traveled around the world especially the industrial countries in his quest to repair Nigeria’s battered image, pleading in the process for economic cooperation and assistance especially in the area of debt forgiveness, trans-border crimes and repatriation of Nigeria’s money looted by former leaders and stashed away in foreign banks. To match his preachment, Obasanjo’s regime undertook broad-based domestic economic reforms as a gesture to the international community of the regime’s preparedness to pull the country out of the economic woods.

Consistent with the tradition of Nigeria’s foreign policy of having Africa as centerpiece, Obasanjo has been active on the continent by giving impetus to both ECOWAS and OAU (Changed to African Union, AU in 2001) in the quest for Africa’s economic development. In collaboration with Presidents Thabo Mbeki of South Africa, Abdulazeez Bouteflika of Algeria and Abdoulaye Wade of Senegal, Obasanjo initiated new development agenda for Africa, which is encapsulated in the New Partnership for African Development (NEPAD).

President Obasanjo’s economic diplomacy from all indications, aim at addressing the reservations of the West and reassuring them of Nigeria’s preparedness to chart the course for its own economic development. Thus the government has committed itself to domestic economic reforms spanning deregulation, privatization, civil service, corruption and cross-border crimes.

The questions that arise then are:

• Can deregulation and foreign investment policies of the Obasanjo government transform and sustain Nigeria’s economic development?

 

• Did President Obasanjo’s numerous foreign trips for debt forgiveness succeed in attracting debt forgiveness?

Did President Obasanjo’s domestic legislations against internal and international economic crimes enhanced foreign direct investment in Nigeria?

1.3 OBJECTIVES OF STUDY

The Nigerian economy has been in the woods since the early 1980s. in spite of General Ibrahim Babangida’s avowed commitment to economic diplomacy since 1988, he could not influence massive foreign direct investment into the economy. Indeed he presided over the funeral pyre into which Nigeria roasted through his Structural Adjustment Programme (SAP). Exasperated at a point by the aimless vicissitudes of the economy, he wondered aloud why Nigerian economy could not collapse.

Subsequent regimes just muddled through culminating in a near prostrate economy in 1999. Obasanjo has embarked on a total of one hundred and eighty foreign trips as at May 29, 2003 when his first tenure as a democratically elected president lapsed (Sonowo, 2003.50) thus earning himself the cynical appellation of “absentee president”. As at the end of Obasanjo’s tenure there was a pot-pourri of verdicts on his achievements with particular reference to the impact of his economic diplomacy on the overall trajectory of the economy.

Therefore the broad objectives of this study are;

1. To assess the general impact of Obasanjo’s economic diplomacy on the domestic economy.
2. To evaluate how Nigerian economy relates with the international economy as a result of Obasanjo’s economic diplomacy.

• To x-ray the strategies that the Obasanjo’s regime has adopted to enhance foreign direct investment (FDI) in Nigeria.

The specific objectives of this study are:

• To determine whether deregulation and foreign investment as conceptualized and implemented by Obasanjo’s government can transform Nigeria and usher it into economic development.
• To examine President Obasanjo’s foreign trips and his quest for debt relief or forgiveness to ascertain whether it has succeeded in attracting debt forgiveness.
• To examine whether President Obasanjo’s domestic legislations and policies relating to trans-border economic crimes have induced international confidence and attracted foreign investors to the Nigerian economy.

1.4 SIGNIFICANCE OF STUDY

In this era of globalization every country is struggling to be carried along by the total wave of this gigantic phenomenon. The economic sanction imposed by the West on Nigeria in the heydays of the Late General Sani Abacha’s military junta worsened the already bad economic prospects of Nigeria and deepened her underdevelopment. The Obasanjo regime thus inherited the unenviable tasks of reintegrating Nigeria into the comity of nations and initiating policies necessary to propel it to economic development.

1. The evaluation of the economic diplomacy of the Obasanjo’s regime and the bridging of the gap, which may exist in literature.
2. It will be of immense benefit to Nigerian leaders and diplomats as it spawns ideas, which may be utilized to pull the country out of its economic doldrums.

• It will serve as secondary data to future research on the economic diplomacy of the Nigerian State.

 

1.5 LITERATURE REVIEW

One of the overt manifestations of political independence is the articulation of a set of interests designated “National Interest” which a country pursues through designated leaders in a sovereign state’s interaction with others. It is this national interest that defines the trajectory of the foreign policy of a sovereign state. Asobie (1991) has delineated three conceptions of national interest of Nigeria. First national interest has been interpreted as the total liberation of Nigeria in particular and the African continent in general. Second, it is conceived as the interest of the dominant class. Third, it is defined as the promotion of Nigeria’s national security or the enhancement of national power. All these different conceptions of national interest determined the nature of Nigeria’s foreign policies since 1960 when Nigeria became an independent nation.

There are two schools of thought whose views about Nigeria’s economic diplomacy differ greatly especially in locating when Nigeria consciously embarked on economic diplomacy.

While the first school contends that economic diplomacy has been part and parcel of Nigeria’s foreign policy, the second locates the emergence of Nigeria’s economic diplomacy to 1988 when the Nigerian government of General Ibrahim Babangida’s officially announced its commitment to economic diplomacy as a “new” focus of its foreign policy (Ogwu and Olukoshi, 1991)

Asobie (1991) believes that Nigeria’s economic diplomacy started in 1960. according to him, since 1960, successive Nigerian government have demonstrated an appreciation of the linkage between the country’s foreign policy and her economic circumstances. The way in which this linkage was conceived and the policies deriving therefrom, however differed though not necessarily from regime to regime. He identified three overlapping patterns or strands of strategies, which emerged in the history of economic diplomacy as:

1. The diplomacy of Dependent Import – Substitution Industrialization (D.I.S.I) 1960 – 1974;
2. The Diplomacy of Regional Economic Integration (R.E.I) 1970-1985; and
3. The Diplomacy of the establishment of a New International Economic Order (N.I.E.O) 1973-1985.

Akindele (1991) agrees with Asobie (1991) when he acknowledged that economic factor consideration in the conduct of Nigerian foreign policy is as old as the entry of the country into the mainstream of international relations in 1960 as an independent state. The flaws were that economic diplomacy was neither systematically addressed nor pursued nor was it then a central preoccupation in the conduct of Nigeria’s diplomacy. He concluded that beginning in 1988 economic issues now features prominently on the top of the foreign policy agenda of Nigeria. The linkages between national economic interest and foreign policy objectives have been stronger at any time in Nigerian history than now.

Ogwu and Olukoshi (1991) locate the emergence of economic diplomacy in Nigeria to 1988. According to them, Nigeria’s commitment to the pursuit of economic diplomacy was first officially and formally, stated in June 1988 by retired Major- General Ike Nwachukwu in his first policy address as Nigeria’s Foreign Affairs Minster. They acknowledge that even though there have been certain economic aspects in Nigeria’s foreign policy since 1960 as Asobie (1991) observed, it was only in June 1988, however, that economic diplomacy was officially adopted as a major element of Nigeria’s foreign policy. What Ogwu and Olukosi are saying in effect is that economic diplomacy in form and substance began with the pronouncements of Major-General Ike Nwachukwu. The salient elements of economic diplomacy which Nwachukwu enunciated were contained in his assertions that:

We feel that it is the responsibility of our foreign policy apparatus to advance the course of our national economic recovery. This entails negotiations and activities that will attract both foreign investment and other assistance required for the successful accomplishment of our national economic goals.

(cited in Asobie, 1991)

 

The economic diplomacy of General Ibrahim Babangida was the same philosophy underlying Structural Adjustment Programme (SAP). It was designed principally as a device that would facilitate the realization of SAP. Babangida’s economic diplomacy was aimed at cultivating the goodwill of the advanced capitalist industrialized countries in order to secure their assistance and support for SAP (Asobie, 1991).

            African Concord (1991) in x-raying the thirty-one years of Nigeria’s foreign policy fixes their searchlight on the Ibrahim Babangida foreign policy especially the component that proclaimed new economic diplomacy. It finds the address by Major-Gen Ike Nwachukwu to the newly appointed Nigerian Ambassador instructive and encapsulating the kernel of the new economic diplomacy. Nwachukwu had told them:

The ball game today in international relations is self-interest and economic development of your nation. In your utterances and in your behavioural pattern, please, remember that Nigeria is a developing country. It needs support from the international community, and support can only come when you can win the confidence of those whose support you seek.

 

Nwachukwu went on to avail them of the strategies to adopt.

 

You begin to win that confidence through friendliness and loyalty to their cause. What matters is your ability to win for Nigeria what we want for ourselves, that is, the economic well being of our people and physical well-being of Nigeria.

 

Amale (1991) has pointed out that Nigeria would face some constraints in the attempt to realize her economic foreign policy objectives. He sees the constraints as emanating from Nigerian political economy as well as the international political economy. He identifies regulations, accepted conventions, international law, multilateral agreements, uneven development and even some self-imposed global moral commitments as constituting the elements of constrains that the Nigerian state has to contend with.

Even though Babangida’s economic diplomacy is reputed to have recorded some achievements especially the establishment of Technical Aid Corps, the central motive for the spawning of this new economic diplomacy was not realized. Nigeria’s debt burden got heavier and foreign direct investment, which SAP promised, did not materialize, at least not enough to turn the economy around.

General Abacha’s regime initially grappled with the fallout of Babangida’s cancellation of June 12, 1993 elections and later compounded the fluidity of the foreign policy of Nigeria by the hanging of Ken Saro-Wiwa and eight other Ogoni activists. Osuntokun (1999) contents that Nigeria under Abacha reversed the limited gains of previous regimes by his pursuit of combative foreign policy. He opines that Nigeria did not consider domestic factors in her foreign policy formulation, neglect he attributes to the inexperience of Abacha’s foreign Affairs Minister, Chief Tom Ikimi.

The lack of diplomatic finesse during Abacha’s regime earned Nigeria the status of a pariah nation. To that extent, one could safely content that there was no serious attempt at economic diplomacy. As Okpokpo (1999) has noted, many ambassadorial positions were vacant and no diplomats were posted out during Abacha’s tenure in office. As at the time he died, Nigeria was under all sorts of economic seclusion from such notable organization as the Commonwealth, the United Nations (UN), European Union (EU) and other front line countries such as the United States. According to Newswatch (5/8/2002):4) the United states as part of its sanctions policy against Nigeria declared the Nigeria Airways persona non grata in the US air space.

Osuntokun (1999) laments that the goodwill that Nigeria laboured so hard to build in the comity of the nations was destroyed in one fell swoop by General Abacha and his Foreign Affairs Minister Tom Ikimi who has a preference for “area boy diplomacy” to any kind of diplomacy.

Obasanjo’s regime inherited a distorted foreign policy. According to Okpokpo (1999), Nigeria’s image abroad and its foreign policy in particular were given lethal blows by the Babangida regime. He identifies such blow as financial waste, human rights abuses, cancellation of June 12 election at a time when every country in particular the G 7 and OECD countries had made democracy, good governance and human rights essential determining elements in international politics and their relations with developing countries.

Obasanjo’s first move with regards to Nigeria’s foreign policy was the recalling of all ambassadors and designated ones. This Day (8/8/99:10) quotes Obasanjo’s first tenure Foreign Affairs Ministers, Alhaji Sule Lamido as explaining this move as a necessity in dismantling the ‘old order”.

In his highly prescriptive piece Okpokpo (1999) suggests that economic development and well being of Nigeria should henceforth be the termed economic foreign policy and that we should revive and reinforce what was termed economic diplomacy by General Ike Nwachukukwu. The fundamental flaw in Okpokpo’s work is lack of analysis and prognosis for action.

Obasanjo is too immersed in shuttle diplomacy to carve a niche for economic diplomacy. Obasanjo has undertaken 180 foreign trips as at 2003 to both major world capitals and meetings and summits of industrial world’s organizations preaching debt forgiveness, foreign direct investment, repatriation of Nigeria’s commonwealth looted by erstwhile leaders and cooperation between the country and the industrialized world in curbing trans-border economic- crimes. Probably impressed by the high-sounding name of globalization or brainwashed by the pro neo-liberal economist about the immense gains to be derived from globalization, President Obasanjo threw open the doors of Nigeria when in addressing the 54^th session of the United Nations General Assembly on 23rd September, 1999 he stated that his regime had put in place:

Policies aimed at revitalizing the economy in order to create an enabling environment for investment and economic growth … also put in place appropriate legal framework of the protection of foreign legitimate profits.

 

 

(Olusegun Obasanjo “Nigeria, African and world in the Next Millennium” at the 54^th session of the UN-General Assembly. Thursday 23/9/1999, New York).

In 2000, President Obasanjo authorized the preparation of a new Trade Policy under the aegis of the Federal Ministry of Commerce. Ikpeze (2004) has identified the context warranting the review as poor national record in non-oil, especially manufactured exports, uncoordinated structure of protection among ECOWAS countries, dumping of substandard goods, protectionism abroad and new international rules of evolving global financial architecture and pressure for regional harmonization of trade, investment and industrial policies.

The objectives of the New Trade policy were derived from and consistent with Obasanjo’s Economic Policy between 1999-2003. These objectives underpinned all the economic activities of the Obasanjo administration both internally and externally. Ikpeze (2004) has listed the components of the policy as including:

• The integration of the Nigerian economy into the global market through the establishment of liberal market economy;
• Promotion and diversification of exports in both traditional and non-traditional market;
• Progressive liberalization of the import regime to enhance competitiveness of domestic industries;
• Effective participation in negotiations to enhance the achievement of national economic gains in the multilateral trading system, as well as regional and bilateral arrangements;
• Promotion and development of domestic trade including intra-state and inter state commerce;
• Attraction of foreign capital inflow into export-oriented production through special incentive packages and domestic support; and
• Promotion of regional integration and cooperation.

To achieve these, Nigeria retraced its steps from its initial hostility and belligerent posture against the International Monetary Fund (IMF) in 1999 and moved towards cooperation with the IMF (Financial Time, 2/8/99). According to the Finance Minister Dr. Ngozi Okonjo-Iweala, the result is that the IMT has allowed Nigeria to implement its own programmes. The triumphant air in Okonjo-Iweala’s revelation is misplaced. Nigeria’s programme is not any different from the traditional IMF pills as its theoretical basis reveals the dominance of neoclassical orientation, which underpinned structural Adjustment Programme (sap) Toyo 20020.

Asobie (2004) identifies the stands of Obasanjo’s economic diplomacy as incorporating the African Growth and Opportunity act 9AGOA) WTO philosophy and NEPAD. AGOA is a United State of America’s initiative aimed at bettering trade relations between African countries and the United States. AGOA was passed by the US Congress and signed by President Bill Clinton in May 2000. By the Act, Africa’s commodities are granted comparatively freer access to the American market. Both American and African government representatives attach so much importance to AGOA and regard it as a breakthrough in Afro-America relations as its major high point is that it serves as the main vehicle for economic, trade and development in Africa.

Nigerian political leaders and public officials place much faith in AGOA as a major economic cooperation programme that can stimulate Nigeria’s rapid growth and following this mind-set, Nigeria met all the conditionalties for participating in the African Growth and Opportunity act (AGOA) (Sunday Vanguard 14/1/2001;18; Vanguard 5/10/2001:17). Underscoring the faith of Nigerian government in the economic benefits of AGOA, Asobie (2004) says:

As soon as Nigeria was granted eligibility status under AGOA, the government set in motion the necessary conditions for the realization of AGOA’s objectives. A National Implementation and Advisory Committee on the Opportunity Act was created. By the last quarter of Year 2001, the committee had developed a new trade policy framework aimed at eradicating unfair trade processes; promotion of free trade and the perfection of strategies to effectively penetrate the US market.

 

Obasanjo’s government was reluctant initially to embrace the philosophy of trade liberalization as encapsulated in the treaty of World Trade Organization (WTO), which Nigeria acceded to in 1995. This changed when Obsanjo’s regime identified full integration with the global economy as the path to economic growth and development and thus adopted the philosophy of trade liberalization (Asobie, 2004). In adopting this, Obasanjo endeared himself and the country to the IMF, World Bank and the West generally.

The trajectory of Obasanjo’s economic policy also covers New Partnership for African Development (African Development (NEPAD). NEPAD is associated with Presidents Thabo Mbeki of South Africa, Olusegun Obasanjo of Nigeria, Abdoulaye Wade of Senegal and Abudulazeez Bouteflika of Algeria (Olukoshi, 2002). Its proponents have acclaimed NEPAD as a novel, comprehensive blueprint for Africa’s development.

Obasanjo has been a fanatical apostle of NEPAD and under its aegis he has traveled around the world parleying with world leaders with world leaders on issues of the forgiveness of Africa’s debt and Africa’s development generally. Asobie (2004) has criticized NEPAD as obtaining its very essence from the neo-liberal orientation. He argues that NEPAD’s basic assumptions as a result of its theoretical foundation are wrong and unlikely to lead Africa to development. Recently one of the architects of NEPAD, President Abdoulaye Wade gave resounding vent to Asobie’s misgivings. President Wade said a lot of time and money had been spend on conferences with few results. NEPAD has a mechanism for peer review, through which African leaders are supposed to monitor each other to ensure they uphold human rights and that elections are free and fair. NEPAD equally set an initial target of $64 million in foreign investments yearly. In evaluating the three years of NEPAD, President Wade said;

I am disappointed. I have great difficulties explaining what we have achieved when people at home and elsewhere ask me that question. (NEPAD) has become confused and a little unfocused.

(Vanguard 24/10/2004)

 

Asobie’s paper (2004) even though a good overview of the foreign policy of Obasanjo between 1999-2003 did not do much analytical justice to the trajectory of Obasanjo’s economic diplomacy. It is silent on the trans-border economic crimes, which have made the international community to look at every Nigerian no matter his status as a common criminal. Also it did not x-ray the debt burden of Nigeria and all the efforts of the Obasanjo administration to attract debt forgiveness. And above all, it is silent on the deregulation of the economy and its attendant effect on the major indicators of the economy for the period.

Extant literature have variously looked at Obasanjo’s economic policies but have not woven a thread between his various reforms and the influences of the international scene or better still have not established a correlation between the international dynamics of his reforms as a necessary corollary of his economic diplomacy.

This work therefore, endeavours to x-ray the domestic economic reforms of Obasanjo and linking them as necessary fallout of his economic diplomacy.

1.6 THEORETICAL FRAMEWORK

The direction of Obasanjo’s economic policy, which underpins his economic diplomacy, is the re-enactment of the conditionalities of Structural Adjustment programme (S. A. P). The basic theoretical foundation of SAP is the neoclassical position (Toyo, 2002:527). Neo-classicism is the same thing as neo-liberalism or liberalism. Just as SAP pursues market-oriented development process with emphasis on smaller government, efficient resource allocation and market determined prices; Obasanjo’s economic policy pursues the same. And also like SAP, his major instruments f achieving his economic goals include trade liberalization, deregulation, public sector reforms and privatization.

Obasanjo’s economic diplomacy is obviously influenced by the liberal theory. The liberal theory asserts that full and extensive integration in the world economy is a beneficial factor in economic development and that interdependence and economic linkage of advanced economies with less developed economies through trade, international aid and foreign investment will open the floodgates of export market, capital and technology required for economic development (Giplin, 1987:26).

In adopting this theoretical position Obasanjo lost sight of the inherent shortcomings of this theory in achieving the aims of his economic diplomacy. These shortcomings include:

• The neglect of power differentials within the market and unclear notion of the extent to which the market generates stale integration of economic and society (Holton, 1992:240).
• Assumption that exchange is always free and occurs in the competitive market between equals who possess full information and are thus enabled to gain mutually if they chose to exchange one value for another (Giplin, 1987:42-46).

The deepening of the contradictions in Nigeria’s economy manifesting in poverty, excruciating debt burden and prevalence of mass exodus of Nigerian to other climes in search of greener pastures, are indisputable pointers to the failure of liberal theoretical position as the basis of Obasanjo’s economic diplomacy.

Having identified the erroneous theoretical basis of Obasanjo’s economic diplomacy, the search for answers to the research problems in this work must recognize the position of Nigeria in the global capitalist milieu. The position of Nigeria in the global capitalist system is the periphery. Nigeria is an unequal partner in a global system touted deceitfully by neo-liberal theorists as compensating ever y nation equally. The continued exacerbation of tans-border crimes, worsening debt profile and negligible foreign direct investment in the Nigerian economy and the general downward trend of the economy as demonstrated by domestic economic indices are all evidence of the poverty of neoclassical foundation of Obasanjo’s economic diplomacy.

We think that the appropriate theoretical position to adopt in evaluating the research questions in this study is the dependency theory. In general, dependency ideas combine variants of traditional Marxism and economic nationalism (Gilpin, 1987:282).

The central preoccupation of dependency theory is underdevelopment arising from unequal relationship between the developed countries of the centre and the underdeveloped countries of the periphery. Dependency theory emphasizes the contrasting positions of dominant and dependent countries within the operation of international system (Meier 1995:107).

The underlying feature of dependency theory has captured by Theotonio dos Santos when he says:

By dependence we mean a situation in which the economy of certain countries is conditioned by the development and expansion of another economy to which the former is subjected. The relation of interdependence between two or more economies, and between these and world trade, assumes the form of dependence when some countries (the dominant ones) can expand and can be self-sustaining, while other countries (the dependent ones) can do this only as a reflection of that expansion, which can have either a positive or a negative effect of their immediate development. (cited in Gilpin 1987:282)

 

There are many variants of dependency theory, but all share basic assumptions and explanations regarding the causes of, and solutions to, the problem of Third World countries. Andre Gender Frank’s variant of dependency theory connotes that “it is capitalism, world and nation, which produced underdevelopment in the past and still generates underdevelopment in the present”. According to Frank, underdevelopment is not the same thing as non-development but rather a unique form of social-economic structure that results from the dependence of the underdeveloped countries on advanced capitalist counties (cited in Meier 1995:107).

Amino (1974) has outlined the under listed as the major features of dependency theory:

• That dependency relationship is the product of the incorporation of Africa and the underdeveloped countries into the capitalist system.
• Dependency and monopoly mean control and exploitation. All underdeveloped countries are exploited by the developed ones and this is a product of capitalist, imperialist and colonist exploration.
• Africa states and indeed all underdeveloped states are dependent on the capitalist world for capital, finance, technology, monetary system and trade.

Osvaldo Sunkel (cited in Meier 1995:108) offers a new conceptualization of dependency theory. To him, structural bottlenecks within the underdeveloped economies act as “mechanism of dependence”. He contends that the developed metropolis exploit the underdeveloped periphery in various ways by biasing its structure of production towards the supplying of raw materials, by the external drain of foreign capital; and by thwart autonomous development.

Regardless of the variations outlined above, dependency theorists generally agree that the particular form in which capitalism has molded the domestic class structure and the external relations of the periphery states precludes the possibility of genuine national development within the context of present international order (Gilpin, 1987:287; Offiong 2001:42-55).

The lamentation of Obasanjo that in spite of his shuttle diplomacy to the major countries of capitalist system, Nigeria’s domestic economic fortune has not improved is instructive. This is an open admission of the futility of neo-liberal paradigm as the basis of his economic diplomacy, which is envisaged to lead Nigeria to economic development.

1.7 HYPOTHESES

(1) The policy of deregulation provides supportive structures for economic development.

(2) Preachment for debt forgiveness does not transform the dependent structures reinforcing external debt.

(3) Positive legal infrastructures boost a robust economy.

1.8 METHOD OF DATA COLLECTION   

By the nature of our hypotheses, the research design for this study is non-experimental. Specifically we shall use field research.  The study relied on qualitative method in generating data. Therefore our data are of secondary sources consisting World Bank Reports, text books, academic journals, seminar and conference papers and newspapers and magazines. The usefulness of this method is that it allows us access to various sources which direct data gathering would have circumscribed. But above all, indirect data-gathering techniques (or secondary data) are best for examining large groups of individual cases or long sequences of events. The economic diplomacy of Obasanjo during his first tenure refers to a broad policy outline both in the domestic arena and the international system whose effect is only evident over time and thus requires secondary data.

 

 

1.8.1 Method of Data Analysis

Our method of analyzing our data in connection with our hypotheses included presenting our data in tabular form and through this we described and examined the relationships among the variables. That is to state that descriptive analytical method was employed in the study. This was essential because the study used the qualitative method of data collection which has the implication of relying on secondary sources of data.

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