Applying the Grameen Model to West Africa: A Case Study of Nigeria

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  • 1. APPLYING THE GRAMEEN MODEL TO A WEST AFRICAN COUNTRY: A CASE STUDY OF NIGERIAA PAPER PRESENTED IN PARTIAL FULFILMENT OF THE REQUIREMENTS FOR LER 590CM CHANGE MANAGEMENT PROF. MICHAEL LEROY Student: CHINWEOKE EKE DECEMBER 7, 2008
  • 2. INTRODUCTIONWest Africa is the westernmost region of Africa – the 2 nd largest continent on Earth and isgeopolitically defined, by the UN, as including the following 16 countries distributed over anarea of approximately 5 million square km: Benin, Burkina Faso, Côte dIvoire, Cape Verde, TheGambia, Ghana, Guinea, Guinea-Bissau, Liberia, Mali, Mauritania, Niger, Nigeria, Senegal, SierraLeone and Togo. Since gaining independence, many West African nations have been plagued bycorruption and instability, with notable civil wars in Nigeria, Sierra Leone,Liberia, and Côte dIvoire, and a succession of military coups in Ghana andBurkina Faso.All West African countries were colonized either by the British or French, with the exception ofGuinea-Bissau which was colonized by Portugal; and Liberia which retained its independence bygiving major territorial concessions. One of the ex-British colonies is Nigeria, the most populouscountry in Africa.Nigeria is a federal republic located in West Africa and got its independencefrom the British on October 1, 1960. The 32nd largest country in theworld yet the 8th most populous, she shares land borders with theRepublic of Benin in the west, Chad and Cameroon in the east, and Niger inthe north.With a population of over 148 million, great climate and an unbelievable range of natural andmineral resources, Nigeria has great potential which for many reasons have not been utilized ormaximized. Currently, rather than being a formidably wealthy nation with citizens living wellabove the UN’s poverty line, 70% of her people live below the poverty line.Top reasons for this are deep-rooted corruption, exploitation of the masses and manipulation ofthe government by international power players including countries, organizations and 2
  • 3. companies with real investments and/or and vested interests in her. These have led to frequenthuman rights violations, desperation crimes at lower levels and a feeling of total hopelessness ina better future among the less privileged in society. Some may argue that it is all the fault ofNigerians with their ebullient inefficiency, relative illiteracy and the irksome short-termorientation of its politicians and businessmen and thus see these as the chief reasons for theircontinuous irrelevance in global circles. As many daily say, “Nigeria has no business being poor”.However whatever the reason for its problems, today the economy of Nigeria is one of the fastestgrowing in the world with the International Monetary Fund projecting a growth of 9% in 2008and 8.3% in 2009. It is also a regional power listed among the "Next Eleven" economies.The get rich quick mindset instilled by the British who did not hesitate to bribe Nigerian subjectswho betrayed their people and willingly helped the slave trade has continued to this day withthe success of corrupt leaders, the easy wealth of ‘419’ scammers and the profitability of piracyin the Niger Delta.A 2001 study done and publicly broadcast by Goldman Sachs projects that afterBrazil, Russia India and China, (BRICs), 11 countries (Nigeria inclusive) have thepotential to be among the largest economies in the world by the year 2025. Thereport predicts that by the year 2050, India, Indonesia, Mexico and Nigeria willknock France, Italy, Spain and Canada off the list of the Top 11 countries withhighest Gross Domestic Production levels.Given Nigeria’s position as the first African country on the list, its turbulent history and currentpresent, is this future forecast feasible? How can this vision be actualized? This paper exploresthe major problems and challenges to achieving poverty alleviation, monetarymanagement and overall societal betterment as well as the possibility of usingMuhammad Yunus’ famed techniques to raise the living standards and quality of lifeof Nigerians. 3
  • 4. MAIN ISSUESThe main issues facing the positive realization and actualization of Nigeria’s great potentials restheavily on the issues below, which if surmounted clear the path to success. i) Corruption: The depth of corruption in Nigeria and the hypocrisy of the government’s anti-corrruption campaigns are the major threat to its progress. This theme spreads out across all aspects and is thus covered under the subsequent subtopics. A few examples of corruption are government officials prospering off bribes given by the wealthy and foreign companies; education officials embezzling teachers’ salaries and students’ school fees and using the monies to buy houses abroad and send their own children to expensive foreign/private schools; governors channeling their state’s budgetary allocations into their foreign private bank accounts; governors and local government authorities selling off new donated power generators donated to their community, pocketing the proceeds, buying the silence of top community leaders and having any strong dissidents silenced or ‘dethroned’. ii) Infrastructural development: As a direct offshoot of its corruption riddled levels of governance, the abundant monies available for the installation, maintenance and efficiency of necessary infrastructure and amenities are stowed away in the private foreign accounts of those in power. Contracts are given out by nepotists and bribed top officials to their partners in crime who charge exorbitantly for the job, purchase substandard, discarded equipment dumped by other countries and provide little or no results. There is no structure to ensure effective deployment of the contract, value for payments made, job performance and end results, but all dissidents to such shoddy goings-on are hushed with bribes and the 4
  • 5. community continues to flounder without power, electricity, constant water supply andother amenities necessary for business operations.iii) Political instability and forced governance: Political instability oftenaccompanies undemocratic governments and Nigeria is no exception as true democracyremains a dream. Nigeria’s political history since independence has been filled withmilitary or contrived civilian rule. Coups were the order of the day till the 90s’ when thatgave way to rigged elections and politicians using thugs, bloodycombat and shameless bribery of election officials, the armed forcesand kingmakers to grab seats of power. As can be well imagined,people who rise through such means do not help and are not the sort of leaders anycountry needs.iv) Business environment: There is underdevelopment of infrastructural facilities,Security and amenities that support trade and commerce. The World Bank envoy toNigeria, Onno Ruhl reports that complexities in doing business in the country are majorreasons why more than half of Nigeria’s population is still poor. If these complexitieswhich, Ruhl basically tied to corruption are not improved upon, government may fail in itsdream of making Nigeria one of the world’s top 20 economies by 2020.In the latest 2009 ‘Doing business report’ by World Bank and International FinanceCorporation (IFC), Nigeria further slid from 108 position out of 178 in the 2008 report, to118 position among 181 countries surveyed. This is chiefly attributed to Nigeria’s presentbusiness environment which, as shown by the low ranking nullifies government’s effortsto create jobs and consequently, reduce poverty. Foreign companies are wary, Nigerianswithin and in diasporas are investing outside the country and the many potentially 5
  • 6. profitable opportunities, resources and facilities are daily wasting away.v) Moral and Social erosion: The ever widening gaps between the rich getting richerand the poor getting poorer in Nigeria has been resolved by the poor thinking up ways toget their fair share. Unemployed young men began sending badly-written scam letters onthe internet and were pleasantly surprised when they began receiving cheques andresponses to their ruses. Others began armed robbery, kidnappingexpatriates for ransom and attacking oil companies who were milkingthe land without giving back to their host communities. The incomegaps polarize and destroy the traditionally hospitable and more collectivist mindset ofNigerians as West Africans. The common good is relegated to the background in favor ofindividualist personal gain. This mindset has to be changed by the upcoming generation(s)of leaders, politicians and all citizens in general.In a country without social security, unemployment pay or insurance and oft-embezzledsalaries of teachers, public sector workers and easy job losses pensions for all, many areunsure of the next paycheck and out of desperation, a lot of disillusioned parents nowconsciously or subconsciously, encourage their children to do anything to earn enoughmoney to help care for the family. This leads to an array of vices which further give thecountry an unsavory reputation and deters businesses and tourists alike. Onno Ruhl shedmore light with this comment “Sometimes, there are vested interests involved in fillingforms or for instance at times your goods get stuck at the Port, there is usually not verygood reason for that except that somebody might be benefiting from it. Just imagine thatyou want to start an import business and every container gets stuck for six weeks, it isgoing to cost you a lot of money”. In contrast in Singapore, it takes two hours to clear a 6
  • 7. container. It would take a miracle for Nigeria to realise vision 2020 without attacking such‘vested interests’ and their root causes.vi) Brain Drain: Due to current conditions, the Brain Drain from Nigeria has reachedstupendous heights. By 1995, there were over 21,000 Nigerian doctors practicing in theUS alone. Most complete the very challenging medical education in Nigeria thenimmediately travel overseas to take qualifying exams in other countries and stay there,while there is still a dearth of doctors in the country. By population, England, Ireland,Scotland and the USA have the highest levels of these, with Germany and the Caribbeancoming in next.Engineering, sciences and the arts are not left out. Nigeria has the highest rates ofeducated and top-earning professionals of any other country’s outside her shores, withmany leaving to attend Ivy League schools on scholarships and not returning to Nigeria.Thus, the lack of trust in her leaders or hope for a brighter future has led many Nigeriansto abandon their country altogether. Evil men triumph because good men are not aroundto do anything about it.vii) Human rights abuses: Nigeria has a poor human rights record which includesmedia oppression, ‘jungle justice on crime suspects’, execution of honest people withouttrials, killing of Muslim homosexuals and adulteresses and most of all the armed forcesharsh treatment of citizens. Media should be given freedom of speech. According to the2005 United States Department of State report, Nigerian government officials and policewere responsible for "serious abuses," including politically motivated killings; the use oflethal force against suspected criminals and hostage-seizing militants in the Niger Delta;beatings and even torture of suspects, detainees, and convicts; and extortion of civilians. 7
  • 8. Other abuses included violence, discrimination, and female genital cutting, child labor andprostitution, and human trafficking. A number of these have gained internationalrecognition such as the death of Dele Giwa, an outspoken journalist who had beeninvestigating the then military government and had allegedly found out a lot of top secretinformation which he was going to go public with, just before he was blatantly paid a visitby a secret service operative who delivered the letter bomb which blew him to pieces.Though the car was recognized and evidence pointed to the source of the bomb, witnessesfeared to testify and no one was ever brought to book.Another case was the case of Ken Saro-Wiwa and eight others (the Ogoni Nine). Ken was aNigerian author, television producer, and environmentalist and a member of the Ogonipeople, an ethnic minority whose homelands in the Niger Delta have been targeted for oilextraction since the 1950s. From being a spokesperson, he later became President, of theMovement for the Survival of the Ogoni People (MOSOP) and led a nonviolent campaignagainst environmental damage associated with the operations of multinational oilcompanies, especially Shell. He had several times being arrested and jailed without trialfor prolonged periods for drawing global awareness to the plight of the Ogonis who sufferwithout electricity, clean water or revenues/proceeds from the oil taken from their lands.The frequent oil spills and explosions in this area also covered the waters in which theylived, killed off their crops on shore and made survival impossible and starvation a reality.However, he and 8 close comrades were executed by the Nigerian military in 1995 withoutany lawyers to defend them or a fair trial. His death provoked international outrage andthe immediate suspension of Nigeria from the Commonwealth of Nations.Other popular cases include the ongoing 2008 cases of Uzoma Okere and naval officers,Nuhu Ribadu of the Economic and Financial Crimes Commission vs. ‘The men in power’ 8
  • 9. and others. The application of Islamic law (sharia) in 12 northern states compounds Nigeria’s poor record of abuses. Sentences imposed under sharia included amputations, stonings, and canings, but no death sentences were carried out. In addition, the U.S. Department of State noted restrictions on the freedoms of speech, press, assembly, religion, movement, and privacy. All these problems complicate the situation and require equally complex situations, or do they? One thing is sure, solutions to the concentric web woven over decades are rare and will call for great wisdom, clear strategies, honest, farsighted and dedicated leaders and a committed ‘all hands-on-deck’ populace.MUHAMMAD YUNUSMuhammad Yunus is an internationally acclaimed Bangladeshi banker,economist and professor of economics famous for his successful application of microcredit - theextension of small loans to entrepreneurs too poor to qualify for traditional bank loans. Thesuccess which stemmed from giving very small loans to local women in Jobra, Bangladesh hasled to a multi-faceted sprawl of organizations including banking (Grameen Bank), telecoms,agriculture, technological and knitwear businesses. He is the recipient of the Nobel Peace Prizefor economic and social development as well as other awards, including the Ramon MagsaysayAward, World Food Prize, Sydney Peace Prize, Ecuadorian Peace Prize, 26 honorary doctoratedegrees, and over 15 special awards.THE GRAMEEN MODEL OF MICROFINANCINGThe Grameen model was created by Muhammad Yunus and originated as a microcredit schemebased on extending very small loans (microloans) to the unemployed, poor entrepreneurs and 9
  • 10. poor people who are not considered bankable. These individuals often lack collateral, steadyemployment and a verifiable credit history and therefore cannot meet even the most minimalqualifications to gain access to traditional credit. Microcredit is a part of microfinance, whichprovides a wider range of financial services to the very poor to enable them engage in self-employment projects that allow them to generate an income, expand their businessopportunities and, in many cases, begin to build wealth and exit poverty.Applying microcredit to the Nigerian situationSeveral programs have tried to solve Nigeria’s problems and meet the great need for trust-building, employment generation, socioeconomic development and poverty alleviation. AsYunus’ models were very efficacious in some developing countries, they are worthyof being applied. The major problems identified are Corruption, conflicts overresources, economic stagnation at the lower levels and lack of infrastructuraldevelopment. The Grameen model can only start out by attacking the issue ofworsening economic stagnation of the poor and hopefully, will concentrically widenwith time to enable their political and social empowerment as well as financial,physical and mental health.CHALLENGES TO THE CHANGE EFFORTSi) Few relevant marketable skills: The first challenge to be faced would be inidentifying and developing marketable skills for the microcredit recipients tobase their enterprise on. This would be especially beneficial if situated in theagricultural, manufacturing, clothing, environmental and extractive industries. Ahuge section of Nigeria’s poor either lack marketable skills or have had productsthey could produce out priced or made redundant by imported or dumped productsfrom other countries. There is an overall perception that locally made productsare substandard to imports and only very few items will stand a chance unlesspride is somehow restored in local goods. Some services can be provided but are 10
  • 11. not beneficial in the long-run. Some initiatives tried in the past turned outnegatively. e.g. the mass import of motorcycles in the 1990s and subsequent saleto low-income people to enable them use the bikes as a form of quick transportcalled ‘Okada’ has today turned sour as such bikes drive dangerously causing manyaccidents, clog up the roads and are often used in quick rob-and-getaway crimes. Some states had to declare dusk-till-dawncurfews for such transportation. Later, it was disclosed that aknown friend of the Presidency had been given the contract to import these (oftensubstandard) motorcycles in exchange for huge bribes and profit sharing.Another double-sided initiative was the ‘Keke NAPEP’ project (NationalPoverty Eradication Program) tried a similar move by importing thousands of tiny3-seater tricycles and selling them to otherwise unemployed Nigerians as a major pillarof the federal governments poverty eradication program. Many criticizedthis and argued that what Nigeria needs is a sustainable strategy toeradicating or at best alleviating poverty and thus the governmentshould focus on creating sustainable means of livelihood by promoting the SMEs sector,involving the millionaire entrepreneurs and building industries that employ people inhundreds and thousands. The base of the developed economies is said to be the bluecollar workers and not menial jobbed literates and any change effort needs to aim atdeveloping both the people and the economy.As a number of the people are not well-educated, it would be helpful to have businesstraining, legal and advisory units to train, assist and guide the microcredit applicants ingauging the feasibility and viability of their planned projects and ensuring that theyunderstand book-keeping/accounting and have proper documentation of theirtransactions. Volunteers and donors with expertise in relevant areas can be called upon 11
  • 12. to give of their time and professional talents to assist the recipients in doing business,keeping their books straight and making smart business decisions.ii) Corruption: This scourge of the masses will be a challenge surmountable only ifa tight structure of accountability is put in place to monitor all levels oftransactions. Honest employees are a must and bribes or any corrupt practices mustcarry strict penalties for offenders.Nigeria remains a cesspool of corruption. Besides, having to cope with bad roads and transportfacilities, most market or rural women have been hindered from making direct transactionsbecause of constant corrupt practices of the Nigerian police force (especially the traffic policeofficers). Police extortion has forced many rural and market women to trade with middlemenrather than sell or buy direct from the source.Besides, it has constantly deprived participants of a huge amount of resourcesboth in goods and cash. It is important that all relevant authorities act to stampout police extortion on Nigerian roads, and discourage other forms of corruptactivities (such as the insiders in the state civil service who connive withmiddlemen on the sales of fertilizers) that affect women’s economic activities.This would encourage women to maximize their profit through direct trading.iii) Lack of infrastructural development: provides a huge challenge and a disablingbusiness environment. Power, energy, electricity and water supply are required formost businesses and are simply not available in most areas. Alternative powersources and diesel/petrol are a must for most businesses and increase their costsof operation.iv) Women/Men and their roles in society: Whereas the Grameen model supportsempowerment through women, the complex issues of gender roles and society and itscontextual constraints have prevented women in Nigeria from accessing programs, increasing or 12
  • 13. controlling incomes or challenging their subordination. As women are not able to significantlyincrease incomes under their control or negotiate changes in intra-household and communitygender inequalities, they become dependent on loans to continue in very low-paidoccupations with heavier workloads and enjoying little benefit.The process of women’s empowerment in Nigeria and West Africa in general is morethan a mere introduction and application of micro-credit schemes or even economicempowerment. Reforms and reorientations of local norms, traditions and above all,the concept of “human beings” in society, are vital tools in the process ofempowerment. In Nigeria where the notion “it is a man’s world” runs supremeachieving gender mainstream egalitarian development seems elusive. Women andwidowers should surely be used as the main recipients of microcredit funding,however the Nigerian family structure is particularly strong on what women can andcannot do. In most cases, resource control is simply not possible where a husbandcan beat, seize the money from and threaten to banish his wife away because she‘wants to wear the trousers in the house’. This would leave her homeless, withouther children (whom by law, belong to the man unless he rejects them too), and yetindebted to the microcredit scheme.Where the land/house granted will be in the name of the woman, extended family permissionsmust often be obtained and if she ever goes ahead to collect and control money on her own, shecan be beaten, physically and verbally abused by her husband, viewed as headstrong, accused ofimmorality and ostracized. Depending on the sort of husband she has, her belongings and kidscould be taken from her and she gets chased out of the very home she is working hard to build.Thus, it would be helpful if the Grameen nets the government’s support and well-structuredlegal protections which protect women in such situations or mitigate risks of such occurrences.Where possible, a few officials should be able to escort such women to their families to explainthe meaning and use of microcredit. 13
  • 14. In Nigeria, women are seen as owners of crops but not as owners of land. They haverights to cultivate, and rights to dispose of crops and crop income, but notrights to allocate or alienate land. Their ultimate rights to use land areassociated with their position in relation to men - as mothers, wives, sisters anddaughters. More importantly, when land becomes scarce or rises in value, or whenrights are formalized through titles or registration, these rights to use land arerevealed to be secondary and tenuous. Land as a form of capital, especially wheninherited, free and without other types of investment of labor or resources, canbring wealth in various ways and enhance women’s chances of empowerment. However,especially in rural areas, women never inherit land and daughters are seen astemporary residents who should go off, get married and build with their husbands.Women in possession of land are viewed as trying to take over the man’sresponsibilities and thus bad wives or evil and greedy women.v) Lack of collateral: for obtaining loans is a big issue, especially for women.With so much rural-urban migration, it needs to be decided whether the Grameenshould establish Change efforts first in the urban areas where there are lots ofpoor people in the slums or from the rural areas.The argument against change beginning in the rural areas is that the people in thevillages are very comfortable on less than a dollar a day and may not expect moreas they often have no rent to pay, are used to traditional ways of water, powersupply and homeopathic healthcare and thus should not be termed as poor.I myself favor beginning the change efforts from the rural areas as this opens thedoors to greater rural and urban development. The rural areas are also where morepeople are likely to have a little piece of family land to use as collateral. Ifthose who moved away to seek greener pastures realize that such opportunities arenow available in their own backyard, they will seek to return and this indirectlyalso lessens the problems caused by congestion in the slums, rate of crime in thecities and leads to all-round urban and rural development. 14
  • 15. vi) Environmental hazards can be random or intentionally caused by friends orfamily. Opportunities and assistance should be extended to all. It would not berare to hear of floods sweeping away crops, fires, robberies e.t.c. With the acutelack of security in many areas, armed robberies are common and just in case, somesort of insurance can be made available for microcredit recipients who have to‘rebuild’ to avoid them losing their homes and collateral due to this hazard.Nigeria lacks efficient connected ways to track its citizens. I.D cards are easilyforged and yet barely necessary. People without personal homes or investments canrelocate between states, leaving a neat trail of mountainous debts at each and nomeans of tracking down their whereabouts. No N.I number, no Social Securitynumber, no solid online databases or systems that “talk to each other”,… you getthe picture.vii) Lack of calculated and concerted interventions: Till date, there has not beena concerted effort by the government of Nigeria or NGOs to carry out an extensivestudy on the micro-credit scheme in Nigeria. Rather a commonpractice is for every state government to unfold a new micro-credit program each year. Without updates on the merit anddemerits of previous microcredit schemes in Nigeria, there is nomeans to ascertain their impact on women’s wellbeing and livelihood or possibleways of improvement on future models. This would entail the maintenance ofconstant statistics or data on women participants and leads to the next challengeto implementing the Grameen model.viii) Advocacy and Information circulation: The lack of statistics/data ondevelopment programs and policies and the lack of explicit guidelines in theadministration of state run micro-credit institutes amplify suspicion and distrustof the scheme by market and rural women. Thus, there is a need to provideinformation on women’s development (especially in local languages, and by radioand public campaigns) to include priorities, aims, processes and possibleproblems. 15
  • 16. It is noteworthy to remember that women’s servitude in Nigeria did not occur in a flash, butthrough a progression of events and incidents dating from pre-colonization. Thus, women’sempowerment will be achieved over a period of time by confronting disconnections betweensocial transformation and cultural requisites, supporting women and men to take action toenhance sustainable development in the years to come and using states and NGOs toeffectively advance the gender and development agenda.Ideas can be exchanged or borrowed but it is difficult to adopt a complete set offoreign idea(s) and implant them in an alien society and expect them to transformthe prevailing situation. This is problematic because the notion implies thatsocial and political problems, like hunger and poverty, can be fixed by the‘right’ scheme or project without addressing social contradictions.MANAGING THE CHANGE AND FIXING THE PROBLEMSThe problems and challenges discussed above need to be overcome and I propose the followingrecommendations in doing this:- Extension of Microcredit to qualified recipients: is a tool for socioeconomic developmentbased on a separate set of principles, which are distinguished from general financing orcredit. Microcredit emphasizes building capacity of a micro entrepreneur, employmentgeneration, trust building and help to the micro entrepreneur on initiation and duringdifficult times. Criteria for selection should be decided upon and communicated to all. E.g.Age requirements, possession of a skill or vocational trade qualification. E.t.c.- Literacy, Education, Skills development and social reconditioning: To achieve itsdevelopmental goals and ensure the effectiveness of the microcredit approach,there is a need to ensure that current and potential recipients develop marketableskills and business knowledge via Skills development in vocational and 16
  • 17. professional fields, financial planning education and business management. Socialreconditioning refers to the need for general advocacy and public enlightenment tostrengthen the confidence and trust of women (and their families) and promote theinterests of women as equal partners in development, decision making and householdresponsibilities. To encourage social entrepreneurs, professionals andorganizations should be encouraged, stimulated and rewarded for engaging insocially responsible and developmental efforts. Tax breaks can be given for firmsthat donate money, support, resources including/or employee hours to theinitiatives.Development agencies should be focused, sustainable and cost efficient and effective tosupport the specific need(s) of the focus group. There should be an organizedstructure staffed with honest people qualified for each job and able to identifypeople genuinely in need of microcredit assistance, keep tabs on those given loansand ensure that in time all benefit from the initiative.- Structural reforms & State subsidies: The government needs to ensure the provision of basicnecessities to its people and prevent people from desperation in trying to ensure that they havea nest egg for their survival and old age. Solid pension and social reforms systems like Medicare,low-cost affordable lifetime housing and the creation of educational and employmentopportunities are essential. The state should subsidize such social services,especially health and education for all, to lessen the hardship onfamilies. Indemnity schemes can be used to achieve a three-partmutual vision of Micro-credit, micro-insurance and savings schemes.Insurance against loss of income, unemployment, emergency relieffunds such as children’s school fees, medical expenses, financialassistance in case of a poor farming year or trade performance andother family needs should be structured into the plan. 17
  • 18. Income generated must allow for savings to be made and reinvested byenabling financial institutions. Savings schemes with periodicmaturity periods are investments for the future and participantsmust be required to save some specific amount every week or month.Medical facilities and hospitals should be equipped with needed equipment, materials andtechnology to and NGO organizations/donors should ensure that budget allocations for hospitalupgrades and maintenance are not side tracked by greedy medical administrators.- Economic reforms: Nigeria’s overdependence on its oil incomes has not helped and thishas led to its currently importing a lot of clothing, food and items which can be easilyproduced domestically. There should be a shift from oil and imports dependence to asupply-focus where it provides raw materials, manufacturing advantages, products andservices to local and foreign markets. Emphasis should be given to other sectors and therevitalization of tourism, agriculture and commercial production for export as well asreduction of unnecessary foreign dependence by restoring pride in locally made qualityproducts.- Continued Financial sector reforms: The banking, insurance and financialsectors all have great potential and can be aligned to ensure that they supportmicrocredit and social business entrepreneurs. The banking sector wasrecently reformed in 2004 by Central Bank of Nigeria (CBN) Governor, Prof. CharlesSoludo, a professor of economics at the University of Nigeria who was called upon to servethe country and appointed to this position. He embarked on an exercise aimed atconsolidating the then over 90 Nigerian banks by setting a $25 billion recapitalizationrequirement and benchmark for all banks to enable them compete with their global 18
  • 19. counterparts and subject themselves to international rating agencies to know how and wherethey stand among others. This seemed to be a death knell to most banks as many who werefinding it difficult to raise the then stipulated N2 billion shareholders’ funds saw the directive toraise N25 billion as impossible. However, it led to many mergers, acquisitions,liquidations, takeovers and IPOs (Initial Public Offering) as many went public andgot listed on the Nigerian Stock Exchange. The result? The program wasinternationally acclaimed as a great success and by 2007, ten out of the existing 25Nigerian Banks were named among the Best Banks in the World and for the first time in thehistory of the industry, Nigerian banks were adjudged by the Banker Magazine, a subsidiary ofFinancial Times of London, to be among the best 1000 globally last year in terms ofcapitalization. In 2008, sixteen Nigerian banks made the list and also six made the top tenleading African Banks’ chart showing the mileage the industry has covered within this shortspan of banks consolidation. Soludo received many accolades including the World CentralBanker of the Year 2005 and was recently appointed as one of the 10 members of the Globalcommittee appointed to resolve the current global financial crisis. However, moreproactive monetary policies and new codes of corporate governance are essential.- Political reforms and stable honest governance: the Government needs to initiate politicalreforms to allow Nigeria to enter and prosper in the world economy. Elections should be freeand fair and candidates should be properly screened to ensure appointment of responsibleleaders as well as avoid corruption and embezzlement of workers’ paychecks,Instituting strict penalties for anyone involved in giving or receiving bribes. etc.In a country torn apart by frequent clashes and inter-tribal suspicion, there is a need to u nify itspeople divided by tribalism, religion and conflicts over resource distribution. Pre- 19
  • 20. colonization, the different regions and tribes had existed fairly peaceably havingindependent rulers for each region and sticking to their boundaries. Like many otherAfrican nations, Nigeria was an artificial structure initiated by the British which had neglectedto consider religious, linguistic, and ethnic differences. Nigeria, which won independence fromBritain in 1960, had at that time a population of 60 million people consisting of nearly 300differing ethnic and cultural groups. The British had forcibly united these groups, fosteredacrid relations between them and post-independence abandoned them. The Southerners(who possess the oil-rich lands) wanted to secede and become Biafrawhere they could co-exist with their own people rather than beingruled by the Hausa & Yoruba tribes who, backed by the British,refused to let the lands and the investments of the British go into hostile hands. This ledto the Civil war of 1967 – 1970. Since then, there is still lots of acrimony and talk ofsecession/peace in division. The continual political instability in Nigeria has not helpedand has led to the inability to forge a national entity that transcends ethnic, regional,religious and economic interests. These diverging interests caused scores of politicalcoups and counter-coups.There needs to be found ways to resolve conflicts, encourage peace and acceptance ofdiversity. The family as a unit of society also has a huge role in this with parents having thespotlight in their duty of instilling stronger values in their children.- Religious conflicts: In line with the above, when Roman Catholics, Anglicans andPresbyterians missionaries came to Africa, Christianity was initiated in adivide and conquer fashion in the south, later the British ColonialGovernment established indirect rule in Northern Nigeria based on Usmandan Fodio’s Islamic government before the advent of Colonialism. The 20
  • 21. breakdown today is roughly Islam (50%), Christianity (49%) and indigenous religions (1%).The latest clashes between gangs of Muslim Hausas and mostly Christian youths began onNovember 28 2008, led to the deaths of over 400 people and was provoked by a disputed localelection after rumors spread that the ANPP party candidate backed by Hausas had lost the raceto the ruling PDP who provided all-Christian candidates. Other examples in this samestate/region alone occurred in 2001 and 2004 when hundreds were killed in separate ethnic-religious fighting. Each time, there are always reprisal attacks in other states and the death tollsare well underestimated.Religious leaders have to unite and come together to preach acceptance, peace and unity amongtheir flock. Political leaders also have a hand in keeping treatment of, and communications with,each tribe on par with all others to ensure fairness, equality and justice.-Business environment: In general, a conducive environment of safety,security, stability and efficient infrastructure should be built and Nigerianeeds to engage its large army of youths to create an enabling environment with the aim ofattracting about 17 million skilled Nigerians in the Diaspora as well as foreign investors.Salaries of both public and private sector workers should be competitively priced to avert the brain drain andencourage them to give their best to building the economy. Doctors, the armed forces, teachers and educators are anespecially neglected professional group. Skills development, training and development should be an ongoing effortto provide women, semi-skilled and unskilled citizens with marketable skills.There should also be emphasis on education of upcoming generations, attracting foreigninvestors, encouraging consumption and export of indigenous products,revitalization of underutilized sectors such as agriculture, textiles, energy,and manufacturing to create new opportunities for socialentrepreneurship. Specific steps must be taken to address the problems of relativeinsecurity, corruption, infrastructure – especially power and basic amenities – as 21
  • 22. well as availability and cost of finance. This will encourage greaterindustrialization from local and foreign sources, lead to more jobs for thepeople, development, less crime and poverty e.t.c.- Reform of the transportation network: in Nigeria especially the urban-ruralnetworks. Participation in economic activities is not only about achieving moreefficient and more equitable production and distribution of material resources; itis also about the ability to gain direct access to resources. A key aspect of thisdirect access starts with state by state transformation of transportation networksin Nigeria including good road and rail networks, promotingcommunity-based road safety programs, promotion of roadrehabilitation and maintenance culture, and attention to genderplanning in transportation arrangements.WHY THE CHANGES CAN BE SUCCESSFULNigeria possesses many enabling factors for success such as those below: I. Strong Financial sector: As previously mentioned, 16 Nigerian banks are now in the league of top 1000 in the world while five of them are in the top 10 in Africa, with the Nigerian market accounting for more than 75 per cent of all the countries in the West African sub-region. This is in contrast with the situation four years ago when none of them was in these top categories due to the systemic crisis arising from inadequate capital base and poor corporate governance. The FSS Project is an ongoing initiative by the CBN and other financial services regulators to develop a well articulated plan that would boost the sector. The Nigerian President, Shehu Musa Yar’Adua has the aim of making the country the 22
  • 23. financial hub of Africa by 2020, because "if Nigeria does not move, the entire Africa cannot move”.II. Natural resources (including climate, raw materials and minerals): In line with the rainfall distribution, there are basically forests (Tropical evergreen forests and rainforest as well as saline and fresh water swamps) and Savanna ( Sudan, Sahel and Guinea savannas) which favor the cultivation and breeding of a very wide variety of crops and animals. There is also the mountain vegetation of the isolated high plateau regions on the far eastern extremes. The savanna, especially Guinea and Sudan, are the major grains, grasses, tubers, vegetable and cotton growing regions. The Tropical evergreen rain forest belt bear timber production and forest development, production of cassava and plantation growing of fruit trees - citrus, oil palm, cocoa, rubber, etc. With vegetation ranging from desert lands favoring a nomadic existence to verdant vegetation and riverine living amid creeks for fishing, the land abounds with rich agricultural advantages, has huge export capacity and with proper encouragement of its people, can be restored to its former position as a top food and minerals exporter. Nigeria also is blessed with most minerals and raw materials like iron, ore, tin, copper, silver, gold, rubber, cocoa and leather. These extensive natural and mineral resources were all neglected in the wake of the oil boom and since then have either been unutilized or underutilized and ‘bunkered/sold ‘through the back door’ for ridiculously cheap prices. A criticism of the Next Eleven projections is that they are based on the assumptions that resources are limitless and endlessly available when 23
  • 24. needed. In reality, many important resources currently necessary to sustain economic growth, such as oil, natural gas, coal, and other fossil fuels might soon experience a peak in production before enough renewable energy can be developed and commercialized, which might result in slower economic growth than anticipated, thus throwing off the projections and their dates. However, Nigeria’s total resources are underutilized in many areas and if supplemented with modern resource extraction techniques and environmental development, its abilities and capability to become the one of the world’s major suppliers of energy and raw materials could be taken to a whole new level. The loans given by Grameen microcredit will further enable Nigerians to appreciate the ‘gold’ to be realized from thinking deep, applying inherent skills and discovering their potential to make money from natural resources around them which were previously taken for granted.III. The Human factor: With a population of over 148 million people, a growing population rate of 3%, over 20 million Nigerians residing outside Nigeria, (majority living in the UK and the U.S.A), Nigeria has the human element necessary for its success. As previously mentioned, the country has lots of extremely intelligent people but very high ongoing brain drain to UK, US and more developed countries around the world. Nigerians were ranked the happiest people in the world in 2003 and their positive attitudes, intellect and diligence make them thrive even in very tough times and situations. African immigrants in general have the highest educational attainment of any immigrant group in the United States, with 24
  • 25. higher levels of completed education than Asian Americans (who have been stereotyped as a model minority). With the availability of microcredit turning the economy around and creating opportunities for all, Nigerians who have migrated abroad will be encouraged to return and those planning their escape routes will have cause to have faith and try again.ConclusionNigeria can indeed achieve her full potentials and eradicate/alleviate poverty if her leaders andpeople join hands to work at actualizing the above recommendations. Change managementstrategies, using an efficiently deployed microcredit model, will positivelyaffect the physical and mental health of its people, socioeconomic situation,technological advancement, political systems, urban and rural development, overallwell-being and image/reputation of Nigeria.The President sums it up when he said "We still have a long way to go if the Nigerian economy isto be the largest here in the next 13 years. To achieve this, it needs to grow by 12 per centannually. "We need to diversify the economy by moving away from oil to the next phase, whichhas to do with the manufacturing and service sectors. We have about 17 million Nigerians in theDiaspora and we have major resources both in human and materials, so a 12 per cent growthrate for the economy is not beyond our reach. Having lost many years, we need to grow oureconomy".For these to happen, there must be drastic change efforts and change management expertise.For the microcredit schemes to make impact, there must be transparency, diligent andresponsible leadership at all tiers of government, an enabling business environment and all-hands-on-deck, jointly uniting to make the Change. 25
  • 26. SOURCES 1) Longwe S. H. (1990), From Welfare to Empowerment: Office of Women in International Development, Working Paper 204, Michigan State University. 2) Longwe S. H. (1991), Gender Awareness: The Missing Element in the Third World Development Project in Wallace T., and March C. (eds). Changing Perceptions: Writings on Gender and Development, Oxford Oxfam. 3) Longwe S. H. (1995), The Evaporation of Policies for Women’s Advancement, in a Commitment to the World’s Women: Perspective on Development for Beijing and Beyond. New York, UNIFEM. 4) Nwanesi Peter Karubi, (2006) Development, Micro-credit and Women’s Empowerment: A Case Study of Market and Rural Women in Southern Nigeria. 5) National Centre for Economic Management & Administration(NCEMA), Structural Adjustment Programme In Nigeria: Causes, Processes And Outcomes 6) "The N-11: More Than an Acronym" - Goldman Sachs study of N11 nations, Global Economics Paper No: 153, March 28, 2007 7) IMF Survey: Nigeria Needs Sustained Reforms to Build on Success 8) allAfrica.com: Africa: IMF Forecasts 9 Percent Growth for Nigeria (Page 1 of 1) 9) The Punch: IMF predicts 9% GDP growth rate for Nigeria 10) http://en.wikipedia.org/wiki/BRIC 11) http://en.wikipedia.org/wiki/Ken_Saro-Wiwa 12) BBC: Nigeria tops happiness survey, Thursday, October 2, 2003. Website accessed March 26, 2007. 13) https://www.cia.gov/library/publications/the-world-factbook/geos/ni.html 14) http://en.wikipedia.org/wiki/Nigeria 15) http://en.wikipedia.org/wiki/Next_Eleven 26
  • 27. 16) http://www.skyscrapercity.com/showthread.php?t=441211&page=2617) http://en.wikipedia.org/wiki/Nigerian_American18) http://en.wikipedia.org/wiki/Microcredit19) Sapovadia, Vrajlal K., "Micro Finance: The Pillars of a Tool to Socio-Economic Development”. Development Gateway, 200620) http://www.nextbillion.net/newsroom/2005/06/21/nigerias-keke-napep-initiative21) allAfrica.com: Nigeria: 9 Nigerian Banks Make World Top Banks Jul 3, 2006 ...22) http://web.worldbank.org/23) http://un.org/ecosocdev/geninfo/afrec/subjindx/subpdfs/131nigr.pdf24) http://www.irishtimes.com/newspaper/breaking/2008/1130/breaking4.htm25) World Bank envoy ties Nigeria’s poverty to ‘poor business environment’ Monday, 03 November 2008 00:38 Onyinye Nwachukwu )26) http://www.businessday.co.za/articles/economy.aspx27) 27) http://www.africaeconomicanalysis.org/articles/gen/alleviatingpovertyhtm.html28) http://en.wikipedia.org/wiki/Religion_in_Nigeria29) http://news.bbc.co.uk/1/hi/world/africa/3157570.stm30) http://news.bbc.co.uk/2/hi/africa/7162719.stm31) http://www.amnestyusa.org/all-countries/nigeria/page.do?id=101121232) http://www.nigeria-can.org.au/about1.html 27
  • 28. APPENDIXAfrica’s big four could power continent- AfDB By News Hound Published 06/15/2007AFRICA’S four biggest economic powers could become an engine for regional growth in the same waythat emerging market giants Brazil, Russia, India and China are trendsetters in the rest of the developingworld, a senior researcher at the African Development Bank (AfDB) said.SA, Algeria, Nigeria and Egypt (SANE) account for over half of Africa’s gross domestic product - puttingthem on par with Brazil, Russia, India and China, or the BRICs, which often hold sway over financialmarkets in their regions.It makes sense that SANE countries should feature strongly in Africa’s fortunes, said Temitope Oshikoya,director of development research at the African Development Bank."Whatever happens to these four countries actually can affect the direction of the African economy," hetold Reuters on the sidelines of the World Economic Forum on Africa on Thursday.He offered various examples of the SANEs’ potential influence, such as their ability to absorb a vast poolof labour and encourage trade among African countries. "So as a result you realise the same countries areextremely important for ensuring the growth prospects and greater prosperity in Africa," said Oshikoya,one of the authors of the 2007 Africa Competitiveness report.The report highlights red tape and weak infrastructure as some of the main constraints to doing businessin Africa and factors which weaken its competitive edge in the global economy.The world’s poorest continent has also fallen far behind in meeting the UN Millennium DevelopmentGoals, a range of targets to erase poverty, including universal education. Oshikoya suggested the key tomeeting those goals may lie with Africa’s big four.Nigeria, for instance, has the continent’s largest population. So, whatever happens there will, even if onlynumerically, make a considerable dent in poverty in Africa as a whole."Nigeria has 148-million people. If we assume the poverty rate is about 70-million people. To get 70-million people across Africa you need to go to about 20 countries altogether," Oshikoya said."So that means if you are able to reduce poverty in Nigeria, you can do a lot in terms of bringing overallpoverty in Africa down." First, though, the SANE economies needed greater coordination amongthemselves, he said."China, Russia, India and Brazil constitute a major force as a group in the global economy ... What wereally need now is to ensure proper coordination among these four (African) countries to be able tospeak as one voice on behalf of Africa at a global and at the regional level." 28
  • 29. APPENDIXAfrica’s big four could power continent- AfDB By News Hound Published 06/15/2007AFRICA’S four biggest economic powers could become an engine for regional growth in the same waythat emerging market giants Brazil, Russia, India and China are trendsetters in the rest of the developingworld, a senior researcher at the African Development Bank (AfDB) said.SA, Algeria, Nigeria and Egypt (SANE) account for over half of Africa’s gross domestic product - puttingthem on par with Brazil, Russia, India and China, or the BRICs, which often hold sway over financialmarkets in their regions.It makes sense that SANE countries should feature strongly in Africa’s fortunes, said Temitope Oshikoya,director of development research at the African Development Bank."Whatever happens to these four countries actually can affect the direction of the African economy," hetold Reuters on the sidelines of the World Economic Forum on Africa on Thursday.He offered various examples of the SANEs’ potential influence, such as their ability to absorb a vast poolof labour and encourage trade among African countries. "So as a result you realise the same countries areextremely important for ensuring the growth prospects and greater prosperity in Africa," said Oshikoya,one of the authors of the 2007 Africa Competitiveness report.The report highlights red tape and weak infrastructure as some of the main constraints to doing businessin Africa and factors which weaken its competitive edge in the global economy.The world’s poorest continent has also fallen far behind in meeting the UN Millennium DevelopmentGoals, a range of targets to erase poverty, including universal education. Oshikoya suggested the key tomeeting those goals may lie with Africa’s big four.Nigeria, for instance, has the continent’s largest population. So, whatever happens there will, even if onlynumerically, make a considerable dent in poverty in Africa as a whole."Nigeria has 148-million people. If we assume the poverty rate is about 70-million people. To get 70-million people across Africa you need to go to about 20 countries altogether," Oshikoya said."So that means if you are able to reduce poverty in Nigeria, you can do a lot in terms of bringing overallpoverty in Africa down." First, though, the SANE economies needed greater coordination amongthemselves, he said."China, Russia, India and Brazil constitute a major force as a group in the global economy ... What wereally need now is to ensure proper coordination among these four (African) countries to be able tospeak as one voice on behalf of Africa at a global and at the regional level." 28