TRALAC - Trade Law Centre

Old ties in new times: Nigeria and the next US administration

Tuesday, 20 January 2009

Source: This Day (Nigeria)

Nigeria’s foreign policy engagement with United States goes as far back as October 7, 1960 when Nigeria, to the surprise of many, chose the United States to perform the symbolic and crucial role of presenting the new Sovereign State, to the United Nations General Assembly. In performing this honorific duty, the then US Secretary of State, Mr. Christian Herter, noted that:

The people of Nigeria have won their independence by demonstrating time and again in many fields, that Nigerians are anxious to enjoy the satisfaction of independence and are fully capable of assuming its responsibilities... reaching agreement among themselves on the form and structure of their federation in one of the most constructive acts of statesmanship of the past decade.

Since then, Nigeria-US relations have been excellent, cordial and mutually beneficial. It is noteworthy that, consistent with his promise of better relationship with Africa, President John F. Kennedy received the Nigerian Prime Minister, Alhaji Tafawa Balewa, at the White House on July 24, 1961, within barely six months in office, and was given the rare honour of addressing a Joint Session of Congress during the visit.

Without doubt, Nigeria and the United States have a long tradition of cooperation in several areas of economic development, political governance issues and maintenance of regional peace and security. The United States has been involved in the training of officers and men of the Nigerian Armed Forces over the years. It has also been giving logistic support to Nigerian military contingents on various peace keeping operations in Africa and beyond. In the economic sector, for example, the African Growth and Opportunity Act (AGOA) was signed into law on May 18, 2000.

A major rationale for the Act is to assist eligible African countries to open up their economies and build free markets. Since then, US volume of trade with Africa has continued to increase. In 2006, the US was on record to have earmarked $394 million for trade capacity building activities in sub-Saharan Africa. However, even though Nigeria has more than 6000 non-oil sector products that can be exported to the US duty free, we are yet to feel the real impact of the AGOA. This is one area of cooperation that will attract greater attention of the Umaru Yar’Adua Administration in the months ahead.

The United States Trade and Development Agency (USTDA) has funded a number of technical assistance programmes in Nigeria, especially the Port Computerization Programme of the Ministry of Transport, technical assistance for the privatization of the 600 MW Shiroro Hydro-power Plant and the 1,320 MW gas-fuelled Egbin Power Plant near Lagos. Both countries have also been partnering in the area of oil and gas, as well as power and electricity.

The fairly robust profile of Nigeria-US relations can be explained by several factors. On the one hand are the factors of oil and gas resources and geo-strategic leverage of Nigeria in the region. Nigeria is Africa’s biggest producer of hydrocarbon resources, and the sixth largest producer of crude oil in the world.

As at today, Nigeria supplies more than 15% of the US oil needs. We are also estimated to supply about 25% by the year 2015. Currently, this makes Nigeria the fifth largest supplier of crude oil to the United States, meaning that Nigeria has been, and will be, substantially relevant to the energy security of the United States in the foreseeable future. For Nigeria, the oil resource not only helps to boost foreign exchange earnings, but also enhances economic capacity for Nigeria’s active involvement in regional peace-keeping and peace enforcement activities.

On the other hand is the factor of people to people relationship. From a demographic perspective, for instance, while Nigeria is the most populous black nation, the United States has the biggest black population outside of Africa. This factor influences decision making at times. Many Nigerians have keen interest in studying in the United States. Indeed, our first President was an alumnus of Lincoln University and University of Pennsylvania.

The United States currently plays host to a substantial Nigerian Diaspora. Inter-University collaboration and cooperation, especially in terms of exchange of scholars and technical assistance, has not been insignificant.

Going by the UN conservative estimates, there are 22,000 highly qualified Nigerian medical doctors in the United States, excluding pharmacists, nurses and other Nigerian health personnel. As noted by Ambassador Andrew Young, former US Permanent Representative to the UN and one time Mayor of Atlanta, Nigerians represent the second most educated immigrants among the Diaspora in the United States.

In general, it can be rightly said that the relationship between and among Nigerian and American people has not only been cordial but has also, in no small measure, complemented government-to-government relations that has transcended political, military, economic, technical, immigration and cultural cooperation at various levels.

Challenges in the Relationship

Nigeria-US relationship has, however, not been without challenges that call for closer cooperation and better understanding. There is an unacceptable level of negative perception of Nigeria and bad publicity about Nigeria in the US media. The very stringent visa policy towards Nigerian applicants has not been very helpful to the development of better understanding between our two countries. Public funds looted and lodged in some Western financial institutions are passing through the eye of the needle to be recovered. They should be recovered. We also believe that United States’ global influence can lend significant diplomatic support to Nigeria’s efforts to making crude oil theft less attractive in the international oil market by declaring them ‘blood oil’ in the same way conflict diamonds were proclaimed illegal and declared ‘blood diamond’.

I refer to the so-called Kimberly Process. Nigeria has raised with the United States, the issue of illicit proliferation of Small Arms and Light Weapons (SALW) in the West African region, which sustains violence in the Niger Delta; the very stringent US visa policy towards Nigerians; as well as the inclusion of Nigeria on the list of countries categorized as unsafe for air travel and American investment.

In light of these challenges, and in the mutual interest of both countries, we believe it has become necessary to predicate Nigeria-US relations on a new level of a more engaged, more sincere Partnership to enable a more comprehensive exchange of ideas on issues of mutual interest. Such a partnership is not only of immense strategic value: it is natural and logical. Here the Obama Administration has a great opportunity to build rapidly on the excellent foundations which have been laid by the last two US Administrations.

Nigeria-US Ties under the Obama Administration

Political and economic relationship between Nigeria and the United States received some boost under both the Clinton and Bush administration. But the gap between the promise and potential is still wide. On economic issues, the United States’ interest seems to be limited to the extractive petroleum industry in Nigeria. American investors have been reluctant to invest in other sectors that can add value to the economy and create jobs. Total US investments in Nigeria currently stand at US$ 18 billion and they are basically in the oil sector.

Oil is the main commodity imported from Nigeria while Nigeria has remained the fifth largest importer of US wheat. So, under the Barack Obama dispensation, we expect political and economic relationships should be up-graded to a level more reflective of what both countries can offer. Nigeria is more than oil and gas. With a market of over 140 million, it has a highly gifted, reasonably well-trained work force that can leapfrog incomes in ICT, Agriculture and Tourism.

Another area of needed cooperation that has not attracted much attention in Nigeria’s relationship with United States is the development of infrastructure. A Big Infrastructure Push in Nigeria will create jobs in the two economies, a shot in the arm so useful at a time of widening global recession. For instance, the United States can facilitate the execution of President Umaru Yar’Adua’s 7-Point Development Agenda, especially its Vision 20: 2020 which is geared towards making good Goldman Sach’s prediction that Nigeria could be one of the leading twenty economies in the world by the year 2020.

The 7-Point Agenda is aimed at addressing the problem of power and energy, security as a critical infrastructure, employment generation and wealth creation, capacity for mass movement of goods and people, addressing the challenges of the education sector, and restoring credibility to the electoral system, as well as resolving permanently the crisis in the Niger Delta region of Nigeria. Given the vast natural resources of Nigeria and US capital and technological endowments, there are opportunities for expanded trade and investments in agriculture, development of infrastructure, including power and energy, transportation and human capital development. The facilitation of these programmes cannot but be most welcome.

The anti-corruption agenda of the Umaru Yar’Adua administration has been designed to enhance its sustainability through a closer adherence to constitutionality and rule of law.

The Economic Financial Crime Commission (EFCC) is, indeed, maturing even while it grapples with the unavoidable challenges of a transition and institutional capacity building. The United States has provided assistance in the anti-corruption drive of the EFCC but will still need to do more.

A Special Partnership with United States is further informed by an undeniable reality: that the wellbeing and security of America is tied to that of the whole world. In this regard, it should be of interest that Nigeria is geo-politically located at the gateway to the West and Central African regions. Located between Benin Republic and Cameroon and the strategic Gulf of Guinea, Nigeria is a clear alternative to the volatility of Middle East energy supply. Covering an area of 356,000 square miles, Nigeria is in the neighbourhood of the North Atlantic and is about the same size of California, Utah and Nevada combined.

Thus, a partnership with us that recognizes equality and the dignity of each, a partnership that opens all the gates to Africa through its largest population, a partnership that can serve as a catalyst in the integration of African economy into the world economy, as well as enhance political stability, peace and security in Africa, a partnership that can strengthen civil society and a growing culture of democracy, as well as accelerate poverty alleviation, and, in fact, a partnership that is marked by mutual respect and synergy – that can be a model for a more integrated world in which the boundaries between rich and poor nations do not harden into the walls of a new form of apartheid.

The Nigerian economy is the second largest in the whole of Africa and is also larger than all the economies of the other 14 Member States of the ECOWAS put together.

This clearly suggests that Nigeria has the capacity to positively influence national, regional and global developments. Even with our challenges and problems associated with nation building,(no country is free from problems) Nigeria is growing steadily on the benchmarks of good governance, the rule of law, respect for fundamental human rights and free enterprise.

While we cannot be completely immune to the current global financial crisis, Meryll Lynch has declared Nigeria one of the least vulnerable economies in the world for investment. This conducive investment environment has been helped by a bank consolidation exercise that was prescient, by foreign debt cancellation, and by a growing modern Stock Exchange.

In the light of the foregoing, there is a compelling logic for the development of stronger ties between Africa and the United States, on the one hand, and between Nigeria and the United States, on the other. Considering the geo-strategic location of Nigeria, rich human and material resources, an investment environment that has been made friendlier, as well as the new wind of change that is blowing across the world with a new message of hope and a can-do spirit, there is an opportunity for a more adult Nigeria-US relationship that should not be missed.

What does the Future Hold?

We in Africa, and indeed, more specifically, Nigeria will expect the incoming Obama Administration to honour the pledge implied in these powerful words. And the time to start is yesterday. I will give an example: US National Security Doctrine posits that US security depends on the trinity of defence, diplomacy, and development. America’s battles in the past decades have taken place in the developing world, often with dire consequences for the world’s most powerful nation.

Concerning that third leg of US Security Doctrine, Development, a major development challenge is the scourge of malaria that leads to between one to three million deaths every year in Africa and up to one billion clinical episodes per year. It is a major barrier to African economic development.

Yet “one day’s Pentagon spending would provide enough funds to ensure anti-malaria bed net protection for every sleeping site in Africa for five years. “Jeffry Sachs, author of the End of Poverty, and currently Special Adviser to United Nations Secretary General on Millennium Development Goals, has revealed that “a fully comprehensive malaria control programme for all of sub-Saharan Africa, including bed nets, medicines, community health workers, diagnostic training and indoor residual spraying, would require around $3 billion per year, or less than two days Pentagon Spending.”

Confronting this challenge will be an excellent test of the Obama Administration’s commitment to a new and more productive way of dealing with Africa. While one is not unappreciative of the commendable leadership President Bush showed in this area, it is simply that it was a drop of water in a desert of need.

Beyond the decimation of Africa’s workforce by malaria, is the bigger challenge of the visionary commitment of the international community to Africa meeting the Millennium Development Goals. The grim news out of the continent of Obama’s father is that no African country looks set to meet those challenges on the due date of 2015. And if the international community is to move from a wringing of hands to real action that can generate results and not despondency and desperation, the Obama Administration will have to provide immediate global leadership to facilitate the much needed, and yet lean, international support for a global aid architecture that establishes a few high-level funds aimed at critical aspects of the MDGs. Such funds include, but are not exhausted as:

Global Fund to Fight AIDS, Tuberculosis, Malaria and other Disease

Global Fund for an African Green Revolution

Global Environment Facility

UN Population Fund

Global Infrastructural Fund

Global Education Fund

Global Community Development Fund

It is in America’s interest to provide leadership here. To deal with recession in America, there is need to stimulate growth in Africa which remains outside the global economy. Africa is not just a crisis; it is an opportunity. Now is a new Day in America. Africa that gave America Barack Obama must be part of it. It can be done. All that is required is to return to “the better angels of our nature” in the words of Abraham Lincoln, another President from Barack Obama’s State of Illinois.



“ Latest AGOA Trade Data currently available on AGOA.info


Click here to view a sector profile of Nigeria's bilateral trade with the United States, disaggregated by total exports and imports, AGOA exports and GSP exports.


Other regularly updated trade statistics on AGOA.info include: (click each link to view)

  • AGOA-Beneficiary Countries’ AGOA and GSP Trade Aggregates

  • AGOA Trade by Industry Sector

  • Apparel Trade under AGOA’s Wearing Apparel Provisions

  • Latest Apparel Quotas under AGOA

  • Bilateral Trade Data for all AGOA-eligible countries individually.