Built-in identity politicsWhen the regime is structured to encourage identity politics, it's very difficult to avoid it. Two things to remember about Nigeria: most government revenue comes from petroleum sales and most non-agricultural jobs are government jobs.
A house divided: How a toxic blend of identity politics and cheap oil hurts Nigeria’s states
NIGERIA’S 37 governors cannot have expected cheers when they declared late in 2015 that they could no longer pay a minimum wage of just $3 per day to their employees. Politicians are seldom brave enough to cut civil servants’ pay but Nigeria’s governors are desperate.
Low oil prices have slashed government revenues. Nigeria, which nowadays is comprised of 36 states and Abuja, the capital territory, operates as a federation in which most decisions over spending take place in the various state capitals. Every month the central government collects money from oil sales (which still account for more than 50% of its total revenues) and hands over just under half to the states. But that sum has plummeted since the price of crude declined…
Although the fiscal crisis came to a head when the oil price collapsed, its origins are much older.
This balkanisation of Nigeria has spawned a poisonous kind of politics. At the ballot box, religion and ethnicity matter far more than a candidate’s ideas. Politicians often win votes by stirring up animosity against the ethnic group next door…
Some financiers think the federal government should provide conditional lending to troubled states. It probably won’t, given its own ballooning budget deficit. States could cut wages, but workers will howl. Some governors have hit on the original idea of trying to collect more tax. Lagos, the nation’s most self-sufficient state, thinks it can tax another 4m people, doubling the number who pay. Many states, however, are simply “hoping that future residents will pay off today’s costs”, says [Lagos based analysist] Oluseun Onigbinde.
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