Nigeria is the most populous country in Africa. 20% of Africa's poor people are Nigerian. It is a country with huge oil wealth yet half the population still lives in poverty and its northern states have the worst human development indicators of any region which is not affected by conflict. If Nigeria fails to make significant progress, the Millennium Development Goals which aim to improve people's lives through poverty reduction and increased access to basic services, are unlikely to be achieved globally.
The Department for International Development (DFID) has significantly increased its allocation to Nigeria in the seven years since the Committee's last visit. Funding for 2009-10 is £120 million, up from £20 million in 2001-02, making it DFID's fourth largest programme in Africa. The need is clear: one child in five dies before it reaches its fifth birthday; Nigeria has 2% of the world's population but suffers 10% of maternal deaths; and it has the highest number of children who are not enrolled in school of any country in the world, the majority of whom are girls. These factors are a key contributor to Nigeria being off-track on all the Millennium Development Goals.
The obstacles to promoting effective poverty reduction in the country are huge. Oil wealth has distorted the economy and has discouraged growth in other sectors. Competition for a share of oil wealth dominates politics, feeds corruption, and diverts attention away from improving governance, management of public finances and delivery of basic services, all of which suffered under 30 years of military rule. Religious and ethnic diversity contribute to regional disparities in wealth and sometimes give rise to conflict and violence.
DFID's programme focuses on building the capacity of the Federal, State and local government in Nigeria to provide the services which its people need and to do this in a transparent way with proper systems for accountability. The vastness of the country, the problems of very poor governance and high levels of corruption in some States, and the need to focus resources where they will have most impact justifies DFID's approach of operating only in selected States where the government has shown willingness to reform.
DFID's partnership with the World Bank, which now also includes the US Agency for International Development (USAID) and the African Development Bank, offers the opportunity for donors to have an impact in a country where aid represents only 1% of GDP. The new Country Partnership Strategy provides a clear focus for DFID's work over the next three years and sets outs sensible priorities. These include assisting States to generate employment for the many young men who are currently without jobs, which wastes their potential and leaves them open to exploitation by those interested in using violence and disruption to promote their own interests.
Nigeria's dependence on oil wealth has made it vulnerable to the volatility in oil prices over the last year. The impact of falling prices is compounded by the instability in the oil-producing Niger Delta region where the poor conduct of oil companies and the failure of State authorities to use their substantial resources to benefit their citizens has allowed violence, kidnappings and abuse of the rights of local people to flourish. Resolution of the conflict and instability in the Delta must be a priority for the Federal Government, supported by donors, including DFID.
Nigeria's oil wealth should be used systematically to fund the country's development. It is right for donors to provide aid to Nigeria at the relatively low level of 1% of GDP to encourage reform, but it would not be sensible to raise the volume of aid to that received by other poor African countries while corruption and poor governance remain such significant barriers to poverty alleviation.
The challenges for DFID of operating in Nigeria should not be minimised. But its work is having a significant impact in demonstrating what can be achieved, in supporting the Nigerian authorities to make necessary reforms, and in bringing much-needed basic services to the Nigerian people. It is, however, important to be realistic about what can be achieved: change is likely to continue to be incremental and slow until the Nigerian authorities provide stronger leadership for reform.
Given the poor standards of Nigeria's governance, it is doubly important that DFID has the necessary mechanisms in place to ensure that its funding is not misused and that its impact is not blunted by the weaknesses of domestic structures. Nigeria's regional and global significance and the scale of the human need justify the UK's continuing engagement. DFID must be able to demonstrate that its investment is making a worthwhile contribution to poverty reduction and improving the lives of Nigeria's poorest people.