THE QUEST FOR AUTONOMY, NIGERIA AND FOREIGN MONOPOLY CAPITAL, 1966-1978

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THE QUEST FOR AUTONOMY, NIGERIA AND FOREIGN MONOPOLY CAPITAL, 1966-1978

ABSTRACT

THE QUEST FOR AUTONOMY: NIGERIA AND FOREIGN MONOPOLY CAPITAL: 1966-1978 Aaron Tsado Gana At the time of Nigeria’s independence in 1960, the Nigerian economy was preponderantly in foreign (mainly British) hands. The colonial administration’s policy of encouraging British private capital coupled with the re-affirmation of 1956, by the federal and regional governments that independent Nigeria would continue the open economy policy of the colonial era, made the country the investment target of European multionals, so much so that by the end of the first decade of independence Nigeria’s dependence on international capital and technology was almost total. This overwhelming presence of foreign capital did not escape the attention of the colonial as well as the post-colonial governments, as reflected in the various steps taken to use state power to mediate the conflict between indigenous and transnational capital. The high point of this mediation was the Nigerian Enterprises Promotion Decree of 1972. This legislation, together with the 1977 Decree is the subject of this study. Seeking a balance between nationalism and internationalism, the decrees aimed at preserving certain sectors of the economy for the growing business class while sharing the more sophisticated sectors between national and international capital. The decrees stipulated that businesses in Schedule I, believed to be within the competence of indigenous expertise, were, henceforth, the exclusive preserve of Nigerians. Businesses in Schedule II-requiring considerable capital and technical or entrepreneurial competence -were to have a percentage of their equity sold to Nigerian individuals or institutions. The 1972 decree stipulated 40 per cent but this was raised to 60 per cent in the 1977 decree. The study reveals that the 1972 decree, in spite of its claim to scientificity (its authors having claimed that it was the first real scientific approach to indigenization) was careless in design and sloppy in implementation. For instance, the policy-makers failed to evaluate critically the size and capacity of the indigenous entrepreneurial class to absorb the sudden flush of shares. The result was the “unintended” outcome of “severe concentration of ownership,” as noted by the investigative panel set up to enquire into the implementation of the decrees. In addition, the lack of adequately staffed machinery to supervise the transfer of shares lured many foreign investors into various acts of subversion which, as the investigative panel observed, could not have succeeded to the extent that they did without the collaboration of Nigerians. It was to redress the inadequacies of the 1972 decree that the 1977 decree was promulgated. The tightening up of the loose ends in the 1972 legislation did ensure not only that the transfers were genuine and effective in terms of ownership and control, but also that the spread of shares was more inclusive. The main conclusion of the study is that underdeveloped countries can, given the right leadership and strategy, effectively tame multinational corporations and direct their activities to accord with national economic objectives. Thus contrary to the popular image of omnipotent conglomerates dictating the direction of economic and political activities of their host countries, this study demostrates that political independence is an asset of no mean value to an underdeveloped nation determined to change the balance of power between the multinationals and their host.

THE QUEST FOR AUTONOMY, NIGERIA AND FOREIGN MONOPOLY CAPITAL, 1966-1978

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