AN ANALYSIS OF NIGERIA- US RELATIONS, 1999-2009

AN ANALYSIS OF NIGERIA- US RELATIONS, 1999-2009

ABSTRACT

This study examines the political economy of Nigeria –United States relations between 1999 and 2009. This study has both broad and specific objectives. The broad objective of this study is to examine the political economy of Nigeria –United States relations between 1999 and 2009. The specific objectives are as follows: To ascertain whether oil is the centerpiece of Nigeria –United States economic relation between 1999 and 2009; To find out if Nigeria –United States economic relations enhanced economic development in Nigeria within the periods under study. Though political economic framework could explain almost every situation in interaction of states, the theoretical framework for the analysis of Nigeria – US economic relations between 1999 and 2009 will be rooted on the dependency theory. This is because it enables us capture at a glance the dependent status of Nigeria in her economic relation with US. We validated the following hypotheses Oil is the centerpiece of Nigeria –United States economic relation between 1999 and 2009; Nigeria –United States economic relations has not enhanced economic development in Nigeria within the periods under study. The method of data collection for this study is observation of documentary evidence that deals with Nigeria –US relations. We heavily relied on secondary sources such as books, journals, articles, periodical, government reports and publications, magazines, unpublished manuscript, commentaries, and conference papers. Other data were collected through electronic sources such as television news broadcasting and radio news broadcasting and Internet materials. Again, we relied essentially on descriptive qualitative method as our methods of data analysis in this study. We also use simple percentages and tables graphs to buttress the arguments in this study. 10

CHAPTER ONE

INTRODUCTION

1.6 Background of Study

 

Nigeria-United States relations remain a critical aspect of Nigerian foreign policy. The demands, challenges and competition of this 21st century have made it pertinent that Nigeria review her relation with United States in order to benefit maximally from their relation. One would have thought that Nigeria-US economic relation since 1960 would have moved Nigeria from being a Third world nation to at least a Second world nation but like the story of any other developing economy dealing with developed economy, Nigeria has remained the same if not worst. Nigeria has remained just a market for the U.S. to buy her crude oil and sell her manufactured goods. United States, adopted the policy of globalization, democratization, free market and liberalism. However one may say that the reason behind US democracy in Africa is to create “FREE ATMOSPHERE” for the implementation of International Monetary Fund and World Bank inspired Adjustment programmes, thereby reinvigorating the type of market, which made Europe prosperous. Expediently, one can say that the free market/free trade they implement is only free movement of capital and not free movement of labour… (Ezea 2005) Now, wouldn‟t it be appropriate to say that more than 47 years Nigeria-United States economic relation has not enhanced Nigeria economic development and that instead it has plunged Nigeria deeper into the role of a mere primary producer of raw materials. Nigeria -US economic relation has only strengthened Nigeria‟s market economy instituted by the colonial masters. 11

As soon as Nigeria got her independence and needed economic aid, US was all over her with fund. According to Chiaka (1989), when the balance of cold-war interests shifted from Europe to the Third world in 50s, the policy of containment embodied in the United States aid programmes dictated a shift in emphasis towards political, economic and military support for “friendly” less developed nations, especially those considered geographically strategic. According to Michael Todaro (1982), most aid programmes to the third world, therefore were oriented more towards purchasing their security and propping up their sometimes-shaky regimes than promoting long-term social and economic development. Certainly, the United States/Soviet competition for Third world affection had a positive impact on decolonization and it may well have kept economic aid at higher levels than it otherwise might have been. Unknown to Nigeria, definite benefit accrue to donor countries as a result of their aid programmes. Typically, Nigeria believed US was a very bighearted friend but as one former United States AID official candidly put it: The biggest single misconception about aid programs is that we send money abroad. We don‟t. Aid consists of American equipment, raw materials, expert service and food –all provided for specific development projects, which we ourselves review and approve. Ninety-three percent of aid fund are spend directly in the United States to pay for these things. Just last year, some 4,000 American firms in 50 states received $1.3 billion in aid funds for products supplied as part of the foreign aid program (Gaud 1968:8).

Correspondently, Dean Acheson, former United States Secretary of State, once said, when he was referring to the motive for American aid to the Third world, that “It is not philanthropy that motivates us. But there is a hard- headed self-interest in this program” (Department of State bulletin, Feb.4, 1952). This of course substantiates that capital aid and technical assistance, which characterized the Nigeria-United States bilateral relation between 12

1960 and 1967, was just serving more of America‟s interest than Nigeria. Remember, aid is not a donation; it is a loan to be repaid with interest. Nigeria civil war interrupted a steady growth in the bilateral ties between the two countries. But between 1970 and 1983, during the oil boom, Nigeria oil became the centerpiece of her relation with the US. It was more of a relation of interdependence than dependence until the sharp fall in Oil price, which affected Nigeria‟s monoculture economy and plunged it back to aids recipient. Nigeria also found herself in the position of debtor in the international financial circles. The story of IMF and Structural Adjustment Programmes followed suit with its adverse effect on Nigeria economy. Since the late 1990‟s and particularly after the 9/11 hijackings in the United States, there has been a resurgence of global strategic interest in West Africa. In spite of the seeming leverage given by the terrorist threat to the US‟s current security cooperation in West Africa, it should be noted that the picture is incomplete if it is not emphasized that American oil interests are central in the US presence in a region that was described at the end of the cold war to have fallen off the world‟s strategic map. US oil companies are at the forefront of the “new scramble for Africa‟s oil” Obi (2005) The US is in competition against Britain, France and China in the new scramble for West Africa‟s oil (AOPIG 2002;Leigh and Pallister 2005) The findings between 1999 and 2006 reveals that though US offered economic assistance to Nigeria, oil seem to be the center piece of the bilateral relation between both countries. The amazing thing is that the buyer determines the price of oil just as they determine the price of their manufactured goods sold in Nigeria.

Evaluating whether Nigeria has benefited economically from this relation, we hear of foreign American foreign investments that come in the form of Multinational Corporations. The 13

impact of MNC on national industries and the capital flight they engender cannot be over emphasized neither can the obsolete technology they transfer be overemphasized. What about the capital-intensive investment they embark on? Until Nigeria understands that US only intervenes where she has interest and intervenes solely to serve that interest, Nigeria can never benefit from her economic relation with US. In essence it is pertinent for Nigeria to revisit her national interest and constantly project it in her relation with the US. By so doing there will be a meeting point that will benefit both countries. This study examines the political economy of Nigeria –United States relations between 1999 and 2009.

1.2 Statement of Problem According to United States information agency report (1985), Nigeria and United States have enjoyed increasingly active trade since Nigeria‟s independence. Currently, the US investment in Nigeria is larger than any other African country. The United States has remained a major investor in Nigeria‟s oil sector with ExxonMobil, Texaco, and Chevron etc as key players. Yet, the Nigeria -United States ties were almost negligible up till 1960. This relationship is essential to demonstrate that the current dependence of Nigeria on the Western capitalist economy of which the United States is its leader has its root on the pattern of political economic links established during the colonial period. The Nigeria market was preserved for the colonialist though there were attempts by the other European powers and United States to break this monopoly through competition and price wars.

Between 1960 and 1970, Nigeria government attempted to diversify her economic relation away from narrow dependence on Britain to a multilateral dependence on both Britain 14

and United States. This explained why between 1961 and 1965, United States emerged as the largest source of capital aid to Nigeria apart from United Nations and her agencies. In spite of the decline in the political and economic relation during the civil war years, the United States had surpassed Britain as Nigeria‟s dominant bilateral partner in important respects like Oil and Agricultural products. Between 1967 and 1970, the period of Nigeria- Biafra civil war, Nigeria -US relation deteriorated. Again in 1990s, Nigeria -US relation deteriorated following the annulment of June 12, 1993 presidential election. It is important to state that Nigeria‟s relation with the United States has been conditioned by the oil factor that is why the United States had maintained the policy of not intervening in Nigeria‟s domestic crisis if such crisis does not disrupt the flow of oil. More so, Nigeria-United States relation since Nigeria‟s independence has been raised on a tripod of democracy, trade and foreign investment. Nigeria ranks second only to Saudi Arabia as the most important supplier of petroleum to the United States which buys over one million barrels a day of the highly desirable light low sulphur sweet crude. Nigeria provides about 10 percent of the US oil imports. Annual trade amounts to US$6 billion and US companies have about US$ 7billion investment in the country (Onuoha, 2001).

All the former colonial powers are today reliable allies of the US in the postcolonial Africa countries including Nigeria. The US role in Africa has effectively secured the continent for expanded penetration of Euro-American Transnational Corporation. The new unipolar world of globalization has perfected the conditions of that penetration. The real issue from a US global security perspective is how to ensure control over the oil-wealth in West Africa (Krueger 2002) In the global economy, the use of technology, trade, investment, aid etc to influence the course of events in the international system has been an important reason nations engage in 15

international economic relation. In this relation the weaker nations especially those like Nigeria are usually subjected to manipulation by the stronger nations like US. This means that the so called mutuality of interests of Nigeria and US has constantly depended on the preservation of the structural conditions where the US is a dominant industrial power and Nigeria, a safe raw material supplier and subordinate ally. Some scholars like Agada (2003) and Agbu (2000) have argued that Nigeria -US relation has greatly undermined Nigeria national economic development and strengthened her dependency structure since Nigeria‟s independence. They noted that President Olesugun Obasanjo‟s administration under the democratic dispensation since 1999 maintained Nigeria –US relation in trade, investments and military. Meanwhile it appears scholars have not determined whether oil remained the centre piece of Nigeria –US relations between 1999 and 2009. Again, scholars appear to have not satisfactorily determined the import of Nigeria –US relation on Nigeria‟s development. Against this background, this study seeks to provide answers to the following questions:

  1. Is there any link between crude oil endowment and intensification of economic relation between Nigeria –United States within the period of study.
  2. Has Nigeria –United States economic relations enhanced economic development in Nigeria within the periods under study.

 

1.7 Objective of study

 

This study has both broad and specific objectives. The broad objective of this study is to examine the political economy of Nigeria –United States relations between 1999 and 2009. The specific objectives are as follows; 16

 

  1. To ascertain whether there is any link between crude oil endowment and intensification of economic relation between Nigeria –United States within the period of study.
  2. To find out if Nigeria –United States economic relations enhanced economic development in Nigeria within the periods under study.

 

1.4 Significance of study This study is theoretically and practically significant. Theoretically, understanding the nature of cooperation between both countries will greatly enhance efforts at further improving economic relations between them. A recent review of the Nigeria –U.S. economic relation reveals that as the US expands her economy, Nigerian comprador bourgeoisie collaborate with US to exploit Nigerian economy. It will lead to the understanding of the place of oil in the Nigeria –US economic relation within the period under study. The study will also unravel the effect of the Nigeria –US economic relation on the Nigeria‟s development. The study will be valuable to scholars and future researchers, as it will serve as a source of secondary data. Practically, the study will suggest and advise Nigerian policy makers on steps they should take in order to maximize their benefits from their relation with U.S.

1.5 Literature review Available literatures on the subject matter have either taken economic or political worldview in understanding of Nigeria US economic relation. Considering this thrust, it will be essential to review this work under the following sub headings namely:

  1. Oil and Nigeria US economic relations.
  2. Nigeria- United States economic relation and Nigerian Development.

17

  1. A. Oil and Nigeria US Economic Relations Agada (2003) in his contribution in the discourse on oil and Nigeria US relation highlighted that following the discovery of larger quantity of oil within the Niger Delta in 1970, Nigeria –U.S. relations improved. According to him, Nigeria has depended on American companies for the development of the petroleum industry. Apart from Shell (which is a British oil Multinational Corporation) the rest of the oil Multinationals involved in oil exploration in Nigeria are American companies. Nigeria and the United States found a mutual interest in cooperation in economic matters. From this period, the United States became more involved in Nigeria‟s economic issues. Implicitly, Agada further claimed that the United States is Nigeria’s largest trading partner after the United Kingdom. The stock of US investment is nearly $7 billion, mostly in the energy sector. Exxon-Mobil and Chevron are the two largest US corporate players in offshore oil and gas production. Significant exports of liquefied natural gas started in late 1999 and are slated to expand as Nigeria seeks to eliminate gas flaring by 2008. Oil dependency, and the allure it generated inflated government contracts and spawned other economic distortions. The country’s high propensity to import means roughly 80% of government expenditures is recycled into foreign exchange Agada (2003).

Agbu (2000) commenting on the centrality of oil in Nigeria –US economic relation remarked that under Sani Abacha‟s era (1993-1998), Nigeria relations with the United States was very lukewarm with both countries barely tolerating each other but that is not to say that both countries have not been cooperating on many other fronts. Indeed, their cooperation on the drug/money laundering problem is quite commendable. He concluded that American companies like Texaco, Mobil and Chevron have been operating successfully in Nigeria for years. 18

Therefore this is one area that, that is, the oil industry that the U. S. government is very much interested in. In fact, a glance at the Balance of Trade between Nigeria and the United States is quite revealing. In 1999, the US imported goods worth $4.4 billion from Nigeria, the 99 percent of this consisting of petroleum and petroleum products. The same year, Nigeria imported goods worth 600 million from the U. S. made up mostly of food and live animals. Congruously, Akinyemi et al (1989) argued that relations between Nigeria and the United States are basically conditioned by the oil factor. He asserted that the United States have shown much concern toward friendly relation with Nigeria as demonstrated in various bilateral agreements between both countries. Confirming this he stated that economic relations between Nigeria –US did not necessarily provoke political understanding and cooperation. In fact the very condition that necessitated intense economic intercourse also necessitated some misunderstanding of policies and politics. Though political relation between Nigeria and US continued to be uneasy, and remained at the lowest ebb level, economic intercourse even intensified. To demonstrate U S displeasure at Nigeria‟ s position, President Nixon refused to receive Gowon at the White house in October 1973. And this was exactly the period when trade in crude oil blossomed between Nigeria and US. The Nigeria- US economic relation though it deteriorated during the civil war did not completely rule out their economic relation.

Similarly, Onuoha (2005) argued that Nigeria relation with the US has been conditioned by the oil factor. According to him, the United States, which has not been significant Nigeria‟s, trading partner until 1960 became by 1970 the major consumer of Nigeria‟s oil. He summarized 19

that United States had maintained the policy of not intervening in Nigeria‟s domestic crisis if such crisis does not disrupt the flow of oil Onuoha . He also has noted that the US interest in Nigeria is centered on trade in crude petroleum. According to him, Nigeria sells 40 percent of its oil to United States and Nigeria crude oil export as well as related products makes up about 10 percent of total annual US imports. Ate affirmed that American private investment in Nigeria is concentrated in the oil sector and telecommunications .He further stated that American multinational oil companies like Chevron, Mobil and Texaco have a great stake in economic growth, environmental well-being and political stability of Nigeria especially in the Niger-Delta Ate (2000).

In the publication of the United States embassy in Abuja, it was confirmed that Nigeria is the largest US trading partner in sub-Saharan Africa, based mainly on the high level of petroleum imports from Nigeria. Total two-way trade was valued at $30.8 billion in 2006, a 19% increase over 2005. Leading U.S. exports to Nigeria were machinery, wheat, and motor vehicles. Leading US imports from Nigeria were oil and rubber products. Nigerian exports to the United State under the African Growth and Opportunity Act (AGOA), including its Generalized System of Preferences (GSP) provisions, were valued at $25.8 billion during 2006, a 15% increase over 2005, due to an increase in oil exports. Non-oil AGOA trade (leather products, species, cassava, yams, beans, and wood products) totaled $1.4 million in 2006, almost double the amount in 2005. The United States is the largest foreign investor in Nigeria. The stock of US foreign direct investment (FDI) in Nigeria in 2005 was $874 million, down from $2.0 billion in 2004. US FDI in Nigeria is concentrated largely in the mining and wholesale trade sectors (http://abuja.usembassy.gov/). According to This Day Newspaper of Monday July 8, 2002, Nigeria supplies United States about 900,000 barrels of oil 20

per day and hope to double its import from this figure to 1.8 million barrels per day. Asserting this, Walter Kanstenier III US Assistant Secretary of State stated that “Africa oil is critical to us and it will increase and become more important as we go forward (Quoted in AOPIG 2002). A great deal of excitement has been generated by some think-tank in the US as well as among leading American policy makers as to the prospect of maximizing their gains in the new scramble for West Africa oil. They point to the fact that West Africa currently provides 15 per cent of US oil (of which 10 per cent comes from Nigeria) and the figure is expected to rise to 25 per cent by 2020 Obi (2005). The implication of all this is that US interest in Nigeria be it economic, political or military has an oil underpinning which mastermind it.

  1. Nigeria- United States Economic Relation and Nigerian Development Integration into the global economy according to a publication of USAID in March 2003 publication titled “Building Trade Capacity in the Developing World” can be a powerful force for economic growth and poverty reduction. Furthermore in its recent National Security Strategy, the Bush administration established the goal of igniting a new era of global economic growth through free markets and free trade. Trade and investment are the principal mechanisms through which global market forces, competition, human resource development, technology transfer, and technological innovation generate growth in developing and developed countries. During the 1990s, developing countries that successfully integrated into the global economy enjoyed per capita income increases averaging 5 percent annually.

The publication however, observed that countries that limited their participation in the global economy saw their economies decline. Developing countries‟ overall share of global trade is increasing, and the flow of foreign direct investment to poor countries has grown 21

rapidly. But this growth is concentrated in a few countries, and many of the poorest developing countries remain on the sidelines because those countries protected their domestic markets with tariff barriers and other measures that limited their participation in the global economy. But has this integration of Nigeria into the global economy enhanced the overall development of Nigeria before and between 1999-2006 even as they enjoyed increasing association and collaboration with the US? Nigeria scholars like Ake (1981), Nnoli (1981), Offiong (1980), Chiaka (1989) to mention but a few have in their various works argued that the development of Nigeria is assured only on the basis of their „break away‟ from the advanced capitalist countries, United States included. They think that Nigeria increasingly collaboration with the United States especially in trade of raw materials and exchange of manufactured goods between 1999-2006 would spell more underdevelopment for Nigeria. To these scholars therefore, Nigeria United States economic relation will only enhance Nigeria underdevelopment and dependency. As noted, sometime in history, Japan was forced to close-up its economy or protected their domestic markets with tariff barriers and other measures that limited their participation in the global economy in order to be self-sufficient and hasn‟t that benefited Japan today? Why will African countries that choose to do the same be considered poor according to the USAID publication? President George W. Bush in his November Presidential address pointed out that developing countries receive $50 billion a year in aid, while foreign investment inflows total almost $200 billion and annual earnings from exports exceed $2.4 trillion. The president also noted that, in 2001, trade opportunities created by the African Growth and Opportunity Act (AGOA) alone boosted African exports to the United States by more than 1,000 percent, generated nearly $1 billion in investment, and created thousands of jobs. 22

The dilemma with this type of analysis is that if it is devoid of bias (which is always unusual), the indices used in this analysis are simply kept secret if at all there is any. Armchair theorizing is another expression of this type of analysis whereby foreign officials/researchers analyze situations in their office or by mere television or newspaper report without really involving themselves in any fieldwork. For all I care the US president might just be making exaggerations to serve their interest. USAID major program areas in Nigeria when it resumed its operation under the democratic dispensation in 1999 include Transition to Democratic Civilian Governance Sustained, Strengthen Institutional Capacity for Economic Reform and Enhance Capacity to Revive Agricultural Growth: Develop the Foundation for Education Reform, Increased Use of Maternal and Child Health/HIV Services and Preventive Measures within a Supportive Policy Environment, while other program areas are: Economic Support Fund (ESF)was established to promote economic and political stability in strategically important regions where the United States has special security interests. In addition, ESF has been used to support USAID’s economic growth objectives, particularly in the area of privatization of state-owned enterprises, micro-enterprise development, and anti-corruption efforts. Democracy and Human Rights Fund (DHRF), Public-Private Alliance (PPA): is USAID’s business model for the 21st century-our commitment to change the way we implement our assistance mandate. PPA in Nigeria supports the development of agricultural partnerships to increase productivity, marketing and export of crops, e.g. gum Arabic, cocoa, cassava. Also, PPA supports a new information technology project that disseminates agriculture-marketing information to producers and many other programs. 23

Agada contributing to the debate asserted that on Nigeria‟s economic development, USAID is helping Nigeria towards economic reforms and agricultural growth. He went further to say that USAID is doing this by strengthening government‟s economic management capacity and promoting private sector participation particularly in Agriculture. USAID assistance to him is focused on economic management and reforms, including the budget process and design and implementation of key policies, such as the on-going privatization, export promotion, technology and commercialization, rural sector development and micro-enterprise development. Apart from the fact that these values being upheld by America which are liberal economic values are more beneficial to the US than Nigeria, it remains a question of whether or not this USAID programs have enhanced Nigeria development because when these USAID programs are not fostering and instituting agricultural sector to the cheer detriment of industrial sectors, it up holds welfare issues, encourages loan lending or more accessibility of the Nigeria‟s market to the US. Some scholars like Akinyemi (1989); Agada (2003); Agbu (2000) and Onuoha (2005) have established that oil is at the centre piece of Nigeria US relations since the discovery of oil in Nigeria, none of these scholars appeared to have updated this information to determine whether oil has continued to be at the centre of the relation between the two countries. Again, Agada (2003) and Agbu (2000) argued that Nigeria -US relation has greatly undermined Nigeria national economic development and strengthened her dependency structure since Nigeria‟s independence. Yet it appears they have not satisfactorily determined the import of Nigeria –US relation on Nigeria‟s development. It is this gap that this study seeks to fill. 24

1.6 Theoretical Framework Though political economic framework could explain almost every situation in interaction of states, the theoretical framework for the analysis of Nigeria – US economic relations between 1999 and 2009 will be rooted on the dependency theory. This is because it enables us capture at a glance the dependent status of Nigeria in her economic relation with US. Dependency theory addresses the problems of poverty and economic underdevelopment throughout the world. Dependency theorists argue that dependence upon foreign capital, foreign trade, technology, and expertise impedes economic development in developing countries. Scholars associated with this theory include Baran, Cockrosft, Theotonio Dos Santos, etc (Ojo et al 1985) Latin American scholar propounded dependency theory to explain the inability of Latin American countries to attain a high level of economic and industrial development after years of independence. According to Paul Conklin, Dependency theorists believe that poverty and underdevelopment in developing nations is a result of those nations’ historical and ongoing dependence on wealthier, Western countries for foreign trade and investment. Dependency theorists are disenchanted with modernization theorists Microsoft Encarta, 2005. According to Gilpin, (1979) dependency means a situation in which the economy of certain countries is conditioned by the development and expansion of another economy to which the former is subjected. The relation of interdependence between two or more economies, assumes the form of dependency when countries (i.e. the dominant ones) can expand and be self sustaining, while other countries (the dependent ones) can do this only as a reflection of that expansion, which can have either a positive or a negative effect on their immediate development 25

Dependency theorists argued that former colonial nations were underdeveloped because of their dependence on Western industrialized nations in the areas of foreign trade and investment. Rather than benefiting, the relationships stunted their development. Drawing upon various Marxist ideas, dependency theorists observed that economic development and underdevelopment were not simply different stages in the same linear march toward progress (see Karl Marx). They argued that colonial domination had produced relationships between the developed and the developing world that were inherently unequal. Johan Galtung (1979) adopted the model of Centre-Periphery to explain this relationship between developed and underdeveloped countries. As the name suggests, the model of centre- periphery implies the division of the world into global centre and global periphery. It suggests the extension of capital principally from the center of capitalist nations of west Europe and North America (USA) to other parts of the world in the periphery (Nigeria). At the economic level, the periphery is incorporated into the global capitalist system of division of labour in a subordinate status. Consequently, the centre expropriates and appropriates surplus value from the periphery. Meanwhile, the economy of the periphery is export or externally oriented and disarticulated such that there is no link between the industrial and agricultural sectors or rural and urban areas.

This incorporation into the global capitalist system as explained by Rodney (1972) is such that the Developed capitalist countries dictate or determine the direction of change. As such, the third world is just as their mercy. This is because the developed capitalist countries are technologically more advanced than the underdeveloped countries. In other words, (within certain limits) it is the technologically advanced metropoles (USA) who can decide when to end their dependence on the colonies in a particular sphere and when that happens, it is the colonies 26

or neo colony (Nigeria) that goes begging cap in hand for a reprieve and a new quota. It is for this reason that a formerly colonized nation has no hope of developing until it breaks effectively with the vicious circles of dependence, which characterizes imperialism. The dependency theory is very relevant in this work because it explains blatantly the economic relationship between Nigeria and US. Nigeria depends so much on the US to sell her oil. Ordinarily, without the purchase of this oil by US, Nigeria is going to be placed on the verge of starvation. Why? Firstly, oil constitute about 90 percent of Nigerian foreign revenue and about 70 percent of Nigeria‟s national income. Oil production revenue provides about 72 percent of the GDP, and has continued to provide more that 94 percent of exports Ukwu (2000). Technologically, Nigeria is still an infant to consume the enormous oil it produces. US understand this and they explore it to their advantage. They decide the price to buy the oil and if Nigeria ever disagrees, they look elsewhere for other willing sellers. Again, like Rodney rightly said, the pace of change is being dictated by the developed capitalist nations. In the 60s, the developed countries demanded agricultural exports and Nigeria supplied this enormously. In the 70s, crude oil became the other of the day and Nigeria abandoned Agriculture in order to produce and sell oil. The effect of this was so great that Nigeria had to import more than 70 percent of her food from the US. US supply Nigeria with 100 per cent of wheat. The US dependence on Nigerian oil will end when US finds a supplement for crude oil just like the westerners dependence on Africa‟s fabric ended when they discovered they could make fabric through synthetic materials. Nigeria is only relevant to the US because the oil is relevant to the US. For certainly power over the world‟s oil reserves is the ultimate symbol of US global military might. 27

No matter how dependency theory is explained, the core message of this work remains that Nigeria is a peripheral nation and therefore structurally dependent on US and other developed capitalist nations in the areas of trade, direct foreign investment, science and technology. And in the words of Rodney (1972) dependent nations can never be considered developed. Though modern conditions force all countries to be mutually interdependent in order to satisfy the needs of their citizens, it is not incompatible with economic independence because economic independence does not mean isolation instead it requires that a nation‟s growth at some point become self reliant and self-sustaining. Today, Nigeria as a peripheral nation depends on US the center nation for economic, political and socio cultural assistance. There has been an established link between the economic dominant class in both US and Nigeria. This is because the economic dominant classes in the two nations under study depend on the mutual exploitation of the non-dominant class. What more, the International division of labour has assigned the function of manufacturing of products to US and the rest of the advanced countries while Nigeria produces the required raw materials like oil. Within this framework we hope to examine Nigeria -US economic relation between 1999-2009.

1.7 Hypotheses

 

In the light of the research questions and review of related literature, the following hypotheses will be tested:

  1. There is a link between crude oil endowment and intensification of economic relation between Nigeria –United States within the period of study.

28

 

  1. Nigeria –United States economic relations has not enhanced economic development in Nigeria within the periods under study.

 

1.8 Method of Data Collection/ Analysis The method of data collection for this study is observation of documentary evidence that deals with Nigeria –US relations. We heavily relied on secondary sources such as books, journals, articles, periodical, government reports and publications, magazines, unpublished manuscript, commentaries, and conference papers. Other data were collected through electronic sources such as television news broadcasting and radio news broadcasting and Internet materials. Again, we relied essentially on descriptive qualitative method as our methods of data analysis in this study. We also use simple percentages and tables graphs to buttress the arguments in this study.

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