Evolution of freedom

The Freedom Index illustrates well two important aspects of Nigerian institutional development in the last three decades. First, the transition to democracy explains the sharp increase of the Index score in 1999, which closes the gap with the average of the Sub-Saharan Africa region. Second, the often volatile evolution in the subsequent decades is a sign that the liberalization process has not been free of challenges and inconsistencies. Politically, the country has consistently held elections since the turn of the century, even though these have often fallen short of high levels of fairness and transparency. In terms of economic policy, while the successive governments have enacted varying degrees of reforms, these efforts have been somewhat inconsistent and not often coherent depending on the sector we analyze.  

The economic subindex exemplifies well this latter point, with really high short-run fluctuations throughout the period of analysis, mainly driven by the trade and investment freedom components. To be sure, the oil industry is central for Nigeria’s economy, representing 90 percent of its exports, and the fluctuations in both measures is, to an important extent, driven by the situation and the legal framework governing this sector. For about twenty years, the country has had internal debates about new oil industry legislation, and a new law was enacted in 2021, which has generated a climate of uncertainty, causing investors to be reluctant to pursue new investments in the country. In fact, Nigeria is producing less oil today than it did in 2010.  

Another factor that can explain some movements, such as the substantial fall in trade and investment freedom in the first decade of the century, is the introduction of different local content policies. Obviously, these kinds of policies are favored by domestic investors and can support a country’s broader development agenda, but they can often affect the degree to which foreign capital finds the country attractive for investment. Finally, the relevance of the oil industry in generating government revenue and foreign reserves has many times led the government and central bank to heavily intervene in the exchange rate market, sometimes in non-orthodox ways. This was particularly the case after the oil price collapse of 2015, which may explain the fifteen-point fall in trade freedom in the following years.  

It is fair to say that the liberalizing effort has been robust in some other sectors of the Nigerian economy. The telecoms industry was liberalized in the early 2000s, as well as the banking sector, which certainly helped unlock growth and productivity. But trade policy has at best been erratic, with the country pursuing an import substitution strategy in sub-sectors such as beverage products, sugar, flour, and cereal. As a result, it is clear that the country has not yet been able to establish a stable and secure framework for international trade and investment.  

Nigeria’s score on property rights protection is relatively low, compared to the regional average, and does not seem to vary much along the period 1995–2023. Nonetheless, this score has less to do with a risk of government expropriation of property than may be the case in some other economies with such low scores. The score may be reflecting the strict local content policies implemented across different sectors, which in some ways impose limits on the capacity of companies and owners to manage their assets.  

The women’s economic freedom component seems to have improved in the last three decades, but is still lower in Nigeria (66.3) than in other comparator countries in the region like Kenya (83.8), Ethiopia (80), or South Africa (88.1). Some important laws regarding gender equality are probably weaker in Nigeria. For example, there are no quotas for parliamentary participation for women, nor specific legislation incentivizing women’s economic participation, although there are a variety of customary and religious laws at the subnational level that have varying impacts on women’s acquisition of assets. Overall, there might be a significant gap between formal legality and actual practice on this matter, because women in the country are highly entrepreneurial, and girls’ school enrollment has increased substantially since the 1990s, which favors their labor force participation and overall economic activity outside the home.  

Moving on to the political subindex, the democratic transition of 1999, that situated the country together with other democracies in the region, is evident in the graph. All components of the subindex sharply improve, with the notable exception of civil liberties. This indicator is the average of two variables, one measuring private civil liberties (freedom of movement, religion, etc.) and another the degree of physical violence (freedom from torture and political killings). When looking at the disaggregated data, it is clear that the very low level of the civil liberties component is generated by an extremely poor performance in the latter, while private civil liberties have consistently scored above 80 in the last two decades. Violent insurgencies are likely influential in the low level of the physical violence variable, with Islamist Boko Haram in the northeast, the separatist movement Indigenous People of Biafra in the southeast, and the rising levels of violent crime including kidnapping for ransom in various parts of Nigeria. The declining quality of the police forces may also be an important factor. There have been protests against police brutality around the country, most recently in 2020, and individual rights relating to detention and imprisonment are not always adequately guaranteed.  

The rest of the components of the political subindex reach standard levels for young democracies in the developing world, at least until 2016, even though there are some small fluctuations that can be discussed. The component measuring the quality and fairness of the electoral process suffers a five-point drop in 2003, and does not recover the initial level until 2011. This fits well with the generalized view that the 2003 and 2007 elections held in the country suffered clear deficiencies. Subsequent elections in 2011 and 2015 were visibly more credible, and the data reflect it well with a ten-point increase.  

Legislative constraints on the executive have been historically strong in Nigeria. Two episodes illustrate this fact fairly well. First, in 2007, the first post-military president tried to extend his tenure to get a third term in power, but he was successfully thwarted by the legislature. Second, in 2010, the successor president fell ill and his inner circle tried to prevent the handover of power to his vice-president. The legislature stepped in again, ensuring a legal transition of power. However, the data show a clear fall starting in 2015, exacerbated in 2019, and only reversed in 2023. It is not clear that any important piece of legislation was passed during this period that could have reduced the power of parliament to control the executive, so the scores may just be capturing the fact that, in the 2015 elections, the opposition party won a decisive majority in the legislature, and thus in the following years legislative checks on the executive may have been relatively soft as a result of both being of the same political party.  

Finally, the seven-and-a-half-point drop in political rights in 2020 can be explained by a combination of the emergency situation generated by the COVID-19 pandemic and the security concerns due to the insurgencies in the Niger Delta, the northeast, and the southeast of the country. It is undeniable that the government became increasingly intolerant with some forms of freedom of speech, for example limiting the use of social media. Nonetheless, the Nigerian situation is not necessarily comparable to other parts of the world that are experiencing deeper and more extended democratic regressions, and the partial recovery in 2023 seems to confirm this intuition. 

Turning to the legal subindex, it is very clear that judicial independence and effectiveness and clarity of the law receive significantly higher scores than the rest of the components of the subindex. This is comparable to the regional average, at least since the democratic transition of 1999. In the last twenty years, there have been numerous disputes between different branches of power (legislative versus executive, federal versus the thirty-six states, etc.) which have been decided in high courts, often times against the powerful federal government. A good example is the decision of the Supreme Court in the case between the federal government and the Lagos state over local government funds, which was decided in favor of the latter, a strong indication of Nigeria’s judicial independence. In most cases, judicial decisions are accepted, respected and abided by.  

Security, as well as bureaucracy quality and control of corruption, are the components dragging the legal subindex score down, generating a substantial gap with respect to the Sub-Saharan Africa regional average. These scores reflect realities on the ground. As commented earlier, the various insurgent movements around Nigeria, together with the spread of organized violent crime and banditry, generate a generalized environment of insecurity. The government appears to have made some progress in fighting insurgents in the last few years, pushing them back and dismantling their strongholds in both the oil-rich Niger Delta in the south and with regards to the Islamist Boko Haram in the northeast. However, there are high levels of violent crime, kidnapping for ransom, and banditry that the government—both at the federal level and across the thirty-six states—has struggled to address, with significant implications for the continuing development of the country.  

Last but not least, the recurrent and discouraging low score on bureaucracy and corruption is very real. The Nigerian civil service desperately needs a total overhaul, and the country’s successive political leaders are fully cognizant of this fact. But such reform could affect tens of thousands or even millions of public employees, who are politically powerful, which makes it politically very costly for any government. The crucial anti-corruption agencies created in the early 2000s, such as the Independent Corrupt Practices Commission and the Economic and Financial Crimes Commission, were somewhat effective initially, in the first decade of the century, but soon became politicized. Thus, widespread and grand corruption in public administration can only be tackled with a holistic reform, which does not seem to be imminent. 

Evolution of prosperity

Despite the sustained growth of Nigeria’s score in the Prosperity Index since 1995, it still finds itself among the lowest prosperity group, ranking 136 out of 164 countries covered by the Indexes. However, there are some encouraging trends worth noting. First, the income component was influenced by the oil boom, in terms of high global oil prices in the 2002–15 period. Yet, as my own research shows, the oil boom was only a small part of the story. Other sectors of the economy also thrived since the early 2000s, such as banking and financial services and the telecoms industry, which were liberalized, smaller industrial services adjacent to oil production, and other non-oil exporting sectors. As a result, the data clearly show that oil’s contribution to gross domestic product (GDP) growth has been declining—from around 40 percent in the year 2000 to less than 10 percent today—with respect to the rest of the economy, denoting that Nigerian growth was not only based on the commodity boom. Nevertheless, the commodity price crash of 2015 affected the country’s overall growth trajectory, as Nigeria relies on oil exports for the bulk of its foreign exchange reserves, and thus many non-oil industries and sectors suffered increasing difficulties in accessing foreign imported inputs. The global effects of the COVID-19 pandemic further exacerbated the situation, and Nigeria has not yet been able to recover the 2015 level of real GDP per capita. 

The promising evolution of the inequality component is probably capturing the substantial decrease in poverty rates within the country. Yet it must be noted that there is a clear regional divide in Nigeria, and the inequality and poverty reduction has not been homogenous across the country. The majority Muslim regions in the north of Nigeria are significantly poorer than the south, explained by much lower levels of educational attainment, higher prevalence of informality, and lower levels of industrial production, etc. Therefore, interregional or horizontal inequality is certainly deep and pervasive, and public policy should be directed to reduce the north-south gap.  

By far the most striking data come from the health component, where Nigeria ranks 162 among 164 countries, and the gap with respect to the Sub-Saharan Africa average has been widening in the last two decades. Nigeria’s life expectancy is much lower than its income level would predict, close to that of much poorer countries in West and Central Africa like Niger, Central African Republic, and others. This is a combination of two factors. First the already mentioned violence across the country, with its associated high levels of mortality of young fighters. Second, a precarious healthcare system that is significantly underfinanced, lacking professionals and personnel, especially in rural areas, a problem that will only be aggravated in the coming years given the high levels of population growth.  

The similarly low score regarding equal access and absence of discrimination for minorities also has important regional differentiations. The imposition of Sharia law in some northern states in the early 2000s did not favor Christian and other religious minority groups, or secular-oriented Muslims, in these states. However, since the mid2010s, the popularity of Sharia law in these states has declined significantly because the political leaders who championed its implementation were largely underperformers in terms of the actual quality of governance.  

Finally, the score on the environment component of the Prosperity Index is clearly low, but seems to show a positive trend in the last twenty-five years, with important caveats. On the one hand, pollution related to oil production is high, and there is uncertain commitment on its decisive reduction, which necessarily worsens air quality in the areas where oil extraction and refineries are prevalent. On the other, indoor air quality may have improved since the year 2000, when less than 1 percent of the population had access to clean cooking technologies, but even today that share is below 20 percent, which is very low. Deforestation, particularly in the north, is pervasive because many households still rely on biomass, wood burning, and other sources of domestic energy that are highly detrimental for their health. 

The path forward

Developments within Nigeria, within the African continent, and around the world will contribute to the country’s freedom and prosperity trajectory within the medium term. There are likely to be continuities and changes in the various dimensions that constitute Nigeria’s Freedom Index. The consolidation of the country’s electoral democracy will continue even if progress is not linear—it is very unlikely to experience a military coup or other such drastic setbacks to its democracy as was recently the case in Mali, Niger, and Burkina Faso in West Africa. Yet, the quality of Nigeria’s elections will continue to vary by election cycle, contingent on the nature of the electoral competition and the profile of candidates running.  

The pace, consistency and scope of Nigeria’s domestic economic reforms, as well as global economic conditions, will have a determinative impact on Nigeria’s economic subindex. While the country’s debilitating challenge of depending on fuel subsidies will remain prominent in the short term, efforts to increase the domestic refining and supply of refined fuels, including the completion of the Dangote refinery complex, will eventually address this challenge in the medium to long term. Nigeria will also continue to implement local content policies across various industries due to the demand coming from the country’s large and vibrant private sector. In addition to the oil and gas sector, creative industries (entertainment, movies, music), and the f inancial sector, where these local content policies have been most visibly enforced, information and communications technology and the digital economy could be the next frontier. A dynamic trade policy will certainly help propel Nigeria’s economy to greater heights, including helping to further advance important elements of small business development and women’s economic empowerment, but its design and implementation is not yet on the radar of the country’s top decision makers.  

There are likely to be both significant advancements and notable setbacks in the components of Nigeria’s political subindex. The exercise of effective checks on the executive by Nigeria’s National Assembly (i.e., federal legislature) may increase in the next election cycle, especially if opposition parties are able to leverage the current popular discontent and gain more seats in the two legislative houses. Progress on this front in the subnational legislatures—state houses of assemblies—is perhaps less certain. Without drastic and concerted efforts at addressing Nigeria’s security challenges, including a wholesale overhaul of the national police force, the significant levels of violent crime are unlikely to abate in the medium term.  

So much about Nigeria’s legal subindex will continue to be weighed down by the absence of comprehensive civil service reform. While this does not have direct bearing on the country’s notable levels of judicial independence, it directly impacts Nigeria’s bureaucratic quality. It remains to be seen whether any government can shoulder the political costs of overhauling Nigeria’s civil service by implementing the recommendations of the Oronsaye report to reform the public sector. 

In the short term, Nigeria’s per capita income will continue its declining trend as a result of COVID-19 shocks as well as the inflationary impacts of recent exchange rate and subsidies reforms. Consequently, Nigeria’s per capita income will continue to trail its regional peers including South Africa, Ghana, Kenya, and Côte d’Ivoire. However, the pace of this income decline could be halted and even reversed in the medium term with the design and implementation of pro-productivity economic policies on the supply side but also on the demand side. Addressing Nigeria’s electricity, transportation and digital connectivity infrastructure gaps will be crucial on this front. Reducing the incidents of violent crime, especially banditry plaguing rural farming communities, is also necessary. Effective coordination of trade, investment and industrial policies focused on labor-intensive industries, particularly agriculture and manufacturing, will be essential. 

In the near term, Nigeria’s social indicators are likely to deteriorate before they stabilize and, contingent on the rollout of mitigating policies, experience a trend reversal. Due to domestic factors, such as, the impacts of the removal of subsidies, harmonization of exchange rates, and inflation, as well as exogenous factors such as the COVID-19 pandemic, the incidence of poverty is very likely to increase inequality. Findings from a new round of the Nigeria Living Standards Survey when released—the last round was conducted in 2018–19—will likely confirm this trend. However, a comprehensive rollout of income-smoothing social protection interventions could support households and even small businesses to navigate the adverse impacts of liberalization policies. Increased health spending as well as workforce training could further bolster Nigeria’s health and mortality indicators.  

Finally, Nigeria’s environment-related indicators may stabilize and take an improving turn as relevant policies take effect. Progress in the implementation of Nigeria’s natural gas masterplan, in the medium term, could help reduce gas flaring and the associated environmental pollution. Political outreach by the federal government to aggrieved groups in the oil-producing Niger Delta could help reduce some types of small-scale oil theft and illegal oil refining that often result in oil spills and aggravate environmental degradation. Extensive support being provided by multilateral development banks and other international organizations to support clean cooking solutions could help reduce biomass use by households and thereby slow down the pace of deforestation in the country. 

Zainab Usman is the founding director of the Africa Program at the Carnegie Endowment for International Peace in Washington, DC. Usman’s enduring area of expertise is identifying the policies and institutions to enable low- and middle-income economies to harness their natural resources to achieve sustainable economic development. She is author of the book Economic Diversification in Nigeria: The Politics of Building a Post-Oil Economy, which was selected as one of the best books of 2022 on economics by the Financial Times. 

The Atlantic Council and its staff, fellows, and directors generate their own ideas and programming, consistent with the Council’s mission, their related body of work, and the independent records of the participating team members. The Council as an organization does not adopt or advocate positions on particular matters. The Council’s publications always represent the views of the author(s) rather than those of the institution.

2024 Atlas: Freedom and Prosperity Around the World

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Jun 15, 2023

Freedom and Prosperity Indexes

The indexes rank 164 countries around the world according to their levels of freedom and prosperity. Use our site to explore twenty-eight years of data, compare countries and regions, and examine the sub-indexes and indicators that comprise our indexes.

The Freedom and Prosperity Center aims to increase the prosperity of the poor and marginalized in developing countries and to explore the nature of the relationship between freedom and prosperity in both developing and developed nations.

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