Nigeria's ethnic diversity can harm economic growth

Jul 01, 2019|Stephannie Adinde

Africa has some of the most ethnically diverse societies in the world. The number of ethnic groups within a country can range from a few in countries like Burundi and Rwanda to more than 250 in Nigeria and the Democratic Republic of Congo. But, what is often viewed as a rich cultural heritage, has often been a source of conflict and a deterrent to development.

Ethnic composition matters for development. Greater ethnic diversity often increases the probability of ethnic tensions and conflict; like those present in Africa. This, in turn, harms economic growth and development. The high levels of ethnic diversity in Africa can aid our understanding of Africa’s poor growth performance. In fact, research suggests that ethnic diversity alone accounts for about 28% of the growth differential between Africa and East Asia.



The aphorism "not yet a country" is one that emerges in any discourse on Nigeria's political and post-colonial history, due to how fragmented the nation is. Nigeria came into existence in 1914 because of the amalgamation of Britain’s possession around that region. The dysfunctional marriage of the different regions was supposed to unify the nation. Instead, it created division, hostility, and unhealthy competition. The fragility of Nigeria's unity was tested for the first time after independence, and the result was a couple of ethnic-related coups and a civil war.

Conflict significantly shapes the political economy of affected nations. It often leads to prolonged political instability, weak institutions, poor economic policy, and uninspiring economic performance. The Biafra war undoubtedly had the same effect on Nigeria. 

Few Nigerians see the entire country as their own. Many lack the proper motivation to do their very best when in positions of power unless their actions are directly benefiting them or their ethnic group. Government officials usually award contracts to unqualified bidders/organizations simply because they are from the same tribe; this inevitably encourages rent-seeking. The prioritisation of tribal identity over professional efficiency often results in the poor execution or non-execution of projects that could have potentially transformed the lives of many Nigerians.

For instance, the Nigerian government constructed one of the country’s largest oil refineries in Kaduna, Northern Nigeria. For many, this was a mere exhibition of power by the ruling northern elite at the time; because the decision to locate an oil refinery miles away from the oil-producing south was highly illogical and cost ineffective. 


Trust Issues

These ethnic tensions lead to worse outcomes for everyone. It leads to a lack of trust, which has negative impacts on business and overall economic growth. It is well known that landlords in Lagos discriminate against Igbo tenants. This leads to an inefficient bias in the rental market. Tribe associated prejudices have now infiltrated how Nigerians interact and perceive each other; both at an individual and national level. 

Once upon a time, the Muslim North supplied agricultural products to the Southern parts of the country, in return for fish, palm oil, cocoa, and sometimes petroleum resources; an effective barter system. However, because of the tribal and religious conflict between the two regions, trade has been disrupted, which has negative implications for the agricultural sector and the economy as a whole.

The lack of trust also makes it difficult for policymakers to agree on policy issues, and they tend to waste limited resources in distributional struggles. Each region stays fighting tirelessly to secure a piece of the national cake. 

The inter-ethnic rivalry has also had fatal consequences on the political process. The country stubbornly maintains a unique presidential rotations system where, after two terms, the presidency shifts between the major political regions to satisfy ethnic interests. At a bureaucratic level, we have the federal character principle, which ironically marginalises minority communities. This alludes to the fact that key positions are allocated based on tribal affiliation rather than merit and capability. 


Reaping the dividends of diversity  

Unfortunately, Nigeria is merely an expression reflecting an amalgam of different tribes struggling to coexist in harmony. But surely, we can do better. We can make a conscious effort to eliminate the harmful stereotypes we have formed against one another. We can engage in healthy dialogue that disintegrate instead of magnifying our differences. The term "we" is paramount, because the onus is on individuals first before the government. At the end of the day, the government is a collection of individual biases and stereotypes; some harmful, some benign. Nevertheless, the government has a pivotal role to play in remedying this issue. Inciting divisiveness among Nigerians for political reasons is not only deeply immoral but also a catalytic act that could explode in the form of conflict in the coming years.

The moment a nation can resolve its ethnic tension, everything pertaining to its growth and development becomes easier; Singapore offers a perfect example. The East Asian country successfully managed ethnic rivalry post-independence, and this significantly contributed to fulfilling its developmental goals. Rwanda is also exemplary. Nigeria's objective should be to install a sense of collectiveness that transcends tribe and ensure that we reap the benefits of being an ethnically diverse nation.


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