Globalization, sustainable democracy and deregulation in Nigeria : a case study of the downstream oil sector.

Abstract

The collapse of communism in the Soviet Union in the late 1980s signified an end to organized impediments to the spread of globalization and this invariably led to the triumph of liberal democracy as the promoter of good governance. Globalization actually provides an impetus for socio-economic and political development. Successive Nigerian governments have found it challenging to institutionalize democratic principles and embark upon sound socio-economic policy initiatives in the country. This has led to questions being raised about the convergence between globalization, sustainable democracy and the implementation of deregulation policy in the Nigerian oil sector. Therefore, the study engages in the crux of Nigeria’s development dilemma under the weight of globalization. It explores the “pseudo-deregulation” in the oil industry, examines the capacity of Nigeria’s state to embark on policy transformation. Furthermore, the study relates the roles of local and international actors involved in the deregulation to economic development and quality of democracy in the country. In achieving this, the dependency, dependent development and new public management theories are utilized as frameworks of analysis. Although the government maintains that the deregulation of the distribution and marketing sector of the oil industry is germane for fiscal balance and socio-economic development. However, based on the influence of global actors, the character of the Nigerian state and its primordial political elites, there is compelling evidence to attribute the deregulation policy to mismanagement and corruption that characterizes the oil industry. This explains the continued resistance to the policy by the majority of Nigerians. I found, in this study, that fraudulent data was generated by the government to justify subsidy-cuts and the announcement of deregulation. The timing and implementation of the policy has left much to be desired. Hence there is a need for a phased deregulation process that provides ‘safety nets’ for the masses and satisfies other criteria for deregulation. State incapacity, structural problems and the underlining political economy of Nigeria remain a challenge to effective reform in the oil sector. I conclude the dissertation by reinforcing the argument that deregulation in the sector is a systematic mechanism by the government to expand the orbit of corruption in the downstream oil sector. Therefore, complete deregulation and subsidy removal, under the prevailing socio-economic realities, would be politically costly and this would endanger political stability in Nigeria.