In a speech to mark Nigeria’s 51st anniversary of independence from British colonial rule, President Goodluck Jonathan talked openly about how the systemic breakdown of government institutions in the ‘giant of Africa’. The Daily Trust reports:

Jonathan said the country has been running on a deficit budget because the institutions that are supposed to protect public resources and prevent leakages have collapsed.

He said his office has been turned into a regular consultation room for ministers because systemic rot made it impossible for them to operate independent of the presidency.

The president said even doctors, who are supposed to protect lives, sometimes end up killing people and nobody takes action because the institutions that should monitor their activities have also collapsed.

These issues are related to the impact of the discovery of oil, and the consequent dwindling of non-petroleum sectors such as agriculture and manufacturing. Nigeria relies on oil for over 89.4% of its total revenue. This overwhelming dependency on oil has created an economy based on rent rather than productive activity, corruption over public service, and a polity that does not rely on its citizens (and crucially, their votes), to survive. While the national elections in April 2011 marked an improvement on the blatant fraud of 2007, there were still widespread irregularities, especially in rural areas. It will take more than credible elections to cure Nigeria’s oil curse.

While the relationship between political and business elites is complex, Nigeria’s oil dependence has enabled multinational companies to act with impunity, exploit lax government regulations and get away with appalling abuses, from gas flaring to oil spills, that would not be tolerated elsewhere. Oil companies, like Shell, Chevron and ExxonMobil have benefited from political instability. Rather than harming business, Nigeria’s chaotic and ungoverned politics has opened the  for massive gains, fraudulent accounting and operational cost cutting. As ruling elites and companies benefit, over 70% of Nigerian citizens suffer below the poverty line.

Functioning government institutions are urgently needed in Nigeria to prevent the daily corruption and abuse of human rights that lie at the root of conflicts in the North and South of the country. But President Jonathan, in yesterday’s speech, was short on concrete proposals.