Intro

Imagine thinking that you have so much oil money that your head of state can (allegedly) tell the USA "to go to hell" over their foreign policy.

After Gowon was ousted in the mid-1970s, Nigeria’s military felt the country had “come of age” as oil revenues exploded.

Under the military regimes of Murtala Mohammed and Olusegun Obasanjo, Nigeria tried to do three things at once: fund African liberation, industrialize at home, and transition to civilian rule.

But beneath this golden-age swagger, the very oil fueling Nigeria's rise was quietly poisoning its roots.

Our Nigeria Series so far:

• Overview of Nigeria: I

• Pre-Colonial Northern & Southern Nigeria: II, III, IV, V, & VI

• British Conquest & Rule: VII, VIII, IX & X

• The Fight for Sovereignty: XI

• The First Nigerian Republic: XII

• The Nigerian Civil War: XIII

• Military Rule under Gowon: XIV

Recap

Last time: During the Gowon reign, oil revenues surged while agriculture was neglected (which employed most of the country at the time), non-oil exports plunged, and corruption flourished. Nigeria flipped from a net food exporter to a net food importer. When Gowon postponed the 1976 elections, a group of military officers removed him, installing Murtala Mohammed as head of state.

By 1975, Nigeria was a “dual economy”. ~64% of the labor force were peasant farmers, 28% were household workers, and only 8% of the labor force were paid wage employees. Urban civil servants & private sector professionals (lawyers, civil engineers, pilots) lived a middle to upper middle class life. But if you were a rural farmer or an urban slum dweller, your life was awful.

Murtala Mohammed (1975-1976)

Economy

Murtala Mohammed inherited a petrostate where over 80% of Nigeria's government revenue came from selling oil. The state was flush with cash, boasting a staggering ₦43B (roughly $70B USD at the time) third development plan.

Murtala went on an “anti-corruption” jihad. The optics of his anti-corruption crusade looked great to the Nigerian public, who saw him as a “mover and shaker”:

• The Purge: Over eight weeks, he fired all 12 military governors, removed federal commissioners, and dismissed 11,000 civil servants accused of corruption or laziness. 10 out of the 12 ousted state governors had illegally amassed fortunes amounting to ~$15M.

• A New Capital: He announced the capital would move from Lagos to Abuja, located at the geographic center to avoid ethnic favoritism.

• A New Map: To balance ethnic fault lines, Murtala split Nigeria from 12 states into 19.

Sadly, Murtala’s 201-day regime wasn’t all perfect. Murtala's purges only rotated who profited. Nigeria's real problem wasn't corrupt individuals; it was structural. Political power controlled access to economic rents. Oil revenues flowed into state coffers, and officials decided allocation through contracts, import licenses, foreign exchange, and public spending. Holding office was the primary path to wealth. His replacements inherited the same incentives and simply built new patronage networks.

Foreign Policy:

Flush with oil money, Murtala pivoted Nigeria toward an aggressive, Afrocentric foreign policy.

• Israel: Continuing the post-1973 trend, Murtala kept diplomatic ties severed with Israel and supported the controversial UN Resolution labeling “Zionism is a form of racism and racial discrimination”.

• Organization of African Unity (OAU): Murtala provided technical and financial aid to many poorer African countries.

• Southern Africa: Murtala was a hawk against white-minority rule, funneling oil money to liberation movements across the continent: the MPLA in Angola, ZANU and ZAPU in Zimbabwe, the ANC and PAC in South Africa, and SWAPO in Namibia. He was one of the first countries to condemn the creation of the South African Bantustans and led the 1975 UN General Assembly to refuse to recognize them. He used the Federal Radio Corporation of Nigeria to broadcast anti-apartheid programming to Nigerian households.

Angola: After Portugal's Carnation Revolution granted independence to Angola in 1974, three factions went to war:

• Popular Movement for the Liberation of Angola (MPLA) backed by the Soviet Union, Cuba, and the Rest of the Warsaw Pact.

• Liberation of Angola (FNLA) supported by the United States and Zaire(Mobutu’s Congo).

• National Union for the Total Independence of Angola (UNITA) led by Jonas Savimbi, supported by South Africa

The OAU wanted a government of national unity. But Murtala broke with the OAU’s position, recognized the MPLA as the legitimate government, and provided ₦14M in aid. The logic was simple: MPLA had the capital, UNITA was South Africa’s proxy, and FNLA was seen as too inept to rule.

This infuriated American President Gerald Ford, who did not like it when Nigeria accepted a Soviet & Cuban backed government, but Murtala did not care what America thought.

Assassination: Murtala's anti-corruption purge and his support for the communist MPLA in Angola made him enemies within his own military. In February 1976, a group led by Colonel Bukar Sukar Dimka attempted a coup and killed Murtala. But Dimka never consolidated power. Forces loyal to Murtala's government rallied, Dimka fled, was arrested, and was executed by firing squad. Murtala only ruled for roughly half a year.

Murtala’s deputy, General Olusegun Obasanjo, took over and continued his predecessor’s policies.

Olusegun Obasanjo (1976-1979)

Unlike Murtala who was a Muslim Hausa Northerner, Olusegun Obasanjo was a Christian Yoruba Southerner. Despite being the complete opposite ethnically and religiously, their ideology was very similar.

Indigenization: “Nigeria for Nigerians”

Obasanjo deepened the Nigerianization of the economy that Gowon had started. Sadly, Gowon’s earlier attempts at “Nigerianization” were toothless: foreign firms used “fronting” (hiring Nigerians as nominal owners) or exploited flimsy loopholes to keep control.

In 1977, Obasanjo updated the Indigenization Decree, splitting the economy into three tiers:

• Schedule 1 (100% Nigerian ownership required): The Service sector (retail, film, light commercial activity)

• Schedule 2 (60% Nigerian ownership required): Consumer & light manufacturing, insurance, and banking. Foreign banks like Barclays, First National Bank of Chicago, Bank of America, and more were forced to sell 60% of their Nigerian subsidiaries to locals or the Nigerian government.

• Schedule 3 (40% Nigerian ownership required): This was for heaviest and most technical industries.

Obasanjo also stepped up enforcement with the Enterprise Promotion Board and closed loopholes. By 1977, 43% of businesses in Nigeria were Nigerian-owned, the highest ever at that time. This policy triggered a boom in the Lagos Stock Exchange (renamed the Nigerian Stock Exchange in 1977) as many foreign shares flooded the market.

But there was a catch. While the policy created a new "ownership class," it didn't necessarily create a more productive economy. Assets were largely transferred to politically connected elites rather than a broad middle class. Some Western firms, like Citibank, simply packed up and left rather than hand over control.

Oil

Obasanjo also increased ownership in oil exploration. By 1979, Nigeria owned 60% to 80% of the joint venture firms with ELF, AGIP, Shell BP, GULF, MOBIL, Texaco, and Pan Ocean.

More importantly, he created the Nigerian National Petroleum Corporation (NNPC). Unlike its predecessor, the Nigerian National Oil Corporation (NNOC), the NNPC could borrow whenever it wanted without asking the Federal Council for permission.

At the same time, the Price Control Act of 1977 formalized the fuel subsidy. It made selling petrol above a government-set price illegal. Combined with the NNPC's new borrowing power, Nigeria was now locked into subsidizing domestic fuel. This policy was extremely popular at the time, but would become a fiscally destructive, politically untouchable nightmare for decades.

Agriculture

Agriculture remained completely neglected under previous administrations. A measly 6% of the budget was allocated to farming, far below the 10% to 20% in developing Asian nations.

Obasanjo tried expressing concern with a program called "Operation Feed the Nation". The military directed schools and government offices to promote home gardening, deployed National Youth Service members as agricultural extension agents, subsidized fertilizer, expanded extension services, and directed the Nigerian Agricultural and Cooperative Bank to increase lending at low interest rates. Radio campaigns urged Nigerians to "go back to the land." The government even encouraged civil servants to farm as a side hustle.

The results? A disaster for traditional staples. Production of yams, groundnuts, cocoa, and rubber continued to crash.

However, there were some successes. Cassava and palm oil were resilient, and rice and wheat exploded upwards (though it’s hard to tell with wheat since it started from a small base).

Why were the results lackluster?

1. Price Suppression: Commodity marketing boards paid farmers so low that it dissuaded production.

Notably palm oil was the only cash crop that increased in production in spite of palm oil farmers being taxed more.

2. Neglect of the Smallholder: Most Nigerian farming was (and is) rain-fed "hoe-and-cutlass" work. While the government supported (poorly managed) “showpiece" mechanized farming estates, the majority of smallholder farmers were starved of credit, insecticide, and irrigation. Commercial banks almost never lent to small-scale farmers, extending credit almost exclusively to medium and large private farmers.

3. Infrastructure Gap: Even surplus harvests were wasted. With no reliable cold chain and terrible rural roads, a farmer in Anambra could grow plenty of yams and watch much of it rot before reaching Lagos.

The land tenure system, which was a mess of local customs, made things worse. In the North, rural farmers accessed state-owned land through their village head, district head, or emir. In the southeast, Igbo states had high population density and a shortage of farmland. Obasanjo tried addressing this with the Land Use Act of 1978, which vested all land in state governors. In theory, this was supposed to make land easier to acquire for large-scale farming. In practice, it was a disaster for the smallholder. It stripped away customary rights and created a bureaucratic nightmare. It helped the urban elite who knew how to navigate the governor's office to secure "Certificates of Occupancy."

Import Substitution & Industrial Policy

Nigeria continued its import substitution strategy: tariffs & import bans as defense, subsidies and local content requirements as offense. High tariffs forced private firms to make joint ventures with the Nigerian government, state governments, or private Nigerian investors.

Nigeria already had manufacturing in textiles (Aba textiles) and brewing, with firms like Nigerian Breweries, Lever Brothers Aba (soap manufacturing), and Aba Associated Industries (consumer goods & packaging). But under Obasanjo, Nigeria was expanding to other industries.

Obasanjo and his predecessors built out an industrial base that looked impressive on paper. Steel plants were being built at Ajaokuta (built by the Soviet firm Tyazhpromoxport) and Delta, alongside rolling mills in Batagarawa, Jos, and Oshogbo. Cement plants operated in Ewekoro and Ashaka.

In 1978, Obasanjo nationalized the oil refinery in Port Harcourt that used to be a joint venture with Shell-BP, and Obasanjo commissioned the state owned Warri Refining and Petrochemical Company.

The Indian firm Hindustan Machine Tools formed a joint venture with the Nigerian federal government in Osogbo. It was a state owned firm named Nigerian Machine Tools Limited and it produced machine tools (hacksaw machines, vertical milling machines, drilling machines, etc).

The Federal Superphosphate Fertilizer Company was made in Kaduna in the 1970s so Nigeria could make domestic fertilizer.

Lastly, many European brands made joint ventures with the Nigerian federal and state governments.

1. French Peugeot made cars in their plant in Kaduna (the North) in 1972

2. German Volkswagen made Beetles and Passat cars in Lagos (Southwest)

3. German Mercedes-Benz made commercial trucks and buses in Enugu, Anambra (Southeast) in 1975

4. Austria Steyr made tractors and trucks in Bauchi (Northeast) in 1979

5. British Leyland made trucks, buses, and Range Rovers in Ibadan (Southwest) in 1979

The Nigerian workers were not building car engine components. The assembly plants bought "Completely Knocked Down" (CKD) kits from Europe, and then Nigerians bolted the parts together like a Lego kit. The strategy worked as long as Nigeria had the foreign exchange to import car parts.

Why Nigerian Industry Couldn’t Compete Globally

Nigeria built out an impressive industrial base on paper, but none of it could compete internationally. Three structural forces explain why:

1. Execution & Graft: Many projects were "white elephants." They were launched for political optics rather than economic logic, leading to massive cost overruns and projects like Ajaokuta Steel that never produced a single ingot. (The Ajaokuta plant still hasn’t produced an ounce of commercial steel and Delta was abandoned in the 1990s).

2. Dutch disease & the Naira trap: Oil exports flooded Nigeria with foreign currency, and Nigeria’s central bank had a policy of selling foreign currency to maintain a strong naira.

But why does a "strong" currency kill local factories? It comes down to the Real Exchange Rate. Think of the nominal exchange rate as the number you see when you look up rates on google, but the Real Exchange Rate is the "shopping cart" rate, it measures how much a basket of Nigerian goods actually costs compared to the rest of the world.

When the oil boom hit, it caused massive domestic inflation. The cost of labor, rent, and electricity in Lagos skyrocketed. Normally, a country protects its factories from this by devaluing its currency, ensuring its exports stay cheap for foreigners. But Nigeria refused. By keeping the Naira artificially strong at the bank while inflation raged at home, a Nigerian-made shirt suddenly became relatively expensive for a buyer in London or New York compared to an Indonesian one.

See chart below:

• Between 1970 and 1979, Nigeria’s real exchange rate appreciated (from 156 units to buy a basket of goods to 106 units).

• Meanwhile, Indonesia, which also had an oil windfall, deliberately depreciated its currency (from 91.8 to 109 units).

A strong naira made imports cheap, but made Nigerian exports uncompetitive. Non-oil exports either stagnated or collapsed entirely. In the graph below, you’ll see that Nigeria was selling less agro-manufactured goods and other manufactured goods than it did in the 1970s.

3. The High Wage Trap: Nigeria was a relatively high-wage developing economy. Again, the best comparison is Indonesia: both had oil booms, large populations, too many ethnic groups to count, and colonial legacies.

The key metric to look at is agricultural land use per capita.

Nigeria’s ratio is .88 hectares per capita in 1975; Indonesia had 0.26. For every piece of land in Nigeria, there was roughly 1 farmer. In Indonesia there were roughly 4 farmers. This means that Nigeria was relatively land abundant. Both countries were roughly 80% rural at the time.

Land scarcity matters enormously for wages. In labor economics, the reservation wage is the minimum pay a person will accept to leave their current situation and take a new job. In Indonesia, with 4 people crowded into a single hectare, the 3rd and 4th person added almost no value (economists call this "zero marginal productivity"). When a textile factory opened offering wages slightly above subsistence, those surplus workers gladly took it. In Nigeria, with almost 1 hectare per person, there was virtually no surplus labor. To pull a Nigerian off the farm, a factory had to offer far more than subsistence.

The premium pay for urban employment was supercharged in 1974 when Gowon’s Udoji awards gave a massive increase in public sector wages. Since the government was the largest employer, the private sector wages were forced upward to compete.

These phenomena impacted the urban-rural wage differentials. In Nigeria in the 1970s, an urban worker made anywhere from 2.6x to ~5x a rural worker.

Meanwhile, in Indonesia, the urban wage premium was more modest. In Java, urban workers made ~2x a rural worker. Outside Java, the wage premium was 1.2x-1.4x.

The result was that Nigeria’s labor market was widely uncompetitive. Nigerian manufacturing wages were roughly 4x Indonesian wages and 3x Indian wages. Nigerian wages were so high that migrants from Ghana, Togo, and Benin flocked to Nigeria for work (like my uncle).

A Nigerian textile mill or car assembly plant could not compete with Asian goods on cost. A shirt in a developing Asian country could cost 25% to 50% of a Nigerian one. For Nigeria to keep industries alive, it needed high tariffs, import bans, and subsidies. Indonesia used its low wage advantage to boost exports in textiles and light manufacturing, with a managed devaluation of the rupiah to keep exports competitive. Nigeria's central bank did the opposite.

As a result, due to Nigeria’s land abundance, Nigeria was a high-cost, high wage developing economy trying to industrialize while competing against land-scarce, low-cost, low-wage Asian economies.

Foreign Policy

West Africa: Obasanjo attempted to mediate the Chadian civil war, but to no avail. Due to Chad’s divided population, it continued to be a proxy war between France and Gaddafi’s Libya.

Zimbabwe: In Rhodesia, two Black liberation movements, ZAPU and ZANU, were fighting Ian Smith's white minority regime. Obasanjo backed both. In 1979, Smith negotiated an internal settlement that led to elections & black rule, but the constitution reserved significant privileges for the white minority. ZAPU and ZANU boycotted, and Obasanjo saw the vote as cosmetic change. When Margaret Thatcher planned to lift sanctions on the new Zimbabwe-Rhodesia, Obasanjo yanked contract bids from British firms to fix the Apapa port in Lagos, threatened to cut off oil sales, and nearly left the Commonwealth. His retaliation paid off. In April 1980, ZANU won a free election and Robert Mugabe became prime minister.

South Africa: Obasanjo created the South African Relief Fund and spearheaded a UN resolution condemning apartheid. After the Soweto massacre of 1976, Nigeria offered refuge to the children of Soweto, gave Black South African students scholarships, and offered to train ANC and PAC fighters at the Nigerian Defense Academy. South African freedom fighters came to see Nigeria as the "Mecca of the liberation movement."

Then came an extraordinary episode. Before the Iranian Revolution, the Shah sold oil to Apartheid South Africa despite condemning the regime. South Africa received 90% of its oil from Iran. After the Iranian revolution, Ayatollah Khomeini cut off oil sales to South Africa. Shell and BP, who jointly owned South Africa's largest refinery, quietly stepped in. BP shipped North Sea crude to South Africa and replaced what it needed for the British market with Nigerian oil. Nigeria was unknowingly subsidizing Apartheid South Africa's oil supply. When the British Anti-Apartheid lobbying group informed Obasanjo of this scheme, he nationalized BP's Nigerian operations, renaming it African Petroleum. He did the same with Barclays (Union Bank) and Standard Bank (First Bank) after reports surfaced of their financial ties to Apartheid South Africa. As a result, BP lost access to over 300K barrels a day of Nigerian crude.

Israel: Obasanjo was notably less anti-Zionist than Murtala. He withdrew Nigeria's support for the notion that "Zionism is a form of racism" and blocked Arab representatives from passing anti-Israel resolutions. He refused to let the PLO under Yasser Arafat open an office in Lagos in 1978.

America: Obasanjo hated the Nixon & Ford administration since he felt they were too accommodating to Apartheid South Africa. US State Secretary, Henry Kissinger, from the Ford administration was banned from entering Nigeria.

But, Obasanjo was a fan of Jimmy Carter. They prayed together when they had diplomatic meetings. Thanks to Carter, Obasanjo preferred Nigerian students study in the West rather than the Soviet Bloc, and he recruited American University professors to temporarily teach at Nigerian universities. Also, America increased arms sales to Nigeria during this period.

However, Nigeria and America still had disagreements. Carter wanted a gradual reform of South Africa to make an inclusive democracy, while Obasanjo wanted utter annihilation of the Apartheid regime with American sanctions. In addition, Carter disliked the Cuban presence supporting communist regimes in Angola, Ethiopia, and Mozambique, Obasanjo, while not a communist, supported the communist governments simply because they controlled the capital of the country.

The Transition to Civilian Rule

Obasanjo designed a new constitution meant to prevent a repeat of the First Republic. To win the presidency, a candidate didn't just need a plurality of the national vote; they also needed at least 25% of the vote in two-thirds of the states (at least 13 of 19). He also switched the constitution from the UK parliamentary model to a US-style presidential system, reasoning that a parliamentary system was unsuitable for ethnically fragmented societies.

Concluding Thoughts

Indonesia & Nigeria both had oil booms but had different paths. Indonesia devalued its currency and fed its surplus labor into export factories. Nigeria kept the naira strong, and its land abundance meant manufacturing wages were naturally high, since workers with decent farmland demand a premium to leave it. Indonesia's land scarcity meant the opposite: too many workers on too little land kept wages rock-bottom. One country used oil to bootstrap manufacturing. The other used oil to subsidize the illusion of it. That illusion bought Nigeria geopolitical power, but it couldn’t competitively export T-shirts or sofas, and it couldn't survive a drop in oil prices. You’ll see the consequences when I discuss civilian rule next time.

Sources

1. The Nigerian Oil Economy: From Prosperity to Glut by J.K. Onoh

2. How Africa Works by Joe Studwell

3. Nigeria: A Country Study, Library of Congress

4. The Political Comparative Study Economy of Poverty, Equity, and Growth: Nigeria and Indonesia by David L. Bevan, Paul Collier, and Jan Willem Gunning

Intro

Last time, we covered the Nigerian Civil War.

In January 1970, Nigeria was exhausted. The civil war had ended in starvation, blockade, and the collapse of Biafra, the rebel Igbo-ethnic led state in the Southeast. Three million refugees were crowded into a 2,500 km² enclave.

But five years later, Nigerians believed they were building the Kuwait of Africa. Oil federal revenues exploded ₦0.17B ($238M, roughly 25% of government revenue in 1970) to ₦4.3B ($7B, roughly 75% by 1975), a 29x dollar increase in five years.

The transformation was real, but so was the illusion. Nigeria's oil rents per capita remained far below those of other petrostates. Nigerians had oil, but they exported far less than Iran, Venezuela, or Saudi Arabia, and they had many more people to support than those nations.

For a country fresh out of a civil war, the oil windfall reorganized everything: economic incentives, federal authority, & the military regime trying to manage it all. This is the story of how.

Our Nigeria Series so far:

• The Overview of Nigeria: I

• Pre-Colonial Northern Nigeria: II & III

• Pre-Colonial Southern Nigeria: IV, V, & VI

• British Colonialism: VII, VIII, IX & X

• The Fight for Sovereignty: XI

• The First Nigerian Republic: XII

• The Nigerian Civil War: XIII

Yakubu Gowon’s Post War Rule

After the war, Gowon stood before the nation and declared “No Victor, No Vanquished”. He promised reconciliation, rehabilitation, & reconstruction, and announced that he would stay in power until 1976. He had an ambitious nine-point political plan covering development, reorganizing armed forces, elections, anti-corruption measures, oil revenue allocation, censuses, political parties, & more.

Rebuilding the Southeast

The wreckage was enormous. Oil infrastructure (refineries, pipelines, storage terminals) in the East and Midwest had been destroyed. The East’s manufacturing base, roughly 25% of national capacity, lay in ruins. Foreign capital had fled.

Gowon created the National Rehabilitation Commission and committed ₦240M to restore roads, ports, hospitals, bridges, and railways across Southeast cities like Enugu, Onitsha, Umuahia, and Nsukka. Cement factories in Calabar and Nkalagu were rebuilt. Within three years, the East Central State recovered ~70% of its pre-war industrial output.

He appointed Ukpabi “Tony” Asika, an Igbo who was a Nigerian loyalist during the Civil War and was seen as a traitor to Biafrans, as administrator of the new East Central State. His cabinet was mostly Igbo, including former secessionists. Some Biafran military personnel were selectively reintegrated into the national armed forces.

But reconciliation had a hard ceiling. Food aid was chronically pilfered. Also, post-war banking policy paid account holders in the former Biafran region a flat rate of £20, regardless of their actual pre-war deposits. The policy was framed as preventing rebel Biafran currency from flowing into the national system, but its effect was wiping out Igbo savings. The Igbo entered the 1970s cash-poor, in a Nigeria that was about to get much richer. You can say the Igbos recovered in spite of Gowon’s rehabilitation program.

Restructuring the Federation

In 1967, Gowon had already reorganized the nation from four ethnically dominated regions into 12 states.

The Hausa-ethnic North split into five states, the Yoruba West and Igbo East into three each, with only the Edo Midwest retained. Twelve states diluted regional dominance and empowered minorities long subordinated within their regions, particularly the middle belt minorities (Gowon’s own constituency), Muslim Yoruba, and Southeastern minorities like the Ijaw and Ibibio. None of Nigeria’s three dominant groups (Yoruba, Igbo, and Hausa) dominated Gowon’s federal executive.

To reduce the tribalism that had fueled the civil war, he created the National Youth Service Corps (NYSC) by decree in 1973, requiring university graduates to serve one year outside their home state.

He also launched the Second National Development Plan (1970-1974), a £N 1.025B ($2.8B) program.

The top allocations were transportation (23.7%), education (13.5%), and agriculture (10.5%).

Nigeria’s Oil Policy Takes Shape

By the war’s end, oil had displaced cocoa, groundnuts, and palm oil as Nigeria’s dominant foreign currency earner. Production rebounded from 630K barrels per day during the civil war to ~1.8M by 1972. By 1975, Nigeria surpassed Kuwait as the world’s 9th largest oil producer.

But, the Nigerian oil sector was essentially a foreign enclave.

An Enclave Economy

Gowon’s government audit found that foreign oil firms contributed little beyond extraction. They weren’t training Nigerians for professional, supervisory, or technical roles. Nigerian staff were on inferior contracts, often openly discriminated against. Seismic data processing and oil facility design was done overseas. No domestic laboratories existed for analyzing crude or gas. Nearly all equipment, from pipes to drilling mud to cement, was imported. There were virtually no backward linkages into local supply chains, and no forward linkages into downstream industries. Pull the oil out, ship it abroad, process the data abroad, buy the equipment abroad, and employ foreigners for the skilled work.

The Legal Shakeup

Gowon had begun changing this before the war ended. The Petroleum Decree No. 51 of 1969 vested ownership and control of all petroleum in the Nigerian state, dismantling the colonial framework under which foreign firms had held resource rights. Only Nigerian citizens or Nigerian-incorporated companies could hold licenses. Companies had to relinquish half their leased area after ten years, preventing them from sitting on concessions indefinitely. Foreign firms were directed to indigenize their workforces to 75% within a decade. The Nigerian government included a revocation clause which allowed the Nigerian state to discipline oil operators acting “contrary to Nigeria’s interests”.

Interestingly, the decree attracted more foreign operators rather than fewer. Nigerian crude, called Bonny Light, is low-density and low-sulfur, requiring minimal refining to produce gasoline, diesel, or aviation fuel. It was precisely the grade that refineries worldwide wanted most, making the Nigerian oil market too lucrative to pass up. Shell-BP remained dominant, but American firms (Texaco, Mobil, Gulf, Esso), Italian (Agip), and French (Safrap/Elf) companies all entered or expanded.

Equity and Political Discipline

Nigeria’s first equity stake in oil came through a 1962 concession option agreement with Agip via the Nigerian Agip Oil Company (NAOC), which allowed the government to acquire a third of the company once commercial oil was discovered. Agip bore all exploration risk; the Nigerian government only invested once there was proof of oil. This was pragmatic: in the 1960s, Nigeria lacked the technical expertise, equipment, and capital to explore oil directly.

In April 1971, after commercial discovery, Nigeria exercised the option to acquire shares. That same month, the Federal Government took a 35% equity stake in Safrap, Elf’s Nigerian subsidiary, not through an option contract but as punishment for France’s covert support of Biafra.

That same year, Nigeria joined OPEC (Organization of Petroleum Exporting Countries), which gave Nigeria collective leverage to push for better prices and technical knowledge-sharing.

That year, Gowon created the Nigerian National Oil Corporation (NNOC) via Decree No. 18 to hold equity stakes, train Nigerian engineers and managers, take over concessions withdrawn from foreign companies, build refineries, assemble a national tanker fleet, and develop the petrochemicals and fertilizer industries.

Nigeria then acquired 35% equity stakes in Shell-BP, Gulf, and Mobil, increasing them to 55% by 1974. Full nationalization was deliberately avoided. The government was threading a needle: assert resource sovereignty and capture rents with more ownership, while keeping foreign capital and expertise in the country by not fully nationalizing.

But the hanging Damocles with oil is that petroleum is a capital-intensive industry, not labor-intensive. No matter how many contracts were signed, the oil sector would never be a mass employer.

Seeds of Grievance

As oil replaced cocoa and groundnuts as Nigeria’s main foreign exchange earner, the federal government rewrote revenue allocation rules via Decree 13 of 1970. The derivation principle, under which regions had retained a large share of revenues generated from cash crops, was substantially weakened. Petroleum income was pooled federally and redistributed by population formulas, benefiting more populous northern states.

For the Southern communities in the Niger Delta, this arithmetic was devastating. The Ogoni people in Rivers State watched their waterways and farmland poisoned by oil extraction while revenue allocation sent their oil money more northward.

In the early 1970s, Ken Saro-Wiwa, then a regional government official, filed a 21-point complaint to Shell-BP's Port Harcourt headquarters. Shell-BP ignored it and kept drilling. What began as grievance would harden into decades of insurgency.

Indigenization

Nigeria’s political class also worried about “neocolonialism”. The fear was that foreign capital from the U.S., France, UK, or West Germany would tie Nigeria’s policies to the foreign policy preferences of those governments, which may not be aligned with Nigeria’s interests.

In 1971, the commercial economy was overwhelmingly foreign-owned, with roughly 83% of commercial firms in foreign hands and local Nigerians were largely locked out of technical and managerial roles.

Gowon’s response was the Nigerian Enterprises Promotion Decree of 1972, barring foreigners from specific sectors and reserving certain trades exclusively for Nigerians. It created two schedules of reserved activities and accelerated programs for middle and senior management training.

Nigerian equity ownership in commercial enterprises rose from roughly 17% to 43%.

Here was the impact:

• The Rise of a Rentier Elite: The primary beneficiaries were politically connected military officers, bureaucrats, Yoruba merchant networks in Lagos, and Northern (“big Alhajis”) in Kano. Fueled by bank loans from regional banks or the newly created, state-owned, National Bank for Commerce & Industry, they acquired shares. The Igbos, only given £20 post-Biafra, were effectively locked out from the largest state-sponsored wealth transfer in Nigerian history.

• State Capitalism: The government didn’t leave indigenization to the private sector. Federal & regional governments bought banking, insurance, and oil shares in foreign firms via state owned enterprises.

• The “Levantine Loophole”: After Nigeria’s 1972 decree, many Lebanese & Syrian migrants did not want to leave Nigeria. After selling their retail shops to Nigerians, they pooled their family network capital and shifted into manufacturing sectors classified under Schedule 2, such as textile mills, plastics, and furniture plants, where majority foreign ownership was still permitted.

Foreign firms continued to dominate activity in capital intensive manufacturing, processing, construction, and large-scale trading. More indigenization would resume in 1977.

The Oil Windfall

In 1973, Ramadan/Yom Kippur War started. When Egypt and Syria attacked Israel with Soviet weapons to reclaim the Sinai and Golan Heights, the United States backed Israel.

Saudi Arabia’s King Faisal responded by coordinating production cuts in OPEC and embargoes with OAPEC (Organization of Arab Petroleum Countries), surging oil prices upward. In inflation-adjusted terms, oil tripled, from roughly $26 to $70 per barrel in 2025 prices.

Nigeria, not in OAPEC, did not embargo. Nigeria sold oil as prices tripled, and Nigeria’s government revenues and foreign exchange(FX) earnings expanded as well.

Rather than building a sovereign wealth fund, as several Gulf states were doing at that moment, Gowon’s government spent. The new states needed administrative machinery, which meant more ministries, planning agencies, and an expanding public sector. Civil servants received massive retroactive pay increases through the Udoji Awards. Minimum wages were raised. Taxes were cut. Fuel subsidies were expanded. Urban infrastructure spending surged.

Each decision was politically popular. Together, they wired consumption into the economy rather than investment, and concentrated spending in cities rather than the countryside. This fueled urban inflation.

The Agricultural Stagnation

The boom’s deepest damage was to farming.

Between 1970 and 1976, agricultural production grew just 0.1%, across six years, in a country whose population was expanding at ~2.5% over the same time frame.

Nigeria went from a net food exporter to a net food importer.

The groundnut pyramids of Kano, which had made Nigeria the world’s leading groundnut exporter, were vanishing.

Nigeria had once been the world’s largest palm oil exporter; but in the 1970s, Nigerians were importing palm oil from the new leaders, Indonesia and Malaysia. Bulk importation of rice, sugar, milk, fish, salt, and beef became routine. This agriculture stagnation was happening in a country where more than 70% of the workforce were farmers and barely 6% of workers held formal, wage employment of any kind.

Why did this happen? Several forces converged.

1. Drought: A severe drought hit the Sahel from 1972 to 1974, devastating northern Nigeria.

2. Tsetse fly: The tsetse fly killed livestock in the middle belt, reducing animal traction and destroying manure production (meaning worse soil fertility).

3. Strong Currency: But the deepest structural problem was Dutch Disease, exacerbated by central bank policy. Rather than let the newly introduced naira (which replaced the Nigerian pound in 1973) have its value determined by global currency markets after Britain ended the Sterling area, the Central Bank of Nigeria used its foreign reserves to maintain a managed anchor to currencies like the dollar (at one point trading at an incredibly strong ₦0.62 to $1 USD).

Nigerian agricultural exports (palm oil, cocoa, cotton, & peanuts) are usually priced internationally in US dollars. But a Nigerian farmer paid for labor, fertilizer, transport, and food in Naira. A strong Naira meant that every dollar earned from selling crops abroad converted to fewer Naira at home, while domestic inflation was simultaneously pushing naira costs upward. Profit margins for farmers were squeezed from both ends. The rational response was to produce less and move to the cities, and that is exactly what happened.

Young men migrated from farming villages to cities, drawn by non-tradable service sector jobs like construction and retail that paid more than subsistence farming. Sadly, many couldn’t find work, creating slums in places like Lagos.

Dutch Disease also hurt manufacturing exports, strangling its infant industry. Non-oil Exports declined 40% in 5 years.

4. Poor Agricultural Policy: Marketing boards compounded the damage. Inherited from the colonial era, these boards continued paying farmers prices far below world market levels, capturing the surplus for regional governments. The mechanism: if the world price of a commodity is $100 but the board pays only $50, a farmer can profitably produce the first units (marginal cost is $35, profit $15) using family labor and existing tools. But expanding production requires hiring labor, transporting crops, and absorbing higher risk, pushing marginal costs above $50. At that point, expansion stops making sense. Farmers behaved rationally: they produced enough to survive but avoided expansion.

Regional governments did eventually raise farm gate prices, but they weren’t enough to close the gap with world prices or make expansion rational for farmers. Because farmer cash income remained low, they couldn’t invest in fertilizer, improved tools, or additional labor. This dynamic depressed yields not only for export crops but also for food crops.

Also farmers sold to licensed buying agents rather than boards directly. Those agents routinely shaved weights and downgraded quality of the produce to pay the farmer less. The agent extracted margins from village farmers who lacked accurate scales, knowledge of grading standards, or any recourse.

The federal government did fund crop research institutes, agricultural colleges, and extension services. But that didn’t improve farming production; the issue was more local. Chiefs controlled land tenure and regional governments controlled marketing boards, farm-gate prices, and input distribution.

Ultimately, federal and regional governments had urban bias, government revenue was used to placate cities instead of fixing hinterland agriculture.

Foreign Policy: “Africa First”

Gowon converted oil exports into continental influence. As Organization of African Unity (OAU) Chairman, he raised Nigeria’s OAU budget contributions and co-founded Economic Community of West African States (ECOWAS) in 1975.

He backed liberation movements against white-minority rule in Rhodesia, South Africa, and Portuguese colonies.

He also led Nigeria and 15 African nations to cut ties with Israel after stating that Israel broke the ceasefire in bad faith in the 1973 war. Nigeria would not restore relations with Israel until 1992.

His administration made Nigeria the continental patron: concessionary loans, subsidized oil, roads funding, factory financing, and electricity provisioning to other African countries like Dahomey (Benin), Niger, and Guinea.

He recognized the People’s Republic of China, replacing Taipei with Beijing at the UN in 1971, while keeping one foot in the Western orbit through Commonwealth membership, receiving British, Canadian, and Australian technical assistance.

But while Nigeria was building prestige by acting as the continental patron, it was rotting from the inside.

Corruption, Crime, Chaos, and the Fall of Gowon

Corruption

The 1973 census was widely dismissed as a farce, claiming the national population had grown 44% in ten years (3.7% per year). The Census Board’s chairman, Sir Adetokunbo Ademola, said the results were a “barren exercise”.

The fraudulent census was seen as naked grab for oil money since census results determined revenue allocation. The Northern states’ share of the national population rose from 54% in 1963 to 64%, but the 1973 census was never credibly defended and was never used as the basis for elections.

Corruption was public and endemic. The army couldn't track its own payroll, paying "ghost workers" for years. Gowon created an “X-Squad” anti-corruption task force, which had the unintended effect of producing a daily stream of exposés. Procurement scandals were exposed. Government officials and Nigerian businessmen conspired with foreign contractors to overcharge construction materials for building complexes and expired medical drugs for hospitals and orphanages. The difference between the actual price and stated price was pocketed. Even when Gowon’s allies were implicated in corruption scandals (Joseph Gomwalk), he refused to discipline them. Gowon’s personal honesty was not in question; but his tolerance for corruption was.

The urban import consumption boom ran straight into a supply bottleneck at Lagos port. Port Harcourt was recovering from war damage; Calabar’s shallow, outdated infrastructure required a complete modernization. Lagos’ fixed berth capacity absorbed most of Nigeria’s import traffic just as import volumes surged.

As a result, ships sat at anchor for months. Demurrage penalties (fees paid to a ship when cargo remains at a port longer than the agreed time for a contract) were charged and freight rates rose as ship firms priced in Nigerian delays. Containers rotted in the sun, creating shortages of the very goods they carried. These all fed into rising consumer prices.

The most egregious episode was the “Cement Armada.” Gowon’s government ordered 16M metric tons of cement for army barracks and public projects, far exceeding Nigeria’s unloading capacity. Hundreds of ships were clogged at Lagos harbor. Contracts were inflated, and the spread between the actual and stated price was pocketed by a nexus of Nigerian officials, middlemen, and foreign contractors. At the same time, Gowon provided civil servants with massive retroactive wage increases and lump sums with the Udoji awards to quell strikes. With demand surging and supply choking, inflation burned through cities. Consumer prices rose roughly 13% in 1974 and then 35% in 1975.

Crime

The labor market pressures from Dutch Disease, the civil war’s end, and agricultural stagnation now had a security dimension. ~250K demobilized soldiers returned from the civil war into an economy with no structured plan to absorb them. At the same time, school graduates and dropouts were entering the labor market at 600K per year by the mid-1970s, arriving in cities that the rural-to-urban migration wave had already swollen. Without enough service employment absorbing the people, crime and drug trafficking rose. Armed gangs, often former soldiers given weapons with no income, kidnapped, robbed, and extorted across major cities.

The final straw came in 1974, when Gowon broke his defining promise: he announced that the transition to civilian rule, scheduled for 1976, was postponed indefinitely. The stated reason was the unfinished business of his nine-point program (i.e. fixing corruption). The practical effect was to confirm what many Nigerians had long suspected: that the military intended to govern permanently.

Within the officer corps, frustration had been accumulating for years. The “Kaduna Mafia”, a loose network of Northerners, had been building influence around an alternative. Murtala Muhammad, a Muslim Hausa whom Gowon had appointed as Federal Commissioner of Communications, had grown openly contemptuous of Gowon’s pace of reform. To Murtala and others, the postponement of civilian rule was the final signal that Gowon would not leave voluntarily.

On July 29, 1975, while Gowon was attending an OAU summit in Kampala, Uganda, his government was overthrown in a bloodless coup led by his brother-in-law, Major General Joseph Garba.

Now it was Murtala Muhammad’s turn to be head of state, but we’ll learn about him next time.

Concluding Thoughts of Gowon

Gowon’s legacy is deeply mixed. He kept Nigeria whole after the civil war, preventing a Sudan-style partition. His indigenization laws shifted more economic control to Nigerians, and the NYSC planted enduring seeds of national unity.

Yet, he planted deeply destructive economic roots. Agriculture stagnated, corruption metastasized, and a historic oil windfall was spent fueling urban inflation rather than building a sovereign wealth fund.

Despite these issues, Nigerians were richer than many developing states (China, India, Pakistan) at this time.

Sources

• Nigeria, a Country Study

• Oil and Nationalism in Nigeria, 1970-1980 by Ann Weymouth Genova

• Dictatorland: The Men Who Stole Africa

• A History of Nigeria by Toyin Falola and Matthew M. Heaton

“Why doesn’t Nigeria just split into different states?”

It’s a question asked often. After all, Nigeria is large, diverse, and politically fractured. Countries with fewer internal tensions have broken apart(Czechoslovakia in 1993, Norway from Sweden in 1905).

But Nigeria almost did split. The attempt nearly destroyed the country.

To understand why Nigeria did not balkanize, and why future secession remains unlikely, you have to understand Biafra in Nigeria’s Civil War.

By January 1970, Nigeria's civil war ended. Between 1M to 2M people died; most of them were “Biafran” children that starved to death. Images of children with distended bellies suffering from kwashiorkor filled refugee camps and shocked humanity.

How did it come to this?

Context & History

This is part XIII on Nigeria. If you are curious about other moments in Nigerian history check out these other parts:

Context & Series Links

• The Overview of Nigeria: I

• Pre-Colonial Northern Nigeria: II & III

• Pre-Colonial Southern Nigeria: IV, V, & VI

• British Conquest: VII & VIII

• British Colonial Rule: IX & X

• The Fight for Sovereignty: XI

• The First Nigerian Republic: XII

Recap

Last time, I covered Nigeria's early post-independence from 1960 to 1966. The economy looked promising: agriculture boomed, factories attracted foreign investment, and oil was starting to flow. But the domestic politics were toxic.

The Powder Keg

After independence, ethnic patronage dominated politics. Politicians rigged elections and censuses. Corruption was routine. Parties distributed jobs, contracts, scholarships, and public services through regional machines. Whoever controlled the federal center had the power to funnel resources to their bloc.

The South benefited from decades of missionary & colonial education before the North was colonized. One group, the Igbos of the Southeast, filled trading networks, railways, postal services, telecommunications, and civil service posts across the nation, even in the North. Northern English literacy rates lagged far behind. They usually read in Hausa-Ajami.

Many Northerners resented Igbos. As Northern Premier Ahmadu Bello put it “If we can’t have a northerner in a job, we would rather have an expatriate than a Southerner. Foreigners do their job and go home, leaving vacancies to fill. Southerners want to stay forever.”

The January 1966 Coup: Chukwuma Patrick “Kaduna” Nzeogwu

“Our enemies are the political profiteers, swindlers, the men in the high and low places who seek bribes and demand ten per cent, those that seek to keep the country divided permanently so that they can remain in office as ministers and VIPs of waste, the tribalists, the nepotists.”— Nzeogwu

On January 15, 1966, young officers (mostly Igbo, led by Major Chukwuma Nzeogwu) launched a bloody coup, assisted by Kwame Nkrumah of Ghana. They killed Prime Minister Balewa in Lagos, Northern leader Ahmadu Bello in Kaduna, four Northern superior officers, and the pro-North, Western Premier Akintola in Ibadan. The plotters framed it as an anti-corruption, anti-tribal reset, claiming they planned a balanced government. They said half the positions would be reserved for Northerners, with imprisoned Yoruba leader Obafemi Awolowo as Prime Minister. But the casualties were overwhelmingly Northern. To the North, this looked like Igbo aggression.

Major General Johnson Aguiyi-Ironsi, an Igbo officer uninvolved in the plot, mobilized loyal troops and crushed the coup. With the civilian authority shattered, senior officers accepted Ironsi as head of state.

Major General Johnson Thomas Umunnakwe Aguiyi-Ironsi (January-July 1966)

Ironsi blamed Nigeria’s instability on regionalism. He responded with Decree No. 34 (the Unification Decree), abolishing federalism and turning Nigeria into a unitary state. He also banned political parties and replaced elected leaders with installed military regional governors, with Lieutenant Colonel Chukwuemeka Ojukwu in the Eastern Region (Remember that name).

Southerners welcomed the end of Northern political dominance. But Northerners saw a confirmation of their worst fears. The coup killed mostly Northerners and was led by mostly Igbos.

Ironsi declined to prosecute key coup plotters quickly. He also made his military promotions in May 1966 merit based, which disproportionally favored Igbos, demographically speaking. Northerners interpreted these moves as Igbo domination, not national unity.

The North responded with anti-Ironsi riots across Northern cities (in Kano, Zaria, Sokoto, Gusau), killing ~3K Igbos in total across May, June and July 1966.

Counter Coup (July 1966)

On July 29, 1966, Northern officers (the "Kaduna Mafia") struck back. They murdered Ironsi and killed 200 Igbo officers. For three days, Nigeria had no head of state. Eventually, the Northern leaders installed 31 year old Yakubu "Jack" Gowon, a Christian from the Northern middle belt Ngas minority group. He was Ironsi’s chief of staff, meant to be a compromise ruler.

Major Yakubu “Jack” Gowon (1966-1975)

Gowon moved quickly to undo Ironsi's policies. He repealed Decree No. 34, restoring regional federalism, and freed political prisoners, including Obafemi Awolowo, who was initially jailed for an alleged coup plot in the early 1960s.

But Ironsi’s appointee for the Eastern Region's military governor, Chukwuemeka Ojukwu, refused to recognize Gowon's legitimacy. Ojukwu argued that Gowon’s government couldn’t protect Easterners, and he had a point.

The anti-Igbo Pogroms

Even after the Northern-led July coup, Northerners massacred Southeastern migrants in the North. Igbos in the North lived in segregated quarters called sabon garis. In the Northern city of Kano, Northerners killed over 1K Igbos in a single week. In October, in Kano, the military joined civilian mobs in shooting and lynching Igbos in the streets. Violence spread in Maiduguri (northeast), Jos & Bukuru in the middlebelt), and Kaduna, the northern capital. Bodies lay maimed in the streets, limbs severed by machetes.

Estimates of the Igbo death count varied widely.

• Nigerian records: 7K died.

• Most historians: 30K died

• High estimates (which some journalists say was inflated by Biafran leaders for nationalism) say 100K died.

Regardless of the death toll, what’s indisputable is that between 1M to 2M Southeastern migrants in the North fled back to the East.

The Igbo massacres crippled Nigeria’s infrastructure in the North. Igbos staffed railways, logistics and commerce. Without them, trains stopped, fuel shortages spread, and gasoline prices spiked. Northern cotton and peanut farmers couldn’t ship crops by rail to southern ports. Ethnic violence destroyed basic state capacity.

The Cycle of Revenge & Internal Population Transfer

Easterners retaliated by killing Hausa traders in Eastern cities like Enugu. Eastern leader Ojukwu concluded that coexistence was impossible. He urged Easterners outside the region return home and encouraged Northerners to leave the East. He began talking openly about secession, or at minimum, much stronger autonomy.

The Aburi Conference

Determined to preserve Nigeria, Gowon met Ojukwu on neutral ground. Ghanaian leader General Joseph Ankrah hosted them in Aburi, Ghana on January 4–5, 1967.

The Aburi talks between Gowon & Ojukwu produced an agreement that reduced Nigeria to a loose federation, granting regions control over security and requiring unanimity in federal decisions. Gowon accepted it while politically weak but later repudiated it under Northern military, Permanent Secretaries (Super Perm Secs), and British nudging, issuing Decree No. 8 to restore federal supremacy.

When the federal government did not implement Aburi, Ojukwu moved to enforce the deal’s terms. In March, he announced that effective April 1st, the Eastern region would assume control over security, federal assets, taxation, and revenues in its territory.

The 12 States

On May 27th 1967, Gowon declared a state of emergency and broke Nigeria’s four regions into 12 states, with three carved out specifically out of the East.

The move strategically boxed the Igbo heartland inland, transferring coastline and oil assets to non-Igbo eastern states. Non-Igbo minorities (Efik, Ijaw, Ibibio, & Ogoni) welcomed the change. They long resented Igbo dominance and saw Gowon’s policy as proof-positive that the Federal Government would protect their interests better than an Igbo-dominated secessionist state.

The Creation of Biafra

On May 30th, 1967, Ojukwu declared the Eastern region as the independent Republic of Biafra.

He timed that declaration to coincide with the 1st anniversary of the lynching of Easterners in Kano, Northern Nigeria’s largest city.

The capital of Biafra was in Enugu.

Gowon’s Response

Gowon rejected secession. If Biafra left, other regions could follow. Even Obafemi Awolowo, the former Western Yoruba leader, had mulled secession two weeks earlier before he chose unity and joined Gowon’s government as finance commissioner.

But the real issue was oil. Biafra had 60% of Nigeria’s oil reserves and 20% of Nigeria’s federal revenues, with production expected to double within a few years. Losing the East meant fiscal collapse and losing crucial foreign currency. To both sides, control of Nigeria’s oilfields became the goal, propelling the country to civil war.

Oil companies paid royalties and taxes to the federal government in Lagos, but since oil wells sat in the East, Biafra claimed those revenues.

Gowon blocked payments from reaching Biafra and moved to strangle Biafra economically. The federal soldiers then captured the vital oil storage areas at Bonny island and imposed a naval blockade, restricted land trade routes, and introduced a new currency in Jan 1968 to invalidate Biafra’s cash reserves. Biafra was cut off from food, fuel, and medicine.

The blockade worked brutally. Food shortages worsened. Inflation soared. Beef and fish went from 3 and 5 shillings to 60. Material deprivation became a strategic weapon.

The War Begins

Civil war followed. Gowon treated this conflict as a swift police action. Ojukwu framed the war as survival against extermination. To amplify this narrative, Biafran leaders hired the NY PR firm, Ruder & Finn for $250K to spread their narrative about the “righteousness of Biafra”. The campaign built international sympathy by labeling Gowon "Black Hitler" pursuing a "final solution" to Nigeria's Igbo question.

When Nigerian forces entered Biafran territory, one colonel reported: "They doubt everything we say. Their leaders tell them we intend to kill everyone age five or over." Gowon insisted his war was "against Ojukwu, not against Igbos."

But Gowon's strategy of blockade and economic deprivation did nothing to dispel the genocide narrative. It hardened total war logic.

Militarily, Biafra started strong. Its forces occupied the Midwestern region (from Aug to Sept 1967) and even threatened Western Nigeria.

In that brief moment under Biafran occupation (but also literally hours before federal forces recaptured Benin City from Biafra) the Midwest military officer Albert Okonkwo declared the Midwest region independent as the state of Benin in Benin City. (distinct from modern-day country of Benin, which back then was called Dahomey).

For a brief moment in Sept 1967, there were two states trying to secede from Nigeria:

But once the federal Nigerian forces regained the initiative, they crushed the Biafran advance in the Midwest and it was incorporated back into Nigeria. The state of Benin didn’t even last 24 hours.

Federal forces then captured Enugu in October 1967, forcing the Biafran leaders to relocate their capital to Umuahia. Nigerian forces then seized the coastal city of Calabar two weeks later and Onitsha, severing river access, scorching the city, and destroying the Niger bridge linked to the Midwest.

The Nigerian forces bombed, shelled and occupied towns along the way as they compressed Biafra into a shrinking enclave.

Also, sadly in Lagos, barely touched by the war, security services and mobs detained and killed some Igbos, driven by fears of sabotage and fifth-column activity. Meanwhile, inside Biafra, Igbo authorities and local militias killed non-Igbo minorities, often accused of spying for the federal side.

Economic Warfare

In May 1968, Nigeria took Port Harcourt, tightened its blockade, and captured the oil refinery. Gowon expected economic strangulation plus outreach to non-Igbo Biafran minorities would trigger an internal collapse of Biafra without further large-scale fighting.

Instead, worsening starvation (100K Biafrans died of starvation in July 1968 alone, ~3K+ perished per day according to the Red Cross) allowed Ojukwu to reframe Gowon’s policies as deliberate extermination of Easterners.

Biafran children suffered from Kwashiorkor, severe protein malnutrition characterized by enlarged livers with fatty infiltrates. Their inflated bellies became the war’s defining image.

Biafra leveraged deprivation into a propaganda weapon. In 1968, the plight of Biafra became the cause célèbre, with massive international outcry in Paris, London, Tel Aviv and other major cities.

What followed was churches and NGOs spearheading the largest private relief mobilization in history at the time.

War Profiteering

As the war dragged on, Nigerian military officers enriched themselves. When Nigerian troops controlled Port Harcourt, soldiers brought food from Lagos and sold it to Biafrans at triple the price. Officers created "ghost soldiers" on paper and pocketed the extra salaries. Commanders inflated procurement contracts and siphoned the remaining cash. Some officers reportedly built $30K homes ($273K in 2025 money) in three months with siphoned funds.

When the Nigerian forces took Calabar, officers turned the city into a currency-laundering node. With their guns, officers controlled checkpoints, roads, and port access. If a civilian wanted entry, the soldier would charge a bribe gatekeeper tax in old Nigerian pounds to pass. Officers or their proxies then deposited these old notes in Calabar banks and converted them into the new currency.

Starvation Politics

President Lyndon B. Johnson urged all sides to allow food airlifts. The United States gave $8.8M in food & medical supplies to the Red Cross, Catholic Relief Services, Church World Services, and UNICEF.

But getting food in became a deadly stalemate. Nigeria demanded all food shipments go through Nigerian territory and be checked for contraband arms to respect its sovereignty. If airlifts were attempted, Nigeria would shoot them down. In June 1969, Nigeria shot down Swedish Red Cross planes flying supplies to Biafra.

Biafran leader, Ojukwu, turned down road shipments from Nigeria, claiming they could be poisoned (this was not unjustified, many investigators stated that poison was detected in food for Biafrans). Instead, he provided food on risky night flights. Some NYT journalists claimed Ojukwu was deliberately allowing his people to starve to attract world sympathy.

Some Nigerian soldiers called these aid efforts “misguided humanitarian rubbish”, arguing food would just go to Biafra soldiers. One said “if children must die first, then that is… just too bad. Ojukwu could stop this war.” Claims like that made some journalists think Nigeria was genocidal, but Gowon rejected genocide claims.

Eventually, international coverage led to international involvement.

The geopolitical map:

Foreign Involvement

Pro-Nigeria:

The USSR became Nigeria’s first arms supplier after the U.S. and UK initially refused to ship arms to Nigeria, which frustrated Gowon. So Gowon turned to the Soviet Union for arms, buying $5M worth of MiG-17 fighters and Ilyushin bombers.

The Soviets sent ~50 technicians to help the Nigerian military maintain and operate the aircraft, offered $56M in economic credits, and increased scholarships for Nigerians to attend Soviet Universities. Lastly, Nigeria and the Soviet Union signed a $140M economic agreement which involved bartering weapons for cocoa.

The USSR’s Warsaw Pact allies also helped Nigeria. Communist Poland provided a $28M development loan. Communist Czechoslovakia provided a $14M loan to Nigeria and six jet fighter trainers to improve Nigeria’s military.

Egypt’s President Gamal Abdel Nasser, believing Biafra was a “Zionist plot”, provided pilots to fly Soviet jets for Nigeria. The U.S.A supported a united Nigeria diplomatically but refused to sell offensive weapons.

The UK initially held back arm sales to Nigeria. But the UK shifted to arming Nigeria with rockets, bombs, and mortar shells after the Soviets started selling arms and the Egypt’s 1967 closure of the Suez Canal threatened British energy supplies. Securing non-Arab oil, specifically Shell-BP’s oil exploitation in Nigeria, became a national security priority.

Lastly, Organization of African Unity (OAU) refused to recognize Biafra, and stood for African territorial integrity. Cameroon, Biafra’s neighbor to the east, blocked all communications, roads, and flights to Biafra.

Pro-Biafra:

France, under Charles De Gaulle, (while never recognizing Biafra) covertly funneled $30M in military arms to Biafra through former colonies (Ivory Coast & Gabon) and via Portuguese Sao Tome. De Gaulle called Biafra a “just and noble cause”, but France’s true motivation was also to diversify oil streams after Egypt’s closing of the Suez. The French oil firm ERAP was already operating in the Niger Delta before Biafran secession. So if Biafra won, the French firm could be first in line for Biafran oil concessions due to French aid.

Ivory Coast, Gabon, Tanzania, and Zambia defected from the OAU’s position and recognized Biafra’s sovereignty. Tanzania bought arms from China and provided those weapons to Biafra. Haiti, under François Duvalier (“Papa Doc”), expressed friendship for Biafrans and recognized Biafra as well.

Sweden was officially neutral but Swedish count and humanitarian pilot, Carl Gustav von Rosen, privately organized a small air force for Biafra using Swedish-made Minicon aircraft to conduct low-level strikes against Nigerian jets. In response, Nigeria shot down Swedish Red Cross planes attempting to fly to Biafra.

Israel hedged strategically, providing technical aid and logistics to Nigeria, while quietly providing captured Soviet arms to Biafra. Domestically, Israeli Jews felt kinship with Igbos since they are both persecuted successful minorities.

Fascist states like Franco’s Spain and Salazar’s Portugal, and Apartheid states like Rhodesia and South Africa also armed Biafra via Portugal’s Sao Tome and Guinea-Bissau. Presumably, all of them wanted Nigeria to lose its oil so it would stop funding Black African liberation movements on their territories. Biafra took their arms but still hated apartheid & colonialism.

Biafra’s Last Stand

By 1969, Biafra turned to sabotage. Guerrilla units and light aircraft attacked oil infrastructure to force negotiation. But, federal forces tightened the siege. Despite inevitable defeat, Ojukwu refused compromise, continuing to present himself as a Messiah for the Igbos. At this point, prominent Igbos like former Ceremonial President Nnamdi Azikiwe, withdrew his support for Biafra.

The End

Federal troops overran Biafra by December 1969. On January 12, 1970, Ojukwu fled to Ivory Coast. His deputy General Philip Effiong, surrendered to Gowon.

Afterwards, Gowon gave a speech of "No Victor, No Vanquished" and promised Reconciliation, Rehabilitation, and Reconstruction. Reality fell short, but I’ll discuss that next time.

The war lasted 2.5 years and killed 1 to 3M people. The International Observer Team absolved Nigeria of genocide charges, citing a lack of “proven intent.” However, Igbos think differently, and this exonerations is widely viewed as a whitewash by survivors. The investigation was limited in scope and dependent on the Nigerian military for access, leading many researchers arguing that the observer team ignored the genocidal reality of the blockade.

Economic effects

The war brought significant carnage and a massive decline in foreign investment (if we exclude oil investment, FDI in Nigeria went from £N 45M per year to £N 6M in 1966). This was particularly acute in manufacturing. Agriculture, livestock, and forestry production stagnated (which was most of the labor force back then).

The war forced a total rerouting of trade. When Port Harcourt fell to Biafra, the western port of Lagos faced massive congestion, handling nearly all exports and imports.

Defense spending tripled from 1964 to 1967, while revenues declined due to losing the East.

Lastly, due to the Biafra war, oil exports dropped. In 1966, crude oil was £N 91.9M ($257M) in foreign currency earnings (33% of Nigeria’s merchandise exports), but due to the Biafra war crude oil dropped to £N 35.9M ($100M) which was 17% of Nigeria’s merchandise export earnings.

Before the war, Nigeria was catching up to states like Indonesia. By the war’s final year, Nigeria was poorer and was overtaken by Pakistan. But Nigeria was still ahead of India, Congo, and Maoist China.

Conclusion

If you ask “Why doesn’t Nigeria just split along ethnic lines?” the answer is that Nigeria almost did, six years after independence.

The Southeast seceded. The Midwest seceded for a day. The Southwest considered it. Nigeria enforced its territorial sovereignty through force. Any zone that seeks independence must be willing to fight the state and survive the consequences.

The better question is why Biafra failed while Africa’s two successful secessions (Eritrea from Ethiopia and South Sudan from Sudan) eventually succeeded.

The answer comes down to political will, resources, and timing.

Biafra fought for 2.5 years. Eritrea fought for three decades. South Sudan fought for nearly four decades across two wars. Secession succeeds when the center collapses, exhausts itself, or consents.

Resources made compromise impossible in Nigeria. Losing Biafra would have rendered the Nigerian state fiscally unviable. Sudan, by contrast, could lose territorial sovereignty over the South while still extracting oil rents through pipeline control (South Sudan was landlocked). Eritrea had no comparable resource base whose loss threatened Ethiopia’s survival (although Ethiopia would like their coastline).

Timing also mattered: Biafra challenged borders in the 1960s, when African leaders treated border freezes as survival policy through the OAU. Eritrea (1993) and South Sudan (2011) emerged later under different diplomatic conditions and with different forms of parent-state consent.

However, after the war ended, there was an oil boom. Next time, I’ll discuss Nigeria’s 1st oil boom post Biafra.

• Dictator Land: The Men Who Stole Africa by Paul Kenyon

• Fortunes of Africa: A 5,000 Year History of Wealth, Greed and Endeavour by Martin Meredith

• Fate of Africa: A History of 50 Years of Independence by Martin Meredith

• A History of Nigeria by Toyin Falola and Matthew M. Heaton

• Ghana’s Foreign Policy, 1957-1966 by Scott Thompson

On October 1, 1960, Nigeria gained independence as Africa’s giant: a federation of 45M, a diversified agricultural economy, and one of the most Africanized civil services on the continent. To outside observers, Nigeria looked like a model post-colonial state.

Six years later, a military coup ended the 1st Republic, and Prime Minister Abubakar Tafawa Balewa was found dead in a ditch, murdered by his own army. What appeared sudden was, in fact, the delayed consequence of unresolved political design flaws embedded at independence.

Balewa himself embodied those contradictions. A northern Fulani schoolteacher elevated by the British as a “compromise candidate,” he lacked an independent power base as he wasn’t part of the Fulani aristocracy. His authority rested not on mass legitimacy, but on fragile elite bargains.

This is part XII on my series on Nigeria. See the Context & Series Links below for the full journey from pre-colonial history to the mess of independence.

Context & Series Links

• The Foundation: I (Overview) | II & III (The North) | IV, V, & VI (The South)

• The Conquest: VII & VIII (British Invasion) | IX & X (Colonial Rule)

• The Fight for Sovereignty: XI (Winning Independence)

Abubakar Tafawa Balewa (1960-1966)

I. Sovereignty with Training Wheels

Even then, Nigeria’s independence was formal but incomplete. Its borders were not finalized until June 1961, when the British Northern Cameroons were folded into the Northern region. The country was a Commonwealth realm with the British monarch as head of state, until October 1st 1963, when Nigeria became a full republic.

II. The Head Start & Hidden Problem

On paper, Nigeria entered independence with advantages most of Black Africa lacked:

• Diversified Exports: While Ghana relied on cocoa for foreign exchange (FX), Senegal for peanuts, or Sudan for cotton in the 1960s, Nigeria was not a monocrop exporter. Nigeria earned FX from exporting peanuts, palm oil, & cocoa, with crude oil discovered in the Niger Delta in 1956.

• Human Capital: Unlike Belgian/Portuguese colonies, Nigeria’s civil service was already largely Africanized by independence, particularly in the South where people were vastly more educated than in the North due to colonial policy.

• Capital Markets: Nigeria opened a stock exchange in Lagos in 1961. Ghana, Tanzania, and Uganda wouldn't have one until the 1990s.

• Infrastructure: In 1958, a $28M World Bank loan funded railway expansion to Bornu in the northeast. Apapa Wharf, Nigeria's first modern deep-water port, was already operational and expanded in 1961.

Yet the core issue was, Nigeria was never forged through national integration.

III. Three Nations in One

Nigerian independence was negotiated through elite ethnic bargaining. The result was three regional power blocs (the North, Southwest, & Southeast) sharing a single federal shell.

Each region viewed the others with suspicion. Southern elites derided the North as feudal and backward, while Northern leaders feared Southern domination of the civil service and erosion of Islamic culture. Even before independence, both the Yoruba-dominated Southwest and the Hausa-Fulani-led North had flirted with secession.

Federalism became a vehicle for patronage rather than integration. Politics followed a simple logic: win seats for your region, channel federal contracts and jobs to your people, and skim a ~10% kickback for yourself through the informal “dash” system. Losing federal power meant losing more bribe money contracts for your region.

At independence, authority rested on a fragile coalition. The Hausa-Fulani NPC governed as senior partner, the Igbo-led NCNC as junior partner, and the Yoruba AG as opposition.

IV. The Continental Policeman

While Nigeria fractured internally, Balewa projected confidence abroad. He positioned Nigeria as the voice of Black Africa: non-aligned in rhetoric, morally outspoken, and quietly pro-West:

• Congo Crisis: Nigeria committed troops and funds to the UN mission in Congo. However, the murder of Patrice Lumumba by the Belgian-backed secessionists left Balewa livid. Nigerian peacekeepers remained until 1964.

• Regional Stability: Nigeria co-founded the Lake Chad Basin & Niger River Commission to secure free water navigation across West African waters.

• Anti-Nuclear Testing in Africa: When France tested atomic bombs in the Algerian Sahara, radioactive fallout drifted into Niger & Northern Nigeria. Balewa demanded an end to testing, but Charles de Gaulle ignored him. So, Balewa cut all diplomatic ties with France. Relations were only restored in 1965.

• Against Apartheid: Following the 1960 Sharpeville Massacre, Balewa stood against Apartheid South Africa. Balewa purged White South Africans from the Nigerian civil service, pressured the UK for South Africa's removal from the Commonwealth & the International Labor Association, and successfully campaigned to ban them from the 1964 Tokyo Olympics.

Yet beneath the non-aligned posture, Nigeria leaned West: Balewa signed a defense pact with the UK in 1961 (giving Britain continued access to Nigerian airspace and refueling rights in exchange for British military training and equipment), but backlash killed the pact the following year.

Balewa allowed the US to build a satellite tracking station in Kano in 1960, banned communist literature in Nigeria until 1961, and kept Nigeria’s currency within the sterling area, anchoring its Nigerian pound to the British pound (The anchor no longer exists, but it was similar to the CFA franc today).

Western firms dominated foreign investment. Soviet engagement was minimal until after Balewa died.

V. African Unity vs. African Nationalism

Africa had broadly three camps in the 1960s:

• The Casablanca group(“Africa Unite Now”): Led by Ghana’s Kwame Nkrumah, along with Guinea, Mali, Egypt, and Morocco pushed for a United States of Africa.

• The Brazzaville group (“The Francophiles”): Led by Felix Houphouet-Boigny of Ivory Coast, along with other French African states, wanted to maintain paternalistic ties with France while keeping national sovereignty.

• The Monrovia group (“Nation First”): Led by Balewa, along with Ethiopia, Sierra Leone, & Liberia, prioritized national sovereignty while seeking continental cooperation.

Balewa had little patience for Nkrumah’s Pan-African vision, which he found theatrical and reckless without stable African nation-states first.

The tension between them peaked at the 1962 Lagos Conference. Nkrumah’s group boycotted the event because Algeria (still fighting for independence) wasn’t invited. Balewa’s reasoning was pragmatic but cold: inviting Algeria signaled a blanket endorsement of all African liberation movements, risking needed Western aid at a moment when UK still ruled Kenya, Zambia, and other African colonies.

The United States of Africa idea never materialized: Morocco turned toward irredentism (“Greater Morocco”), while Egypt drifted toward pan-Arabism. The Brazzaville and Monrovia blocs merged and outnumbered the shrinking Casablanca group. The Organization of African Unity (OAU), founded in 1963, became a forum for cooperation among nationalist states, not a vehicle for continental government. But Balewa came around to supporting African liberation movements by sponsoring the OAU liberation fund.

Balewa’s position against a United Africa reflected Nigeria’s own unresolved internal nationalism. A state still struggling to integrate Hausa-Fulani, Yoruba, Igbo, and dozens of minority groups was in no position to gamble on supranational governance.

VI. Nation Building

Economic Strategy

Nigeria’s economic strategy was open to foreign capital and comparatively capitalist by African standards. Unlike state-dominated Nkrumah’s Ghana or Sékou Touré’s Guinea, Nigeria was open to private enterprise. The state stepped in only when private capital failed to materialize or was deemed insufficient.

Nigeria adopted a textbook infant-industry protection approach. Luxury imports faced high tariffs, industrial machinery received exemptions, and domestic manufacturing was encouraged through incentives. In 1962, Balewa launched the First National Development Plan, a ~€700M program scheduled to run through 1968. Roughly half was financed through foreign borrowing from the World Bank, UN funds, the International Finance Corporation, and bilateral foreign aid. The rest came from Nigerian private and state-owned banks, including the Nigerian Industrial Development Bank.

The plan prioritized communications, transport, and electricity, which together absorbed over three quarters of total spending.

Education was 10% but still expanded widely. Each region developed flagship universities: Nsukka (East), Ahmadu Bello University in Zaria (North), and the University of Lagos and Ife/Obafemi Awolowo University (West). Teacher-training colleges also expanded in Lagos.

But, First Development Plan had a flaw: investment flowed disproportionately to two places: Lagos (the capital) and the North (which led the federal coalition).

The Northern Kainji hydroelectric dam alone, budgeted at £68M but ultimately costing closer to £90M, absorbed ~10% of the federal budget.

Defense spending, roads, education, and health infrastructure all tilted toward the North.

Northern leaders defended this as corrective policy. British missionaries had built schools and hospitals in the South for over a century while leaving the North to its own devices. Catch-up, in their view, was overdue. But, Southern elites saw these affirmative action policies as a slippery slope that institutionalized permanent Northern dominance.

The same logic governed personnel policy: from 1958, military recruitment followed a quota system, with half of all admissions coming from the North and the West and East splitting the remainder. This made a paradoxical force; at independence, the army was largely northern in ranks, but southern in command, a colonial hangover from of Western education-based promotion that favored the South.

In 1961, quotas extended to officer recruitment. Similar balancing rules applied across the civil service and public-sector recruitment.

These policies infuriated Southerners, especially Igbos, who saw merit systematically overridden by ethnicity. For the Igbo-led NCNC, the optics were disastrous. Despite being a coalition partner, federal resources flowed disproportionately to the North and Lagos (the West), not the East, and this is all before oil dominated politics in Nigeria. Let’s talk about oil’s emergence.

VII. The Emergence of Fossil Fuels

Once Shell struck oil in the late 1950s, Balewa moved to break its monopoly. The government forced Shell to surrender 50% of its unexploited concessions, then Nigeria subdivided the returned acreage for new bidders.

By the mid-1960s, Italian Eni, American firms such as Mobil, Gulf (Chevron), Phillips & Tenneco, and France's SAFRAP were all drilling in the Niger Delta. These firms made Nigerian subsidiaries, but Balewa did not mandate government ownership in oil operations yet. Nigeria acted as a landlord, not an operator.

The fiscal terms were straightforward: firms paid “rent” per square mile, a ~12.5% royalty on every barrel, and split profits 50-50 profit with Nigeria. During Balewa’s tenure, only Shell-BP were producing oil.

Natural gas followed a different path. Most Nigerian gas was associated gas, released when oil was brought to the surface. In a few localized cases, Shell supplied gas to industrial customers in Aba (East) through short, dedicated pipelines. Because production and demand were in the same spot, gas could be used without costly transport or processing.

Outside these pockets, gas had no market. Nigeria lacked a pipeline grid, gas-fired power plants, and processing facilities. Moving gas over distance was uneconomic. In most fields, flaring remained cheaper than capture, and large-scale gas monetization only became viable in the 1990s with offshore liquefied natural gas projects.

Nigeria also built downstream capacity. In 1965, an oil refinery opened in Port Harcourt, jointly owned by the federal government and the Eastern Region through the Nigerian Petroleum Refining Company, alongside Shell and BP. It produced petrol, kerosene, diesel, heavy fuel oil, and bottled gas.

At this time, however, oil did not yet dominate the economy, cash crops did.

VIII. Regional Self-Help

Nigeria’s regions retained significant fiscal autonomy. Beyond federal transfers, they levied import and export taxes and relied heavily on marketing boards to finance development.

Marketing boards functioned as implicit farmer taxes. By purchasing cash crops from farmers below world prices and selling them at global rates, regional governments captured large surpluses. Those funds underwrote infrastructure, industrial projects, rewarded political supporters, and enriched ruling parties.

Agricultural output initially rose. Cash crops like cocoa, peanuts, rubber, and cotton expanded through the early 1960s. But, food crops grew more slowly.

The Regional and Federal investment in extension services (government-paid agronomists promoting fertilizer, better seeds, and pest management to village farmers), while tying small loans to agronomic compliance pushed yields higher. Marketing boards increased prices paid to farmers over time.

The Western Region used the regional funds the hardest for development. In April 1965, Premier Samuel Akintola inaugurated the Ikeja Industrial Estate, Nigeria’s first industrial estate. Western Nigeria Marketing Board and the Western Nigeria Development Corporation used cocoa revenues to fund roads, power, and water. Foreign capital flowed in:

• British Dunlop built a $4M tire factory.

• Guinness opened a brewery.

• Italian, American, and British investors put over $10M into textile mills.

Outside the industrial zone, Blue Circle built a cement plant at Ewekoro, an American flour company made a joint venture with Nigerian entrepreneurs to make a flour mill in Apapa, and foreign investors made a sugar cane plantation and refinery in the Western region as well.

In the southeast, US firm, Indian Head Mills, opened a textile operation in Aba. Canadian Alcan built an aluminum rolling mill in Port Harcourt. French Michelin made tires in Nigeria using Nigerian rubber.

Foreign capital flowed in. Between 1960 and 1964, Nigeria attracted ~$75M per year in foreign direct investment. 60% of paid-up capital was foreign-owned, 30% from the Nigerian government, and 10% from the Nigerian private sector. Fully foreign-owned firms outnumbered domestic ones nearly two to one.

Nigeria even imposed FX controls that limited capital repatriation (restricting the conversion of the Nigerian pound and transfer of profits/dividends abroad). Investors from U.S, Japan, U.K, and West Germany still came. Manufacturing expanded in textiles, cement, flour, food processing, and beverages.

IX. Political Crises

Ibadan Crisis of 1962

By 1962, the Yoruba-dominated Action Group faced a split between two leaders who were once allies. Samuel Akintola, the Premier of the Western Region, and Obafemi Awolowo, the party’s founder, now represented incompatible strategies.

Akintola favored cooperation with the Northern-led federal coalition to gain more access to federal resources. Awolowo rejected this as capitulation. When Awolowo attempted to remove Akintola and replace him with a loyalist, violence erupted in Ibadan. Fistfights in the Western Regional Assembly spilled into the streets.

Balewa declared a state of emergency, suspended the Western Regional government, and installed an interim administration.

Awolowo was arrested and later convicted of diverting ~₦5M in regional funds to political causes and private companies. Prosecutors also alleged that he had plotted to overthrow the federal government. The charges said Awolowo sent 200 supporters to Nkrumah’s Ghana for paramilitary training, smuggled explosives back into Nigeria, and planned to sabotage critical infrastructure in Lagos under cover of a blackout in order to capture Balewa during Indian Prime Minister Jawaharlal Nehru’s visit. Awolowo denied these claims.

27 Action Group members were arrested, including Chief Enahoro, who fled to the UK, triggering a six-month extradition battle that drew international attention. He was returned to Nigeria, tried, and convicted.

When the emergency ended, Akintola returned as Premier, but now leading a new Yoruba-led party aligned with the North, the United People’s Party. The Action Group was reduced to a minority in what had once been its stronghold. A new precedent was set to utilize federal power to neutralize regional opposition.

The Census Wars

In Nigeria, population meant power. Census figures determined parliamentary seats and revenue allocations. Control of the numbers meant control of the state.

Southern leaders viewed the 1962 census as a chance to weaken Northern dominance. When preliminary results showed a 70% population increase in the South compared to 30% in the North, the Northern People’s Congress rejected the figures outright and forced a recount.

As an aside, between censuses in July 1963, the Mid-West, populated by Edo people from the former Benin Kingdom, voted 90% to break from the Western Region. By August, Nigeria had four regions instead of three. Oil discoveries soon followed in the new Mid-West.

On October 1, 1963, Nigeria became a republic. Balewa remained Prime Minister. Nnamdi Azikiwe shifted from ceremonial Governor-General to ceremonial President.

The 2nd census, conducted in November 1963, swung dramatically in the opposite direction. This time, Southern leaders accused Northern authorities of inflating their numbers by 8M. The most infamous claim was that livestock were counted as people. Despite Eastern Region protests and a Supreme Court challenge, the federal government adopted the new figures.

Official population: 55.6M, with 29.8M in the North.

For southerners, that census episode delegitimized the federal system to them.

The Middle Belt Crisis (1960-1964)

The first sustained violence of the First Republic did not erupt in the South. It began in the Middle Belt, the lowest region in the North.

The Tiv, Idoma, and Birom peoples resisted Hausa-Fulani domination of the Northern Region. Led politically by Joseph Tarka and the United Middle Belt Congress(UMBC), they demanded a separate Middle Belt region. Unlike much of the North, these communities practiced traditional religions or Christianity instead of Islam, deepening their sense of exclusion.

NPC-aligned chiefs were installed across the Middle Belt. Courts ruled against UMBC supporters. Licenses, scholarships, and jobs were denied. Bribes became routine. By 1960, resistance boiled over.

The Tiv launched the Nande Nande uprising, burning NPC offices and attacking government officials. Northern Premier Bello unleashed the Northern regional police to suppress the revolt and arrested UMBC leaders. Grievances remained unresolved.

Then in 1964, the conflict escalated. Tiv fighters adopted guerrilla tactics. This time, Prime Minister Balewa deployed a federal army battalion. Villages were burned and civilians displaced. Official figures claimed ~300 deaths. Middle Belt leaders estimated closer to 4K.

1964-1965 Elections and Collapse of the Republic

After the disputed 1963 census, opposition politics hardened. Southern parties joined anti-NPC northern groups like the United Middle Belt Congress to form the United Progressive Grand Alliance (UPGA). In June 1964, the Igbo-led NCNC left its coalition with the North and aligned with the Southwest, Yoruba Action Group despite longstanding tensions between Igbo & Yoruba elites.

The North responded with the Nigerian National Alliance(NNA), pairing the North with Akintola’s Yoruba-based NNDP and smaller southern parties. The alliance played on Yoruba fears of Igbo domination.

Before campaigning even began, Nigeria ground to a halt. An initial national strike in 1963 over stagnant wages signaled growing unrest. But, in June 1964 for 14 days, a far larger strike involving ~800K workers shut down the ports, railways, power stations, and airlines. Lagos emptied.

The strike began in state-owned enterprises and spread nationwide to the private sector. Workers protested stagnant wages and elite corruption. Ultimately, the unions won concessions. But politically, the strike functioned as a vote of no confidence against Balewa’s government.

The December 1964 federal elections were catastrophic. The NPC-led alliance blocked, detained, or prevented UPGA opposition candidates from filing papers. Entire districts went uncontested. In Kano, the Northern coalition jailed UPGA candidates for months. Middlebelt leader, Joseph Tarka, was arrested, crippling UPGA’s Northern campaign in the middle belt.

UPGA boycotted. Eastern places like Enugu & Port Harcourt did not participate. The election proceeded anyway. The NPC-led coalition claimed victory. With new oil discoveries in the Southeast and no meaningful representation, some opposition leaders openly discussed secession. Foreign diplomats warned Nigeria was nearing civil war. Protesters in Lagos chanted “Free elections or chaos” and “No government by fraud.”

Whatever faith remained in electoral politics died in the 1965 Western Region elections. Fearing defeat, Akintola’s Northern-aligned party deployed systematic rigging. Reports circulated that Akintola brought Yoruba-speaking people from neighboring Dahomey (now Benin Republic) to vote for him. Ballot theft, multiple voting, and centralized counting enabled manipulation. Both sides declared victory.

Violence followed immediately. Riots, arson, and killings spread across Ibadan, Ogobomosho, and surrounding towns. To win, Akintola purposely paid high wages to cocoa farmers before the election, but they were slashed by nearly half afterward(£120 per ton to just £65). Farmers revolted. Political violence merged with economic fury.

Young men recruited by Akintola’s party patrons burned opposition homes with occupants inside in a practice known as “Operation Wetie”, where victims were doused with petrol and set alight. Hundreds died. Opposition aligned newspapers were destroyed.

Balewa refused to declare a state of emergency. Instead, federal forces were sent to prop up Akintola’s regional government. Civilian authority collapsed in the West.

President Nnamdi Azikiwe warned that Nigeria risked becoming “another Congo” (referencing the secession attempts by Katanga and South Kasai).

By late 1965, elections no longer transferred power. Courts no longer resolved disputes. Violence had become the final arbiter. Many southern elites concluded the ballot would never deliver power for them. Many military officers concluded civilians could not govern.

In January 1966, a group of young officers led by Major Nzeogwu acted on that conclusion. But we’ll discuss the coups and the civil war next time.

Conclusion

Nigeria’s first six years were not an economic failure. Output rose and agriculture expanded before oil became a big deal. Nigeria was catching up to Indonesia while staying ahead of Pakistan, China, India, Congo, and Ethiopia.

What failed was politics. Federalism without trust turned every census, quota, budget, and election into an existential contest. By 1965, ballots no longer decided outcomes. Violence did.

Sources

1. The Fortunes of Africa: A 5000-Year History of Wealth, Greed, and Endeavor by Martin Meredith

2. A History of Nigeria by Toyin Falola & Matthew Heaton

3. Nigeria: A Country Study

4. The Fate of Africa: A History of the Continent Since Independence by Martin Meredith

Introduction: A Fragile Union

On October 1, 1960, traditional war canoes raced across the Lagos Lagoon, celebrating Independence day.

It was a joyful moment, but the road to independence wasn’t a parade. It was a series of frantic compromises to stop a divorce.

Context & Series Links

This is Part XI in my series on Nigeria. For backstory:

• Overview of Nigeria: Part I

• History of Pre-colonial Northern Nigeria: II & III

• History of Pre-colonial Southern Nigeria: IV, V, VI

• British Conquest of pre-colonial Nigeria VII & VIII)

• How British Colonialism operated IX & X

Previously

Last time (Part X), I covered how Britain’s economic blunders in the post-WWII food crisis ignited Nigerian Nationalism. What started as elite debates exploded into mass strikes, riots, and urban chaos.

To ease the pressure, Britain reformed colonial rule with the Richards Constitution of 1946, which split Nigeria into three distinct regions.

This constitution was supposed to be a release valve, but it was also clever containment. It shifted power from fiery Lagos nationalists to more manageable chiefs and elites in Ibadan (West), Enugu (East), and Kaduna (North). Regional assemblies got budgets and debating chambers, but Executive power stayed British and senior posts stayed European.

But this constitution created the geopolitical tripod that would define (and haunt) Nigeria:

Beyond Simply “Tribalism”

Obviously, tribalism was an issue. The North generally saw the South as heathens and South thought the North was enabling British rule.

But, Nigerian “tribalism” is more sophisticated than ethnic monolithic parties for the Yoruba, Igbo, and Hausa-Fulani. There were fierce ethnic cleaves even within each party. Remember, from my previous pieces, I told you that “Yoruba” and “Igbo” are actually meta-ethnicities that were crystallized by missionaries and colonialists.

For example, the people in Ijebu and Ibadan both speak Yoruba dialects, but they historically warred with each other (the Ekiti–Parapo War from 1877 to 1896). They saw themselves as distinct: Ijebu were merchants and Ibadan were warriors. In the 1950s, Ibadan Yoruba used to vote NCNC while Ijebu Yoruba voted Action Group (AG).

Meanwhile, minorities in every region hated being dominated by one of the big three.

• In the South West, the Edo & Itsekiri resented Yoruba dominance

• In the South East, the Ibibio, Efik, Igala, and Ijaw feared Igbo encroachment

• In the North, the non-Muslim middle-belters (i.e. Tiv and Birom) feared being outsiders within the Muslim, Hausa-Fulani North

The National Question loomed: What is Nigeria, and who speaks for it?

The Education Gap: Lugard’s Legacy

Here’s what made the North fundamentally different: Frederick Lugard’s hands-off policy.

When Britain conquered the Sokoto Caliphate and named it Northern Nigeria in the early 1900s, Lugard feared endless jihadist revolts. His solution? Don’t mess with the Caliphate’s customs (except slavery). He restricted Christian missionaries & Western schools in the Muslim North. Some missionaries went to the pagan Middle belt(which was part of the North), but missionaries dominated the South:

By independence, less than 5% of the North were literate in Roman Script. In the increasingly Christian South, that number was closer to 20%. Look at the regional disparities in Roman script literacy below:

To be clear, the North did have literacy before and during colonialism. But instead of the Roman script, mainly male elites (clerics, poets, top merchants, emirs, judges, and court scribes) used Arabic script to write in Hausa Ajami, Fulani Ajami, Kanuri Ajami or Arabic. There were Koranic schools taught by Mallamai (Quranic teachers). But these schools did not prepare students for European-style civil services jobs.

As a result, the Northern bureaucracy was dominated by Southerners, especially Igbos. This fueled resentment, as the North saw them as infidel foreigners instead of fellow Nigerians.

In this post, I’ll explore:

• Politics: constitutions, elections, riots, federalism

• Economy: postwar boom, Britain’s 10-year plan, marketing boards, early industry

• State-building: civil service “Africanization,” Northernization, the road to independence

• The warning signs: minority fear, coercion, and the cracks visible before 1960

Macpherson Constitution of 1951: When Representation Turned Population Into Power

The nationalist leaders hated that Richards’ unilaterally imposed his constitution without their consultation. A period of militant nationalism called “Zikism” followed, inspired by Nnamdi Azikiwe’s dream of one Nigeria.

To quell militancy, the new Governor John Macpherson consulted with the Nigerian leaders. This created the Macpherson Constitution in 1951, giving educated Nigerians a sense of authorship in finances & legislation while ultimate authority remained colonial. Key Changes:

• House of Representatives: Seats by Region (68 North, 34 West, 34 East). Representation was based on population.

• Ministerial roles: Educated Nigerians appointed to oversee transport, health, education, communications

• Electoral politics: The new arena, replacing street protest

In the 1951 regional elections, the Hausa-Fulani NPC won the North, the Igbo NCNC won the southeast, and BOTH Action Group & NCNC claimed they won the southwest.

Yoruba Action Group ultimately won the Yoruba-dominated West by weaponizing ethnic politics. They claimed that an Igbo (Azikiwe) would not represent the interests of the majority of Westerners as well as a Yoruba. As a result, minority parties like the Ibadan People’s Party (another Yoruba party), “cross carpeted” from NCNC to the Action Group. Azikiwe then retreated to the East. Now each main party controlled its own region.

Also, population became power in this parliamentary system. Census tracking was no longer a neutral administrative exercise, but the determining factor of regional dominance. The 1952 census (54% Northern) was decried as fraud by the South, structurally tilting seats Northward.

1953: Constitutional Collapse

By 1953, the fragility of this union was exposed. Southern leaders (AG & NCNC) moved a motion for “Self-Government in 1956.” But, the North voted it down, saying they weren’t ready yet.

To the South, this looked like the North was acting as useful idiots for the British. But the northern perspective was more desperate than cynical. The North literally lacked the educated manpower to run an independent region. Northern elites feared that rapid independence meant the Southern Kafir (non-Muslim) would effectively rule the North’s railways, administration, hospitals, and security apparatus.

When the Northern delegates walked out of the parliament in Lagos, the Lagos crowds booed and jeered them. Humiliated, the Northerners returned home.

But, when the Action Group toured Kano shortly after, many in the North viewed it as an invasion. The Kano Riots of 1953 exploded.

For four days, inter-communal violence raged. The official death toll was 46 (mostly Southerners), though real numbers were likely higher. From the Igbo perspective, this wasn’t just a riot, it was an anti-Igbo pogrom.

This regional violence showed the deep problems in Nigeria. Bello flirted with Northern secession via his “Eight-point programme”. Awolowo in the West also made a threat to secede. Colonial governor Macpherson realized his constitution was dead, writing: “If Nigeria splits, it will not be into two or three parts, but into many fragments.”

The Lyttleton Constitution of 1954: A Federation to Stop the Breakup

To save Nigeria, the Colonial State Secretary, Oliver Lyttleton rushed to negotiate a settlement. The result was the Lyttleton constitution of 1954, which turned Nigeria into a clear federation with strong regional autonomy.

It barely worked. In the 1954 election, the NPC won the North, but the Igbo NCNC, won both the Igbo East AND Yoruba West. It was the last time a party would win outside its ethnic base in the colonial era.

Awolowo, the Western Premier, faced NCNC federal ministers (it’s like Democratic President Obama dealing with a Republican Congress). To avoid lose power in the 1956 election, Awolowo used his cocoa funds to execute popular policies: universal primary education, minimum wage hikes, and free child care. This points to the other transformation reshaping Nigeria: money.

Nigeria’s Economy

Economic Structure Before WWII

While the politicians were arguing over constitutions, the economy was undergoing a seismic shift. Before 1945, European giants like UAC and John Holt dominated important industries like shipping, insurance, warehousing and banking.

Nigerians were shut out. With almost no access to credit from the British banking duopoly (Barclays & Bank of British West Africa), Nigerians were relegated to petty trading. There were almost no Nigerians that ran the “meaty logistics middle”: regional distribution networks, managed accounting across cities, or imported in bulk. To fill the gap in the middle, the British brought in Greeks, Lebanese, Indians and Syrians to run logistics and warehousing. In addition, the British brought Gold Coaster (Ghanaian) and Sierra Leonian migrants to work as clerks or artisans.

But after WWII, Nigerians pooled together in different regions and made their own banks. They were big lenders to the nationalist movements in their regions. Also after WWII was the British Investment Plan.

The British Investment Plan

Post WW2, London launched the 10 year development plan for Nigeria (1945-1955), investing:

• £11.3M to improve telecommunications

• £4.2M for research and development in farming.

• £7.7M on education: specifically teacher training and building more high schools, which was not stressed pre-1945.

• £10.4 million for medical and health services

• £8 million to improve water supplies

Education

The British invested way more in schools. See the jump in school attendance below:

Not just primary school but high school too:

In terms of University education, the University College of Ibadan opened in 1948 as an extension of the University of London, meaning Nigerians could finally get degrees on home soil. The University of Ibadan did not become a fully independent university until 1962.

Across all of Sub-Saharan Africa in the late 1950s, there were roughly 8K graduates. Half of them were in Southern Nigeria & Ghana.

Health

The medical plan increased the number of hospitals, trained more medical staff, and provided more equipment.

Treatment facilities for leprosy and malaria were created, vaccination campaigns against smallpox were undertaken, and treatment for such epidemic and endemic diseases as yaws, scabies, and trypanosomiasis was expanded.

Economy

Post-WWII, Nigeria had an export boom from £24 million in 1946 to £130 million by 1955, due to the global post WWII recovery. This 21% growth rate was even before Nigeria struck oil!

This growth drove rapid urbanization & population growth. Lagos only had 126K people in 1931. By 1951, the population more than doubled to 274K. In addition, the vast majority of developmental aid went to the cities, while villages were neglected.

When each region gained self-governance in the 1950s, control of the marketing boards passed from colonial administrators to Nigerian politicians.

Marketing Boards & Corruption:

These boards were created as price stabilizers after European firms cartelized to crush farmer incomes. In reality, the boards just paid farmers below the global price for cocoa/palm oil/peanuts, and sold the commodity to trading firms at the international price at a profit(i.e. Unilever for palm oil, Cadbury Brothers for cocoa).

When Nigerian politicians gained control of these boards, they realized that they sat on a goldmine. They continued to underpay farmers and the surplus profit was kept as a slush fund for their political parties. This established the destructive concept of the “National Cake.” Politics became a zero-sum game: you didn’t enter government to serve; you entered to capture the Marketing Board revenue for your region and your party.

• In the Southwest, the Yoruba-led, Action Group used cocoa profits to fund campaigns and made the National Investment & Properties Company. Corruption was already visible before independence. The company gave millions to company directors as “special donations”.

• In the North, the peanut & cotton marketing boards provided funds to the Bank of the North, the Northern Nigeria Development Corporation (NNDC), and the Northern Nigerian Investments Limited (NNIL).

• In the Southeast, the Igbo-led, NCNC used palm oil & palm kernel revenues to fund the African Continental Bank(ACB, which is owned by Zik) and Eastern Nigeria Development Corporation, which financed party-loyal firms. This led to the most famous scandal of the era.

Zik’s Scandal

In 1956, a tribunal found that Eastern Premier Nnamdi Azikiwe injected £877K of public funds into ACB (which he owned) to save it from bankruptcy, which was a conflict of interest. But instead of the censure destroying his career, this corruption scandal increased Zik’s popularity.

Zik framed the issue as economic nationalism. He argued he was using public funds to save a Nigerian-owned bank because the colonial regime was passing laws to crush African-owned banks. Igbo voters believed him and viewed the investigation as a colonial witch hunt. When Zik called a snap election in 1957, Igbo re-elected Zik in a landslide. This set a dangerous precedent for Nigeria: corruption could be excused if framed as “fighting for your people” or “fighting the imperialists”. The Economist said at the time that Nigerians had a “sunny and tolerant mentality” towards corruption.

As scholar Eghosa Osaghae noted, “There was thus nothing seriously wrong with stealing state funds, especially if they were used to benefit not only the individual but also members of his community. Those who had the opportunity to be in government were expected to use the power and resources at their disposal to advance private and communal interests.”

Attempted Import Substitution Industrialization

While the 10-Year Plan primarily doubled down on cash crops, it also introduced an experiment on Import Substitution Industrialization (ISI).

ISI is the idea that the free market alone can’t turn a poor region of mostly illiterate peasant farmers into one that makes airplanes or semiconductor chips. The government must intervene in the economy offensively (via subsidies) and defensively (via tariffs) to nurture infant industries, hoping to replace imported manufactured goods with Nigerian-made ones.

• The Carrots (Tax Incentives): Under the Aid to Pioneer Industries Ordinance (1952) and Income Tax Relief Ordinance (1958), investors who started new industries were granted “pioneer status,” enjoying tax holidays (zero taxes) for their first few years of operation.

• The Shields (Trade Protection): To lower input costs, the government slashed import duties on the machinery and raw materials factories needed (Import Duty Relief, 1957). Simultaneously, they imposed heavy tariffs on cheap foreign finished goods to prevent them from undercutting the new local factories (Customs Duties Ordinance, 1958).

The result? The incentives helped make industry in Nigeria, but they did not help Nigerians.

The primary beneficiaries of these tax breaks were not budding Nigerian entrepreneurs, but European firms bringing foreign direct investment. However, foreign firms repatriated the profits (dividends & earnings) to European banks rather than Nigerian banks. Lastly, these factories weren’t really manufacturing hubs, but rather assembly plants. They put together parts imported from Europe rather than building local supply chains. So Nigeria ended up importing the “capital goods” (machinery & tech) anyway.

Discovery of Oil

Before 1956, “oil” meant palm oil in Nigeria. In fact, that’s exactly what the Niger-Delta fishing villagers in the town Oloibiri thought when Shell-BP arrived.

The British firm D’Arcy Exploration Company, a subsidiary of Anglo-Persian Oil Company (BP) had been hunting for oil in Nigeria since 1918 with zero success.

In 1938, D’Arcy formed a joint venture with Dutch Shell to make Shell-D’Arcy (which became Shell-BP in 1956). In the spring of 1956, Shell BP found commercial quantities of oil in Oloibiri.

It took two years to build a pipeline from the oil field in Oloibiri to the mouth of the Bonny River. By 1958, Nigeria was exporting crude oil. At this time, crude oil was at best 3% of exports, but production would explode post-independence.

The Regional Struggle

While the economy was growing, the civil service was quietly transforming.

Africanization of the Civil Service

In 1939, there were only 23 Nigerians in senior levels of civil service. By 1947, 182; by 1953, 786; by 1960, 2.6K. Gradually, Nigerians gained greater control over the day-to-day administration.

The Educational Gap and Igbo Domination of the North

Due to the educational gaps we discussed earlier, the Civil Service in the North was dominated by southerners, especially southeastern Igbos.

The Northern elite, led by Ahmadu Bello, were terrified. They feared that after the British left, the non-Muslim Igbos would permanently settle in their lands, sabotage Sharia law, control their bureaucracy, and leak sensitive information back southeast to gain political dominance.

In response in 1954, Bello launched the “Northernization Policy”, an affirmative action program that replaced Igbos & other Southerners with underqualified Northerners. 2000+ Southerners were dismissed from Northern Civil Service Positions. By 1959 there was just one Southerner left. This angered many Igbos who saw it as discrimination.

To his credit, Bello didn’t just purge, he aggressively invested in Northern human capital to get ready for independence. He launched a War on illiteracy (“Yaki da Jahilici”) and frantically built new teacher training colleges, technical & vocational schools. He also funded University sponsorships to study in universities in Nigeria, UK, Sudan, Pakistan, and India. Lastly, he founded a University in Zaria.

Frankly, he needed a generation or two, not six years before independence, but he set the foundations.

The Final Countdown: 1957-1960

In 1957, the endgame began. At the London Constitutional Conference, the British agreed to a time table for independence. The Southwest and Southeast were granted immediate self-government in 1957, while the cautious North waited until 1959. In a UN plebiscite in 1961, Northern Cameroon voted to join Nigeria, while Southern Cameroons voted to join French Cameroon.

To manage the transition, the British appointed Alhaji Tafawa Balewa, a Fulani Northerner, to be Nigeria’s first Prime Minister.

Balewa was an interesting choice. A former high school teacher, university-educated, incredibly eloquent, and Bello’s VP. Though Fulani, he wasn’t aristocracy; he came from humble origins and lacked an independent political machine. He didn’t threaten the South.

But his appointment revealed a fatal flaw in the constitution since Bello refused to be Prime Minister. To Bello, Premier of the North was more powerful than Prime Minister of Nigeria. He viewed Lagos as a distant outpost. His patronage network was in Kaduna.

This set a dangerous precedent: the most powerful man in the ruling party wasn’t even in the federal government.

Final Election before Independence

A final election was held in 1959 to decide who would lead independent Nigeria.

• The Result: The NCNC and AG won more total votes than the NPC. But NPC had the won the most seats (Seats were allocated based on the Census. The game was tilted for the North to win).

The NPC lacked an outright majority, so the Igbo-led NCNC formed a coalition with the Hausa-Fulani NPC. Balewa remained Prime Minister, and Nnamdi Azikiwe settled for the ceremonial role of Governor-General.

Also, in 1958-1959, Nigeria established a Central Bank and adopted its own currency, the Nigerian pound, anchored one-to-one to sterling.

Independence

On October 1, 1960, Nigeria became independent. Balewa declared confidently that “history will show that the building of our nation proceeded at the wisest pace… and Nigeria now stands well built upon firm foundations.”

He even spoke warmly of Britain’s colonialism “first as masters, then as leaders, finally as partners, but always as friends.” This was the opposite of what other colonies said at Independence day. For example, Patrice Lumumba, gave a scathing indictment of Belgian rule on Independence day.

At independence, Nigeria had roughly 45 million people and felt pollyannish about their prospects.

At the time Nigeria had a diversified agricultural economy instead of being a monocrop colony (70% of Ghana’s exports were cocoa, most of Gambia’s exports came from peanuts, and Mauritius depended on sugar). See Nigeria’s exports at independence below:

Also, more oil firms were drilling, and Nigeria had a functioning-African-led civil service. Lastly, Nigeria was one of Britain’s best colonies.

The average Nigerian was richer than most other colonies including Indians and Kenyans. It was right below white-ruled Rhodesia (modern day Zimbabwe).

What could go wrong?

Everything unfortunately. There were many warning signs.

Besides the factionalism and corruption, in 1957, the Willink Commission acknowledged that minorities in each region (the Edo, Ijaw, Efik, Ibibio, Tiv, and others) feared domination by the “Big Three” ethnic groups.

In the decade leading up to independence, there were land clashes between the Tiv & Jukun. Also, in the 1959 election, the Tiv voted for the Action Group because AG promised to support a Middle Belt state seceding from the Muslim North.

The NPC government was furious. They unleashed the native authority police on the Tiv: arrests, floggings, arbitrary taxes. The Tiv endured this abuse for months.

Britain suggested delaying independence for a few years to establish new minority states. The Nigerian leaders ignored the report. That decision planted seeds for the post-independence Tiv riots in the Middle Belt.

Conclusion

Nigeria at independence was a country of 45 million people held together by British glue, marketing board money, and fragile compromises.

The North controlled the seats but lacked the education. The South had the education but not the seats. The minorities had neither. Corruption was already endemic, excused as ethnic solidarity. Igbos in the North were being purged and felt like foreigners. The Tiv were being beaten for voting wrong.

Next time, we’ll discuss Nigeria after independence.

Sources

Nigeria: A Study
A History of Nigeria by Toyin Falola & Matthew Heaton
Nigeria: Background to Nationalism by James S. Coleman
Fortunes of Africa by Martin Meredith
Fate of Africa by Martin Meredith
Dictatorland by Paul Kenyon
The History of Political Change Among the Tiv by Tesemchi Makar

This is Part X of my Nigeria series. Previous parts covered pre-colonial kingdoms, the slave trades, and early colonial rule.

In this article, I’ll discuss:

1. The Economics: Nigeria’s Colonial Budget & The Great Depression

2. The Geopolitics: World War II

3. The Domestic Politics: Nationalism, the 1945 Strike, and Federalism

Note: The end of this article might be cut off in some email clients. Read the full article, unbroken here.

Previously: Multiple Worlds, One Colony

Last time, we saw how Fredrick Lugard merged two distinct worlds into one colony. In both areas, Britain ruled indirectly, but indirect rule was applied in two starkly different ways, creating a profound and lasting divergence.

The North: Preservation

Northern Nigeria was dominated by the Kanuri-ethnic Bornu Kingdom and the Hausa-Fulani-ethnic Sokoto Caliphate. By the early 1900s, the Sokoto Caliphate was the largest slave plantation state on earth with 1-2.5 million slaves. Britain’s indirect rule here meant “preservation”.

The traditional Emirs ruled with minimal British supervision, Sharia remained the law of the land, literacy remained an elite male activity, and slavery (Bayi & Cucanawa) persisted (though the British frowned upon it). The Fulani aristocracy continued to rule over the Hausa majority, intermixing over time like the Manchu elites ruling Han China in the Qing Dynasty or the Normans ruling Saxon England.

Crucially, Islam continued to spread under colonial rule. Parts of the North, and especially the Middlebelt, were pagans or practiced syncretic Islam mixed with local African traditions. Because British colonial pacification reduced warfare and banditry, Muslim clerics could travel into previously inaccessible North & Middlebelt pagan areas, proselytize, and establish Quranic schools and Sufi brotherhood networks. Islam was even spreading southwest into Yorubaland and the “Middlebelt”, the region between the North and South. The Middlebelt societies (Tiv, Idoma, Birom) avoided Muslim rule for centuries, but became increasingly Christianized under colonial rule. They felt like (and still feel like!) persecuted minorities in a mostly Muslim region.

The South: Transformation

Southern Nigeria was a patchwork of kingdoms, chieftaincies, village clans, and city-states. Some of these ethnic groups (like Efik, Ijaw, Warri, and Edo) had existed for centuries. But others (like Yoruba and Igbo) were essentially colonial stitches consolidated by missionaries and colonial officials who grouped related dialect clusters into macro-identities. Over time, these labels hardened into ethnic categories people now live and die for.

In the South, Britain destroyed the old order. Christian missionaries replaced pagan shrines with Christian schools, chiefs were invented in places that did not have chiefs before, and “backwards customs” (like ritual sacrifice, twin killing, widow killing, and slavery) were outlawed. In a single generation, much of the pagan South was remade into a literate, Christianized society.

The Result:

• The South developed higher human capital: producing a small, but influential class of journalists, lawyers, engineers, and doctors

• The North kept its older structures, but lagged behind in Western education.

Out of this Southern middle class emerged the first pan-Nigerian nationalists, who blended racial solidarity with anti-colonial critique.

Below you will see a rough estimate of the ethnic breakdown of Nigeria:

Note: Very few Europeans settled in Nigeria (~4K by the 1930s), mainly because Europeans hated the terrain, climate, and malaria. As a result, Nigeria never had the entrenched racial land issues like South Africa or Rhodesia(Zimbabwe).

#1 The Colonial Budget

In a nutshell, colonial Nigeria ran two budgets: the recurrent budget (taxes & tariffs) for salaries, and the capital budget (bonds, grants and loans) for infrastructure (similar to municipal finance today).

The Recurrent Budget:

Britain wanted Nigeria self-sufficient, so the colony relied on import/export tariffs. When Nigerians imported clothes or alcohol, or exported palm oil, cocoa, and peanuts, everything was taxed at coastal ports. From 1900 to WWI, over half of government revenue came from tariffs. The recurrent budget boomed when exports rose and collapsed during global downturns.

About ~50% of the recurring revenue went to British salaries and pensions. British district officers, engineers, police, customs officers, and colonial secretaries were all paid by the Nigerian treasury, not London. Even after retiring in Britain, their pensions came from Nigerian revenues. Another 14% to 33% went to loan repayments, and remainder went to economic development.

Capital Budget:

If you thought the recurrent budget was volatile, wait until you see the capital budget. The capital budget financed infrastructure, but British Nigeria struggled to attract investors.

For example, in 1923, British Nigeria attempted to raise £5.7 million through a bond offering on the London market. Investors purchased only £460,000, just 8% of the issuance. The New York Times called it a “FIASCO.”

British Nigeria tried to price its bonds like British government securities. But investors weren’t braindead, you can’t compare industrialized Britain to a colony that depended on the volatile global price of palm oil and cocoa. As a result, investors demanded higher returns from British Nigeria to compensate for that risk.

South Africa, by contrast, successfully raised £9 million at 5% interest around the same time. The message from global markets was clear: British Nigeria was not a trustworthy investment and was deemed high risk (This is still true today. Nigeria has a junk credit rating at B-).

#2 Great Depression: Where Colonial Rule Failed

Economic growth and living standards rose until 1929. The population grew too. By 1929 the North had 10.4M people and the South had 8.4M.

But, when the Global Great Depression struck in 1929, Nigeria’s commodity-dependent economy collapsed. Export values nearly halved from £17 million in 1929 to £9.7 million by 1938 as global prices for cotton, palm oil, and peanuts cratered. The colonial government was powerless to end the crisis.

This catastrophe coincided with Britain’s violent suppression of the Women’s War of 1929, when colonial authorities killed protesting women.

In addition, too many Nigerian farmers shifted into cash crops over staple crops. This created food shortages and forced the colony to import of staples like rice, biscuits, bread, corn meal, fish and others. In the North, farmers focused so heavily on peanuts that they weren’t producing enough food to feed themselves. Then came the 1935-1936 drought. Poor rainfall caused nationwide shortages and sent the price of corn, rice, and yams soaring by 50% to 100%. The British tried to raise domestic rice output, but the crisis still lingered with other staples.

Together, these failures (economic collapse, food inflation, food shortages, and brutal repression) catalyzed nationalist movements across Nigeria.

Colonial rule rested on the idea that Britain would provide progress & security. When that promise collapsed, many Nigerians began thinking “Why do we let these idiots rule us?”

#3 Nigerian Nationalism Emergences

Pre-1930: West African, Not Nigerian

Before 1930, few Nigerian elites identified as “Nigerian.” Even nationalists like Herbert Macaulay saw Britain’s boundaries as arbitrary constructs, confining Black Africans to menial positions in the colonial bureaucracy and European firms.

The Nigerians who studied at British universities, alongside subjects from Sierra Leone and the Gold Coast (now Ghana), began developing a broader West African identity. This led to the formation of the West African Students’ Union in London in 1925.

At this stage, these Africans were focused on ending racial barriers across the empire. A good example is the colour bar, which limited African advancement throughout the empire and entrenched racial discrimination in elite civil service jobs.

Post-1930: A New Generation

By the 1930s onward, a different breed of Nigerians emerged. Born under British rule, they were the first in their families to gain Western education, travel abroad, and speak/write English. They attended not just British universities but also American Historically Black Colleges. In sheer numbers, this generation dwarfed its predecessors.

This new educated class formed the backbone of Nigerian nationalism, not because they rejected modernity, but because they embraced it and demanded full participation in it. They hated racial hierarchy and the stark differences between Nigerian and Western livelihoods.

Organizing for Change from the Bottom Up

This new professional managerial class built political power through:

Ethnic Unions:

Western-educated Nigerians were not satisfied becoming just teachers, clergymen, or low-level civil servants. They voiced discontent with colonialism, embarked on self-help campaigns, and formed tribal kinship unions in urban centers (The Ibo (Igbo) Federal Union, the Yoruba Egbe Omo Oduduwa, the Ibibio Welfare Union, the Ijaw Rivers People’s League, and more). These ethnic unions helped their members find jobs, navigate city life, and maintain links with their villages. They funded primary and secondary schools in rural areas and sponsored scholarships for higher education abroad.

Ironically, these Nigerian-made ethnic unions reinforced tribalism even as they pursued nationalist goals.

Professional & Labor Unions:

Non-ethnic unions also proliferated: the Nigerian Civil Servants Union, the Nigerian Union of Teachers, and the Mechanics’ Union of railway workers. They pressured the colonial government to arbitrate disputes between labor and management and went on strikes to improve their conditions. In addition, cocoa farmers formed cooperatives.

Women’s Organizations:

Southern women created organizations like the Lagos Women’s League (1936) and the Abeokuta Ladies’ Club (1944) to push for women’s advancement in civil service jobs.

The Nigerian Youth Movement (NYM)

Lagos became a hotbed of Nigerian nationalism, especially under an organization called the Lagos Youth Movement. By 1936, they changed their name to the Nigerian Youth Movement to illustrate their nationalist goals.

They fought for Africanization of the elite civil service jobs, better wages & working conditions for Nigerians, and more elected representation in government. By 1938, the Nigerian Youth Movement had expanded to other cities: Ibadan, Ijebu-Ode, Warri, and Benin City (Southwest and South-central); Port Harcourt and Calabar (Southeast); Jos (Central); and Kano, Zaria, and Kaduna (North). They had a membership over 10K and ran their own newspaper called The Daily Service, which criticized the British government.

The Catalyst for NYM’s popularity, The Cocoa Pool Incident:

By the late 1930s, seven European firms controlled 67% of all Nigerian export trade. The largest was the United Africa Company (a branch of the larger Anglo-Dutch firm Unilever), which handled 40% alone in 1939. Unilever controlled 80% of Nigeria’s export trade overall.

During the Depression, these European trading firms colluded and lowered the prices they paid for cocoa in what became known as the “Cocoa Pool incident of 1937.” This devastated cocoa farmers’ incomes in Gold Coast (Ghana) and Nigeria. The NYM responded by supporting farmer boycotts and demanding a commission to prevent collusion. These actions made the NYM popular among Nigeria’s rural majority.

#4 Britain’s Top Down Change

Abolition of Domestic Slavery

Beyond the educated elite, criticism of colonial rule increased when Britain joined the League of Nations. British NGOs like the Anti-Slavery and Aborigines’ Protection Society in London travelled to Nigeria and submitted scathing reports to the British Colonial Office and League of Nations. While domestic Nigerian slavery was more-or-less abolished in the South between 1880 to 1915, domestic slavery was very much alive in the North. In the 1900s, Northern elites retained female concubines, Emirs had palace slaves, and hereditary domestic slaves remained attached to aristocrats. As a result, these NGOs pushed Britain to end Northern Nigeria’s culture of domestic slavery with the ordinance of 1936.

Imperial Preference & Wartime Controls

Before WWII, Britain established the Imperial preference system (Ottawa, Canada, 1932), lowering tariffs within the Empire and raising outside it.

But when war began in 1939, Britain imposed emergency mechanisms that:

1. Forced colonies to buy only from suppliers inside the British Empire

2. Fixed colonial export prices far below world-market levels

3. Imposed price controls on local food (meat, gari, dried fish, rice & beans)

4. Created government monopolies to buy African cash Crops.

Price controls (#3) infuriated market women. Prices aren’t the problem, scarcity was. Prices are signals: when a good is scarce, prices rise; when it is plentiful, they fall. By capping prices in Lagos in 1942, the colonial government broke the price signal. Women still had to pay farmers more during wartime, cover transport costs, bribe checkpoint guards, and manage risk of food spoilage. When forced to sell below cost, they simply stopped selling, sold it in black markets, or diverted food to towns without controls.

Women caught selling above government fiat prices were criminalized by price inspectors. Ultimately, price controls resulted in empty shelves on markets, not cheaper food. The price controls created the very scarcity the British tried to solve.

Commodity Control Boards

The most consequential wartime institution was the set of commodity control boards for palm produce, cocoa, groundnuts, and cotton. Officially, they were created to stabilize prices during WWII so farmers wouldn’t riot during price crashes. In practice, they let the British buy cash crops at low fixed prices and sell the price difference into government reserves.

To Nigerian farmers, this was an enormous reduction in incomes: producers received 10–50% less than the world price. In 1950, for example, cocoa farmers were paid £150 per ton by the board while global prices were £205. That 27% difference was a hidden farmer tax. For cotton, the ‘tax’ was 42%; for peanuts 40%; for palm kernels 39%; for palm oil 17%.

The total reserves accumulated were modest in the context of Britain’s war economy. Still, every ton of cocoa and kernel helped Britain scrape together scarce foreign exchange to protect the pound sterling from further currency depreciation. The boards kept their reserves in London banks, which parked their reserves at the Bank of England, giving Britain a small but needed pool of foreign reserves. You could call this “emergency exploitation” if you’d like.

Labor Shortages

Thousands of Nigerians were conscripted or recruited:

• to fight in East Africa, Burma, and North Africa

or

• to serve as technicians, nurses, carpenters, clerks, and drivers.

With fewer farmers, staple prices like yams and gari surged.

Imperial Wartime Development

Yet WWII also brought unexpected infrastructure spending. To move troops and supplies, the colonial government expanded:

• harbors and railways

• military hospitals,

• airfields and communications infrastructure.

For millions of Nigerians, especially in the North and interior, this was their first exposure to large-scale, government-funded development.

How WWII Fueled Nationalism

World War II radicalized Nigeria in three ways:

1. The “World Food Crisis” (1946-1948) caused hardship, riots, and widespread smuggling.

2. Returning veterans faced unemployment or wages far below what they earned in the military. They had fought for an empire that offered them little in return.

3. Nigerians saw the colonial government provide social services and economic planning in wartime. The war revealed that a modern state could build roads, hospitals, and schools, raising expectations among Nigerians.

For the first time, Nigerians demanded a government transforming the economy. After WW2, Nigerian nationalists were serious about ending British rule.

#5 1945: The General Strike That Changed Everything

With farmers underpaid, government employees’ wages frozen, official markets suffering from shortages, and black market prices soaring up 200%, the whole colony faced a severe post-war cost of living crisis. Many Nigerians could not survive on their incomes.

That year, the African Civil Service Technical Workers Union demanded a 50% wage increase. When their demands were refused, 17 unions with 30K members launched a 37-day, colony-wide strike, shutting down railway, postal, and telegraph services.

Enter “Zik”: The New Face of Nigerian Nationalism

During the strike, two journalists and protest organizers seized the moment. Herbert Macaulay, the old nationalist, and Nnamdi Azikiwe (“the Great Zik”), the charismatic new leader.

Zik was unique; he felt pan-Nigerian rather than just Igbo. After all, he spoke English, Hausa, Igbo, and Yoruba. He was an Igbo raised in the North since his dad served in the colonial civil service there. He attended Christian missionary schools, studied at the HBCU Lincoln University (1925), and University of Pennsylvania for masters studies in Anthropology & Political Science.

After a sedition conviction in the Gold Coast, he returned to Nigeria and founded the West African Pilot, which became the colony’s loudest nationalist newspaper. By WWII, Zik was already a national figure.

In 1941, he split from the NYM over what he saw as tribal ethnic rivalry. Together with Igbo and Ijebu Yoruba allies, he formed the National Council of Nigeria and the Cameroons (NCNC), which quickly surpassed the NYM as the most influential nationalist movement.

The Zikist Movement: Nationalism Turns Militant

After Zik claimed the British tried to assassinate him, a militant wing emerged within the NCNC: the Zikists. Some were communists and socialists; all were deeply anti-imperialist. They advocated strikes, sabotage, and at their most extreme, violence to end colonial rule.

But the British crackdown that followed, triggered by a failed Zikist attempt to assassinate the colonial secretary, shattered the movement. Though the wing dissolved, the episode revealed the rising militancy and impatience of Nigerian nationalism.

#6 The Richards Constitution:

After the strikes and attempted assassinations, Britain finally took Nigerian grievances and development seriously. In the UK, Churchill was replaced with Clement Attlee of the Labour Party who was more friendly to colonial development. This, coupled with India’s impending independence (the UK’s most treasured colony), pushed British officials toward constitutional reform.

In 1946, Governor Arthur Richards introduced a new constitution dividing Nigeria into three regions: North, West, and East.

The regional divide wasn’t random. The West was dominated by Yoruba, the East by Igbo, and the North by Hausa-Fulani. As seen below, the map loosely resembled the three original colonies (Lagos, Northern Nigeria, and Southern Nigeria), though not perfectly.

The Richards Constitution provided:

• A central legislature in Lagos

• Regional houses of assembly for each region

• African members in the legislative council

• Northerners included in the central legislature for the first time

Nigerian elites felt ambivalent about this constitution. Some hated that it was imposed without negotiation; others recognized its usefulness in a geographically, economically, and culturally diverse country.

Even pan-Nigerian nationalists like Zik vacillated. In the 1940s, he condemned regional divisions as tools of “divide-and-rule”. But by the 1950s, he embraced regionalism and even argued that three assemblies weren’t enough. He wanted eight, so ethnic minorities in each region wouldn’t be dominated by Yoruba, Igbo, and Hausa-Fulani.

However, the consequence of a system meant to accommodate diversity instead hardened ethnic blocs. Each region developed its own political party, economic priorities, and vision for Nigeria.

Three Regions, Three Parties, Three Visions

The South West (Yoruba):
After Zik left the NYM, Obafemi Awolowo, a Yoruba politician, London-trained lawyer, and a cocoa farming magnate, transformed it into the Action Group, essentially a pan-Yoruba party.

The West, containing the capital Lagos and Ibadan, was (and is!) the richest region.

The South East (Igbo dominated):
Zik’s NCNC became dominated by the Igbo State Union. The Igbo region was the poorest, best educated, and most densely populated. Many Igbos swarmed out seeking work as clerks, technicians, and traders, becoming a successful middleman minority like Jews in Europe, the Indians in East Africa, or Chinese in Southeast Asia. This made them resented.

The North (Hausa-Fulani dominated):

In 1949, the Hausa-Fulani elites created the Northern People’s Congress (NPC) to protect Northern autonomy. Led by Ahmadu Bello, the Sardauna of Sokoto, who famously said of the South: “The whole place was alien to our ideas...might as well belong to another world.”

Three regions. Three parties. Three visions. And only one country. Learn about the countdown to independence in the next piece here.

To give you a preview, this is what the Western leader, Awolowo, said in 1947: “Nigeria is not a nation. It is a mere geographical expression. There are no “Nigerians” in the sense as there are “English”, “Welsh”, or “French”. The word “Nigerian” is merely a distinctive appellation to distinguish those who live within the boundaries of Nigeria and those who do not.”

#7 Conclusion: The Myth of the “Good Ol’ Days”

Amidst corruption, terrorism, and economic issues in modern Nigeria, it is common to hear some Nigerians, especially older generations or online youth, yearn for colonial rule again.

While colonialism did bring obvious signs of development that pre-colonial states did not (ending domestic slavery, bringing rail, modern medicine, airports, and more literacy & education, especially for women), this hankering for colonialism is mainly nostalgia talk for the old, and romanticization for the young.

There were many issues with colonial rule:

1. 50% of government revenue went to British salaries and pensions, not Nigerian development

2. Colonial Nigeria failed catastrophically in global bond markets

3. The Great Depression devastated farmers and towns, causing years of extreme agony

4. Price controls created food shortages and punished market women

5. Marketing boards taxed farmers too harshly

Independence did not guarantee better leadership (I mean just look at Nigeria now), but neither were British administrators the wise technocrats they are sometimes imagined to be. Nigerian nationalism grew because Nigerians rejected racism, exclusion, and economic misrule.

The irony is that when people today yearn for colonial days, they are remembering the post-1945 period. After years of protests, strikes, and political organizing, Nigerians forced Britain to finally take their development seriously. They’re nostalgic for the fruits of Nigerian resistance, not British benevolence.

Book Sources

1. A History of Nigeria by Toyin Falola

2. The Fate of Africa by Martin Meredith

3. An Economic History of West Africa by A.G. Hopkins

4. African Politics: Crises & Challenges by J. Gus Liebenow

5. Slow Death for Slavery: The Course of Abolition in Northern Nigeria 1897-1936 by Paul Lovejoy

This series became my longest because Nigeria is a tapestry of kingdoms, peoples, and collisions. In this piece on British Nigeria, I provide a recap, and then cover the southern resistance, indirect rule, the 1914 amalgamation, and the north–south divide.

I. The Big Recap

Part I gave an overview of Nigeria. Parts II & III traced the northern arc: the trans-Saharan slave routes, the rise of Middle Belt states such as Nupe, Borgu, Jukun, and Igala, the militarized Hausa city-states, the Kanem-Bornu empire, and the revolutionary jihad that forged the Sokoto Caliphate from the Hausa kingdoms.

The Letter That Started a War

When High Commissioner Frederick Lugard arrived with his threadbare army (3,000 African troops on a shoestring budget), he tried diplomacy first. The Sultan of Sokoto, Abdurrahman, replied in Arabic:

“I will never agree with you… Between us and you, there are no dealings, except as between Muslims and Kafir (unbelievers): war, as God Almighty has enjoined on us.”

Lugard treated that as a declaration of war.

The conquest was swifter than expected. The Sokoto Caliphate was a patchwork bound by religious authority, not military unity. Each emirate kept its own forces and acted independently. From 1901 to 1903, ~300 British troops (mostly African soldiers) burned the emirates in Bida, Kontagora, and Zaria, liberating hundreds of slaves from the ruins. Then they stormed Kano and Sokoto. The Caliph Attahiru I was killed; Sokoto’s cavalry crumbled before British Maxim guns and artillery.

Lugard unilaterally installed Mohammed Attahiru II as a puppet sultan, bypassing Sokoto’s traditional elective council composed of clerics and emirs. At the ceremony, Lugard proclaimed:

“The Fulani in old times under Dan Fodio conquered this country. They took the right to rule over it, to levy taxes, to depose kings and to create kings. They in turn have by defeat lost their rule which has come into the hands of the British.”

In 1904, Bornu (once mighty, long hollowed out) fell without a fight. Britain then fixed northern Nigeria’s borders with France and Germany, leaving parts of old Sokoto and Bornu inside French Chad & Niger and German Cameroon.

The Southern Kingdoms

Part IV covers the southern polities in Igboland, Yorubaland, and Edoland, including Benin’s pepper and ivory trade and Warri’s slave trade with the Portuguese.

Part V follows how that trade metastasized to the Trans-Atlantic Slave Trade. Inland empires like Oyo raided and funneled captives to coastal middlemen kingdoms (Allada & Whydah), who exchanged human beings for cowrie shells, guns, cloth, and gunpowder with Europeans along the Bight of Benin. In the Bight of Biafra (Part VI), the pattern repeated with different players: the Aro network orchestrated raids across Igboland, selling captives to Ijaw and Efik canoe houses who ferried them to coastal cities (Bonny, Old Calabar, New Calabar) where European ships waited. There, the currency was brass manillas rather than cowries.

The Gradual Colonization

Part VII details Britain’s gradual conquest. First, the Royal Navy’s West African Squadron blockaded the coast to end the slave trade. Second, British merchants pivoted West African commerce toward palm oil and palm kernels. Third, quinine broke malaria’s grip on European explorers, opening the Niger River’s interior to missionaries and traders. By the 1840s, Britain established trade courts to settle disputes. By 1861, Britain annexed Lagos.

Part VIII introduced George Goldie, a British businessman who merged rival palm-oil trading companies and obtained a royal charter to make the Royal Niger Company. His firm monopolized trade along the Niger River and pushed inland with Maxim guns that murdered thousands. Eventually, Britain revoked his charter and reorganized the conquered territories. Lugard’s wife, Flora Shaw, then named these lands as “Nigeria.”

By then Britain administered three Nigerias: Southern Nigeria(Benin, Warri, Calabar, etc.), Northern Nigeria(Sokoto, Nupe, Kano), and the Lagos Protectorate (Lagos, Ibadan, Abeokuta), a mosaic with very different histories.

II. The Southern Resistance

The Southeast: Village by Village Conquest (1900-1919)

While the north fell swiftly to British firepower, southeast Nigeria (Igboland) was harder to subdue. The region was dominated by the Aro network, a commercial and religious group linking hundreds of acephalous Igbo villages through the Ibini Ukpabi shrine-cave at Arochukwu (the “Long Juju” as the British called it).

For over two centuries, the Aro had used this shrine-cave as both a court and a scam. Those found guilty supposedly disappeared into the cave, consumed by the deity according to cult officiants. In reality, they were led out a hidden back exit into slavery. The Aro sold thousands of Africans this way. The condemned criminals were sold to African middlemen in exchange for guns, making the Aro amass hard power in the region.

Some Igbo sub-groups, like the Obegu, signed protection treaties with the British, allowing missionaries to operate freely. As Christianity spread, it weakened the Igbos’ belief in the shrine-cave, since new converts no longer believed that a cave deity swallowed up criminals. When the Obegu openly rejected the cult, the Aro retaliated, raiding Ogebu villages and slaughtering 400 people. This gave the British its pretext to come guns-blazing.

In 1900, the British launched the Aro Expedition, mistaking the Aro trading network as a military confederacy. This miscalculation would cost them nearly two decades, as the expedition became a tiresome, village-by-village grind campaign. By recruiting their treaty Igbo/Ibibio allies like the Obegu, Asa, and Obokwe, the British burned Arochukwu and destroyed the shrine-cave.

Besides the Aro, other networks resisted. The Ekumeku secret societies waged guerrilla war from 1898 to 1911, forcing Britain to subdue villages with Maxim guns. Even neighboring peoples (the Okpoto, Urhobo, Isoko, and Ukwuani) fought the British right up to 1914. Control was declared in 1906, but pockets of resistance continued until 1919.

The conquest was also spiritual: oracles were outlawed, shrines destroyed, and Christianity advanced.

The Southwest(Yoruba): Creating Nationalism

In 1906, Lagos was merged into Southern Nigeria.

Two years later, protests erupted in the city over newly imposed water rates, led by an emerging class of educated Nigerians. Among them was Herbert Macaulay, grandson of the first Nigerian Bishop, Samuel Ajayi Crowther. Macaulay became known as the “father of Nigerian nationalism.”

By 1912, this ferment gave rise to the Southern Nigeria Civil Service Union, marking the beginning of organized political expression under colonial rule.

Before the 1920s, most Western educated Nigerians were “Saro”, ex-slaves or ex-slave descendants saved by Britain and shipped back to Sierra Leone before arriving home in Nigeria, like Macaulay. After 1920, the homegrown Nigerian elite grew. More Yoruba lawyers, clerks, and journalists educated in mission schools began to challenge British paternalism.

In 1920, National Congress of British West Africa was formed, and three years later the Clifford Constitution introduced limited elected African representation in colonial government from cities like Lagos. In 1925, Macaulay and other educated elites made newspapers like the Lagos Daily News and Daily Times to criticize colonial officials and explain government policy to a wider audience. The literate community spoke both to the educated elite and to the masses who still relied on word of mouth for news. By 1937, there were 50+ newspapers by 1937 in Ibadan, Abeokuta, Calabar, Port Harcourt and more.

III. Forging the Colonial State

Creating Tribalism

Before British rule, ethnic identity was fluid and local. Communities & families sometimes migrated due to droughts, slave raids, or wars, forcing people to adopt new identities and learn new languages or customs.

An African near the Niger River would identify themselves by their village, town, kingdom, or lineage rather than a “tribe”. For example, an African would most likely say “I’m from Oyo,” “I’m an Ife person,” or “I’m from Ijebu,” rather than say “My tribe is Yoruba.”

The British and missionaries changed that, though not entirely by design. Colonial officials wanted fixed categories they could govern, so they grouped loosely related peoples into large “tribes.” Missionaries, focused on evangelism, reinforced this by translating the Bible into a few written languages, collapsing many unwritten dialects into standardized forms. Once written, these languages gave educated Nigerian elites new shared identities and clear borders of belonging.

For example, “Yoruba”, comes from a Hausa-Fulani term. The Sultan of Sokoto, Mohammed Bello, used “Yarba” to describe the people in the old Oyo Empire. Missionaries and returnee slaves in Lagos and Freetown, Sierra Leone (people like Samuel Ajayi Crowther) transliterated Yarba to Yoruba and expanded that term to include nearby dialect groups (Ife, Ijebu, Abeokuta, Ilesha, Ibadan, & Ekiti) who spoke closely related tongues. In the process, the language of a once-mighty but hollowed-out rump kingdom became the basis for a new identity. The dialect of a fallen empire came to describe an entire group of people and their former vassals.

The same process created “Igbo,” a label for dozens of southeastern clans and hundreds of autonomous villages that spoke mutually intelligible dialects in Awka, Nri, Onitsha, Arochukwu, and more.

Mission schools and city life deepened these identities. Students learned standardized Edo, Yoruba, or Igbo, while migrants in cities formed hometown unions, welfare associations, and trade groups along ethnic lines.

By the early twentieth century, ethnicity had become a social reality. Groups such as the Society of Descendants of Oduduwa and the Igbo Descendants Union turned these new identities into political ones. What began as a colonial classification evolved into Nigeria’s proto-nationalism, organized around tribe. Britain then governed through these tribes where possible.

Indirect Rule in the North

In the Islamic north, emirs retained their titles but became paid agents of British district officers stationed at their courts. They still collected taxes, enforced Sharia, and administered justice, but rebellious emirs were deposed and replaced with loyalists. Christian missionaries were restricted to prevent religious conflict, as Lugard assured northern leaders that Britain would not interfere with their Islamic customs (except encouraging to end domestic African slavery). This left the north with minimal modern education or healthcare; if emirs wanted modern services, they had to fund the services themselves.

Indirect Rule in the Southwest

In Yorubaland, indirect rule fit existing hierarchies. The British kept the kings (Obas) and chief councils but made them accountable to colonial residents. Lagos, however, was treated differently. It was a Crown Colony, and its inhabitants theoretically had the same rights as British subjects. The Oba of Lagos became largely ceremonial while Governor William MacGregor and a legislative council ruled. Beyond Lagos, partly invented “native councils” enforced indirect rule. Resistant chiefs were fined or imprisoned.

Indirect Rule in the Southeast

The system worked in coastal/riverine towns like Calabar, Bonny, Degema, and Buguma, where the British could rely on long-established ruling houses from earlier 1850s trade relations.

In the hinterland, indirect rule was a disaster. The British could not find traditional rulers because most Igbo, Urhobo, and Ibibio villages were governed through councils, not kings. To fix this “problem,” the British created one. They invented “warrant chiefs,” often opportunists, outcasts, or outright criminals who lacked legitimacy. To many Igbos, they were simply thieves with British backing.

The historian A. E. Afigbo later described the tragic irony: When British officers demanded that communities “produce their chiefs,” many villagers assumed the British would execute or enslave them. To protect their village council, they presented marginal figures instead: criminals, debtors, or former slaves. The British then issued these men warrants and crowns, granting them unprecedented authority.

Answerable to colonial officers who made up new jurisdictions for chief rule, the warrant chief enforced direct taxation, labor conscription, cash-crop production targets, and forcibly replaced manilla brass currency with paper money. Resentment and uprisings followed.

IV. Stitching Nigeria with Rails, Roads, and Paper Money

Rail & Cash Crops

Between 1896 and 1912, Britain built two major railway lines: the Lagos–Kano through Ibadan and Ilorin, and the Port Harcourt–Enugu connecting the coast to the coalfields that powered the trains. These rails carried cocoa from Yorubaland, palm oil from the southeast, and peanuts, cotton, and rice from the north for export. Food production fell as farmers turned to cash crops, making Nigeria dependent on imported grain.

In Yorubaland, cocoa transformed rural life. Owning a cocoa farm became the key to wealth, pushing many families to lease or sell land. During WW1, when men were conscripted, Yoruba women dominated local markets in import-export trading. In Igboland, women managed cassava and yam production, building trading networks that fed towns and villages.

Nigeria’s export growth was massive (1904 to 1929):

There was barely any gold or diamonds, but tin in the Jos Plateau MiddleBelt attracted mining firms like Ropp Tin and Naraguta Company. However, the vast majority of Colonial Nigeria’s exports were agricultural.

Currency and Labor

In 1912, Britain replaced cowries and brass manillas with a colonial paper currency called the West African Currency Board. The new coins and paper money forced Nigerians into the cash economy. People now needed cash to pay taxes, which drove them into wage labor or cash-crop farming.

Infrastructure, Hobs, and Health

Britain expanded transport and sanitation for the export economy. Swamps were drained to curb malaria, ports were dredged, and roads connected farms to rail stations. Veterinary injections curbed diseases (i.e. sleeping sickness) in northern cattle. All of the manual labor was either:

• Low-wage paid work: British firms or the colonial administrating hired Nigerians for mining, dock work, freight hauling, and more.

• Corvée labore: The Brits also conscripted Nigerians against their will to build ports, roads, and railways. Many Nigerians fled these forced labor schemes by joining the military, turning to cash-crop farming, or migrating to cities where there was more paid labor (craftsmanship, tailoring, haircuts, trading, small businesses, and more).

Migration

Besides jobs, urban population growth was also driven by better healthcare. Lagos, the colony’s main port, expanded from 42K residents in 1901 to nearly 130K by 1931. The British made hospitals in the south, which lowered infant mortality and death rates while birthrates remained high, fueling city expansion.

The Dual Mandate

Britain made Nigeria a high-tariff zone with one exception: British goods. This was the “Dual Mandate” coined by Lugard. The UK could benefit from Nigerian cocoa, palm oil, and peanuts, while Nigerians could enjoy British manufactured goods like shirts, suits, pots, pans, and bicycles.

V. Amalgamation and the Taxation Crisis (1914-1929)

By the early 1910s, the Northern Protectorate was bankrupt, dependent on annual subsidies of nearly £300,000 from the more prosperous south and Britain. In 1914, Lugard merged the North & South into one Nigeria, despite protests from both regions.

This was done so the south’s customs revenue could finance the north.

World War I

Also in 1914 was WW1. From 1914 to 1918, thousands of Nigerian troops fought for the British Empire. The Nigeria Regiment of the West African Frontier Force joined troops from the Gold Coast (Ghana), Sierra Leone, and Gambia to invade the neighboring German colony of Cameroon.

The campaign was brutal. British and French forces advanced from multiple directions against the German African troops. Both sides scorched villages, burned crops, and starved civilians. The final German outpost in Cameroon surrendered in February 1916.

Some Nigerians also fought in the East Africa campaign. By 1918, when Lugard’s tenure ended, most chiefs were loyal to the British crown, though the king in Egbaland led an uprising before being subdued. After the war, Cameroon was divided between Britain and France.

The Taxation Crisis & The Woman’s War

In the north, taxation was familiar. Emirs had long collected taxes under the Sokoto Caliphate. In the south, however, direct taxes was alien. Colonial revenue came mainly from customs duties, court fees, and fines. In pre-colonial times, Yoruba rulers like the Alafin of Oyo or the Alake of Abeokuta never directly taxed their subjects.

Lugard insisted on introducing direct taxation in the south, claiming it would reduce government corruption, but his advisers warned it would provoke revolt. He went ahead anyway: Benin had direct taxes in 1914, Oyo in 1916, Abeokuta in 1918, and finally Igboland in 1926.

The backlash was fierce. In Abeokuta, women who refused to pay were stripped naked in public. In Egbaland, angry residents destroyed railways and telegraphs.

When direct taxes reached Igboland, the British started by taxing only men but soon considered including women. That rumor ignited one of the largest protests in colonial West Africa: the Aba Women’s War of 1929. Thousands of women marched from Owerri to Calabar, confronting British officers, burning native courts, and attacking the warrant chiefs’ homes. British troops fired on them, killing fifty-five women and ending the revolt.

The protest failed to end taxation but exposed the failures of the warrant chief system. In 1931-1932, Britain sent anthropologists to study Igbo governance, realizing a truth every Igbo villager already knew: traditional governance worked through clan and village councils, not kings.

VI. The North-South Divide

Education and Christianity in the South

Before colonialism, the Hausa, Fulani, and Kanuri in the north had been more literate than the southerners. By the 1500s, Quranic schools existed in the North, though literacy remained confined to a small male elite. Most southern societies, by contrast, lacked written language entirely, relying instead on oral traditions or pictographs like those in Igboland.

Christianity reversed that balance. Missionaries built schools that taught reading, writing, arithmetic, and scripture to southern boys and girls. Literacy spread rapidly, and mission schools gave local languages written form for the first time.

Mission schools produced southern Nigeria’s first literate, middle class, composed of teachers, clerks, merchants, doctors, and minor administrators. They built and maintained roads, electricity lines, telegraphs, and harbors that supported a growing export economy. They abandoned older customs such as slavery and polygamy and adopted Christian monogamy and European attire. A hat, a book, or a radio became a symbol of modern identity.

Yet Western education did not erase their Nigerian roots. Many retained their traditional names, spoke indigenous languages at home, and attended African-led churches where worship included drumming, dancing, and group baptism. These congregations blended Christianity with African rhythm and community, creating something distinct from European practice.

The mission-educated elite had the most to gain from colonialism, but also the most to resent. They filled the colonial clerical and teaching jobs, but they also saw the limits of that rule. For example, Nigerians were initially restricted to 4th grade education, Christian theology, or industrial training. It was hard to obtain more education. So, the literate middle class led early protests against racial exclusion and demanded political recognition for Africans.

By the 1920s, the southern literacy far outpaced the north. In 1921, there were 32K European-educated Southern Nigerians (0.5% of the population) and 4% had basic literacy.

By 1926, there were 18 secondary schools, though high fees restricted access. Only a handful of southern Nigerians attended university abroad in Sierra Leone or the UK, producing a small but influential class of doctors, lawyers, and engineers. Altogether, southern Nigeria had seventy-three post-university professionals, more than anywhere else in Sub-Saharan Africa at the time.

Southern education was almost entirely missionary funded(2K schools by 1921); the government invested little. Only a handful of government schools existed, mostly in the north. Northern Nigeria remained dominated by Quranic schools serving only wealthy boys. Northern enrollment in non-Quranic schools was less than 2% of southern levels.

The north also refused to educate girls. At best they learned Quranic verses from the Mallam, the learned man of the village. The Hausa believed that a literate woman would say to her husband “Why should I labor for you? I know more than you do” and leave him.

VII. Conclusion: The Ledger of Colonialism

We have barely discussed colonialism, but we can use this to answer the question: Was colonialism good or bad?

Clearly the slaughter with gatling guns to conquer people was grotesque and is indefensible. Burning towns and brutal pacification campaigns to subject millions to a rule they never asked for was heinous. Forced labor was terrible too, though a step up from slavery.

Yet the colonization that followed became an interesting test case for two experiments:

• In the North, Britain preserved existing institutions. Emirs stayed in power, missionaries were restricted, and Islamic law continued. The result was social continuity but economic stagnation and backwardness.

• In the South, Britain tore up the old order. Missionaries replaced shrines with schools, chiefs were invented, “backwards customs” were banned (i.e. murdering slaves & concubines to join their master in the afterlife and twin killings), and literacy, Christianity, and wage labor were introduced.

The outcome was stark. The region where culture was preserved remained poor and illiterate (except a small clerical & royal class, as since medieval times). The region where culture was uprooted became more educated, urban, and politically conscious.

Ironically, education was the perfect ingredient for nationalism. As the educated southern elites in Lagos, Ibadan, and other cities developed, they realized what the British restricted from them. The same mission schools that produced loyal clerks also produced critics who saw through Britain’s racial paternalism. Next time, we’ll talk about Nigeria during the Great Depression & WWII.

Sources

• The Fortunes of Africa: A 5000 Year History of Wealth, Greed, and Endeavor by Martin Meredith

• The Fate of Africa by Martin Meredith

• A History of Nigeria: by Matthew Heaton and Toyin Falola

• Nigeria: Background to Nationalism by James S. Coleman

This is Part 8 of my Nigeria series. Previous installments traced the region’s deep origins, the rise of northern Islamic polities and southern states, and the ad-hoc beginnings of British colonization which you can read here (I, II, III, IV, V, VI, VII).

The Ad-Hoc Empire

As mentioned in my previous article, 19th-century British colonization in West Africa emerged not as a master plan, but rather as an improvised conquest. At first, British engagement was less about colonial rule and more about suppressing the slave trade, securing palm oil trade, checking French & German rivals, and propping up client rulers. But each “temporary” intervention made withdrawal harder until annexation seemed inevitable.

It began on the coast: first in Old Calabar, where “humanitarian intervention” turned into bombardment, and then in Lagos, where Britain restored an exiled King and then annexed his kingdom in 1861. Steamships & quinine changed everything. With faster travel and lower death rates from malaria, British power began pushing inland—into Yorubaland, the Middlebelt, and eventually the Sokoto Caliphate—turning diplomacy and trade into direct rule.

Britain’s default policy was simple: trade with informal control if possible; trade with rule only when necessary. The Treasury refused to finance new bureaucracies in West Africa, so a cheap “company-run empire” was the only acceptable colonization… Until it wasn’t.

The Technologies That Changed Imperialism

The empire’s next phase was driven not by ideology but by technology.

Before the 1870s, sailing ships made the voyage from Liverpool to Lagos a months-long gamble—small cargoes, high freight costs, unpredictable winds, and irregular delivery kept palm oil prices high. Steamships changed everything: iron hulls, reliable timetables, massive loads, and a 50% reduction in travel time from months to weeks slashed costs and flooded West African markets with European goods.

At first, this boosted the palm oil trade. African chiefs expanded production using slave labor to meet demand. But just as output peaked, a second industrial revolution in the West upended the market: refined petroleum from Pennsylvania, US and Baku, Czarist Russian Azerbaijan replaced palm oil in factories.

Mineral lubricants didn’t gum up machinery like palm oil did. Kerosene lamps burned cleaner and brighter than palm oil candles. Ships switched to petroleum-based greases that better resisted salt corrosion. Palm oil’s industrial value collapsed. By the 1880s, palm oil’s main use cases were soap and margarine.

The double shock of reduced demand and increased supply crushed prices, triggering a palm oil depression in West Africa. Prices tumbled from £45 per ton in the 1850s to just £20 per ton by the 1890s.

One British merchant lamented in 1873 ‘in the days of sailing ships a few wealthy firms had a sort of monopoly on the (palm) oil trade and large profits; but large profits are a thing of the past which can never return. Steam has brought new firms and a keen competition”.

Falling prices and suicidal price wars from French–German competition triggered a wave of bankruptcies and desperate consolidations. In 1863, several Liverpool firms merged into the Company of African Merchants, but even this alliance struggled. By the 1880s, British traders were undercutting one another while shrewd African middlemen played them like chess pieces. Price wars turned violent, profits evaporated, and in 1889, nine companies combined into the British and Continental African Company—soon restructured as the African Association, a last-ditch cartel trying to stop the bleeding.

See chart of prices below, it never returned to £45 per ton :

During this time, the Niger-Delta was awful for London investors, but was a “golden age” for the African brokers. Europeans stuck at the coast, African middlemen and chiefs from the Bonny and Nembe controlled the upriver supply. The Africans in Bonny & Nembe armed local African allies with European rifles to raid rival trading stations. But, one British businessman upended this whole system.

Goldie's Corporate Solution

Sir George Tubman Goldie, outplayed everyone. In 1879, he merged four British firms into the United Africa Company (UAC, this company would become a subsidiary of Unilever), creating a cartel to end destructive price wars. The headquarters of the UAC was Lokoja, an inland supply depot strategically located at the confluence of the Niger & Benue Rivers.

But mergers alone couldn’t solve his problems. African chiefs continued to pit rival firms against one another, while German and French companies kept undercutting his prices. Goldie realized he needed more than cooperation—he needed to eliminate rivals, control the rivers, and rewrite the rules.

Goldie’s masterstroke came in 1882: he restructured the UAC into the National African Company(NAC) and floated its shares on the London Stock Exchange, raising massive capital to buy out competitors.

Between 1882-1884, flush with investor cash, Goldie systematically bought out rivals, British, French, and German alike, while bribing African chiefs to sign exclusive treaties. By 1884, he controlled 90% of the lower Niger Delta trade. The company had become a monopsony, the single buyer of palm oil.

To add legitimacy to Goldie’s enterprise, he recruited the former Home Secretary, Lord Aberdare, as chairman — giving him a direct line to Foreign and Colonial Offices in Whitehall, London.

To put the Niger trade in context in the British Empire, Sub-Saharan Africa’s total trade was a rounding error compared to India. Between 1880-1884, Sub-Saharan African trade was £2.8M (£1.3M exports, £1.5M imports), only 4% of Indian trade. The Foreign Office had no interest in expanding colonial rule besides the coastal hub of Lagos.

The British Treasury refused to fund more colonization in West Africa at the time. It was only after Germany declared a protectorate over Cameroon in 1884— a region Britain had long treated as its commercial backyard — did London finally panic.

This brought the logic of “competition vacuum” —the belief that “If I don’t secure influence, then France or Germany will!”. To Britain, Germany and France were exactly how modern-day America views China (rising threat) and the European Union (a wimpy catch-up rival/ junior partner).

To ease tensions and prevent war, German Chancellor Otto von Bismarck convened the Berlin Conference (1884-1885) with 14 powers to prevent European skirmishes over Africa.

Berlin and the Race for “Effective Occupation”

Contrary to popular belief, the 1884-85 Berlin conference did not draw up African boundaries. Most of the African borders didn’t take their final form after the conference in the 1890s-1910s. Some of the attending powers left empty-handed (Netherlands, Russia, Austria-Hungry, Sweden-Norway) and others had their ambitions dismissed (Portugal’s “Pink Map” claims were ignored. Ottoman Turkey, which already lost most of North Africa from France, was about to lose Tripolitania (Libya) to Italy in 1910s).

Instead, the conference established the framework of “effective occupation”: only powers that demonstrated real control through treaties, military presence, or administration would receive recognition from other European powers.

This conference was Goldie’s opening. He pitched to the British government that the NAC would be Britain’s “Cheapest Empire” — a self-funding company that could enforce British interests at no cost to the taxpayer.

This intrigued Britain, as a British Foreign Office memo explained: “unless it should be necessary that this country should go to the great expense of setting up the machinery of government, there seem to be no other course open and certainly no better one, than that of legalizing and affirming the position of the Company and placing the business of administration into its hands.”

The Treaty Blitz

Between 1884-1887, Goldie launched his treaty blitz— a campaign to turn his trade contracts into sovereignty. As Britain scrambled to beat France & Germany to prove “effective occupation”, NAC’s agents fanned out across the rivers of Niger and Benue. The NAC made chieftaincies and kingdoms sign agreements that they could/did not read that ceded their sovereignty. Chiefs were bribed for cowrie shell payments (The West African currency), gin, and guns to sign treaties.

The language was blunt. One such treaty read:

“We bind ourselves not to have any intercourse with any strangers or foreigners except through the said National African Company.”

By 1886, Goldie submitted 200+ treaties to the British Foreign Office. Some of these treaties were in places beyond where British merchants had ever set foot, including the Muslim Emirates of the Sokoto Caliphate. As a result, the British crown bestowed a royal charter on the NAC.

The NAC was renamed the Royal Niger Company (RNC). Modeled off the North Borneo Company (Malaysia) in 1881, the company was given sweeping sovereign powers, — tax & custom collections, military force, law courts, even a post office. By the 1890s, the company amassed over 300 treaties, transforming the Niger basin into a corporate state.

Hewett’s Government Solution

While Goldie was using his company to colonize inland, the British government sought to prove “effective occupation” along the coast. In 1885, Britain proclaimed the (Palm) Oil Rivers Protectorate, covering Bonny, Opobo, New Calabar, Brass, Warri, and Benin. Consul Edward Hewett, based in Calabar, had thin authority—local rulers remained in place, and British consuls merely arbitrated trade disputes.

But tensions rose quickly. When King Jaja of Opobo violated his treaty by taxing British traders, he was captured and exiled to the Caribbean. In response, London authorized a small constabulary force—80–100 African mercenaries from Hausaland in the North or from Sierra Leone, led by British officers—to enforce its will.

In 1893, the protectorate was renamed the Niger Coast Protectorate, formalizing British jurisdiction.

The War Against the Middlemen

The RNC trekked through the Niger, Benue, and Cross Rivers to meet interior producers, bypassing coastal middlemen entirely. Armed with quinine and steam power, Goldie’s traders bypassed the entire coastal trading network—eliminating the markups that once flowed from African producers to transporters to coastal middlemen. The RNC could buy palm oil straight from the source.

Quinine prophylaxis reduced European mortality from malaria and tropical diseases from 25% to 2%—suddenly, British agents could survive in the interior.

Let’s break down British inland skirmishes by region:

In “South West” — Yorubaland

In 1800s Yorubaland, the Hausa-Fulani Sokoto Caliphate destroyed the old Oyo Empire. The collapse created new polities. Oyo refugees and warlords carved out new kingdoms: Ibadan, Ijaye, New Oyo, and Abeokuta, all armed with European guns bought with slave labor and palm oil profits.

Ibadan emerged as the unlikely champion. When Fulani jihadists of the Sokoto Caliphate tried to conquer them, Ibadan’s forces held back Sokoto’s emirate of Ilorin at Ogbomosho in 1840. By the 1840s, Ibadan had become the largest city in Black Africa and a regional superpower that sold slaves for guns.

But victory bred ambition—after stopping the jihad, Ibadan turned on its Yoruba neighbors.

Ibadan’s crushing of Ijaye in 1862 was Ibadan’s high-water mark. When they pushed south into Egba and Ijebu territory, they triggered the epic Ekiti-Parapo War (1877-1893). Five kingdoms—Egba, Ijebu, Ekiti, Ijesa, and Ife—united against Ibadan in a conflict that raged from 1877 to 1893.

It was a bloody gun war in West Africa, with firearms imported through Benin. In the midst of that war, Britain brokered peace in 1886. The treaty called for all sides to stop hostilities and secure safe passage for British merchants. All sides agreed to let the British governor in Lagos settle all future disputes—essentially handing over their sovereignty. However, mutual distrust reignited the war within months.

Eventually the anti-Ibadan alliance fractured as members pursued different interests. The Awujale (King) of Ijebuland banned British trade, giving Britain the excuse it needed. Despite commanding 8,000 warriors, Ijebu’s forces were massacred in 1892 by 450 British troops (from Gold Coast (Ghana), Sierra Leone, Ibadan and Lagos) armed with Maxim guns—a preview of colonial Africa’s future.

After witnessing Ijebu’s destruction, other Yoruba leaders signed away their sovereignty, becoming part of the Lagos Protectorate. Any polity that resisted (like New Oyo in 1894) was thoroughly bombarded.

In “South South (Central)” — Benin & Warri

Even before Britain colonized Benin & Warri, these polities were in decay. Both polities experienced succession crises after their Kings died without an assigned heir around 1848. Warri disintegrated as merchant families fought over the scraps of power. Benin had a civil war led by two rival princes (Adolo & Ogebewekon) between 1854-1862. The Kingdoms were ravaged, leaving them vulnerable to raids by Nupe horsemen from the north and crippling its economy as palm oil revenues withered.

This chaos was a gift to British imperialists. Victorian travelers and officials sent back lurid, often exaggerated, accounts of Benin as a “City of Skulls” or “City of Blood,” dwelling on tales of human sacrifice and crucifixion that accompanied the brutal civil war. These stories, published in magazines like Burton and Punch, painted a picture of Benin as “barbarous”, needing a “civilizing” intervention. Both these kingdoms signed treaties with the British, but they weren’t “pacified” yet.

When the RNC was exploring upriver, Warri’s profits were being cut since they were the middleman. King Nana tried blockading the river, as a result, the RNC and the Niger Coast protectorate teamed up to crush Warri in 1894.

When Oba Ovonramwen emerged, he tried to revive Benin’s fortunes by killing rival chiefs (including his own brother) and reassert control over trade. He even killed British officers and consuls who entered Benin during Benin’s sacred festival. Britain retaliated with the 1897 Benin Punitive Expedition, which razed the city, exiled the Oba, and looted the royal bronzes that still sit in European museums today.

“South East” —Bonny, Nembe, & Calabar

In the Southeast, when the RNC bypassed Southeastern middlemen trading communities, the middlemen in Bonny and New Calabar tore each other apart in the late 1880s since their livelihoods were disrupted.

The Brass people in Nembe suffered the most from RNC monopoly. Once prosperous traders, they were starving to death as they were bypassed by the British. With nothing to trade, they had nothing to eat. In 1894, King Koko ordered his Nembe warriors to conduct a desperate raid on the RNC depot at Akassa, killing its employees, seizing goods, and, according to British reports, allegedly ate them. This reminds me of the Volga & Ural famine in Czarist Russia in the 1890s, which reports described starving villagers resorting to cannibalism. The revolt shocked Parliament, exposing the dangers of private empire. British forces retaliated by torching Nembe villages.

In Bonny, the last spark came when the King of Okrika, fearing economic ruin, blocked British access to inland markets. A gunboat expedition bombarded Okrika in 1898, ending resistance.

Middle Belt

Although Goldie made treaties with emirates in the Sokoto Caliphate (Bida, Nupe, & Ilorin), they were pure theatre to show the principle of “effective occupation”. There was no control of these Emirates. These Emirates blocked British trade and raided caravans, so Goldie ordered punitive expeditions against Bida, Nupe, and Ilorin in 1897. By 1899, these places were conquered.

The Financial Statements of the Royal Niger Company

The Goldie’s RNC was just one of the three chartered British companies operating on the continent, the other two were the Rhodes’ British South Africa Company (BSAC) and Mackinnon’s Imperial British East Africa Company (IBEAC). Of the three British chartered Africa firms, BSAC was the wealthiest company by far, much larger than RNC and IBEAC combined.

The company functioned less like a normal business and more like a colonial tollbooth.

• Import Duties: It made money by taxing merchants who brought gin, cloth and rifles to exchange for palm oil.

• Export Duties: It taxed the palm oil, ivory, shea butter and palm kernels collected by the merchants who wanted to sell the goods to Europe.

• License fees: The RNC required European merchants to buy licensing fees.

Lingering Liverpool merchants hated the RNC’s monopsony and launched their own economic war. The African Association, formed in 1889 from nine major firms, tried to bleed the RNC dry through “dumping”—offering 15 barrels of gin, 10 bales of cloth, and 6 bags of cowrie for palm oil that normally cost 10 barrels, 5 bales, and 3 bags. They were trading at a loss to bankrupt Goldie’s monopoly.

Goldie countered by buying out the African Association’s assets entirely. By century’s end, a non-compete agreement divided the spoils: Liverpool merchants kept the coast along the government, while the RNC ruled inland.

Its trading arm — selling palm oil, cocoa, and cotton — was consistently profitable. Take a look at the trading arm of the royal Niger Company below:

The trading arm was a money maker, making ~£700K over its 11 year run, paying ~£20K in dividends to shareholders per year. But once you net out government subsidies, British Parliament was saying the trading arm earned roughly £500,000 over eleven years. Its administrative arm, which acted as government and police, lost net ~£300,000.

Shareholders were paid dividends while British taxpayers subsidized the company’s military and administrative costs—a classic case of privatizing gains while socializing losses. It was politically indefensible.

The End of Corporate Rule

The Nembe uprising convinced London that pure trading monopolies bred too much violence. When the RNC nearly triggered an Anglo-French war over Borgu in 1895, Colonial Secretary Joseph Chamberlain decided that a private company can not substitute for governance.

Firstly, Goldie wanted government money for an expensive military operation against the heart of the Sokoto Caliphate, but Chamberlain declined and made the West African Frontier Force. This force incorporating the RNC’s private army into a proper colonial force in 1897-1898, run by Frederick Lugard, an employee of the Royal Niger Company since 1894.

Secondly, British government stepped up to negotiate the 1898 Anglo-French Convention, which split Borgu between British Nigeria and French Dahomey, avoiding war but highlighting the company’s diplomatic failures.

Thirdly, Chamberlain didn’t renew Goldie’s charter.

By the late 1899, You had three entities:

• The RNC ruling inland Nigeria as a corporate state

• The Niger Coast Protectorate ruling from Benin to Old Calabar under the Foreign Office

• The Lagos Colony under the Colonial Office

So, on December 31, 1899, Britain terminated the charter of the company. In 1900, the British government bought out the Royal Niger Company for £865,000 — a sum many MPs thought far too high, with some arguing it should have been closer to £400,000.

Of the £865K, £300K repaid debt to bondholders. After roughly £120K in legal/reorg/admin fees, investors received ~£444K on an initial £200K stake— ~2.5x in 11 years (~8.7% annually). The RNC’s return on investment was roughly the same as buying and selling Johnson & Johnson or Pepsi stock from 2013 to 2024. The RNC was a below average investment with house- burnings, machine-gun massacres, and forced labor. At the time, there were far more lucrative ventures on the London Stock Exchange than the RNC.

The Royal Niger Company was relegated to pure business as the Niger Company, and the administrative and security part was administered by the British.

It was around this time in the late 1890s when, Britons stopped using the term “the territories near the Niger River”, and when Flora Shaw (soon to be wife of Fredrick Lugard) wrote in the Times of London the word “Nigeria” was used for the first time.

There were three colonies at the time that would soon be part of Nigeria:

• Southern Nigeria: Benin, Warri, Calabar, New Calabar, Bonny, & Yorubaland

• Northern Nigeria: Nupe, Ilorin, Kabba, Lokoja, Kontagora

• Lagos Protectorate: Lagos

As you can see from the map, by 1900 there’s two polities that aren’t yet part of Nigeria but soon will be. That area in the Southeast, which is Igboland and the Sokoto Caliphate in the North. We’ll discuss both of these next time.

Conclusion:

The creation of Nigeria was not the birth of a nation; it was a hostile takeover followed by a corporate merger. It was improvised in four stages:

• First, informal consular supervision to manage trade (1849-1884).

• Second, a coastal protectorate and a “cost-cutting” inland company to outmaneuver European rivals (1885-1899).

• Third, colonial governance as separate entities (1900-1914): Lagos, North, and South.

• Fourth, the fusion of all three into one colony (1914-1960).

Next time, in Part 9, we’ll explore how Lugard crushed the Sokoto Caliphate, the unification of Nigeria, and colonial rule.

Sources

1. The Compatibility of the Slave and Palm oil Trades in the Bight of Biafra by David Northrup

2. The Yoruba: A New History by Akinwumi Ogundiran

3. Benin & The Europeans by A. F. C Ryder

4. A History of Nigeria by Toyin Falola

5. UNESCO General History of Africa, VI: Africa in the 19th century until the 1880s by J.F.A. Ajayi

6. UNESCO General History of Africa, VII: Africa under Colonial Domination 1880-1935 by A. Adu Boahen

7. Nigeria, a Country Study, Helen Chapin Metz

8. An Economic History of West Africa, 2nd edition, A.G. Hopkins

9. The Parliament Debate on the British government buying out the Royal Niger Company with the financials.

10. Old Calabar 1600-1891 by A. J. H. Latham

11. The End of the “White Man's Grave"? Nineteenth-Century Mortality in West Africa by Philip D. Curtin

Hi everyone, I received several questions by email, in the comments section, and through private chats, so I’ve compiled this Q&A. Also, check out Critical Perspectives, that Substack will have their own version of this topic as well.

#1 What’s Going on in Botswana?

Botswana is taking a dangerous gamble. The current president, Duma Boko, wants his government to buy a controlling stake in De Beers, the global diamond giant, this October 2025.

This deal could happen. Anglo American PLC, the mining conglomerate that owns De Beers, is looking to divest its stake to potential investors.

Right now, De Beers’ value has declined to $5B. Botswana already owns 15% of De Beers ($750M). To control 51% ($2.55 billion), Botswana needs an additional $1.8 billion. The government is negotiating with Oman’s sovereign wealth fund to help finance this acquisition.

But the timing couldn’t be worse. Botswana’s economy contracted in 2024 and is projected to shrink again this year due to collapsing diamond prices. Debswana, the joint venture between De Beers and Botswana, saw revenues plunge roughly 50% in one year in 2024. Boko believes “resource nationalism” will help save Botswana, but he’s betting the country’s future on a dying industry.

#2 Can you give me a brief history of Botswana?

For decades, Botswana was Africa’s quiet “success story”. It was one of the few Sub-Saharan countries with living standards higher than some Latin American or Eastern European countries.

The secret was diamonds and not being foolish with them.

When vast deposits were discovered in the late 1960s after independence, Botswana struck a joint-venture deal with De Beers to create Debswana. Unlike Sierra Leone or the Democratic Republic of Congo (then called Zaire), where diamond nationalization bred corruption and mismanagement, Botswana let De Beers handle mining and marketing while the government collected half the profits plus taxes.

The strategy worked brilliantly. Diamonds made up a third of state revenue and most of its foreign-currency earnings.

By dollar value, Botswana is the largest diamond producer on earth, selling $5B in diamonds in 2022.

#3 Why Did Botswana avoid Africa’s Common Pitfalls?

De Beers, founded in 1888 by Cecil Rhodes, once controlled 90% of global diamond sales through a cartel. The company hoarded gems in London vaults to restrict supply and raise prices, while its legendary Madison Avenue campaign—”A Diamond Is Forever”—artificially sustained demand.

This marketing brilliance convinced generations of middle-class women that a diamond engagement ring was a necessity, transforming a luxury into a cultural requirement.

That mix of diamond marketing and price-fixing enriched De Beers and saved Botswana. While other African economies were ravaged by collapsing commodity prices in the 1980s and 1990s, Botswana’s diamond revenues stayed stable because De Beers kept prices artificially high.

Each commodity crash devastated the countries that depended on it. Below you will see how prices crashed for coffee, cocoa, oil, and gold. They all collapsed around the 1980s and didn’t recover until the 2000s.

You tell me the resource and I’ll tell you when it crashed.

• Cocoa Crash in late 1970s? Hurt Ghana and Ivory Coast

• Coffee Crash in the late 1980s? Hurt Rwanda, Burundi, Uganda, Ethiopia, and Ivory Coast

• Gold crash in 1980s? Hurt Ghana

• Copper Crash in the 1980s? Hurt Congo and Zambia

• Oil Crash in 1980s and 1990s? - Hurt Nigeria