Business Groups in Nigeria

Nigeria suffers from low levels of industrialization and remains confounded by the dominance of extractives (oil and gas) and high levels of corruption. Only a few private companies, mainly commodity-based, diversified conglomerates, have reached a level close to their sector’s productivity and competitiveness frontier.

This research aimed to investigate how regime proximity and rent-seeking by the major diversified business groups helped in their productivity dynamics. It mapped the historical evolution, contemporary structure, and productivity levels of key conglomerates. Based on the political settlements framework, the project identified the specific nature of state-business relations that allowed conglomerates to expand, diversify, and maintain dominant positions in certain sectors.

The overall contribution of the project was a detailed analysis of Nigeria’s key conglomerates in the extractive and non-extractive sectors and the evaluation of how regime proximity was utilized by certain conglomerates to enhance productivity. While some conglomerates increased their industrial efficiency and continued to contribute to the overall goals of Nigerian industrial policy, others stagnated over the years. The delineation between productive and non-productive rents, as used by the business sector in relation to different eras of Nigeria’s governance, was a key contribution of this project.

SOAS-ACE is currently undertaking research in Bangladesh and Nigeria, including in the education, health and power sectors, as well as on successful collective action that overthrew a corrupt autocracy. Moving beyond pure research, we are also monitoring the implementation of anti-corruption strategies our research has recommended, such as a strategy to reduce pharmaceutical companies’ overpricing of medicines.

Our partner on this project was Dr Farwa Sial (independent consultant).