Imperialism and Multinational Corporations: A Case Study of Nigeria (Bade Onimode 1978)

Imperialism and Multinational Corporations: A Case Study of Nigeria
Author(s): Bade Onimode

Source: Journal of Black Studies, Vol. 9, No. 2, Nigeria: Problems of Development (Dec., 1978),
pp. 207-232
Published by: Sage Publications, Inc.
Stable URL: http://www.jstor.org/stable/2783836
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IMPERIALISM AND
MULTINATIONAL CORPORATIONS
A Case Studyof Nigeria
BADE ONIMODE
Departmentof Economics
of Ibadan
University
In Nigeriaas elsewhere,thegiantmultinational
corporations
neoare the basic units of imperialismin its contemporary
colonial stage. The analysis of these monopoly"sharks" is
ofthemechanisms
criticalto theunderstanding
throughwhich
Third World countriesare exploited,manipulated,and perpetuatedas the collective"wretchedof the earth."
This paper is essentiallyan attemptto documentthecharacterand role ofthesemultinational
agentsof imperialismin
ittriesto provideempiricalvalidationforthe
Nigeria.In effect,
basic MarxistthesisthattheseriousproblemsofThirdWorld
countrieslike Nigeriacan be traceddirectlyto theoperations
of imperialistforceswhose most powerfulcatalystsare the
These activitiesare closely
colossal multinationalenterprises.
coordinatedwithsuchotherimperialist
mechanisms
as foreign
investment,
export-import
trade,and foreignaid. They have
generatedand perpetuatedtheseemingly
intractable
problems
of mass poverty,stifling
foreigndomination,savage exploitation,open starvation,debilitating
disease,pervasiveilliteracy,
wideninginequality,irrationalwaste, culturaldegradation,
and political instabilityin Nigeria and otherThird World
countrieswithinthe imperialistorbit.
The historicaloriginofthiscollectivemalaiseis nineteenthand twentieth-century
colonialisationof Nigeria by British
JOURNAL OF BLACK STUDIES, Vol. 9 No. 2, December 1978,207-232
C 1978 Sage Publications,Inc.
207
208
JOURNAL OF BLACK STUDIES / DECEMBER 1978
imperialists.
Theycreatedthepoliticalclimateand propagated
the economic theoryof the national advantagesof foreign
investmentand import-substitution
industrialisation,
which
forthebirthand
framework
offeredthesocial and intellectual
growthof multinationalcorporationsin the country.In particular,afterindependencein 1960,thecarefully
recruited
and
cultivatedpro-imperialistprivilegedclasses articulatedan
"open door policy"forthefreeinflowand outflowof foreign
monopolycapital.Theseelitealso continuedtheircolonialrole
ofNigeria
of imperialist
collaborationand willingintegration
into the orbitof worldcapitalismas a neocolonialstate.
THE SCOPE OF
MULTINATIONAL CORPORATIONS IN NIGERIA
The intensiveactivitiesof multinationalcorporationsin

Nigeria span the most importantsectors of the national
economy,suchas petroleum,
mining,manufacturing,
banking
and insurance,construction,
distribution,
transport,
and agriculture.Their pervasivecontrol in these sectorshas been
of each of thesectorsin
largelya functionof the significance
theeconomyand theextentofgovernmental
control.Imperialist dominationof thesesectorsis based on eithersole foreign
or joint venturesbetweenmultinationals
proprietorship
and
or capitalists.
Nigeriangovernments
Since 1960, political manipulation,capital requirements,
sophisticatedtechnology,market control,and native collaborationwithimperialists
have combinedto renderdominationof theoil sectorbymultinational
corporationsveryeffectiveand sinister.Table 1showstheannual outputofthemajor
foreignoil companiesfrom1960 to 1972.
The petroleumor oil sectoraccountedforabout 90% of
Nigeria'sforeignexchangeearningsand about 95% of state
revenuesin 1976,when Nigeriawas the world'sfifthlargest
exporterof oil. This heavydependenceon oil is also reflected
71
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209
JOURNAL OF BLACK STUDIES / DECEMBER
210
1978
TABLE 2
Assets
Company
Standard
of New Jersey
Oil
Royal Dutch/Shell
..
Gulf
Texaco
(Shell-BP)
..
..
..
Secony-P-obil
Stcandard Oil
British
of California
Fetroleum
..
C. F.P.
Profits
3,800
240
i_,300
180
1,700
120
1,700
140
1,500
68
1,200
100
900
65
600
42
1,250
Otners
NOTE:
.l
SOURCE:
kmn llion)
(kmillior)
45
= N2.00 = $3.00 U.S.

Aluko and Ijere (1965).
inthefactthatitaccountedfor45.5% ofGDP (GrossDomestic

a mere
contributing
Product)in 1974-1975withmanufacturing
4.7% and agriculture23.4% (Turner,1975).
In spiteof thedominanceofthissectorin theeconomy,the
Nigeriangovernmentexercisesonly formalcontrolover it.
Historically,the Britishcolonial governmentawarded Shell
and BritishPetroleum(BP) thetotalland area ofNigeriaas an
oil concessionin 1937,and the companiesfirstexportedoil
fromthissource in 1958. At independencein 1960,Shell-BP
oil concessions,some of whichwereinheritedby
surrendered
Gulfand Mobil. Table 2 shows
the Americanmultinationals
the assets and profitsof the major multinationalsin the
industryby 1963.
Accordingto Turner(1976), in February1976,the seven
multinationalsthat dominatethe oil oligopolyproducedas
follows:Shell-BP(British)produced1,250,783barrelsperday;
Gulf (American)produced 289,123 barrelsper day; Mobil
(American)produced221,930barrelsper day; Agip/Phillips
(Italian) produced182,692barrelsperday; Elf(French)made
75,532 barrelsper day; Texaco produced 35,873 barrelsper
Onimode / IMPERIALISM
211
day; and Ashland produced 11,471barrelsper day. All the

productiontotalled2,070,424barrelsper day.
inthecountryis ownedjointlyby
The existingsinglerefinery
the federaland RiversState governments
and thecompanies
thatdominateoil distribution.
Withonly one refinery
in the
country,Nigeriadependson themarketing
subsidiariesofthe
firstsix oligopolistsforimportof petroleumproducts,which
have been in acute shortagesince 1973.
Apartfrompetroleum,the importantmineralsof Nigeria
are tin,limestone,ironore,marble,lead, zinc,and gold. In the
colonial period, Britishimperialistshad exclusivecontrolof
"Crown Lands" in Nigeria,and this gave Britishimported
capital the monopolyof exploitationover Nigeria'smineral
wealth.
The most notable of the transnationalcorporationsthat
dominatedthis sector was the British-owned
Amalgamated
Tin Mines (Nigeria)Limited.It was incorporatedon 25 April,
1939witha registered
capitalofN4 million.In 1973,itsannual
turnoverwas N7.9 millionwhile its retainedearningswas
N1.16 million.The federalgovernmentestablishedits own
Nigerian Mining Corporationas a joint venturewith this
multinationalin 1972.
Untilrecently,limestonewas exploitedfromcementproductionby the West AfricanPortlandCementCompany,a
joint venturewhichoriginatedfromBritainwith48% foreign
and 52% local equity.FromitsN 1-2,5
millioncapital,itrealised
N24.6 millionin 1975 witha pretaxprofitof N5.1 million.
There are similarjoint cemententerprisesbetweenvarious
regional governmentsand overseas partnersat Calabar,
Nkalagu,Sokoto, and Shagamu.
Whilecoal and tinore are beingminedbythegovernment,
gold is not yetexploitedin commercialquantities.Together
withpetroleum,mininghas harbouredbetween36% and 54%
of all foreigninvestmentin Nigeria during 1962-1974.(See
Table 10).
Bankingand insurancehavebeentheexclusivemonopolyof
212
1978
TABLE 3
Deposits and Loans of the CommercialBanks as of

31 December, 1975 (N)
Operation
1.Current
deposits
a/c
2.Savings
deposits
a/c
3.Time
4.Total
deposits
deposits
Total
Total all
Banks
expatriatel
iks B
1,266,819
6 3 2350
521,306
1,051,050
2,839,175
I
Total
Indigenous
Banks
of
Share
i.xnatriate
Banks
403,I589
68.140/
376,836
144,470
7
72.26%
713,415
337,635
67.879
885,694
68.80%O
426,545
71.09%
1,953,481
5.Loans
advances
SOURCE:
1,0475,613j1,49,159
Central Bank of Nigeria, Lagos.
The foreign
financecapitalinNigeriauntilrecently.
imperialist
commericalbanks dominatedthe marketforcreditto comthepace of developmerceand industryand thusdetermined
bankingcorporations
mentofthesesectors.The multinational
have maintained the British reluctance to participatein
forself-liquidating
medium-term
lendingin strongpreference
transactionsand overdraftlending.
In thisway,theimperialistbanksand insurancecompanies
have been the major sources of national economic surplus.
They generallypreferto investoverseasor to lend to fellow
expatriateexploitersin Nigeriaratherthanto offercreditto
Nigerians.
The dominantforeignbanksin Nigeriaare: StandardBank
(Nig.) Ltd.; BarclaysBank (Nig.) Ltd.; UnitedBank forAfrica
BankforWestAfrica
Ltd; Bank ofAmericaLtd; International
Ltd; Bank ofIndia Ltd; and Arab Bank (Nig.) Ltd. Theirmain
functionhas been to servethe needs of large multinational
corporationsin WesternEuropeand NorthAmericaand their
were
agentsin Nigeria.Until 1968,whenforeignenterprises
213
TABLE 4
ForeignInsuranceCompanies in Nigeria
Date
Registered
Company
1.
American
Co.(Nig.)
Ins.
2.
British-A.merican
Ltd
Ins.Co.
(nig)
Int.
Ltd
July
1970
June
1970
Parent
Share
Company
American
Delaware,
Life Ins.Co
U.S.!.
British-American
Bahamas
Co.Ltd.,
Island
Ins
i'57,304
1973)
Capital
(31
Dec.
150,000
(1971)plus
(1972)
50,000
Dividend
rate
300%, (1972)
400,/ (1973)
3.
British
India
General
Co.
Ins.
Ltd
(Wig.)
February
1970
4.
Crusader
Ins.
Ltd
(Wig.)
April
5.
Guinea
6.
Law Union & Rock

Ltd
Ins.Co.(Nig.)
June
7.
Nercury
,,bout
8.
Life Assu.
N.E.L.
Ltd
Co. (Nig.)
9.
N.E.M.
(Nig.)
Co.
Ins.Co.Ltd
Dec.
1970
British
General
India
Ins.Co.Ltd.
Foreign
& incorporated
in
India
Crusader
Ins.
Britain
Ltd.,
1958
L 50,000
Co.
UI-50,000
Approx. L 229,500
Dividend
rate
70C
Ins.Co.Ltd
Ins.
Ltd.
Feb.
1969
Co.
1970
April
550,000
National
Employers'
Life Assurance
Co.
Britain
Ltd.,
tW50,020
Employers'
National
Ins.
IKutual
n
Ltd.., Bri tai Assoc.
N200,000
10.
Royal Exchange
Ass.
Ltd
(Wig.)
Dec.
1969
Royal Exchange
Co.,
Britain
11.
Sun Ins.
Office
Ltd
(Big.)
Feb.
1970
Sun Ins.
Britain
12.
The Lion
Ins.
Co.
13.
of Africa
Ltd
The iew India

Assurance
Co.
Ltd.
(oig)
14.
The !,ew 1_ geria

ins.
Co. Ltd
15.
Ins. .. Lt
Tne I ew frica
Ins.
_-o. Ltd
~ ~
1969
andinc
I Before
1968
'
,oyal
L50,000
1966
1970
Ju~l 19-55
(1973)
Ass.
Office
Ltd.
1W50,000
N700,000
Dividend
rate
Bombay,
About
R798,000
India
About
N2 5 ,00 0
-o100,0(0
_a-n
(
i)Lt .
Kxchange
_tsslr-,nce (I, ip) ILtd | bu 2),0
214
1978
Table 4 (Continued)
Com;any
1_ To nite(_
15. Tnle l nites
i
igeria
Ins.
Co. Ltd
17. '?oe United
igeria Prov.
Ins.Co.Ltd.
if.
19.
Date
Registered
.
D 9
1c6~
vier)
An)ril 1970
ast African
Provincial
ins.
Co. L~td
Parch 1958
SOURCE:
I
4~~4
11|
Northern Assurance
'Co.Ltd. & !:Jiite Cross
Britain
April 1965|]ns.Co.Ltd,
I nited
imaeria Life
Jons. Co. Ltd
ie
Parent Company
Share Capital
o200,000
sFriends' Fro-vident
DCe turns Life
Office, 3ri cain
50,000
an 3rasoch of
ssurance
Northern
Cc.Ltd.,
Britain
L200, 000
80,000
Dividend rates
0
j ?<7.50
(1972)
96.25 (1973)
my own survey, 1976.
requiredto incorporatein Nigeria,theyweremerebranchesof

theirEuropean and Americanparentcompanies.
Table 3 depictstheirdominancein the bankingindustry.
The major foreigninsurancecompanieswithat least 51%
foreignequityare shownin Table 4.
stillaccountsfora relativelysmall part of
Manufacturing
Nigeria'sGDP witha shareofbarely4.7% in 1974-1975.Butit
is undoubtedlythe sector withthe fastestand most stable
growthrate,apartfrompetroleum.From 1962-1963to 19721973, value-added in manufacturing
and craftsgrew at an
annual compoundrate of 10%.
'Thethreebasic characteristics
of thissectorare itsdomination by imperialistmultinationals;
the 51% predominanceof
low-technology
consumerindustriesin its value-addeddividendintoabout 34.3%forfood,beverages,and tobaccoas well
as 17%fortextileand wearingapparelsin 1972;and thevirtual
nonexistenceof engineeringindustry,which accounted for
only about 12.9% of the sector'svalue-addedthroughsuch
elementarysubgroupsas metalfurniture
and fixtures,
strucThis content downloaded from 143.210.133.26 on Sun, 22 Mar 2015 18:07:46 UTC
Onimode /IMPERIALISM
215
TABLE 5
3.
5.
Bicycle
Cement
-.
84
Concrete
D1
10.i41 P0
10Lo 00Mt
ass
pu
l
tile
&other0
bail
po0ut4
Industries
~~~~~~~~~~~~~~~~~~1.
LoaV.to
v4
van
s
ash4 4s
sio
Perfume
15.
S..'ma.cu
Lc14al
_ 4._ _ Beer
_ _ _ _ __ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _
4
41
2
1P
L
0
10
2
44
64
i
5
i4
10
i
_
03
I1
3. Bicycle
1
4
4. Beer
41
5. Cement
6. Ceramic Clay pottery
1I
9. Furniture & fixtures

10. Metal fabrication
11. Motor vehicle assembly
12. Paintm & vanishes
product
21
9
1
3
3
33
15. Pharmaceuticals
i6
16. Radio & TV-.-iet assembly

17. Soft drinks bottling
1B. Shoes
12
4-
19. Textiles
11
20. Tobacco
10
Total
SOURCE:
4'
1.
1
iI
*Li
6-
_
Li
_
4%
_
l
>_1
4.1__
_
00
0.
--
2
1
_1
2
_
I1
-etal
T1
1
1
2
2
?
ecto
3
2
4
?
4?
16
4
_
41
10
25. Timber
_0
-1
13. Perfumes, Cosmetics & toilet

proportions
14. Paper product
24. Soap
0_
0.M.
_4>
>
_
3I
8
4
4
4
21. Tyre production & retreading

22. Boat building
23. Rubber processing
~~~~~~
~~
01.)o
_~~ ~~ ~ ~ ~ ~ S'.0.
~ ~ ~~~~~~~~~~~
2. Mattresses
7. Concrete, tile & other bail

8. Dairy products
4_
U Lo 0 2 M
1. Biscuit
assembly
L _
0
1
_
1
2
ai
0.0,r
0.4
1
1 _40
10
4'
_
1
4
_ B cit> 1 3 0_
1
_
0
a
0*Lo
a64.
0
I
1Li 01.001 4
1
_1
41
_0 O
--
1
-
1
? ??-
-6
1
1
19
12
185
74
34
17
221
Edozien (1968: 201).
turalmetalproducts,and fabricatedmetal.
The disaggregationof theseindustrialenterprisesby subsectorand nationalityof ownersis in Table 6.
Three of the biggestmultinationalsharks in this sector
whose activitiescut across other sectors of the Nigerian
216
1978
TABLE 6
Numberof Enterprisesby Nationalityof Owner and

Type of CommoditySold
yrye
(Jmmrodn
by
old
1.
C(rsum1er nnn-ciirables
2.
-r Qirables
Con~;sunr
3. Capital
4.
equiornent
Industrial
sunplies
5. Goods for exports

6.
l ixed
SOURCE:
Commodities
, orniany
Foreign
i'ctal
TnCi- enous
Company
46
32
12
10
14
13
'
41
41
14
0
0
Central Bank of Nigeria, 1970.
economy are United Africa Company (U.A.C.), Lonrho

(London and Salisbury),and Unilever.Theirramifications
are
indicatedin Tables 7, 8, and 9.
The interlocking
structureof theseenterprises
correspond
to the familiarlineageof imperialistenterprises
(Perimutter,
1065; Kappon and Phillip,1972). It is thiscomplexorganizationalformthatweavesthevariousmultinational
corporations
in the manufacturing
sectorinto a formidableforeignsubinterwoven
intothestructure
of
sector,whichis also intricately
inothersectorsoftheeconomy,thatconstitutes
multinationals
a foreignsocial systemwithinNigeria.
Nigeria's distributiveor commercialsector was the first
sectorto be assaultedbyimperialist
financecapitalduringthe
earlydaysofcolonialismin Nigeria.Until1970,thissectorwas
only second to miningand quarryingas the mostimportant
domainofforeigncapitalin Nigeria.(See Table 10,column6.)
Under the propaganda of the mutualbenefitsof freeinternational trade and foreigninvestmentby the participating
countries, Britain slammed a total barrieragainst other
and monopolisednotonlyNigeria'simport-export
imperialists
trade but also internalwholesaledistribution
of herimports
217
TABLE 7
UnitedAfricaCompany (UAC) NigeriaLtd-Subsidiaries

and Associated Companies
Year of
Incorporation
Company
1. African Timber &
Plywood (Nig) Ltd
Authorised
Capital
Issued
Capital
1952
N2,500,000
N2,500,000
2. 1Aiger Notors Ltd
1931
2,000,000
2,000,000
3. Finets
1935
300,000
1937
700,000
700,000
1947
600,000
600,000
1954
5,000,000
3,000,000
1937
120,000
Ltd.
4. G. Gottshalck
(west Africa)
5. U.A.C.
6. G0..
& Co.
Ltd.
Technical
Ollivant
7. Pan Electric
Ltd.
(Nig)Ltc
Ltd.
8. Kingsway Stores
Lcd.
(IIig),l
9. Green LanmPlant hire
1959
4,000,000
300,000
100,000
3,000,000
Ltd.
1961
200,000
160,000
10. A.J. Seward (Nig)Ltd
1961
300,000
300,000
(Nig)
11. West African Cold

Storage Co.Nig.Ltd.
1961
1,000,000
200,000
12. Bordpark Ltd.
1962
1,000,000
800,000
1962
100,000
10,000
1965
200,000
90,000
13. Ringsway Chemist

(Nig) Ltd.
14. Premier Packaging
SOURCE:
Ltd
Daily Times (1974).
into the country.Various Britishtradingfirmssuch as the

Royal NigerCompany,thecolonial forerunner
ofthepresent
UnitedAfricaCompany(U.A.C.), JohnHolt, G. B. Olivant,
and Kingswayestablishedtradingposts in Nigeriato initiate
theearliestexposureofthecountryto theexploitativeactivities
of multinational
enterprise.
Later,otherimperialistcountries
like France, West Germany,Italy, and, more recently,the
UnitedStates and Canada, especiallyafternominalpolitical
independencein 1960,enteredin the pillage.
218

TABLE 8
Lonrho Ltd.
(Cheapside House, 138 Cheapside, London EC2V 6B2)
Subsidiariesand Associates in Nigeria
1, John Holt Properties (Nig) Ltd 13. P.S. Mandrides & Co. Ltd
2. African Propertes
(MffE)Ltd
3. John Holt Ltd

4. J. Allen & Co.
Ltd
5. Holt Engineering
Ltd
6. Haco Ltd
7. Haco Plastics
14. Maiduguri Oil Mtills Ltd

15. Nigerian
Net & Twise Co.Ltd
16. Nigerian
Securities
18. Holts
Ltd
8. John k{olt Shipping
Services
Ltd
9. West African Drug.Co.Ltd
Nigerian
19. Nigerian
21. Pito
Industries
22. Kaduna Textile

23.
12. Niger Traders
Ltd
Ltd
Enamelware Co. Ltd
10. John Holt Rubber Co. Ltd

Ltd
Tanneries
20. Phoenix Motors Ltd
11. Holts
Transport
Ltd
17. John 4-olt Investment Co.Ltd
Ltd
Mills
Ltd
Star Motors Ltd
24. David Whitehead & Sons (NigiLtc
SOURCE: Who Owns Whom, A Directory of Parent, Associate and Subsidiary

Companies, United Kingdom edition (1975-1976).
Theirimperialist
commercialoutpostsmaintainwarehouses
and tradingstoresthroughoutthe countryforthe importof
variousmanufactured
productsand thewholesaledistribution
of these importsas well as the local productsof the multinational corporationsin the manufacturing
sector.In many
also engage in retailtradeeither
cases, these multinationals
directlyor throughtheircontrolof supplieswithresale-price
dictationto millionsof Nigerianpettytradersand market
women.In theseways,themultinationals
appointdistributors
or "factors"forbothimportedmanufactures
and thoseproduced bytheindustrialforeignenterprises.
The productsthey
handle include vehicles, plant machineryand equipment,
textiles,electricalappliances,food,and beverages.See Table
11forsome ofthewholesaleand retailactivitiesas wellas the
in distribution.
of the multinationals
capital investment
The other sources included in the imperialistenclavein
219
TABLE 9
UnileverLtd (UnileverHouse, Blackfriars,London EC4P 4B0)

Subsidiariesand Associates in Nigeria
1. African Timber & Plywood (Nig)
Ltd
& Co.
3. G. Gottschalck
(Nig)
7. Lipton
(W.Africa)
Nig.
Nig)
of Nigeria
Ltd
Ltd
Ltd
Ltd.
Ollivant
12.Parmol
Ltd
Ltd (textiles)
10.Norspin
11.G.m.
Ltd
5. Kingsway Stores
6. Lever Brothers
Breweries
9. Nigerian
2. Boodpak Ltd.
4. Guiness
Motors Ltd
8. Nigeria
(Nig)
13.UAC Nig.
Ltd.
14.UAC Technical
(Nig)
Ltd
Ltd
(Holding
Co)
Ltd.
Who Owns Whom, A Directory of Parent, Associate and Subsidiary

SOURCE:
Companies, United Kingdom edition (1975-1976).
buildingand confishingand forestry,

Nigeriaare agriculture,
See columns3,4,
and communication.
and transport
struction,
in totalforeign
and 5 ofTable 10fortheirrelativesignificance
investment.
On climaticgrounds,Nigeriawas declaredunsuitablefor
so land was
European habitationby the Britishimperialists,
neveralienated.Underthenativelands ordinance,foreigners
were preventedfromowningland anywherein the country
exceptLagos, thecapital,whichwas declareda crowncolony.
were,therefore,
in agriculture
The activitiesof multinationals
ofagriculand themarketing
confinedto agro-alliedindustries
The main
turalproductsin theexportmarketand internally.
agro-alliedindustriesincludethe use of domesticcottonfor
textiles,sugar, pulp, palm oil forsoap, margarine,and the
productionofgroundnutoilfromgoundnuts.The mainexport
products marketedby foreignfirmsbefore 1960 included
cocoa, cotton,rubber,groundnut,palm oil and kernel,hides
and skins, and beniseed. Afterindependence,the federal
governmentestablished the Nigeria Produce Marketing
for scheduledagricultural
Companywithsole responsibility
exports.
220
1978
TABLE 10
CumulativeDistributionof ForeignInvestmentAccording
to Type of Activity(in percentages)
au
Year
NA
.0VI
O'0
~~~
'4
0)
m0 W.
0a
St
$ '"
'd
1962
36.7
17.3
;.0
1.1
3.8
1963
36*1
19.1
1.0
1.0
4.2
V
to$@@
go
$4
,8.k4
07
37.2
0.5
4964
4o.1
18.2
1.7
1.1
3.8
31.4
3.7
1965
43.7
18.5
1.5
1.5
5.3
24.6
4.9
1966
50.8
17.5
1.1
1.5
2.2
24.8
.0
1967
45.9
22.2
1.2
1.1
2.5
24.8
2.3
1968
49.1
20.0
1.1
1.1
2.4
24.2
2.1
1969
4X.2
22.2
1.3
1.3
2.5
26.2
2.3
1970 51.4
22.4
1.1
1.4
1.4
20.6
1.7
1971 52.5
28.6
1.2
0.9
1.2
14.1
1.5
1972
54.7
22.7
0.6
o.8
2.2
15.4
3.6
1973
52.5
23.2
O.4
o.6
2.6
16.7
4.o
197;
15.1
28.7
1.1
1.2
3.5
17.7
2.5
*provisiona I
NOTE: Column 6 corresponds to the distributive sector including oil.
SOURCE: Central Bank of Nigeria, 1968 and 1976.
Inforestry,
andjointforeign/
subsidiariesofmultinationals
Nigeriangovernment
venturesfeature.Theyareas indicatedin
Table 12.
In fishery,distant-water
fishingis dominatedby foreign
trawlerswhich operate under charterarrangementswith
q~un zed
$A
nr-ig,
O-4
Ln
Lao
Cs
o en
*u
pua ,e2 anleAt H
:S
uoqevoajdaaj
~~~~~~~~~
.-
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-5 S
o ButuuTBOS
qpanleoIvA
<
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I.
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to
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4.
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r
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m<Q
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221
222
TABLE 12
in Nigerian
Multinationals
Forestry
Parent
Company
Share
Company
1.
African Timber
& Plywood Co.
Unilever;Britain
(UAC of Nig. LtdS
One of the biggest

in the sector
2.
Hushin
Ltd.
Commonwealth Dev.
Corporation
(CDC)
About V2 ml.
Estates
holds 35*% of its

issued
& Lyle
3.
Tate
Ltd.
4.
Savannah
Co. Ltd
5.
6.
(Nig)
share
Tate & Lyle Invest.

Britain
Ltd.,
.5 ml. (Annual
turnover
Sept.
1975 = Pl49.2 ml.)
4-35 nil.
Swiss-Nigerian
Wood Industries
Ltd. .
Voestern State
& Swiss Govt.
t1OOOOO
South Eastern
State Rubber
Ltd
Plantations
&
CDC of Britain
SES Government
SOURCE:
capital
Gott.
CDC, Federal
& North East.State
Government
Sugar
--1Year
Registered
Capital
Govt
July 1965
my own survey, 1976.
Nigeriancompanies.About 100 of such deep-seavesselsare

currentlyin operation.But overall,fishingis a minorcomponentof the agriculturalsector.
is a rapidlygrowingsectorofthe
Buildingand construction
economy,especiallyon account of huge road, harbourand
buildingconstructionprogrammesof thecountrysince 1970.
Road constructionis dominatedby foreignoligopolyled by
JuliusBergerand Dumez of WestGermany;theothermultinationalsinvolvedare Strabag(West German),Solel Boneh
(Israeli),and Cappa and D'alberto,and Guffantiand Stirling
havehandledover
(Italian). Amongthem,thesemultinationals
N10 billionworthofcivilengineering
contractsinNigeriasince
1970alone; a singlecontractlike the Lagos-Ibadan Expressway or Lagos Ringroadcould runinto about N300 million.
The distributionof buildingcontractorsbetweenNigerians
223
and expatriateswas 2 to 19 in 1960,3 to 29 in 1962,3 to 38 in

1964,and 3 to 39 in 1966,forcontractsoverN200,000(Ogunpola, 1968).
Transportand communicationis anothersectorthat has
been infiltratedby multinationalcorporations.Shippingis
dominated by the West AfricanConferenceLines, which
accountedforabout 53% out of 60% of the total U.K. West
AfricaLines'traffic
byoriginor destination.The governmentowned NigerianNational Shipping Line, which was establishedin 1961,controlsbarely10% of thecountry'sshipping.
Airtransportis dominatedby multinationals
like Pan Am,
Lufthansa, British Caledonian, Swiss Air, Sabena, and
Alitalia. Their huge capacities,monopolycapital, and personnelenable themto out-competethecountry'sonlyairline,
NigeriaAirways,in both passengerand cargo traffic.
Whilerailwayis whollygovernment-owned,
road transport
has been controlledby imperialistswithrespectto supplyof
machinery,such as tractors,trucks,buses,and tankers,and
provisionof consultingservices.Until 1973, almost all the
fleetof tankersfor conveyingrefinedpetroleumthroughout
thecountrywereforeign-owned,
and operatedthroughtheoil
multinationals.
In communication,
the AmericanIT&T has alreadyestablishedin Nigeriaas a major transnationalcorporation.
The overallpictureof theflowofforeignmonopolycapital
throughthevariousmultinationals
by nationalityis shownin
Table 13.
IMPACT OF MULTINATIONAL CORPORATIONS
ON NATIONAL DEVELOPMENT
The collectiveimpact of the operationsof multinational

corporationsin Nigeriais thegenerationand perpetuationof
theunderdevelopment
ofthecountry.The profoundstructural
distortions
whichtheplanlessnatureoftheactivitiesofmulti-
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225
nationalenterprises
causedand theirexploitativeprofitmotive
constitutethe heart of this problem.The specificeffectsof
imperialist
corporationsthatsustainthissocial malaiseinclude
debilitatingexportof nationaleconomicsurplus,technological deprivation,subversionof skilldevelopment,culturaldegradation,and politicalinstability.
The outflowof capitaldepictedin Table 13 reflectspartof
the exportof national economicsurplusin the formof imperialistprofits,dividends,interest,and the like.
In 1973 alone, the threemajor oil companiesdeclaredthe
followingdividends:Shell-BP, N61.1 million; Gulf, N38.0
million;and Mobil, N25.7 million.Total is N677.8 million.
(See Oni and Onimode, 1975: 41.) Most of thesedividends
togetherwiththose of the otherforeignoil oligopolistswere
exported.In 1963,all the multinationaloil companieshad a
total profitof N1,910 million(Oni and Onimode,1975:237).
sectorforone yearwhich
The profitsin themanufacturing
accrue largelyto multinations
are shownin Table 14.
Some oftheexportedprofitsof some of theothertransnationalenterprises
forone ofseveralyearsareshowninTable 15.
Transfer
pricingunderwhichtransnational
corporationsare
able to inflatetheircostsin anyparticular
countryorsubsidiary
in orderto evade profittax is employedto limitthesehigh
profits.Such pricesare used to transfer
additionaleconomic
surplusabroad.
A seconddeleteriouseffectofmultinational
corporationsin
Nigeriais theirhistoricaltechnologicalunderdevelopment
of
thecountry.Throughtheiroperationsin thename ofimportsubstitution
industrialisation,
theseimperialist
enterprises
not
onlyhaltedthepace ofindigenoustechnologicaldevelopment
by Nigerian blacksmiths, iron-smelters,brass-workers,
weavers,and the like by eliminatingtheirmarketsthrough
importof manufactures
and subsidiaryproduction,but also
of
the
spread illusion technologicaltransfer.
Indeed,thismyth
of technologicaltransferhas been one of thebourgeoistheoreticaljustificationsforthe foreigninvestment
purveyorsof
226
1978
TABLE 14
Profitsin ManufacturingIndustries
(~,ooo)
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
21.
22.
23.
24.
25.
26.
27.
28.
29.
30.
31.
32.
33.
34.
35.
SOURCE:
Meat Product
Dairy Products
Fruit Canning
Grain Hill Products
Bakery Products
Sugar Confectionery
Sugar & Spirit Distillery
food preparations
Miscellaneous
Beer brewing
Soft drinks
Manufacturiing of textiles
Footwear
Wearing apparel
Made-up textiles
Saw milling
Other wood products
Furniture & fixtures
Paper products
Printing
Tannirg & I'ravel goods
Rubber Products
Basic inoustrial
chemicals
Vegetable oil milling
chemical Droducts
Miscellaneous
Pottery & gless product
Cemert
Conecrete products
Basi c metals
Metal products
Electrical
equipment
Building and repairs
Motor vehicle ; bicycle assembly
Motor vehicle repairs
Mliscellaneous manufactured goods
Bricks and tiles
324
70
30
1, 759
854
638
213
10,042
9,488
633
580
415
271
368
1,484
1,058
375
266
469
2,895
367
3,631
3,980
115
3,248
338
133
3,351
475
54
1,005
3,028
871
85
Oni and Onimode, 1975: 233.
227
TABLE 15
t
Xividend
porifi
________
fills
Textile
1970
Cct.
19'71
islackwood
1' 7,-
Paterson
Zochonis
1072
i imeria:
Breweriesn
Pc.
1272^3
Dec.
1972
P .r. 1975
Err. 1975'
ttr
,,ill
r 1 V'S
1'Q71
ta
ilodge
(: i)
Co.
Jtd
i c.
1.5
(Lt)
1.
110
7.0
Itd
'
Berr or t aintc
(! icg)
(
I.
58.4
2*2
l td
ig.
W1e-tal 3aox Co.

>..
(3)
Ltd
-ec.
Wig.
(1)__(_)
i'"COO
c
-'.. .. (1jI)
.8.
(ig)
.?,
I
It
Ltd-
Tota>
0.
Ltr
It
25
'
5
260
/.f
35,
For each company,

NOTE:
the profit figure for the single year given here represents the profit trend for each of several years of operation.
Thus for a decade,
we simply multiply the figures in column 2 by 10 to get a rough idea of how
much Nigeria has lost in export of economic
surplus through each company.
SOURCE:
Oni and Onimode,
1975: 41-45 and 238-244.
multinationalcorporationsand import-substitution
industrialisation.
The unequal capital/labourendowmentsand development
of Nigeriaand the industrialisedcapitalisthomes of foreign
monopolycapitalhave combinedto inundateNigerianpetroleum, mining,manufacturing,
and otherindustrieswithunsuitableimportedtechnology.WhileNigeria'srelativelabour
abundanceand earlystageofdevelopmentdictatetheneedfor
relativelylabour-intensive,
medium-and small-scaleproduction technology,the relativeabundance of capital and advanced stage of developmentin WesternEurope and North
Americahave led to indiscriminate
impositionof theirnative
capital-intensive
and sophisticated
technologyon thiscountry
by theirtransnationalcorporations.Indeed since permanent
fearof capital glutand fallingprofitrateat home are critical
228
1978
tryto
theydeliberately
motivesof imperialistmultinationals,
and equipmentas partof
exportas muchredundantmachinery
theirfaketechnologicaltransfer.
In these various ways, the technologyof transnational
corporations,which is restrictedto a foreign-dominated
to theoverall
enclaveoftheNigerianeconomyand is irrelevant
of thecountry,has led to technologicaldisinput-endowment
a potent
and constitutes
tortionsand technicaldiscontinuities,
barrieragainsttheemergenceoftrulynationaltechimperialist
nologicalculture.Since the sedate foreigntechnologyaffects
less than 10% of the nationalpopulationand is monopolised
expatriates,
bylargelyracist-inclined
evenwithinthatminority
theimportedtechnologyhas no real chanceofbeinginternalthetediumoflabourpersists
ised bythemasses.Consequently,
withthecrudesttechniqueswhilemanufacturing
in agriculture
This has also led to the
remainsmarginalisedtechnologically.
domination of technical and professionalmanpower by
expatriates.
Structuraldistortionin productionand distributionis a
relatedconsequence.Underthe so-called"open door policy"
multinationalcorporationshave been
on foreigninvestment,
virtuallyfreeto choose notonlytheirproductionmethodsbut
also theirareas of operation.These have been the enclave
industries
yieldingquickestand highestprofit.Such industries
are typicallyunrelatedto the developmentprioritiesof the
country.Thisis whathas led to masscultivationoftobaccofor
theNigerianTobacco Companyand PhillipMorrisofAmerica
land whilethereis acutefoodshortage;to
on richagricultural
softdrinks,beer,lace, and the
of cigarettes,
the manufacture
like and massiveimportationofluxurycarswhiletheproducproducts,
tion of basic implements,
spare parts,intermediate
and so on is neglected.The resultingacute shortageof basic
sourceof thecripfood and othernecessitiesis one persistent
pling inflationwhich increasesthe profitloot of the transnationalcorporations.
The lessmundanebut,perhaps,moredevastatingimpactof
multinationalcorporationsin Nigeria,and the Third World
229
forgenerating
is theirpropensity
generally,
politicalinstability
and culturaldegeneration.
to an attempt
The 1967-1970Civil War has been attributed
More recently,
at balkanisationof Nigeriabytheimperialists.
T. Turnerhas argued that the 1975 coup d'etat in Nigeria
involvedthe political machinationof the multinationaloil
oligopoly.Accordingto her,contradictionswithinNigeria's
compradorstateinvolvingtheforeignoil technocratsand the
led to thecoup thattoppled
compradorbourgeoisieultimately
Gowon's regime.The combinationof government
participationand pricehikesagainsttheoil multinationals
provedtoo
to theirexploitativeprofits,so theyhad to dethreatening
stabilisethe country.
The loud outcryof imperialistenterprises
againstNigeria's
of foreignenterprises
whichwas launchedin
"indigenisation"
1972 is anothercase in point. Allegationsof Britishinvolvementinthe 1976Februaryabortivecoup inwhichthelatehead
of stateGeneralMurtalaRamat Muhammedand otherswere
assassinatedhave also been linkedto theprotectionof British
activitiesin Nigeriaand of worldimperialist
interimperialist
ests in SouthernAfrica.
In a moresubtlebut subversivestyle,imperialistcorporations deliberatelyunderminenational culturesin order to
facilitatethe penetrationand consolidation of imperialist
interests.They assault national dress by insistingon their
imported"tie and collar," especiallyin banks and insurance
companies,and disseminatecapitalistvaluesthroughsupport
for Christianreligiousactivitiesand bourgeoiseducational
programmesincludingsocial studiesthatdepictNigeriansas
"uncivilizednatives"withincurable"tribal"animosities.Their
freneticpromotionof imperialisthabits of consumptionin
mass media advertisements
and importationof permissive
foreignpopular music,of whichAmerica's"Motown" is the
best example,are also subversiveof nationalculture.In the
name of the so-called internationalunderstanding,they
sponsor lavish foreignexchange programmesand tripsfor
academics,students,technocrats,businessexecutives,and so
230
1978
on withthe major purpose of exposingtheirvictimsto the

powerfulpropaganda of imperialistvalues whichundermine
indigenousculturalnorms.They also offerhypocriticaland
whichis
paternalistic
supportto indigenousculturalactivities,
typicallydesignedto petrify
such endeavoursby eliminating
theirpopularand spontaneouscharacteras a preludeto comand debasingthem.
mercialising
NATIONAL RESPONSE TO
MULTINATIONAL CORPORATIONS
The predominantnational response to the activitiesof

multinationalcorporationshas been one of eithercollaborationor,at best,ambivalencebytheNigerianprivileged
classes.
Clearlyovergenerousfiscalincentiveswereofferedto foreign
investorsin a mistakenbeliefofencouragingindustrialisation.
These deliberatepolicies of underdevelopment
by the ruling
oftheirhistoricalroleas theerrand
class constituted
fulfilment
who had beencarefully
cultivatedforthat
boysofimperialism
mission under colonialism (Frank, 1972). Their rewardas
loot includedcommissions,
nativecollectorsoftheimperialist
and the consolidationof theiroppresbribes,profit-sharing,
sive gripover the Nigerianmasses.
Withmountingmass strugglefornationaleconomicindependence,especiallyafterthe civilwar,Gowon's neocolonial
regimehad no choice but to offerconcession.Thisled to the
indigenisationquibbles, a veritablenational camouflageof
imperialistcapitulationfor patriotism.The NigerianEnterprisesPromotionDecrees of 1972 and 1976 werethe result.
The 1972decreelists22 small-scaleenterprises
whichare to be
in
reservedforNigerians ScheduleI and 33 othersin Schedule
1I increasedby 19and indigenousequityparticipation
in them
by governmentagencies or Nigeriancitizensraised to 60%.
Moreover,thereis nowa newScheduleIII embracingall other
enterprisesnot in I and II; these require 40% indigenous
participation.The schemeis to starton 31 March 1978. See
231
AppendixB. In addition,theInsuranceDecree No. 59 of 1976

offersmajorityequitysharesinforeigninsurancecompaniesto
Nigeria.
Othercontrolsovertheactivitiesof multinational
corporations includethe NigerianStandardOrganisationDecree of
1971, which is to ensure that the local productsof transnationals are not below world standard.The Price Control
Decree No. 1 of 1977 whichreplacesthe one of 1970 is also
aimed at ensuringreasonable prices for productsof multinationaland otherenterprises.
Otheradministrative
and legislative measures such as Foreign Exchange Regulations,
Labour Code, Central Bank directivesto the commercial
bankstryto regulatetheactivitiesoftheimperialist
enterprises.
In spiteofthesequibblesoverthecriticalissueofimmediate
national economic independence,Nigeria still persistsas a
savagelyexploitedneocolonialcapitaliststate.Indigenisation
has been ambivalentand diversionary.
Even ifindigenisation
were to offerequity participation,it would not guarantee
controlovermanagement and therefore
technology which
is crucialfornationaleconomicliberation.
CONCLUSION
Past colonialismand post-independence

collusion of the
privilegedclasses withimperialismhave combinedto secure
veritablecitadelofneocolonialdominaNigeriaas a continuing
tionand brutalexploitationbymultinational
corporations.In
such key sectorsas petroleum,manufacturing,
bankingand
insurance,transport,constructionand distribution,transnational enterprisesstill dominatecapital investment,
technology,and management.
The disastrousimpact of this stiflingdominationis the
colossal appropriationof the country'snational economic
ofthecountry
surpluswhichperpetuates
theunderdevelopment
and thewideninggap betweenitand theimperialist
sourcesof
foreignmonopolycapital.
Ambivalentreactionarymeasuressuch as "indigenisation"
232
have so farprovedineffective
by designand logic againstthe
imperialistcorporations.This underlinesthe criticalurgency
of a revolutionary
solutionin termsof totallyantiimperialist
socialisationof all multinational
withintheframeenterprises
work of effectiveand structuraldisengagement
fromworld
of Nigeria.
capitalismand the socialistrestructuring
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(1968) Economicand Financial Rev. 6, 2.
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and Nigeria'seconomic
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Imperialism and Multinational Corporations: A Case Study of Nigeria

Author(s): Bade Onimode

JOURNAL OF BLACK STUDIES / DECEMBER 1978

The intensiveactivitiesof multinationalcorporationsin

JOURNAL OF BLACK STUDIES / DECEMBER

= N2.00 = $3.00 U.S.

inthefactthatitaccountedfor45.5% ofGDP (GrossDomestic

day; and Ashland produced 11,471barrelsper day. All the

JOURNAL OF BLACK STUDIES / DECEMBER

Deposits and Loans of the CommercialBanks as of

Central Bank of Nigeria, Lagos.

Law Union & Rock

The iew India

The !,ew 1_ geria

JOURNAL OF BLACK STUDIES / DECEMBER

my own survey, 1976.

requiredto incorporatein Nigeria,theyweremerebranchesof

6. Ceramic Clay pottery

9. Furniture & fixtures

16. Radio & TV-.-iet assembly

13. Perfumes, Cosmetics & toilet

21. Tyre production & retreading

7. Concrete, tile & other bail

Edozien (1968: 201).

JOURNAL OF BLACK STUDIES / DECEMBER

Numberof Enterprisesby Nationalityof Owner and

5. Goods for exports

Central Bank of Nigeria, 1970.

economy are United Africa Company (U.A.C.), Lonrho

UnitedAfricaCompany (UAC) NigeriaLtd-Subsidiaries

2. 1Aiger Notors Ltd

9. Green LanmPlant hire

10. A.J. Seward (Nig)Ltd

11. West African Cold

12. Bordpark Ltd.

13. Ringsway Chemist

Daily Times (1974).

into the country.Various Britishtradingfirmssuch as the

JOURNAL OF BLACK STUDIES / DECEMBER 1978

3. John Holt Ltd

14. Maiduguri Oil Mtills Ltd

Net & Twise Co.Ltd

8. John k{olt Shipping

22. Kaduna Textile

12. Niger Traders

Enamelware Co. Ltd

10. John Holt Rubber Co. Ltd

20. Phoenix Motors Ltd

17. John 4-olt Investment Co.Ltd

Star Motors Ltd

24. David Whitehead & Sons (NigiLtc

SOURCE: Who Owns Whom, A Directory of Parent, Associate and Subsidiary

UnileverLtd (UnileverHouse, Blackfriars,London EC4P 4B0)

Who Owns Whom, A Directory of Parent, Associate and Subsidiary

buildingand confishingand forestry,

JOURNAL OF BLACK STUDIES / DECEMBER

pua ,e2 anleAt H

JOURNAL OF BLACK STUDIES / DECEMBER 1978

One of the biggest

holds 35*% of its

Tate & Lyle Invest.

my own survey, 1976.

Nigeriancompanies.About 100 of such deep-seavesselsare

and expatriateswas 2 to 19 in 1960,3 to 29 in 1962,3 to 38 in