“Democracy without dividends.” That’s the phrase you’re likely to hear from many Nigerians asked to assess the country’s democratic experience under President Olusegun Obasanjo. Two years into civil democracy, Nigeria is once again an accepted member of the international community. But Obasanjo, who portrayed himself as a political messiah, has so far failed to redeem his promises to Nigerians of a better life.

When Obasanjo took the oath of office as Nigeria’s elected President on May 29, 1999, after the country had endured fifteen years of adventurism and brigandage under military rule, it was regarded as a turning point in its political history. And indeed, there were many early positive developments. The media and the civil population regained their freedom, investor confidence was restored and international financial institutions like the IMF were willing to discuss the rescheduling of Nigeria’s debt. The Obasanjo administration also won plaudits for passing an anticorruption act that prescribes stringent punishments for corrupt officeholders and for forcing the retirement of more than 120 military officers whose careers were judged to be tainted by politics. A government-sponsored panel investigated human rights violations during the period of military rule based on thousands of petitions, thereby achieving, to some extent, a national catharsis.

But more recent developments are far less encouraging. The economy remains nearly comatose, with imports accounting for more than 80 percent of manufactured goods consumed. The value of the national currency has gone from 100 to 135 naira to the dollar in the past four months. The collapse of the social infrastructure remains unaddressed, as do crime and the battered education system. The imposition of Sharia (Muslim law) in the northern states has upset many southerners and Christians.

Perhaps the biggest problems Obasanjo has failed to solve involve Nigeria’s lifeline, oil. The conflict between the oil-producing communities of the Niger Delta and the oil multinationals has assumed the status of low-intensity warfare, with the government on the side of the oil giants. The government provides police protection for oil companies’ installations and applies military force against protesting communities. Last year Obasanjo ordered an attack on Odi, a sleepy village with immense oil and gas reserves; the soldiers razed the entire village in order to put down an uprising. Recently the governors from the oil states demanded control of the resources in their domain, citing the Nigerian constitution. The international character of the struggle has intensified with a ruling in October by a US Circuit Court of Appeals that the Ogoni community could bring a class-action suit against Royal Dutch/Shell.

Gas lines–which briefly disappeared after the Obasanjo administration blocked some of the loopholes in the supply and distribution system, carried out refinery maintenance and embarked on a well-supervised massive importation of fuel–have returned. The country’s three main refineries are near collapse, and the government no longer has enough funds to subsidize imported fuel. Ironically, the world’s sixth-largest oil producer is unable to make fuel available to its people. Obasanjo has now decided to end government subsidies, which will mean price increases of 200 to 300 percent. That threatens to bring about a massive national strike and possible economic shutdown.

There are palpable fears that Obasanjo’s seeming inability to find ways of resolving these problems may provide a justification for a military takeover. The past two years have witnessed worsening living conditions, and many Nigerians argue that it was never this bad, even under the military. Retired generals openly attack the government for its woeful performance, while forced retirements cause restlessness in the barracks. In April three service chiefs were suddenly retired based on intelligence reports questioning their loyalty. Meanwhile, agitation for a national conference to renegotiate Nigeria’s federalism, to which the government is opposed, has won more converts. And opponents are already looking toward the next presidential election, in 2003.

Obasanjo must take bold and pragmatic actions toward resolving these seemingly intractable problems and bringing about genuine reconciliation among Nigeria’s tribes if he is to avoid the risk that the country will disintegrate. Obasanjo understands this but is confronted by powerful forces. Recently while on a visit to the United States, he was asked to name the major achievement of his administration. After a deep breath, he answered, “Nigeria is still united.” To force change, Obasanjo must stop dispensing patronage, send home the aged brigade of ministers recycled through several administrations and recruit young technocrats who better understand the nuances of the new economy. Corruption and inefficiency must be rooted out. Obasanjo must also involve Nigerians more in decision-making rather than acting unilaterally, as has been his practice. If he falters, the club of retired military officers, with their civilian collaborators, is prepared to seize any opportunity to take power.