A New Nigerian Shakedown

cigarettes and ash tray
(photo: Jonathan Boeke)

The latest 419 scams aren’t the only nuisances for American businesses emerging out of Nigeria this year. Using the vast archive of documents made public during the 1990s epidemic of class action lawsuits against tobacco companies, Nigeria has decided to get in on the gravy train. The BBC is reporting today that Nigerian prosecutors are seeking an astronomical $44 billion in damages against American and European cigarette makers, for the costs supposedly sustained by their health care system. To put this allegation in some perspective, that’s approximately 43 times the entire 2007 Nigerian national health budget.

The government seems confident enough though, describing the tobacco companies as “dead on arrival” in court. I don’t envy the firms after hearing such definitive assessments from the state. In May of last year when prosecutors were beginning work, 23 Nigerian judges were removed from the bench on charges of bribery and corruption.

For Nigeria it would be an interesting approach to federal revenue diversification. Presently the country derives 80% of its fiscal budget from oil exports. At 2007 levels of expenditure victory in this suit could finance the entire Nigerian state for three years.

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