By Adisa Adeleye
ABOUT twenty years ago, the military President confounded the nation, under his powerful grip, with an economic programme romantically styled, â€˜Structural Adjustment Programmeâ€™ (SAP).Â The delicate but fragile programme was carefully packaged by a crafty general after a carefully arranged audience had approved the stand of the gullible public to reject IMF (International Monetary Fund) loan with its stringent conditions, which included devaluation of the domestic currency.
There is little doubt that SAP was introduced at the crucial time when the economy was in shambles and when other policies were ineffective to stop that inevitable drift towards depression or bust.Â In 1986 with the collapse of oil price (between $8 – $10), and the consequent drastic reduction in revenue to the covers of Federal Government, the economy became suspect, especially with hard attitude of our foreign creditors.Â The economy seems to be at the point of collapse and some suggested that our fat currency (Naira) had to shed its weight.
What happened later has become a valuable lesson for the country.Â In retrospect, the SAP regime deemed to have created an atmosphere of stability in a confused and terrible situation.Â The twin evil of scarcity of goods and replacement cost bred the culture of proper maintenance.Â Also, agricultural products received a tremendous boost with increased foreign exchange earnings.
But it soon dawned on the nation that increased revenue could not match adequately the rise in inflation caused by rising domestic consumer prices arising from higher costs of imported imputs.Â The problems of dearer foreign exchange, accompanied by domestic credit squeeze affected domestic industrial production and expansion, leading to a large-scale invasion of domestic market by cheap manufactured goods.Â Effective demand at home was painfully curtailed by the tight Income Policy of the time.
Unemployment loomed large in the urban centres with the attendant prevalence of social vices; it was the beginning of armed robberies.
It may be useful to re-assess the value of SAP in combating the economic ills of the 1980s.Â The problems came in different forms â€“ retarded growth manifesting in persistent balance of payments deficits; raging inflationary trends; conspicuous taste for foreign goods; foreign debts and seemingly over-valued Naira.Â A situation which needed drastic solution.
However, SAPâ€™s shock treatment appeared more drastic than the patient could well tolerate â€“ massive doses of devaluation which disgraced the Naira; tough credit squeeze which reduced profitable investment and income policy that affected effective domestic demand.
Thus, SAP whose goals were to be balanced growth, stable prices, favourable balance of payments and full employment, suffered through poor management. Nigeria became, from the time of SAP a nation of consumer of second-hand goods and products.
The average Nigerian could no longer afford any new thing except those Nigerians who have profited from government contracts and favours.
The real beneficial lesson of SAP regime is that no serious government would sit and allow its economy to be destroyed through selfish interests of the few, though powerful and influential.
Within the last decade, another army general in civilian dress.Â Chief Obasanjo, backed by arrays of World Bank experts ingeniously bull-dozed another economic package on the nation elegantly presented as â€˜The National Economic Empowerment and Development Strategyâ€™ (NEEDS).
The package which would take care of short-term and long-term needs, according to the carefully selected and brilliantly tutored protagonists, would represent many good tidings of â€˜life more abundantâ€™ for all Nigerians.
The emphasis of NEEDS is on the provision of good roads, better schools, responsive health-care system, water for drinking and agricultural purpose; safer streets and of course, food on the table.Â There is no doubt that those concepts of NEEDS are lovely by any standard, even if they were not new or original.
In fact, the needs to improve the lives of Nigerians had been the clarion call of leaders (both civilian and military) since Independence in 1960.Â Nigerians under Obasanjo happily responded to a policy that promised better standard of living, full employment and rapid industrial growth.
Others were happy that, for once, the government thought about the majority of people of the country whose opportunities were limited.Â Judging by the â€˜suffer-suffer mentalityâ€™ of the people, it was expected that making required sacrifices would not be difficult under an atmosphere of trust and confidence.
However, unfortunately, the dream of NEEDS evaporated with the departure of the architect and his eminent World Bank experts.
It is known that past governmentsâ€™ efforts in bringing economic, political and social changes had been affected by poor management of allocated resources, conflicting fiscal and monetary policies and wrong timing of otherwise progressive programmes.
Nigeria needs political and economic stability for NEEDS to succeed â€“ an atmosphere which was not prevalent during the past regime.Â Under that regime, the fear of inflation by the officials of Central Bank and government functionaries worked against policy for industrial growth.
Still not out of woods under the past regime, came from the blues the Yarâ€™Adua Seven Point Programme with the same emphasis on prosperity and safety of life and property of an individual. To many, the new package looks like SAP-NEEDS, â€˜write largeâ€™.Â The aims and goals are not different in formulation or operation.Â They look like promises without proper understanding of why previous policies failed.
First, â€œStructural Adjustment Programmeâ€ (SAP) did not function effectively because of absence of enabling environment. Perhaps devaluation could have worked better without the crippling credit squeeze; if the motive is to increase our exports (agricultural products) it would have been wiser to strengthen domestic production to cater for increasing demand.Â A regime of high lending rate of 17 percent (then), and about 22 percent at present, would not do the trick.
It would amount to self deceit to expect a policy of #145 to a dollar, a regime of high lending rate (22%); total darkness (inadequate power supply), constant threat to life and property and unsure political reforms in an atmosphere of dilapidated infrastructures, to perform miracle of macro-economic stability and full employment.Â God will save Nigeria.
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