By Prof. Mannixs E. Paul

Introduction:

The Faculty of Management Sciences, Niger Delta University, successfully hosted its 4th International Conference from September 3rd to 6th, 2024, with the Theme: Strategies for Resilience and Financial Integrity in Turbulent Times. The event attracted diverse participants, including government officials, academics, industry leaders, and international experts, all focused on addressing the pressing economic challenges facing Nigeria and the global economy. Prof. Mannixs E. Paul, Global Chairman of Chartered Examiners of Criminology and Forensic Investigation, USA, and Chief Technical Director of NDU International Strategic Alliance FAFI\CIMFI Programmes, stressed corporate governance reforms are crucial for enhancing investor confidence, particularly during economic instability. Presenters advocated for transparent decision-making processes, stringent anti-corruption measures, and implementing international best practices in governance to attract and sustain investment.

According to Prof. Paul, Nigeria has faced economic crises for the past four decades despite numerous efforts to reverse the trend. The Nigerian citizens, especially the baby boomers, have endured this persistent challenge and have seen significant policy changes and government interventions. As citizens seeking a standard solution, we must understand the root causes of the crises and realize the potential for positive change by implementing the proposed solutions.

This analysis delves into Nigeria’s economic crises from 1979 to the present, examining the reasons for their continuity and the limited effectiveness of government responses. Focusing on specific periods such as the Structural Adjustment Program (SAP) era and the recent COVID-19 pandemic, this analysis sheds light on the underlying causes of Nigeria’s economic instability and proposes recommendations for long-term solutions.

1. Oil Boom and Economic Mismanagement (1979–1985)

The Nigerian economy depended heavily on oil exports, contributing significantly to government revenues during the late 1970s and early 1980s oil boom. The sudden influx of oil wealth led to economic mismanagement, as excessive spending on public projects and inefficient allocation of resources became widespread. This mismanagement had adverse effects, including inflation and the rising cost of imports, which were not offset by the introduced austerity measures and currency management strategies. Nigeria’s reliance on oil revenues meant external shocks, such as declining oil prices, exacerbated the crisis, highlighting the need for effective economic policies and resource allocation.

2. Structural Adjustment Program (SAP) Era (1986–1993)

In 1986, the Nigerian government adopted the Structural Adjustment Program (SAP), a set of economic policies recommended by the International Monetary Fund (IMF) and the World Bank. SAP aimed to stabilize the economy through the naira devaluation, trade liberalization, privatization, and deregulation. The devaluation of the naira led to increased inflation and a decline in purchasing power for the average Nigerian. Trade liberalization resulted in an influx of foreign goods, which weakened domestic industries. Although SAP sought to address Nigeria’s mounting external debt, the reforms were highly controversial and faced significant public opposition (Oyejide, 1991). The overall impact of SAP was mixed, as it improved some macroeconomic indicators but failed to address structural weaknesses within the economy, highlighting the complexity of economic reforms and their varying effects.

3. Banking Crisis and Economic Recession (1994–1999)

The mid-1990s brought about a banking crisis characterized by the collapse of several banks and a loss of confidence in the financial sector. This period also saw a significant economic recession, weakening the country’s financial infrastructure. To address the banking crisis, the government introduced bank recapitalization and regulatory reforms, attempting to restore stability to the economic system. Despite these measures, the reforms were insufficient due to poor regulatory oversight, corruption, and weak governance structures. The lack of a comprehensive approach to tackling the root causes of the crisis, including poor banking practices and regulatory failures, hindered the success of these interventions (Okonjo-Iweala, 2012).

4. Global Financial Crisis (2007–2008) and Oil Price Shock (2014–2016)

The global financial crisis of 2007–2008 significantly impacted Nigeria, coinciding with a sharp drop in oil prices. This crisis exposed the vulnerability of Nigeria’s oil-dependent economy, leading to a decline in government revenues and a spike in unemployment. The Nigerian

government responded by implementing banking sector reforms, including tighter regulations and greater transparency. The Economic Recovery and Growth Plan (ERGP) was also introduced to diversify the economy from oil dependence (Adelakun, 2016). However, the implementation of these reforms was hindered by governance challenges and institutional weaknesses, leading to limited success.

5. COVID-19 Pandemic and Economic Impact (2020–Present)

The COVID-19 pandemic has profoundly affected the global economy, and Nigeria was no exception. The government introduced an economic stimulus package and several monetary policy measures to mitigate the financial impact of the pandemic. The National Economic Sustainability Plan (NESP) aimed to create jobs, support businesses, and provide social safety nets for vulnerable populations (IMF, 2021). Despite these efforts, Nigeria’s economy has struggled to recover fully, primarily due to the persistent structural weaknesses that have plagued the country for decades, including corruption, a lack of economic diversification, and poor governance.

Outcome

External shocks, such as fluctuating oil prices, global financial crises, and internal structural weaknesses, have consistently led to economic instability in Nigeria from 1979 to the present. Despite the government’s well-intentioned responses, the results have often been disappointing. Corruption, inconsistent policy implementation, and a lack of structural reforms have consistently undermined these efforts.

Reflection and Recommendations

To achieve sustainable economic stability, Nigeria must prioritize the following strategies:

1. Strengthen Governance Structures: Establishing more robust governance frameworks
   will ensure accountability and better policy implementation.
2. Promote Transparency: Increasing transparency in public and private sectors will help
   build trust and reduce corruption.
3. Enhance Risk Management: Government and financial institutions should focus on
   comprehensive risk management strategies to anticipate future crises.
4. Prioritize Ethical Practices: Promoting ethical behavior in business and government will improve the country’s reputation and attract foreign investment.
5. Review and Update Policies Regularly: Economic policies should be frequently reassessed to adapt to changing global and domestic conditions.
6. Learning from Past Failures: Nigeria can avoid repeating mistakes and implement more effective reforms by studying past economic crises. Learning from the past can enlighten us toward a more stable and prosperous future, instilling a sense of wisdom and foresight in our decision-making.

Conclusion

Nigeria’s enduring economic challenges since 1979 stem from internal and external influences. Despite concerted efforts by the Nigerian government to introduce reform programs and policy initiatives, the efficacy of these endeavors has been consistently hampered by factors such as poor governance, widespread corruption, and a deficit in institutional reform.

Nonetheless, the potential for transformative change persists. Nigeria can surmount its financial tribulations and establish a more prosperous trajectory by adopting well-considered strategies and a unified commitment to instigating change. Leaders must demonstrate unwavering political determination in combating corruption at all levels, as such steadfastness plays a pivotal role in fortifying the nation’s appeal to substantive investors.

In areas where governance is lacking, corruption is rampant, and political instability persists, there is significant unpredictability. Investors drawn to these environments often exhibit opportunistic behavior like scavengers by aligning themselves with self-interested entities and organizations focused on personal gains rather than national progress. This approach has resulted in numerous unfinished projects when there is a change in government. Therefore, there is an urgent need for comprehensive institutional reforms aimed at strengthening the fragile systems responsible for safeguarding the nation’s resources. This is especially crucial due to previous administrations taking advantage of weaknesses within public service institutions.