PROJECT TOPIC- STRUCTURAL ADJUSTMENT PROGRAMME AND THE FAILURE OF DEMOCRATIC POLITICAL TRANSITION IN NIGERIA
Economic policy is always the outcome of an interplay of several interests. Sometimes, the outcome is a reconciliation
of the divergent interests. More often, however, the outcome is closer to the interest of the most powerful of the contending groups. In the current essay, two main interests are relevant. On the one-hand there is the national interest, which itself is the outcome of the interplay of groups and special interests within the country. On the other-hand, there is an ” international” interest, represented by our creditors – the Paris and London Clubs and our ggsponsorsg- g the IMF and the World Bank. There is of course, a degree of intersectionbetween “national” and “internationalw interests.
In a fundamental sense, SAP, is the outcome of the interplay of these two interests, with the outcome tending more towards
the demand of “international interest. Their leverage is derived from our indebtedness and our own inability to undertake a truly home-grown programme of structural transformation. Though various attempts have been made to resolve the economic crisis which became manifest in Nigeria In 1991.
To the International Monetary Fund (IMF), the crisis was brought about by the excessive state regulation of the
economy. It therefore advocated the deregulation of the economy which would grant ascendancy to market forces in
Nigeria’s political economy, as the solution to the economic quagmire. The Shagari regime under which the crisis
manifested itself disagreed with the IMF and believed that the crisis would be solved through state regulation. It therefore
introduced “Austerity Measures.” Similarly, Buhari regime believed that the crisis would be resolved through state
regulation, and so, it embarked on measures like retrenchment, anti-corruption crusade and the promotion of greater state
control of the economy. The disagreement between the Shagari and Buhari regimes on the one-hand and the IMF on the otherhand, resulted in a stalemate over Nigeria s request for a loan. This was the situation when Babangida came to power in August 1985.
Right from the beginning, Babangida made it clear that he was ready to resolve the impasse between Nigeria and the IMF.
This tended to promote the feeling that his coup was a pro-IMF coup – a feeling which was reinforced by the subsequent
economic policies of the regime. After the rejection of the IMF loan, through a public debate, the regime went ahead to
introduce the Structural Adjustment Programmed (SAP).
These programmes, the Structural Adjustment and Transition to Democratic Rule, was later designated the Babangida
‘Revolutionf (cf . Oyovbaire and Olagunju eds . , 1989) .
However, the greatest challenge that confronted the Babangida revolution and indeed the IMF/World Bank and the Western
authors and guardians of SAP was how Structural Adjustment – an anti-peoples neo-imperialist economic package “could be
implemented and legitimized within the context of democratic politics” (Nyong’ o, 1992: 12) .
This work has set on for itself the task of examining and establishing the correlation, if any, between the Structural
Adjustment Programmed and the failure of Democratic Political Transition in Nigeria between 1986 and 1993.
Chapter one deals with the rubrics of this work. It will provide the reader an insight to the direction of the research. Chapter two embodies a review of related literature. Chapter three encompasses the theoretical and methodological perspective. We undertake to test our three hypotheses to either prove or falsify them in Chapters four through six. Then, we submit our findings, conclude and make some recommendations in Chapter seven.
PROJECT TOPIC- STRUCTURAL ADJUSTMENT PROGRAMME AND THE FAILURE OF DEMOCRATIC POLITICAL TRANSITION IN NIGERIA
Two issues, Structural Adjustment Programmer (SAP) and Democratization have come to dominate the political agenda of most African countries since the mid – 1980’s. By 1988, more than twenty five African countries were already implementing SAP of one type or the other. At the same time, popular demand for democratization were being made across the continent. Such demands have already brought changes in government in Zambia, Mali, Benin Republic, among others. In some other countries, such demands have not been successful.
So far, Nigeria seems to be one of such cases. In Nigeria, by December 1983, the economy was practically in shambles. About 50% of industrial capacity had been lost as a result of closure of factories which could not find foreign exchange to import critical raw materials and spare parts.
Consequently, between 1980 and 1983, about one million workers were retrenched from the manufacturing sector alone. Gross nomestlc Product fell by 44% in 1983, after a 2% decline the previous year.
Foreign exchange earning principally from export of crude petroleum fell from =N=10.1 billion in 1979 to =N=5.161 billion in 1981. As a result, the country’s foreign indebtedness peaked =N=15 billion in 1983, while her backlog of trade payments stood at =N=5 billion (Olukoshi and ~ibdulraheem, 1985 : 95) . Whereas, in nominal terms, the deficit varied from year to year, it assumed alarming proportion visa- vis the Gross Domestic Product (GDP) from 1986.
This development certainly has had immense implications for growth in the production of the domestic economy. Indeed, in the period up to 1977, these budgetary deficit were covered almost entirely from internal loan sources, that is, from the Central Banlc, the commercial banks and public subscription to development” loans, in that order of magnitude. In 1978, the first nJumbov loans of $1.75 billion were contracted from the
Between 1979 and 1980, Nigeria again raised a $2.8 billion loan while the $2.2 billion raised in 1981 was for the Ajaokuta integrated steel mill; thus bringing the estimated total foreign borrowing at about that time to close to $7 billion. There was a great deal of controversy at a point in time with regard to the volume of the external debt (cf . World Banlc Report, No. 6716 – UN, 1988) .
Nigerian leaders were faced with the unenviable task of finding alternatives for saving the ailing economy. The civilian government of Shehu Shagari introduced some stabilization measures in 1980-83, which were replaced by more stringent austerity measures under the military regime of Buhari (1983-85) . On June 27, 1986, Babangida announced the introduction of the Structural Adjustment Program me, presumably without formal IMF backing or endorsement. The Structural Adjustment Programme expired in mid-1988 without formal replacement. Rather, the government embarked on a more radical adjustment programmed with the support of the IMF and the World Bank.
At the same time, the Babangida administration embarked on a political programmed for the transfer of power from the military to a democratically elected civilian government. A political bureau was inaugurated, whose report led to the drafting of a new constitution. Two government approved parties, Social Democratic Party (SDP) and the National Republican Convention (NRC) , were formed. An electoral commission and agency for mass mobilization were also established. Subsequently, local government chairmen, state/national representatives and governors were elected and sworn in.
Nevertheless, the government suddenly began to renege on the handover date. From October 1, 1990 to October 1992 and then to August 27, 1993. Eventually, when a presidential election was finally held on June 12, 1993, the government nullified the election (after announcing more than lf the result) and threatened to dismantle the whole democratic structures already established. By November 17, 1993, Nigeria had returned to full military rule, thereby aborting the democratic transition programme.
Statement of Problem.
Except for a few works, the literature on economic and political reforms in Africa is predominantly descriptive (see for instance, Delgado, 1991; Picket and Singer, 1990; Phillips and Ndekwu, 1987). Besides, many observers have over-looked the links between economic reforms and democratic political transition. Even when this link is recognized, the tendency is to view democratization as a necessary political correlate of SAP. However, some scholars have challenged this contention.
They argue that SAP is a hindrance to democratization (cf. Olukoshi, 1991; Stepan, 1971:9). While agreeing with this, we must note that not much empirical validation of this proposition has been conducted, particularly in the African context.
Our central contention therefore, is that SAP is a major factor in the failure of democratic political transition in Nigeria between 1986 and 1993. Under this premise, some questions become quite imperative.
What is the impact of the structural adjustment programmed on orderly political transition? What are the effects of the structural adjustment programmed on the conduct of free and fair elections? What is the impact of cuts in public spending on strengthening of local governance? These are the central questions that this study proposes to answer.
Objective of the Study.
The objective of this study is to explain the links, if any, between SAP and the failure of democratic political transition
in Nigeria between 1986 and 1993. Despite the fulfilment of the academic requirement, we are motivated to write on the
problem and to explore the infrastructural foundations that would guarantee economic development and at the same time,
institutionalise democracy in Nigeria.
Furthermore, to acquaint ourselves with the dynamics of a transitional process and the ability to elicit the empirical research spirit of colleagues that are involved in the same issues raised.
Significance of the Study.
This study is significant because it is essentially an inquiry into the participation of the IMF and the World Bank in the Nigerian political system.
With more than two decades of this participation behind us, the end result has largely been a catalogue of unfulfilled expectations. For instance, the policy strategy of the import substitution/ primary export model of accumulation has run its full course without leaving any positive impact on dependence and under-development. Instead, what we have is an valance of foreign debts, high level of unemployment and downward trend in the standards of living of the Nigerian masses.
Given this state of affairs, it is therefore quite pertinent at this point in time to provide insights or clue which will enable us evaluate the policy prescriptions (like the SAP) by the IMF and the World Bank to the Third World countries in general and Nigeria in particular. This is quite timely and in fact necessary in order to find out why we have performed so poorly and whether this participation in our political system engenders political stability.