By Eteteonline
Structural adjustment
To ensure a stable and viable Third Republic, the Babangida Administration realized that a sound and self-reliant economy must be in place and Nigerians must have abundant food, work, and houses.
From its inception, the administration discovered economic and social deficiencies in Nigeria.
These deficiencies included the following:
1. a debt-ridden economy;
2. an import-dependent economy;
3. import license fraud;
4. high levels of unemployment;
5. too much government in growth-inducing sectors of the economy;
6. a corrupt and inefficient civil service;
7. an economy laden with subsidies:
8. outrageously misdirected and high public expenditures;
9. a perverted reward system weighted in favour of indolence and nepotism;
10. Capital flight;
11. over-valued currency;
12. neglected agriculture and food shortages;
13. Inflation and hoarding; and
14. A society without a clear vision, strong-willed leadership, or sense of
mission.
The first major economic decision was the declaration of a fifteen-month National Economic Emergency on October 1, 1985, which gave the President necessary powers to adopt measures to reorganize, stimulate, reactivate, and improve the productive sectors of the economy. The next major step was whether to take an International Monetary Fund (IMF) loan for the implementation of its economic programmes. However, in line with its open-door policy, consensus-building, and full public participation in solving national problems, the question of whether to take the loan or not was submitted to public debate. At the end of the national deliberation, the Nigerian people rejected the loan because of the conditionalities attached to it. Accordingly, the government accepted the verdict of the people.
The rejection of the IMF Loan meant putting forward an alternative economic programme. The government then introduced the Structural Adjustment Programme (SAP) as the most viable alternative on June 20, 1986. It was originally intended to be a two-year medium-term package from July 1986 to June 1988. Due to the numerous benefits derived from its implementation, the SAP was extended after the expiration of the two years. According to the government, certain attributes informed the adoption of SAP, and these include, among others, the following:
- SAP, which offers specific sectoral and general policies for agriculture, manufacturing industries, education, health, science, technology, and research, housing, and other growth centres, improvement in the macro-economic environment, elimination of factory-gate controls, and the general conduct of socio-economic policy;
- A resolute attack on unemployment, especially the encouragement of the use of appropriate labour-intensive technologies;
- Political and administrative changes which will ensure a stable and effective implementation of adopted development policies;
- Thorough-going reforms are required in the political and social framework to permit the factor of mobilization, which is perhaps the most potent reform in the foundations of society and stable economic progress.
- The design of a stabilizing financial flow mechanism which would afford the planners, at any level of government, certainty, adequacy, and timeliness;
- The preclusion of dan indiscipline, public sector recurrent expenditure runway growth, and unwarranted external and internal public borrowings; and
- Reforms in monetary organization.
To realize the ideals embedded in SAP and to achieve self-propelling and self-reliant growth, a number of measures were taken. The importation of rice and wheat was banned. The measure, apart from boosting the Local production of these commodities, served the nation hundreds of millions of dollars, which were diverted into other needy or sick sectors of the economy.
The agricultural sector was overhauled to enhance efficiency and achieve sufficiency in food production. Farmers were encouraged with incentives, and food production was boosted. Subsidized fertilizers, improved seedlings, and farm implements were made readily available to farmers. Additionally, an insurance scheme, storage facilities, and irrigation projects were instituted. Also, farmers had easier access to credit facilities. The River Basin Authorities across the nation were reorganized to achieve greater productivity. Unfortunately, however, Nigeria has continued to experience diminishing returns in this sector because smugglers and profiteers continued to export food in defiance of the government ban, thereby causing shortages.
Great achievements were recorded in the area of rural development, unprecedented in Nigeria’s history, even during the era of the oil boom. This was made possible by the establishment of the Directorate of Food, Roads, and Rural Infrastructures (DFRRI). Under the scheme, several rural roads were opened, making the evacuation of agricultural produce to Urban areas possible. Boreholes were sunk in many rural communities across the country. This made potable water easily available and reduced the incidence of water-borne diseases like cholera, Guinea worm, and typhoid fever. Rural electrification was given top priority. Millions of people in rural areas started enjoying electricity. The work of DFRRI has discouraged the migration to Urban areas and made life in rural areas more meaningful than before.
The problem of unemployment received adequate attention and consideration under the Babangida Administration. It was the first time any government in Nigeria would boldly take up unemployment as an issue. In response to this problem, therefore, the Babangida Administration created the National Directorate of Employment (NDE). The NDE was set up to promote self-employment and self-reliance among Nigerian youths. It embarked on the following programmes, among others:
- (a) The National Open Apprenticeship Scheme (NOAS)
(b) The Waste-To-Wealth Scheme
(c) The School-on-Wheels scheme
- (a) Small-scale Industries and Graduate Programme
(b) The Graduate Loan Scheme
(c) The Matured People’s Scheme
(d) The disabled People’s Scheme
(e) The exportable crafts for Rural Women
3. (a) The agricultural sector employment programme
(b) The School Leavers Training Scheme
4. The special Public Works Programme.
Many young men and women were trained under the various schemes. At the end of such training, the trainees were granted credit facilities to establish businesses.
Thousands of self-employed people, some of whom have become employers, remain very grateful to the Administration for the successful implementation of the NDE Programmes.
In its effort to enhance greater private participation, efficiency, and profitability in government enterprises, the Babangida Administration embarked on a policy of privatization and commercialization. Private management of enterprises has been successful in many countries, including the USA, Japan, South Korea, and Western European countries.
This policy by the Babangida Administration has been paying off. In Nigeria, many government businesses are regarded as ‘no man’s business’ and are often characterized by inefficiency, losses, mismanagement, and fraud. Privatization, therefore, eliminates these anomalies. Those enterprises which could not be privatized for strategic reasons have been commercialized to make them independent of government subsidies and subventions, and at the same time improve the quality and quantity of their output.
The skills, efficiency, prudence, and successes of private management to be injected into these enterprises would stimulating the economy. This was a single policy that attracted widespread support from all sectors. The government also put in place measures to prevent the hijacking of these enterprises by the rich and powerful.
A very significant measure that the government of General Babangida put in place to revamp the economy was the diversification of the economy. Over the years, Nigeria has been solely dependent on oil as the major source of foreign exchange. But with the downward slump in oil prices, the administration encouraged the export of non-oil products. To this end, exportation of cash crops like rubber and cocoa was encouraged. Industries received a boost, and the manufacturing sector was revitalized with a package of incentives. Out of great effort and commitment, the iron and steel industry in Ajaokuta was earmarked for commissioning in 1993. This will provide the nation with high, durable steel products for the domestic and international markets. Other major undertakings included Machine Tools Oshogbo, Iwo paper mill, NAFCON Phase II, aluminium complex, and petrochemicals complex.
As part of its giant step to boost exports, the administration established an Export Processing Zone in Calabar, Cross River State. When completed, the EP will provide basic facilities and a conducive environment for the processing and export of non-oil products. It is also expected to attract foreign investors. Already, a Nigerian delegation visited Taiwan to study the operations of their very successful export processing zone.
The Administration also provided good grounds and incentives to foreign investors. Apart from guaranteeing the safety of their investment and repatriation of profits, they are being allowed into certain sectors of the economy where they were hitherto barred from. Nigerian trade delegations visited other countries to advertise and explain the potential and new climate of investment in the economy.
The lack of capital has long been a major stumbling block to business growth in Nigeria because of the stringent security and high interest rates of commercial banks. Therefore, to make credit facilities available and easily accessible to the public, the Peoples Bank was established by the Babangida administration. No borrowing from the bank, no security was necessary, and the interest rate was minimal, enough to meet the running costs of the bank. Community Banks were also established and had been on the increase nationwide with objectives similar to those of the Peoples Banks.
In 1989, the National Economic Reconstruction Fund (NERFUND) was established. And since then, about 192 projects have been approved. NERFUND, in concert with banks, lends money and provides incentives for small and medium Enterprises (SMEs). There are, however, criticisms and dissatisfaction as to the under-utilization of funds available under the scheme by investors.
The financial sector was overhauled as part of this structural adjustment, where there is greater discipline in the foreign exchange operation than ever before. One major task that faced Babangida. The Administration was finding the correct value for the Naira, which had been overvalued for many years. In this regard, the Second Tier Foreign Exchange Market was introduced (SFEM) and later metamorphosed into PEM from July 1, 1987. This was a mechanism designed to find the real market value of the Naira, and one major advantage is the elimination of the fraud associated with the import license system. In an interview with Giant Strides, President Babangida said:
“SFEM, as you know, is the core policy of our structural adjustment programme. The government has succeeded through SFEM to reduce the degree of overvaluation of our currency, to correct structural distortions in the domestic economy, and discipline the taste for imported items.
“Because importers have to pay the true cost of foreign exchange as a result of the rates generated by SFEM, we have been able to introduce some efficiency into the use of our foreign exchange resources amongst competing users. I should add that SFEM has enabled our export to become competitive again. The exchange control liberalization and the boosting of our non-oil exports brought about by the SFEM decree have contributed in a large measure to the success so far recorded in our SAP programne. All these are advantages which could not have been derived from IMF facilities.”
Fiscal discipline also extended to financial institutions. Many commercial, merchant, cooperative and mortgage banks emerged and contributed significantly to efforts to revamp the economy. The Central Bank was reorganized and granted greater autonomy and improved conditions of service as incentives.
In an overall assessment, SAP had proved to be a successful policy in terms of fiscal discipline and making Nigerians look inwards for their needs. The policy of self-reliance produced the world’s greatest economic power today, Japan. The success story of SAP, however, has not been without its biting effects. The government had warned from the inception of the programme and appealed for sacrifice, patriotism, and patience. As President Babangida put it to Giant Strides:
“Undoubtedly, our people have experienced some difficulties as a result of some of the measures being implemented under the programme. The government is fully aware and appreciates the courage with which the citizens of Nigeria have borne the pains and cherishes their support of the programme.
“I believe that the support which our adjustment policies have received is based on the awareness of our people that the adjustment programme is our own home-grown package of policies designed to enable us to become more self-reliant and depend less and less on the External sector. “
The government also responded to the harsh effects of SAP by releasing a package of incentives to workers. It also took steps to reduce the harsh impact on the populace in general.
Transport
The transport sector was not left out of the areas of government priorities. The introduction of the mass transit programme boosted the transportation of people and goods across the country and assumed a vital role as an essential vehicle for economic development. It provided a fair competition with the private sector and guarded against unreasonable fare increases and exploitation of commuters. To make spare parts cheap and readily available, the government reduced or removed import tariffs on them. The maintenance culture campaign was also intensified in this regard.
Air travel was enhanced. The Nigerian Airways was reorganized, commercialized, and partially privatized to enhance greater efficiency and productivity. The private airlines increased their fleets, routes, and schedules in response to the huge demand in the sector. The Metro Line projects were revived in big cities like Lagos and Kano to ease transportation problems.
Another landmark achievement of the Babangida administration was in the area of shipping. The shipping policy positively ‘Nigerianized’ the maritime industry, dominated by foreigners, to the complete exclusion of Nigerian shipping operators. The National Shipping Policy Decree 10 of 1987 was promulgated to give Nigerians control of their shipping operations. Thus, the small-time shipping lines run by Nigerians started growing since then and witnessed for the first time the procurement of vessels by some companies.
Reward programme
In addition to the series of policies and measures designed to revamp the economy, the Babangida administration evolved a way of rewarding hard-working Nigerians. February 21, every year, is to be observed as National Productivity Day with reflection on the following objectives:
- Ensure a high-level effectiveness and efficiency in the implementation of public policies and programmes of various public services;
- Stimulate work values for high performance and efficiency in all sectors of the economy;
- Inculcate in the public and private sectors ethics, hard work, discipline, productivity, humility, patriotism, and selfless service;
- Encourage promptness, thoroughness, courtesy, responsibility, and dependability;
- Build and encourage the spirit of self-reliance and draw the government’s attention to the problems facing labour productivity.
The National Productivity Merit Award was instituted as a follow-up to the National Productivity Day. As an index for national development, the Award was a prestigious honour for the nation. It was conferred by President Babangida as a reward for excellence in output and an incentive for Nigeria’s economic operators in the private and public sectors.
Education
The educational sector received substantial support and underwent reforms.
The emphasis on science and technology was very strong. At the secondary school level, a 6-year programme was evolved as part of the 6-3-3-4 system, where students were exposed to introductory technology at a tender age. Infrastructure was provided to a large extent to enhance teaching and learning. The government also conceded to teachers’ demand for professionalization of teaching.
The introduction of nomadic education marked a major innovation in the nation’s educational system and a breakthrough in attempts to provide education for all Nigerians. The scheme took off successfully and proved useful to the beneficiaries.
Adult education and mass literacy received a boost under the administration. Many adult men and women learnt how to read and write as a result of their participation in the scheme. Female education received attention under the administration. Withdrawal of girls from school for marriage was discouraged and even made criminal in some states. On the whole, the mass literacy campaign was intensified.
To promote tertiary education, the government made N20 million grant available to Federal polytechnics to enable them to upgrade their programmes to meet the standard set by the National Board for Technical Education for accreditation. The Federal Government also granted N20 million each to all federal universities to enable them to complete abandoned projects and meet other financial commitments.
State Governments were directed to pay at least N500 bursary to students in tertiary institutions to ease their financial problems. Nigerian students further had cause to smile as the more than one-year ban imposed on the National Association of Nigerian Students (NANS) was lifted in April 1993 by President Ibrahim Babangida.
The administration granted enhanced salaries to the academic and non-academic staff of universities and also committed itself to the proper founding of the institutions. As part of its commitment to adequate funding of universities, the Babangida Administration in August 1993 established a stabilization fund with a take-off grant of 100 million Naira.
The commissioning of the auditorium and hostel complex of the Nigerian Law School, Lagos, by President Babangida solved an acute accommodation problem of the noble institution, which in turn recorded an unprecedented four first-class honours in the 1991/92 Bar Final Examinations.
Housing
The programme of providing houses for all Nigerians was stepped up by the Babangida Administration. The National Housing Policy Decree was promulgated and aimed at providing adequate and modern houses for all Nigerians. The National Housing Fund was instituted, and the National Housing Council was established to manage the fund.
Apart from directly building houses, Nigerians have been encouraged financially and morally to build their own houses. Mortgage institutions, both private and public, received tremendous support and incentives from the government. Prototype and low-cost houses have been on the increase around the country as part of the government’s effort to provide houses for all Nigerians.
Health
The Babangida administration gave health care the attention that the sector rightly deserved. The health policy was founded on the objective of health for all by the year 2000. In this regard, several projects were commissioned by President Babangida during his eight years in office, including the Minna pharmaceutical and surgical company, which will manufacture tablets, capsules, and surgical equipment. The provision of drums and equipment had been steady, save for theft, which caused shortages. Teaching hospitals have been given due attention to face the Challenges of modern health care delivery. General and specialist hospitals, both public and private, have been on the increase nationwide, among them the recently commissioned Chief Igbinedion Hospital and Medical Research Centre, reputed to be the best equipped in the country.
Nigerian children will ever remain grateful to the Babangida administration for the intensification of the Expanded Programme on Immunization (EPI). In fact, the mortality rate has fallen sharply as a result of the commitment of the government to the success of the progamme. The EPI was taken to rural areas, and the superstitious beliefs often associated with infants’ illness were effectively curtailed.
Acquired Immune Deficiency Syndrome (AIDS) and the threat posed to the populace have been of grave concern to the administration. Accordingly, it initiated policies and took actions to check the spread of AIDS. Public awareness through symposia, workshops, and Jingles went a long way in spreading the message. AIDS testing equipment and screening centres have been set up around the country.
A very important aspect of the campaign for a healthy and prosperous family relates to the size of the family. Thus, the population control campaign took a different dimension when the government advocated a maximum of four children for every couple.
The era of having as many children as possible is over, and Nigerians must live according to the realities of the time. The family planning policy will ensure good health for mothers, adequate care and education for the children, and steady, well-articulated economic growth for the nation.
Public service reforms
The Babangida Administration embarked on major reforms in the public service to make it more functional, productive, and result-oriented. Ministerial posts were reduced by about a quarter at the federal level. The same was done at the state level in the office of the commissioners. The civil service was rationalized to eliminate redundancy and made more functional as the policy implementation arm of the government.
The office of the permanent secretary was replaced with that of the Director General in the federal and state ministries. The permanence inherent in the office was removed, thus making merit, excellence, hard work, and dedication conditions for continued stay in office. This policy truly has brought greater efficiency and reduced bureaucracy in the civil service.
Local Government Councils enjoyed some reforms. The Federal Government granted them the much-needed autonomy in which they could freely and without hindrance plan and execute development projects. This has had a tremendous effect in realizing grassroots development and made the third tier of government more meaningful and relevant than ever before. Grants to local Governments now go straight to them without passing through the state Government as before. Such funds were diverted by the states and hardly went to the local Government Councils.
After the democratization of the Local Government Councils, the principle of separation of powers was introduced into the Councils. In a remarkable and unprecedented development, a legislative arm was created out of the elected councilors of the local Government.
The office of supervisors, the equivalent of commissioners at the state level, was also created to constitute the executive arm. This brought checks and balances, discipline, prudence, and accountability into the management of the affairs of the local government, never seen before since their creation as the third tier of government.
Every other sector of the public service underwent some reforms, innovations, or reorganization, all aimed at producing greater results, efficiency, and productivity. The Communications Ministry was reorganized in 1986. The former Post and Telecommunications gave birth to two separate bodies, namely the Nigerian Postal Service (NIPOST) and the Nigerian Telecommunications Limited (NITEL). The two Establishments have been commercialized and made self-sustaining. The Eastern Gateway was commissioned by President Babangida in Enugu in August 1993 and became one of the landmarks of his Administration. This project added to the numerous achievements of his Administration in the area of telecommunications.
The Revenue Allocation Formula was also reviewed by the Federal Government in recognition and appreciation of the developmental needs of all tiers of government. The work of the National Revenue and Fiscal Mobilization Commission deserves commendation. The Federal Government reduced its share below 50 per cent for the first time and made more money available to state and local Governments. 3% was set aside as a derivative fund for oil-producing areas. This has enhanced the smooth running of government between the three tiers.
Defence is one of the most important Departments of every government because of its unique role. The Babangida Administration continued to give the defence sector the top priority it needed. Men and officers received qualitative training at home and abroad. The armed forces here are involved in the patrol of borders to check the activities of smugglers and other criminals.
The armed forces were pruned, made more professional, and defence-oriented. In 1987, General Babangida said to Giant Strides:
“I have no doubt at all in my mind about the preparedness of the Nigerian Armed Forces to deter and contain all external military challenges to the sovereignty and territorial integrity of Nigeria…Let me assure you that the Nigerian Armed Forces are totally committed, and stand ready, to meet force with force in the defence of our birthright.”
In June 1992, President Babangida took the Nigerian Armed Forces a great step forward with the establishment of the National War College. This gave Nigeria not only defensive but also offensive capabilities, as well as brought her into focus as a sub-regional superpower and world medium power. On May 17, 1993, the first set of graduates passed out of the War College. His administration also established the National Guard to strengthen internal security.
Law reform
To ensure a stable political atmosphere, economic independence, and social justice at all times, the Babangida Administration embarked on a review or reform of applicable Laws. The laws that would bring about the above goals were enacted, and those inconsistent with them abrogated, amended, or modified. From its inception, the reforms of laws to make them more relevant to society had been top on the agenda of the administration.
Apart from abrogating the unpopular Decree No. 4 of 1984 and substituting imprisonment for some economic offences that carried the death penalty, the administration abrogated the age-old colonial law of wandering. Perhaps its greatest achievement in the area of law reforms is the updating of the entire Laws of the Federation of Nigeria, now cited as 1990.
Another major reform is in the area of company law and allied matters. The Companies and Allied Matters Decree No.1 of 1990 was enacted to replace the Companies Act of 1968. It was later amended and consolidated as part of the laws of the Federation of Nigeria, 1990. This new Act emphasized the importance and addressed the unique role of companies in the building of a modern economy. The Act also prohibited the politicization of companies and their use as agents for embezzlement by making them unable to donate to political parties. The Corporate Affairs Commission (CAC) was established and vested with the duty to manage company affairs and register new ones. This was intended to reduce fraud and inefficiency associated with the former practice.
Mass communication
The mass Communication policy of the Babangida Administration was founded on the free and unhindered flow of information. To this end, the prospect of press freedom was encouraged. Upon his coming to power in 1985, Decree No.4 was repealed. The administration inaugurated the Press Council to adjudicate on the moral and professional conduct of journalists, the aim being to raise the quality of journalism in Nigeria.
Perhaps the greatest achievement of the administration was the opening up of the electronic media to the private sector. On June 10, 1993, General Babangida presented licenses to private television and cable/satellite retransmission owners. On the repeal of Decree 4 in 1985, General Babangida said that “our conviction on press freedom remains as strong today as it was then.” The President said further that “Our print media have since then enjoyed all the freedom that is in consonance with a democratic environment in a developing country.” He added that the “administration has continued to accommodate so many criticisms with so much tolerance.”
To monitor and regulate the electronics media industry, the National Broadcasting Commission (NBC) was set up. The NBC must ensure that the licenses are used to promote national interest and unity.
Sports
The eight years of Babangida’s administration witnessed tremendous development in sports. Nigeria took part in all international competitions. Sports were adequately funded, and infrastructures significantly improved. Training facilities were provided or upgraded. Coaches and sportsmen received incentives to boost their performance. Nigeria was given the privilege to host the Under-20 World Cup Championship in 1995. In this regard, the Presidential Monitoring Committee was set up to see to the readiness of Nigeria to host the Championship.
Women Commission
Unlike what obtained in Nigeria before the Babangida era and what obtains in many other countries of the World today, where women are relegated to the background and completely disregarded, the Babangida administration devoted satisfactory attention to issues affecting women and their development. Credit went to the Better Life for Rural Women, a programme initiated by Mrs. Maryam Babangida. The Better Life programme really uplifted the status of women and made many of them realize their full potential. The developmental activities of the Bettor Life programme were reinforced with the establishment of the Commission for Women.
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