By Rekpene Bassey
Not long after the overthrow of the Buhari-Idiagbon regime in 1985, the succeeding administration headed by Gen Ibrahim Badamasi Babangida retd) encountered a turbulent economic storm.
The intensity of this storm reverberated across the country, plunging Nigeria into a deep depression. The national debate focused on whether to adopt the Structural Adjustment Program (SAP), a controversial economic reform initiative.
At the heart of the debate was SAP, a program endorsed by the Bretton Woods institutions—the International Monetary Fund (IMF) and the World Bank. SAP’s core tenets emphasized fiscal restraint, free-market reforms, austerity measures, currency devaluation, subsidy removal, public sector downsizing, and reduction in budget deficits. Additionally, SAP advocated for the privatization and deregulation of state-owned enterprises, setting preconditions for securing loans from these international financial institutions.
While the ordinary Nigerian remained largely mute and aloof, a handful of elite SAP proponents, including notable personalities like Gamaliel Onosode, Christopher Kolade, and Earnest Shonekan, eventually won the debate. This was not unexpected, as these men were closely aligned with the Bretton Woods institutions and worked in concert with the military government to implement SAP.
Despite this, the military administration showed some sensitivity to the socio-economic realities of the time. They allowed for certain concessions, such as not floating the Naira and not unilaterally removing petroleum subsidies.
Fast-forward to contemporary times. President Bola Ahmed Tinubu, without a thorough examination and consideration of the socio-economic implications, has dived headlong into adopting similar policies promoted by the Bretton Woods institutions. This decision, lacking in-depth socio-economic diligence, has resulted in severe economic hardship for Nigerian citizens.
Since assuming office, President Tinubu has obtained loans totaling approximately $1.9 billion from the World Bank in less than 16 months. These loans, ostensibly aimed at funding projects like adolescent girls’ education, women empowerment, and power infrastructure, have yet to show tangible benefits. The opacity surrounding the utilization of these funds raises questions about their effectiveness and the true intentions behind these economic reforms.
The policies adopted by President Tinubu’s administration have imposed severe and unbearable hardships on the Nigerian populace. The sudden removal of fuel subsidies, currency devaluation, and other austerity measures have led to skyrocketing prices of essential goods and services. This has exacerbated the economic plight of ordinary Nigerians, pushing many further into poverty.
One of the most glaring impacts of these policies is the significant increase in the cost of living. Transportation costs have surged due to the removal of fuel subsidies, leading to higher prices for goods and services. The devaluation of the Naira has further eroded purchasing power, making imported goods prohibitively expensive and contributing to inflation.
Moreover, the downsizing of public sector employment, a key tenet of SAP, has resulted in widespread job losses. The reduction in public sector jobs has increased unemployment rates, leaving many families without a stable source of income. This has had a ripple effect on the economy, as reduced consumer spending has led to lower business revenues and further job cuts in the private sector.
Another SAP-inspired policy, the privatization and deregulation of state-owned enterprises, has also faced significant challenges. While intended to improve efficiency and attract investment, these measures have often led to job losses and higher service prices. The privatization process has been marred by allegations of corruption and cronyism, with assets sold at undervalued prices to politically connected individuals and entities.
The socio-economic impact of these policies has prompted widespread protests and social unrest. Nigerians from all walks of life have taken to the streets to express their frustration and demand better governance. The government’s response to these protests has often been heavy-handed, further alienating the populace and eroding trust in public institutions.
The question arises whether there are better ways to manage these policies to lessen their debilitating burden on the people. Can the Bretton Woods institutions hold leaders accountable for bad governance and corrupt practices that make these policies counterproductive? The lack of transparency and accountability in implementing these reforms raises severe concerns about their long-term viability and effectiveness.
It is crucial to explore alternative policy approaches to achieve economic stability without inflicting undue hardship on the population. Social safety nets and targeted subsidies could help cushion the impact of austerity measures on vulnerable groups. Investing in education, healthcare, and infrastructure can create jobs and stimulate economic growth.
Furthermore, strengthening governance and anti-corruption measures is essential to ensure economic reforms benefit the broader population. Transparent and accountable institutions can help build public trust and ensure that resources are used effectively to address the country’s developmental challenges.
In conclusion, President Tinubu’s administration’s policies have resulted in significant economic hardship for Nigerians. While the goals of fiscal restraint and economic reform are important, the approach taken has been detrimental to the well-being of ordinary citizens. It is imperative to reconsider these policies and explore more inclusive and sustainable alternatives that prioritize the people’s needs.
*Rekpene Bassey is the President of the African Council on Narcotics (ACON). He is also a Security and Drug Prevention Expert.
