Dedicated to Nigeria's socio-political issues
October 3, 2007 - December 2, 2007
STATE AND CIVIL SOCIETY IN NIGERIA IN THE ERA OF STRUCTURAL ADJUSTMENT PROGRAM, 1986-93
Mojubaolu Olufunke Okome
culled from West Africa Review
1 I have a dream of a nation where no man is oppressed. An egalitarian society. That is what we are working towards. We desire a nation, a true federal state where all the nationalities will have equal access to political power. Where justice, equity and the rule of law operate. We want to leave a good legacy for our children like you said, I am old. There is nothing again I am looking for. But our children and children's children must not be slaves in their father's land.
Senator Abraham Adesanya
The focus of this paper is on state-society relationship in a situation of flux, where there are fundamental questions regarding the nature of the state, and the type of state that will best serve a country whose goal is economic and political development. It is also a situation where the state is stuck deep in the morass of economic and political crisis, creating even more urgency to fashioning answers to these questions.
Within society, there are organizations that challenge the state and critique its responses to political and economic problems, organizations that push for further opening of the political sphere. They are not political parties, but associations whose social and economic agenda compel them to make claims on the state. Specifically, the paper explores the dynamics of the decision by the Federal Military government of Nigeria to adopt and implement an orthodox policy of economic reform - the Structural Adjustment Program, (SAP) on the advice of the IMF and World Bank, and against the wishes of the majority of Nigerian people.
The situation surrounding the decision can, and has been characterized as an instance of state- civil society struggle during which the government utilized a variety of strategies, including discussion, negotiation, compensation, amelioration, co-optation, coercion and repression. These strategies were pursued sometimes sequentially, and at other times, simultaneously. However, due to overwhelming public antipathy to the SAP, its implementation did not always follow a direct path, or keep to the original schedules agreed upon with the multilaterals and Nigeria's creditors. The government's inability to maintain a strict enough agenda in its implementation of the SAP in turn elicited negative and punitive responses from the IMF, World Bank and creditor clubs' coalition. The punitive measures taken served to aggravate the already explosive political situation within Nigeria.
Nigeria during the period from 1986 to 1993 provides an interesting case study of the dialectical process in which contesting social, political and economic forces shaped the implementation of SAP. In consequence, the domestic political economy underwent radical transformation. The question of state sovereignty is central to discussions of policymaking and implementation, thus, the paper will assess the extent of the power of the Nigerian state over society. It will also evaluate state power in relation to external actors. In the main, the major external actors include the Paris Club, the London Club, and the multilateral organizations. The perceived weakness of the African state has generated immense contestation on the relationship between state and civil society. While some consider this an inherently conflictual relationship, others see the possibility for a relationship that “may be congruent as well as conflictual” [Bratton, 418] A serious examination of the Nigerian situation reveals the resistance of a trans-class coalition of social forces united against economic and political marginalization. 2
The interaction between state and civil society that I examine occurs in an environment where by and large, the theoretical explorations into the nature of the state in Africa tell us that there are strong societies, and weak states. Overlaying this environment is what is often characterized the “Washington consensus” which contends that it is imperative that African countries become further incorporated into the world system. This imperative generates the utilization of programs of structural adjustment as the only viable option for economies in distress. Nigeria is heavily indebted. Its political economy has for the past sixteen years been defined by the burden of a huge external debt and:
My major points are: the phenomenon observed in the period between 1983 and 1993 was an instance of a relationship between state and civil society in a period of deep economic and political crises where the possibility of both democracy and economic development were challenged and deeply contested. The grounds of contention were the following:
Was this an instance of state - civil society struggle? This is a crucial methodological question because scholarly discourses on Africa have been rightly critiqued by Mahmood Mamdani as tending toward the programmatic and ideological as opposed to historical analysis. To claim that civil society exists as a fully-formed construct in Africa as in Europe amounts to claiming that the driving force in democratization is universally a struggle between civil society and the state. That scholarly interest in the study of civil society has increased since the Eastern European Resistance movements of the late 1980s was assumed to indicate a shift from “bringing the state back in” to what Michael
Bratton describes as “taking the state back out.” The latter, an imperative pursued vigorously by groups undertaking what Mamdani describes as an “unarmed civil struggle that seeks to create a self-limiting power” as the new model of the relationship between state and society, entailed ignoring the occurrence of a prior shift in the same direction in South Africa at least a full decade earlier (Durban, 1973, Soweto, 1976).
For a claim that state and civil society either collide or relate in other ways in Africa to be valuable and valid, historical analysis is needed, instead of seeking analogies between African phenomena and those in the dim or recent past of Europe. This is not an argument that civil society cannot possibly exist in Africa, but that it may not parallel its Western counterpart in its behavior and priorities.
There is ample evidence of the long-term existence of associational groups in Nigeria. There has also been a record of the vibrancy of such groups under situations of extreme repression and oppression, beginning from the colonial era, and continuing until the very recent past. Some would argue that the spectre of repression still lurks visibly in the Nigerian body politic. During the period considered by this study, the Shagari, Buhari/Idiagbon, and Babangida regimes displayed high levels of authoritarianism. Regardless, associational groups not only existed, they thrived. Additionally, while the opening up of the political arena leads to even more efflorescence of associational groups, a narrower political arena does not necessarily lead to the groups' disappearance. Instead, they may choose to pursue their goals through different strategies – a strategy that could lead to such associations becoming either less or more politicized.
Nigeria's associational groupings have their roots in pre-colonial organizations that were brought into the colonial cities and mining centers by rural migrants -ethnic mutual support/hometown associations, burial societies, informal savings clubs, dance groups, trade associations/guilds - to promote and defend the interests of their members. Some of these formed the nuclei of the political associations that provided the vehicle for nationalist anti-colonial agitation, others continued to serve and protect the myriad interests of their members in other ways. Mamdani tells us that one avenue to genuine democracy lies in recognizing the liberatory possibilities of the rural in the urban, and the concomitant possibilities of the urban in the rural generating democratic change.
Thus, particularistic groups can engender democracy when they bring the knowledge and strategies that are gleaned from sojourn in urban areas to rural areas. New forms of knowledge can also be introduced when those who originate from, and intermittently reside in the rural areas come to work or reside in urban areas. When there are divisions that forestall the development of a united front between the disenfranchised rural and urban populations, democratization is stymied. Ultimately, only a combination of the rural and urban will democratize African countries.
The untold story of state-civil society relations in Nigeria and most of Africa is that civil society is a restricted arena, a playing field for the privileged few. It was the same in the colonial era, it remains the same today. As expressed so concisely by Mahmood Mamdani, there is a divide between citizens and subjects in Africa that was constructed during the continent's colonization, and which remains unchanging. Thus, one can say that the civil society of which I speak is not all inclusive. It is also not necessarily internally democratic. For civil society to become meaningful as a bearer of change, those Africans who have been incorporated into the arena of state power as subjects must first become citizens. The larger implication of this is that the centralized despotism of the state as constructed during colonization must be dismantled. While then, the numerous groups, some of whom I consider here, fought valiantly against the despotic power of the state, the struggle for democracy remained limited since the organization of power remains the same. The struggle between state and society is best observed in the process of implementing the structural adjustment program.
Implementing SAP: Tactics Utilized by the Nigerian Government
The process of the implementation of the IMF conditionalities can be traced through the methods deployed by the three successive administrations which were involved up to 1993. These were the civilian administration of President Alhaji Shehu Shagari (September 1979 - December 1983), and the military regimes of General Muhammadu Buhari (December 1983 - August 1985), and General Ibrahim Babangida (August 1985 - August 1993). There was a significant difference in approach in that both Shagari and
Buhari, while attempting to incorporate the IMF framework in their economic policies, refrained from implementing the crucial conditionalities:- namely devaluation, subsidy removal, trade liberalization and privatization. On the other hand, the Babangida administration made the implementation of these conditionalities, its raison d'etre. A comparison of their respective attitudes to conditionalities such as trade liberalization and privatization, for example, illustrates this observation.
State Attitude Toward the Problematic Conditionalities: A Comparison
1. Trade Liberalization
Through the Economic Stabilization Act of 1982, which accepted the principle that economic recovery should be promoted through austerity programs, the Shagari administration put restrictions on imports, recalled all unused import licenses for review and required compulsory advance deposits of 50 to 250 percent on various imports. The Buhari regime extended these policies, placing all imports under license, in the belief that import controls together with aggressive local sourcing of raw materials, were vital to the recovery of the manufacturing sector. Thus, in 1984, only 20 items were exempted from payments of import duties, and industries were allowed to import only essential raw materials and spare parts.
The Babangida regime proclaimed its faith in the efficacy of the free market and phased out import licensing. In October, 1985, the Minister of Finance dismissed manufacturers' fears that foreign goods would be dumped on the Nigerian market with the explanation that tariffs would be adequate protection for locally manufactured goods. He also expected domestic productivity to be enhanced by devaluation, which would make imports more expensive and force people to both produce and buy locally. It was also government policy to give incentives such as the credit and capital that domestic producers require to improve their production profile. In September 1986, duties on all finished and manufactured goods were reduced. The 1987 budget reduced the number of formerly banned goods and those requiring licenses. There was also a downward adjustment on import tariffs, a reduction on advance payment of import duty to 25% until full receipt of the goods, the abolition of import duties on raw materials and components for manufactured goods that were slated for export, and various incentives directed at attracting foreign investment.
In 1981, before the Shagari administration approached the IMF for balance of payments support, it appointed a Presidential Commission to review 34 major parastatals and recommend necessary reforms. In its report of October 1981, the Commission recommended increased participation by the private sector in non-strategic parastatals and the injection of financial discipline and managerial accountability in these parastatals. However, the administration's efforts were limited to an announcement that it would forgo its ownership in some parastatals to private interests in principle. Nothing more concrete was done before the Buhari coup.
On its part, the Buhari regime appointed the Ali Al-Hakim Study Group on Statutory Corporations to deliberate on the issue of privatization and suggest suitable policy options. The study group recommended the privatization of some enterprises and the commercialization of others. The regime itself decided to commercialize rather than privatize. The Babangida regime on the other hand, repeatedly expressed its commitment to privatization and commercialization. It set up the Technical Committee on Privatization and Commercialization (TCPC) to facilitate the achievement of this goal. It also created the Industrial Development Coordination Committee (IDCC), to expedite the application process for foreign investors. Towards this end, amendments were made to the Nigerian Enterprises Promotion Decree (NEPD) of 1972 and its 1977 amendment. Thus, by 1989, foreigners were allowed to own 100 percent of manufacturing companies instead of 40 percent as formerly permitted by the NEPD. They were also allowed to invest in areas previously reserved for indigenes, including small-scale manufacturing, the commercial and service sectors.
In his 1986 budget speech, the Minister of Finance, Kalu Idika Kalu, announced a policy of “gradual and deliberate” divestment of government holdings in all non-strategic industries. Government subsidies to parastatals were reduced by 50 percent, while the dissolution and privatization of seven agro-allied parastatals which had been initiated by Buhari, was completed. Commodity boards which had overseen the production and distribution of agricultural produce and other commodities were abolished along with the Nigerian National Supply Company (NNSC), which had procured and distributed consumer goods. State governments were given more responsibility for implementing agricultural policy, while the number of River Basin and Rural Development Authorities which had been doubled by Buhari were reduced from 18 back to nine. The divestment of government interests in holdings such as hotels and brewing companies began in 1987, with the shares being sold through a private issuing house based in Lagos. On 5th July, Decree number 25 on Privatization and Commercialization was promulgated.
Contesting Views - A Bourgeoisie Divided
Before and since the inception of SAP, a multiplicity of contesting social forces and economic classes have continuously expressed vociferous opinions about it. Since the private sector was deemed to be a primary beneficiary from the downsizing of the state and fostering of a spirit of entrepreneurship, it is significant that it was also the source of some of the most widely differing views. Many leaders of economic thought subscribed to monetarist ideas which present the market system as the most rational means of resource allocation. However, being heavily import dependent, the bulk of the private sector, particularly the manufacturing businesses, ended up being negatively affected by SAP. This led to an intra-class debate which is reflective of a split between the comprador bourgeoisie who aligned themselves with foreign capital interests, and the nationalist bourgeoisie which attempted to create a domestic base that would enable them compete effectively against foreign capital.
Initially, some manufacturers applauded the SAP measures. These included members of the Manufacturers' Association of Nigeria (MAN), the Nigerian Association of Chambers of Commerce, Industries, Mines and Agriculture (NACCIMA), directors of the Nigerian Stock Exchange and chief executives of major banks. In general they agreed that was a mechanism through which multiple problems could be solved. They felt that pervasive government interference with the free operation of the market and the concomitant drain on government resources, could be put to an end, along with inefficiency, low productivity, unprofitability, unemployment and corruption. Some indeed called for the repeal of the NEPD on the grounds that the laws designed to promote indigenization were hostile to foreign investors and damaging to the Nigerian economy.
Opposing views came from members of the Nigerian Association of Small Industries (NASI). They feared that privatization would jeopardize easy and affordable access to raw materials, and that only speculators and large industries could thrive. Similarly, some elements within the state apparatus, such as the Senior Staff Association of Statutory Corporations and Government Owned Companies (SSASCGOC), found no merit in the argument that the private sector was more efficient than public enterprises, pointing out that the private sector was itself sustained by heavy government subsidies.
With regard to the petroleum subsidy, the overriding concern of MAN was that the removal had the potential to cause an inflationary spiral, retard the recovery of the agricultural sector, and accelerate the collapse of public transportation. It also considered that subsidy removal would prove dangerous when combined with strict wage controls and deregulation of prices. Chief executives in the insurance industry stressed the advantages of a subsidy which kept local production costs and inflation rates low. Many manufacturers also considered that trade liberalization would make them vulnerable to unfair competition from cheaper imports of finished goods, and characterized the September 1986 interim tariff structure as traders' tariffs that encouraged the dumping of consumer goods on Nigeria. Indeed, Decree number 32 of December 15, 1986, confirmed their fears, as it rendered local manufacturers and assembly plants defenseless against imports.
The devaluation of the naira caused considerable erosion in the living standards of the majority of Nigerians. Workers were hit by underemployment, unemployment and mass retrenchment. Wages were grossly insufficient to meet basic needs and people embarked on a multitude of livelihood survival strategies. The informal sector bloomed. However the initial blossoming of the sector became increasingly less profitable because of the sheer numbers of people involved.
The drastic reduction in consumer purchasing power meant that manufacturers were burdened by huge inventories of unsold goods. This was compounded by the fact that they were already operating at reduced capacity of an average of 20 to 25 percent. The devaluation of the naira neither generated the expected increase in foreign investment nor a stable exchange rate. Instead, for manufacturers, devaluation and the reduction of the petroleum subsidy reduced their production and customer base. Capital market speculation became prevalent. Small-scale industries were particularly affected by an increasing wave of mergers, closures and collapse. MAN attributed these difficulties to the shortage of foreign exchange, high interest rates and chronic depreciation of the naira. Even though the finance sector was one of the primary beneficiaries of SAP, the sector's profits were sharply curtailed by the low value of the naira vis-a-vis “hard currency” like the dollar and pound sterling. In 1989, some foreign banks either reduced their commitments in Nigeria, or pulled out altogether due to the reduced profitability of their operations.
The naira cost of imported inputs continued to rise astronomically, while that of locally made imports also increased drastically with the slide of the naira in the foreign exchange market. The deregulation of interest rates made the cost of borrowing higher than many manufacturers could afford. The regime of liquidity and credit squeeze also worsened the cash-flow problems of manufacturers. With all these developments, opposition to SAP steadily mounted within the manufacturing class.
The Sruggle to Remove the Petroleum Subsidy
The IMF conditionality was that the petroleum subsidy should be removed either in one single step or over a three year period. As with the other conditionalities, the Babangida regime was more thoroughgoing than its predecessors in its attempt to eliminate the subsidy on petrol. Babangida's regime maintained that the removal would balance the budget, encourage efficient utilization of a wasting resource, and curtail the smuggling and bunkering of petroleum products. It also said that funds released by the removal would be used to develop a mass transit system, create jobs and improve its fiscal balance. In his 1986 budget speech, the President announced an increase in the price of petroleum products.
While the implementation of SAP policies encountered general resistance, the reduction of the petroleum subsidy was the most explosive. As a result, one of the broadest coalitions of inter-class, sectional and group alliances known in modern Nigerian politics was forged. This coalition persistently arrayed itself against the government over this and ensuing issues. The confrontations were vociferous, bloody and unrelenting. Hence, it serves to illustrate the degree to which the public took an uncompromising stance vis-a-vis government policy.
The Nigerian Labour Congress (NLC), objected to the reduction of the subsidy, which it criticized as feeding an inflationary spiral and contributing to the immiseration of workers by reducing their purchasing power and increasing the level of hardship that they experienced with transportation. Workers demanded an upward review of wages in line with inflation if the government was hell-bent on subsidy removal. Another secondary perspective was one which categorically rejected an IMF loan and petroleum subsidy for regional reasons. For some, the removal of petroleum subsidies was unacceptable because it would make petroleum products more expensive and drive up all prices, particularly in the North.
In contrast, NACCIMA took the position that low petroleum prices were not justifiable, given Nigeria's predicament. The association suggested that in order to combat smuggling and augment government revenue, a phasing out of the subsidies should take place over a period of approximately two years, with subsidies maintained on fuel used by commercial vehicles and for household consumption. It felt that prices should be reviewed regularly to reflect changing market prices. As indicated earlier, MAN recommended a selective removal of the petroleum subsidy, because of its potential to exacerbate inflation.
In his budget speech, President Babangida noted that the devaluation of the naira had made the price of petroleum products cheaper, leading to increased smuggling to other West African states. He warned that if surveillance and preventive measures did not work, his administration would “not hesitate to introduce the necessary corrective through price adjustment”.
Later that year, following further decline in the value of the naira, an attempt was made to reduce the petroleum subsidy. In November and December, the regime sponsored a media campaign to promote an increase in the price of petroleum products. This move met with widespread opposition from the Nigerian public. The NLC, the Academic Staff Union of Nigerian Universities (ASUU), and the National Association of Nigerian Students (NANS), jointly opposed the government's plan to phase out the subsidy by successfully presenting convincing reasons why the subsidy should not be eliminated. The NLC in particular, embarked on its own media crusade to argue against subsidy removal, and organized demonstrations in protest.
The Inspector-General of Police announced in a broadcast to the nation that all demonstrations, strikes and public processions were banned forthwith. Among those arrested in connection with these demonstrations were journalists, university lecturers, students, union leaders and militants. They were detained and the state threatened to bring charges of sedition against them for an unreasonable and selfish desire to foment crisis and public discontent against the government. These detainees were later released because the overwhelming force of public opinion was in their favor.
Consequently, the 1988 budget made no mention of increases in the price of petroleum products. Workers celebrated their victory openly. The Babangida regime decided to pave the way for a future problem-free increase, by taking three steps. First, it announced that petroleum products “would continue to attract a reasonable level of government subsidy”. Second, it allocated N 700 million ($ 168.7 million) to be spent on improving public transportation and that part of the money would be spent on buying locally assembled vehicles in order to provide employment. A task force on mass transportation was also established under the office of the Chief of General staff to speed up the implementation of the program. Thirdly, in February, 1988, under the pretext of uniting the moderate and radical factions of the NLC, the regime suspended the union leaders, and appointed a Sole Administrator to handle its affairs.
The regime then attempted to deflect the expected negative reactions to increases by delegating the responsibility for announcing the increase to the Nigeria National Petroleum Corporation (NNPC), which announced a modest increase in the prices of petroleum products on 10 April, 1988. This led to widespread demonstrations by students, bank employees, air traffic controllers, hospital workers, tanker drivers, teachers and traders, which paralyzed the nation. Students were penalized for their role when 31 educational institutions were ordered to be closed, some until 1990. Student unions were banned, their leaders detained and arraigned before the miscellaneous Decree Tribunal, which could pass sentences of up to 21 years. This generated more protests and boycotts of lectures by students. The government also attempted to infiltrate the student movement and supplant NANS with its own organization, albeit unsuccessfully.
Although the NLC was proscribed, workers were able to organize nationwide strikes through local Action Committees. An attempt was made by the labor movement to persuade the lower levels of the armed forces to join the protests. The leaders of the Action Committees were arrested and the regime conducted a program of intimidation against workers. Many were threatened with dismissal and imprisonment for sabotaging state policy. The regime also maintained that the workers' actions constituted a selfish outburst of an urban elite which was not supported by the rural majority. The continuation of strikes and popular unrest however, eventually forced the government to negotiate with workers. A memorandum of agreement was signed jointly by the Federal Government and trade unions on October 4, 1988, in which the union leadership agreed to call off the strikes in return for concessions on SAP as well as on space for student and trade union activism from the government. Finally, the reduction of the petroleum subsidy was scrapped by the regime for the time being.
The matter of the petroleum subsidy was however, far from settled. A plethora of student protests broke out again, beginning on May 24, 1989, when students organized demonstrations against various SAP policies, including the removal of the petroleum subsidy, after the expiration of a six-week ultimatum that was issued by NANS to the government in November 1988. There were bloody confrontations between the police and protesting students. The Armed Forces Ruling Council (AFRC)'s policies were challenged on several fronts. The NANS ultimatum had been accompanied by a 10-point demand for the amelioration of what the students termed the “pains of SAP”. NANS reiterated these demands when it issued a 24- hour ultimatum after considerable loss of lives, as the military had been ordered to shoot demonstrators on sight. As with the earlier ultimatum, this was ignored. The protests became even bloodier and educational institutions at all levels were closed down throughout the country. The government ridiculed students for being mere tools in the hands of unscrupulous “Nigerians who felt the transition to civil rule could not go on without them”.
The selective re-opening of universities on July 3, 1989 led to boycott of classes by university students, student nurses, secondary and primary school pupils. At the Lagos High Court, an undergraduate student at the University of Lagos, Olusola Dairo, brought a lawsuit against the government, based on the argument that SAP was a violation of students' fundamental human rights. The selective closure policy was reversed, although NANS leaders were arrested and detained under Decree no. 2.
The evidence of the existence of a trans-class coalition emerges when one considers that support for the students came from diverse sources. These included other organizations, such as the Committee for the Defence of Human Rights; the Civil Liberty Organization; the NLC; the Nigerian Political Science Association; the Christian Association of Nigeria; the Ondo State Congress of Farmers; the Nigerian Bar Association; groups of university lecturers; traders and respondents to public opinion surveys. Many social critics, including Wole Soyinka and Tai Solarin and many other individuals also spoke out in support of the students. This coalition was however, unable to mobilize and execute consistent opposition to government policies in the face of the regime's open repression. Eventually the government increased petrol prices in 1989 through a two- tier price structure which enabled commercial motorists to pay less, and later introduced a voucher system through which commercial vehicles were given discounts. In addition, a number of “SAP relief” measures were announced to smooth the way for the removal of the subsidy.
The Student Union Activities (Control and Regulation) Decree no. 47 was promulgated in 1989, which made national student unions illegal, and the unions in individual universities subject to proscription if found to act contrary to national interest, security, public safety, morality and health. Violators of the decree were subject to prosecution by the Special Miscellaneous Offences Tribunal, and could be imprisoned for a five-year term, and or fined N 500,000 if found guilty.
Due to the difficulties in obtaining its fifth stand-by arrangement with the IMF, which insisted on the complete removal of petroleum subsidies, a further increase in the prices of petroleum products was sought by the regime in late 1992. Knowing from experience that this would be an explosive issue, it engaged in another media blitz and wide-spread campaigns. These required NNPC officials to travel extensively within the country and outside to Nigerian communities abroad, to present the correct pricing of petroleum as the rationale for the proposed price increases. The low price of petroleum products was identified as the main cause of the proliferation of smuggling and bunkering, and the government's loss of substantial revenue. Most Nigerians however, continued to reject the proposed increase.
Babangida made one last ditch attempt to remove the subsidy on petroleum, by passing a decree increasing prices, on virtually his final day of office, leaving the responsibility of implementation to the Interim National Government that he had foisted on the people. The seven- fold price increase only served to intensify tensions already kindled by the subversion of the June 12 Presidential elections by the Babangida regime. Nationwide strikes were organized to protest both the election cancellation and the price increases, leading to economic paralysis throughout Nigeria. This contributed in no small measure to the fall of the Interim government, as the Abacha- led military used the crisis as an opportunity to insert itself as the new solution. A compromise which involved some reduction of the new price was finally reached after lengthy negotiations between the government and several unions.
The IMF/WORLD BANK Stance
As recounted above, because of the challenges faced, the Babangida regime had to make some strategic retreats and tactical reroutings in the implementation of specific conditionalities. However, neither the World Bank nor the IMF was satisfied with the pace of SAP implementation. Consequently, they utilized carrot and stick tactics to push the regime to keep to the original schedules. For example, due to demands from social forces, the regime was constrained to increase government spending by 37 percent in the 1988 budget. These funds were to provide SAP relief measures, which included meal subsidies for civil servants; the provision of mass transportation; the creation of the National Directorate of Employment (NDE), and the Open Apprenticeship Program. The budget projected that $ 3,395 million would be allocated to the foreign exchange market, with $ 50 million a fortnight reserved for the public sector and $100 million a fortnight for the private sector.
The multilaterals and Nigeria's external creditors considered the reflationary tendencies of the 1988 budget a departure from their expectations. The World Bank opposed the Babangida regime's spending on development projects, particularly the Ajaokuta steel plant. Consequently, the Bank withheld a $500 million trade and investment policy loan, which was to have been a source of funding for the foreign exchange market. As was the case with the oil subsidy removal, pressure from the World Bank and IMF forced the government to use extreme measures to impose the conditionalities on the people.
In 1990 the World Bank's evaluation of SAP in Nigeria read in part as follows:
“Significant progress has been made ... though there is still a long way to go. The real exchange rate has undergone substantial depreciation and has been maintained at the depreciated level over a three year period. Import licensing has been abolished. Freedom in pricing and marketing arrangements for agricultural produce has led to a revival of non-oil exports. A start has been made in privatizing and commercializing public enterprises. The public expenditure program, now much smaller than in the early 1980s, has been rationalized... Clear cut policy statements and/ or action programs have been adopted for a large number of sectors, including agriculture, industry, population, health, education and the environment.”
The foregoing statement implies that by August 1993, SAP had been successfully implemented in Nigeria, thereby suggesting that the state does indeed have dominant power of the people. It also suggests that the hegemonic project by the creditors and multilaterals was successful. However, more careful examination of the Nigerian situation reveals a different scenario. It is noteworthy, for instance, that the removal of the petroleum subsidy which was supposed to have been completed within three years was still being tackled unsuccessfully a full decade later. In addition, the difficulty with which the government imposed SAP also suggests that the people not only have a will of their own, but that they do have some power in exerting it.
Nevertheless, some semblance of SAP was implemented in Nigeria. The implementation of the SAP had the following results - it was damaging to state sovereignty, social cohesiveness, and the material well-being of the majority of Nigerians. State sovereignty was eroded due to four factors. First was its loss of autonomy in policymaking and the domination of external forces over the process of determining state goals and objectives. Second was the active involvement of technocrats from both the World Bank and IMF in the policy implementation process in both monitoring and keeping the Babangida regime faithful to the spirit and letter of SAP. Third was the subordination of the domestic social contract to the payment and servicing of external debts; and fourth, was the lack of a consciously and independently determined and articulated national interest.
Social cohesiveness was eroded because several social problems intensified and proliferated in the era of SAP. These included religious and ethnic conflicts that arose out of the struggle for scarce resources; increase in crime, including armed robbery and drug trafficking, which became the new avenue to instant prosperity; declined standards of living and increased polarization of society into the few wealthy, the shrinking numbers of the middle classes and rapidly increasing ranks of the impoverished. Social services were eroded to the point of non- existence. In consequence, many diseases which had been under control in the pre-SAP period wreaked havoc on society. Secondly, the educational system was besieged by problems arising from lack of funding and the after-effects of the struggle by students and the intelligentsia against the state for an improved educational system. Demonstrations and strikes were frequent and the tertiary institutions in consequence, were closed more often than they were open.
Both the economic crisis that preceded it, and the solution endorsed by the World Bank and IMF, the SAP did considerable violence to the social fabric in Nigeria. The standard and quality of life of the majority of Nigerians deteriorated with the fall in the value of the naira. Contrary to projections that SAP would benefit rural dwellers, the devaluation of the naira increased the prices they had to pay for goods and services, thus whittling any increase in the income of even commodity farmers. The speculative activities of merchants who used commodity exports as a means of facilitating capital flight, initially drove up the prices of some agricultural exports such as cocoa, but by 1989, the cocoa market slumped, causing the incomes of cocoa farmers to diminish precipitously. Many committed suicide. The consumption of food, health and social services declined due to the inability of the majority of Nigerians to afford these necessities. The level of social volatility was such that frequent mass demonstrations were sparked off to protest SAP policies. Many lives were lost due to the state's indiscriminate use of force against these protesters.
Discussions of policymaking and implementation under conditions of economic crisis abound, but scholars often assume that actors in economic policymaking and implementation are, or that they ought to be rational maximizers. Otherwise, it is assumed that state inability to either make or implement policies is due to rent- seeking behavior. These assumptions lead to conclusions which obfuscate more than they clarify. When powerful groups within an indebted country resist the implementation of SAP in debates over economic policy, their action is also often dismissed as irrational or rent-seeking behavior. It is more fruitful to consider these instances as episodes in the writing of a constantly evolving transition to democracy. Civil society during these periods, either challenges and confronts a still authoritarian state, or it becomes a pawn in the power game of ensuring a managed transition where voting does not amount to choosing, and the limited openings into the political arena is policed by a state that justifies its actions by claiming the importance of political order and economic survival.
The dynamic interplay of economic, political and social forces continues up to the present (April 1999) under the military regime of General Abdulsalami Abubakar. As living conditions continue to plunge down into hitherto unimagined depths and smoldering domestic resentment is held in check by the expectation that the ushering in of a new elected government may bring a combination of political and economic stability, autonomous associations thrive some of which oppose the government's political transition as not genuinely democratic, while the balance engage the government in discussions that will yield benefits to their membership.
The attempts by the multilateral/creditor coalition to impose their hegemonic agenda on the Nigerian state cannot be described as an unqualified success. Nigeria has still not become as integrated into the world economy as the multilaterals would wish. It is also clear that the Nigerian state has not successfully established its hegemony over the groups in civil society which take an oppositional stance toward it. While it is certain that the impact of SAP will be felt in Nigeria's history for a long time to come, it also seems certain that there will be a diffusion of opposition to the government's economic policies at the inaugural stage of governance by a democratically elected government. If the economy does not improve appreciably, the groups in civil society that will challenge the state are already in existence.
This paper began with an excerpt from an interview of Senator Abraham Adesanya, who was asked by a journalist: “What is your vision of Nigeria in the next millennium?” The senator's reply that he dreams of a Nigeria where no one is oppressed, a country that is egalitarian, where all peoples can freely exercise the right to self-determination, where there is fairness, impartiality and the rule of law, where the legacy that the present generations leave for future Nigerians is that of freedom and equality in all respects. The claims that are being made by the organized civil society in Nigeria are essentially reflected in this statement. The demand that people participate in the making of decisions that will impact not only on them, and on their well-being, and also negatively impact on their material interests is not a frivolous demand. It is a claim by people against the state that question what the appropriate role of the state ought to be in the realization of economic and political development. It is a claim that remains relevant today as Nigeria seems to be on the verge of concluding its latest foray into political transitional politics. The economy is relevant, and so is politics.
However, in the dialectics between economics and politics, to decide to sacrifice people at the altar of a “fine” program of economic recovery is to allow the social fabric to be torn apart. Nigeria is still in the throes of the crisis that was set in motion as a result of the decision to experiment with policies that were devised for other economies in other lands. Having a strong civil society is a necessary bulwark against the misuse of state power. In this respect, both state and civil society in Nigeria are works in progress.
The IMF's prescription to indebted states is that they stabilize their economies by fulfilling conditionalities such as adopting policies of fiscal and budgetary austerity; exchange rate devaluation; “getting the prices right”, stimulating investment instead of consumption; cuts in real wages; cuts in public expenditure; prioritizing external debt
service; currency devaluation; high real interest rates; and import liberalization. Indebted states are required to comply with these guidelines in return for balance of payments assistance. The World Bank, and creditor clubs also collaborate with the IMF and jointly insist on the fulfilment of conditionalities and the receipt of an IMF seal of approval before concluding any meaningful agreements. The Nigerian government was no exception. In large part, there was willingness on the part of Nigeria to fulfil majority of the conditionalities required by the World Bank and IMF, however, the state became involved in deadlocked negotiations with the multilaterals for three years over its refusal to comply with some key conditionalities, which are summarized in brief in the following section.
Removal of the Petroleum Subsidy
The state was required to stop its subsidies on petroleum products. The rationale offered was that the provision of this and other subsidies was one way in which the state interfered with the free operation of markets. In particular, the removal of the petroleum subsidy would release government revenue previously tied up in the subsidy; earn more revenue for the government through an increase in the exportation of petroleum products; and reduce waste in the domestic consumption of petroleum products.
A second problematic conditionality was the requirement that the government privatize public enterprises. The rationale for privatization was also provided in the Berg report which argued that the excessive intervention of the state in the economy, caused price and market distortions, inefficient allocation of resources and stagnation.
The liberalization of trade was another sticking point in the negotiations between the Nigerian state and the IMF. Due to the rise of neo-liberal regimes in the advanced industrialized countries, monetarist ideas were on the ascendance in international relations. The ideological underpinnings of these ideas can be found in liberal thinking, which dates back to Adam Smith's concept of the “invisible hand”. The liberalization of trade entails the removal of tariff and non- tariff barriers to imported goods. Regulations that discriminate against foreign investment are also to be eliminated. For the monetarists, the ensuing free interplay of market forces was expected to eliminate waste, generate productive forces and foster efficiency and growth.
As part of the free market package, the Nigerian currency which was considered to be overvalued had to be allowed to float in order to achieve a realistic exchange rate on the international market.
Michael Bratton, “Beyond the State: Civil Society and Associational Life in Africa” World Politics, 41:3, April 1989, pp. 407-430.
Mamdani, Mahmood. Citizen and Subject: Contemporary Africa and the Legacy of Late Colonialism (Princeton: Princeton UP, 1996).
World Bank, “Nigeria: Medium Term Development Prospects January 1990,” Western Africa Department, Country Operations Division, Abstract.
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