President Babangida's structural adjustment programme and inflation in Nigeria

Description:

The IMF-WorldBank economic policy packages embodied in President Babangida's Structural Adjustment Programme (SAP) provide overt encouragement to the fostering of an unregulated, dependent capitalist development model, while allowing only a supportive role for the government in a refurbished economic environment of highly reduced government ownership and control of enterprises. Inflation has assumed a doomsday scenario since the inception of the SAP in July 1986 (from 5,4% in 1986 to 40,9% in 1989), and is threatening to destroy the very fabric of Nigerian society. It is the principle price of Babangida's SAP measures, which include external debt management strategies, SFEM/FEM/IEEM, removal of subsidies on petroleum products and fertiliser, privatisation and commercialisation, trade liberalisation, and interest rate deregulation. This SAP-induced inflation has resulted in adverse income redistribution, leading to increased personal insecurity and lessened personal satisfaction, while heightening interpersonal and institutional tensions and deterring investment and inhibiting consumer spending. Other costs include the depletion of external reserves; a worsening balance of payments position; the diversion of managerial talent from managing production, maintaining efficiency and innovating, in favour of manoeuvring and speculation for protection against (or benefit from) inflation. This paper recommends abandoning the "old-timereligion'of orthodox policies in favour of" shock treatment' embodied in herterodox policies, including monetary reform, exchange rate reform, tax-based prices policy (TPP), fiscal policy reform, etc.

Date Issued:

1992-01-01T00:00:00Z

Data Provider:

Michigan State University. Libraries

Collection:

Journal of Social Development in Africa

Language:

English

Rights:

In Copyright

URL:

https://n2t.net/ark:/85335/m5bg2jp25