Government Role in Economic Development: An Evaluation of Structural Adjustment (original) (raw)

The Structural Adjustment Programme In the Context of Nigeria as a Developing Country

It cannot be said that economic problems are a new phenomenon. Instances of economic dysfunction have been variously observed the world over, evident in such incidences as economic depressions, debt crises, inflation problems, prevailing unemployment, financial instability, and unfavourable internal economic fluctuations. Domestic economic imbalances have resulted in the prominence of International Financial Institutions (IFI’s) – the IMF and the World Bank and their policy prescriptions (and finance) as an external solution to an internal problem. However these recommendations come as conditions attached to a World Bank/IMF backed financial assistance as a somewhat non-mutually exclusive deal. It is these conditions that make a Structural Adjustment Program (SAP), as argued by these bodies, a desideratum in a functionless economy. Implemented without an associated pay-package (as was the case with Nigeria, in what was described as a homegrown programme produced by Nigerians for Nigerians) nonetheless, a SAP still remains, to all intents and purposes, a Bretton woods invention and one in which this paper is centered on. The paper therefore elucidates the Nigeria’s SAP as well as renders a critical probe into the concepts of privatization, deregulation and liberalization as part of the adjustment programme in the economy.

IMF and Crisis of Development in Nigeria, 2000-2015.pdf

The incessant development crisis that engulfed the post-colonial Nigerian state amidst externally and internally oriented policy prescriptions, coupled with the abundant material and human resources within its territory, has continued to elicit contentions among scholars and policy-makers. With the transition from the military to democratically elected government in 1999, the then President Olusegun Obasanjo through the instrumentality of the IMF-sponsored National Economic Empowerment and Development Strategies (NEEDS) adopted and implemented among other things, the deregulation and trade liberalization reforms, which were touted as a panacea for resolving the development crisis in the country. It is in this connection that our study was saddled with the responsibility of interrogating the nexus between the adoption and subsequent implementation of the IMF-induced reforms and the persistent development crises in Nigeria in the context of ascertaining whether the adoption of IMF-imposed deregulation policy reduced the Human Development Index in Nigeria; and whether the implementation of IMF policy of liberalization of trade increased the unemployment rate in Nigeria between 2000 and 2014. With the aid of the blended Economic Structuralism and Economic Nationalism analytic approaches combined with the qualitative descriptive method of data analysis and documentary method of data collection, the study argued that the adoption of deregulation and trade liberalization reforms were responsible for the decline in HDI and increase in unemployment rate. Thus, from the above, we recommended for the implementation of two-phased development plan and resort to regional integration development strategy as practical solutions to the persistent development challenges of Nigeria.

Adjustment with growth: Nigerian experience with structural adjustment policy reform

Journal of International Development, 1991

The paper presents an account of the origin, contents and apparent impact of the Nigerian structural adjustment programme of 1986-90. The programme arose from pressure by Nigeria's external creditors to reach an accommodation with the Bank and the Fund, but once the decision to undertake such a programme had been taken it became largely 'home-grown' and contains a number of heterodox elements, including a ban on imported foodstuffs. Other major elements are a shift to a market-determined exchange rate, the winding-up of the six government commodity marketing boards and the gradual elimination of administrative controls on overseas trade. The design of the programme takes note of a number of recent theoretical findings, including the significance of the intermediate import constraint and the presence of crowding-in effects of public expenditure on private investment in a number of African countries, any assessment of the programme's impact is of necessity preliminary; but, at the least, it has made possible a reduction in the burden of debt service, and the growth rate of GDP and exports, in particular export crops such as cocoa and rubber, have been much higher in the postthan in the pre-structural adjustment period; but inflation has worsened, real wages have fallen, and diversification of exports has not occurred. The tentative verdict is that the programme tried to achieve too much too soon, underestimated the resultant social costs, and placed too much reliance and changes in price incentives as a means of bringing about the necessary restructuring.

The IMF and industrial relations dimension of instability in post-independent Nigeria

African Journal of Business Management, 2009

This study argues that, based on the Nigerian experience, there is a connection between IMF-type programmes and instability in some of the countries that adopted them. Structural supply-oriented policies such as reducing the size of the public sector and the removal of state resources from that sector to the private sector (privatization), creating financial intermediaries, promotion of savings, and discouragement of wasteful spending by increasing real interest rates all help to reduce the welfare of workers. Reactions of industrial workers to this deficiency, disappointment, and irritation are however smothered by the compulsion and suppression of state agencies.

Interrogating the International Monetary Fund (IMF) Policies in Nigeria, 1986-2018

Cogent Arts and Humanities, 2021

From the 1980s, Nigeria’s economy has witnessed severe stagnation. While Eurocentric literature pinpoint the Nigerian civil war and her leaders’ corruptive tendency as the prima facie, Afrocentric literatures trace the country’s economic woes to her historical processes of colonial domination and economic exploitation. Nevertheless, none of the above arguments underpin more firmly as being the catalyst to the country’s economic dysfunction especially when compared to IMF policies in the country. This paper in part, demonstrates that IMF policies in Nigeria vis-a-vis its Structural Adjustment Program (SAP) through its Loan Conditionality is “the crux impediment facing the country.” As such, the paper argues that the acceptance of IMF loans during General Ibrahim Babangida’s among other misgovernance administration perpetuated the economic woes and fostered the backwardness of the country. Employing primary and secondary sources, the paper posits that a more inclusive economic system devoid of the current extractive economic policies would revitalize its fortunes.

Lessons from Structural Adjustment Programmes and their

2011

After independence around 1960, African countries started with high hopes for rapid growth and development. Whereas the initial performance was remarkable, economic development slowed in the 1970s and stagnated in the 1980s. In response, the states' attempts to reinvigorate economic growth through state-led investments and import substitution industrialisation strategies were unsuccessful. The World Bank, the International Monetary Fund and Western donors developed and advocated Structural Adjustment Programmes (SAPs), which emphasised macroeconomic stabilisation, privatisation and free market development. The SAP approach has generated considerable debate within African countries and development circles. While proponents argued that the reforms were essential and without alternatives, critics charged that SAPs paid insufficient attention to the social dimension of development and to the institutional weaknesses of developing countries. The debate continues. This paper discusses the pro and contra arguments of the debate, presents lessons learned, and draws conclusions for future policy priorities.

The IMF and SAPs, Curses or Blessings

The focus of this research is to analyze the effects of the International Monetary Fund’ (IMF) Structural Adjustment Programs (SAP) on income distribution, poverty and social wellbeing in a number of African states with a special focus on Zimbabwe and Nigeria during the early 1990s. Both countries had debts that surfaced in the late 70s, Nigeria’s debt is an outcome of private and IMF lending as an effect of the much larger African debt crisis (Ikejiaku, 2008), while Zimbabwe’s debt originated from government borrowing from private parties to fund its civil war (Jones, 2011). Zimbabwe’s need to maintain military expenditures and Nigeria’s economic turmoil forced them both to seek IMF loans. Despite the IMF’s dedication to eradicate poverty, critics claim that SAP participant countries have experienced increases in poverty rates and income inequality (Abugre, 2000; Lundberg and Squire, 2003). Obviously, the studies conducted on this relationship are relatively fresh and essentially hold a theoretical weight, few are the studies with empirical data support. I concern myself with both types of research, with more emphasis on evidence-backed analyses. Structural Adjustment Programs are licenses for states to acquire loans from the IMF and/or the World Bank. These programs provide neo-liberal economic conditions for states to implement prior to loan granting. The SAPs aim towards free market development on the expense of the public sector, that is by privatizing public sector services and organizations; Social welfare and subsidies would be eliminated under SAPs. These policies are a reflection of the Washington Consensus (Anup Shah, 2013). I will estimate the direct impacts and effects of SAPs (between 1985 and 1995) on the Nigerian and Zimbabwean economies. I will use variations in GINI ratio and poverty indicators before the implementation of SAPs and after; the GINI coefficient ranges from 0 (perfect income equality) to 1 (perfect income inequality). Referencing the IMF, World Bank and several economists we will match the goals of such adjustment policies and their actual effects on local economies across the globe. While the IMF extols poverty reduction, a great number of economies around the globe reported higher poverty rates and lower standards of living following the granting of IMF loans and implementation of SAPs (Hertz, 2004). Clearly, within the IMF loaning program SAPs are necessary for development under capitalism, yet it is uncertain if they are beneficial in economies that are floating with poverty (Oberdabernig, 2010). It is important to note that SAPs are offered with uniformity. That is, the same programs are offered regardless of the country’s economic background or infrastructure. In this case, the African debt crisis played a big role in encouraging African states, though sometimes due to lack of options, to seek IMF loans (Biersteker, 1993). Under the IMF’s SAPs, the role of the state is greatly diminished and regulation is left to the open market in one’s economy, while this is ideal for states with proper infrastructure, most African states in question were emerging from a neo-socialist economic model (Quarterly Journal of International Agriculture 50, 2011) at the time of the implementation of SAPs. The nature of these African economies prior to SAPs participation plays a great role in determining the efficiency of these programs, yet SAPs by themselves are uniform and strict to the extent that they cripple the ability of such economies to pay back the loans; in accordance to the adjustment programs’ neo-liberal essence, should the SAPs be adjustable for African economies to guarantee development and economic growth? Is the uniformity of such programs hurting African economies rather than improving them? Are SAPs a part of a neo-liberal dependency agenda? Or are all SAPs-participant African economies mismanaging their markets? Keywords: IMF, SAP, Africa, economic dependency, liberalism, poverty, Zimbabwe, Nigeria.