Economic policies under different democratic dispensations: Triumphs and challenges

As Nigeria transitioned from the shadows of military rule in 1999, a new dawn of democratic governance set upon a nation promising hope and transformation. The transition brought with it aspirations of economic revivals, social justice, and national prosperity. The over two decades of democratic sojourn have seen Nigeria navigate the labyrinth landscape of economic reforms, policy innovations, and development strategies aimed at propelling the nation to a lofty height of inclusive growth and economic stability.

Since the transition, Nigeria has experienced significant shifts in economic policy aimed at fostering growth, stability and development. Yet, the story of the journey so far is far from linear! Triumphs and considerable progress in the telecommunication and banking sectors stand in stark contrast to the persistent challenges of poverty, regression, unemployment, and infrastructural deficit. Thus, the narrative of the nation’s economic policy journey under democratic rule is one of bold ambitions tapered by harsh realities One can conveniently say that it ours is a tale of visionary plans occasionally marred by inconsistent policy implementation and the perennial struggle to reduce the nation’s overly dependence on the oil sector. The trajectory of these policies, therefore, highlights both notable successes and failures, providing valuable lessons for future policy-making direction.

“In the intervening period, specific sectoral reforms in telecommunication, banking, power, maritime, civil service, and trade policy were introduced to varying degrees of success.”

Although the June 12 commemoration dates back to the botched election held in 1993, widely regarded as the most transparent, fairest and most credible election the nation has ever witnessed, it was not until June 2020 that the date was effectively recognised. However, this piece will focus on snippets of economic milestones of successive democratic dispensations in Nigeria from 1999 to date.

Analysis of major economic policies since 1999:

Structural Adjustment Policy and Economic Liberalisation Era (1999–2005)

At the outset of Nigeria’s fourth republic, the nation continued implementing the structural adjustment and economic liberalisation policy introduced in the 1980s and early 1990s. These policies were aimed at reducing the government’s role in the economy, encouraging private sector participation, and attracting foreign sector investment. Notable measures included the deregulation of the telecommunication sector, resulting in a significant boom and the privatisation of selected state-owned enterprises.

In 2003, National Economic Empowerment and Development Strategies (NEEDS) were introduced to focus on wealth creation, employment generation, infrastructure development, poverty reduction, and value orientation. NEEDs emphasised macroeconomic stability, public sector reforms, and increased investment in infrastructure and human capital through the deployment of oil wealth to develop the non-oil sector of the economy. To complement it at the subnational level, the State Economic Empowerment and Development Strategy (SEEDS) programme was designed to ensure policy coherence and targeted focus across different government tiers.

In the intervening period, specific sectoral reforms in telecommunication, banking, power, maritime, civil service, and trade policy were introduced to varying degrees of success.

Vision 20:2020 Era (2007-2019)

Launched in 2009, the Vision 20:2020 was targeted at positioning Nigeria as one of the top 20 economies in the world by 2020. With a strategic focus on improving critical infrastructure, developing a vibrant and globally competitive economy, and enhancing human capital development, the strategy sought to diversify the economy away from its heavy leanings on oil.

This period also saw significant fiscal buffers emanating from the tough but ultimately successful debt negotiations with the Paris Club and banking reform policies put in place to mitigate the impact of the global financial crisis of 2008/2009, reducing bank exposures and stabilising the financial sector.

In 2017, the Economic Recovery and Growth Plan (ERGP) was implemented in response to the economic recession the nation plunged into in 2016. The plan focused on restoring growth, investing in people, diversifying the economy, and building a globally resilient economy. It prioritised macroeconomic stability and improvement in transportation infrastructure, energy, and agriculture.

Recent development (2019-date)

Nigeria Agenda 2050:

Formulated against the backdrop of several subsisting developmental challenges, Agenda 2050 is a prospective plan designed to take the country through to an “Upper Middle-Income Country” by 2050 and subsequently to the status of High-Income. This plan requires significant improvement in the country’s per capita income to be powered by rapid and sustainable inclusive economic growth. The ambition was to improve the nation’s GDP per capita from US$2,084.05 in 2020 to US$6,233.23 in 2030 and US$33,328.02 in 2050, projecting an annual growth rate in GDP of 7.0 percent. The agenda also plans to create 165 million jobs during the implementation period.

-National Social Investment Programme (N-SIP):

At the dawn of the Buhari administration in 2016, a retinue of social intervention programmes such as N-Power, the National Home-Grown School Feeding Programme (NHGSFP), the Government Enterprise and Empowerment Programme (GEEP), and the conditional cash transfer (CCT) were launched to alleviate poverty and provide support for a vulnerable segment of the populace. The seed fund for the project was N500 billion.

Success stories and policy failures

Success Story 1: Telecommunication Revolution

Policy: Liberalisation and Privatisation of the sector in 2000

Impact: The deregulation and subsequent privatisation of the sector in the early 2000s led to an explosion in telephony penetration. From less than 500,000 telephone lines in 1999, Nigeria now boasts over 220 million active mobile lines in 2024, fostering connectivity through increased access to information, boosting economic activities and job creation.

BDI Remark: A notable success under the nation’s democratic governance has been the transformation of the telecom sector

Success Story 2: Banking Sector Reforms

Policy: 2005 Banking Consolidation.

Impact: The 2004/2005 banking consolidation trimmed the number of banks from 89 to 25, thereby creating stronger and more resilient financial institutions.

BDI Remark: This policy stabilised the banking system, attracted foreign investment, and enhanced public confidence in the banking system.

Success Story 3: Economic Diversification Drive

Policy: Notable policies with significant impact include the Agricultural Transformation Agenda, Anchor Borrowers’ Programme (ABP), and ERGP

Impact: Significant strides were recorded in agricultural yield particularly in rice production, reducing import bills and boosting local production.

BDI Remark: Increased employment, enhanced food security and reduced dependence on oil revenues are some of the attendant outcomes of the policy.

Success Story 4: Infrastructural Development

Policy: Public-Private Partnership (PPP), targeted investment such as Presidential Infrastructure Development Fund (PIDF)

Impact: Development of critical infrastructures such as Lekki Deep seaport, a modernised terminal of MM2, and a raft of smooth road networks.

BDI Remark: This has culminated in improved logistics, trade facilitation, enhanced connectivity and acceleration of economic activities.

Success Story 5: Anti-Corruption Crusade

Policy: Establishment of anti -corruption watchdogs such as EFCC, ICPC, Public Complaint Commission etc.

Impact: Several high-profile convictions have been secured and stolen assets running to trillions of naira have been recovered.

BDI Remark: The fight has brought about increased awareness and some deterrence of corrupt practices, though palpable challenges remain.

Some of the challenging episodes witnessed so far in the annals of democratic dispensation in Nigeria include: persistent poverty and unemployment; inconsistent power supply despite significant investments and reforms; heavy dependence on oil for revenue and foreign exchange; and rising insecurity levels, including terrorism, banditry, and kidnapping.

As Nigeria commemorates a quarter-century of uninterrupted democratic governance, we see a nation determined to harness its potential amidst formidable obstacles. This journey, characterised by both challenges and achievements, highlights the resilience of the country’s democratic institutions, the steadfast spirit of its people, and a moment of introspection for the nation and its citizens. Nigeria’s experience underscores the profound impact of governance on economic fortunes and the critical need for policies that balance visionary aspiration and pragmatic execution. Celebrating this milestone involves not only reflecting on past experiences but also committing to safeguarding the future of democracy in Nigeria.

About the author:

Muhammad is a research and data analyst at BusinessDay Intelligence. He has over seven years of quality analytical experience on issues related to the economy, finance, and human capital development.

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