Wanted: A new Structural Adjustment Programme

In the mid-1980s when Nigeria found itself neck-deep in an economic crisis after a decade and a half of spendthrift policies followed by Buhari’s kamikaze economics, a new word “SAP” entered the public lexicon. The Structural Adjustment Programme, an economic and political restructuring programme. Imposed by the International Monetary Fund (IMF) as part of its conditions for a desperately-needed financial bailout, it quickly became public enemy number one as naira devaluation, civil service job losses and rapid inflation hit the unprepared middle classes, leading to Nigeria’s first mass exodus of talent.

Despite Nigeria’s history which tells a very clear and unmistakable story about the failure of statism, many Nigerians are still committed to believing that handing over more money or more executive power to the government in one form or the other, is how to build a successful economy and a free country

While growing up, I would often hear my parents and their contemporaries discussing “Babangida’s SAP” with the sort of contempt and vehemence one would normally reserve for conversations about rapists or axe murderers. According to them, “SAP”’ was the policy that “ruined” Nigeria. While taking me to school in the early noughties, dad would often point to bank managers and FMCG suits driving Toyota Corollas and scoff at their self importance. “When Nigeria was Nigeria,” he would tell me, “This was the type of car given to entry level employees starting their first job after graduating.” To him and several others in his peer group, Nigeria’s economic slide could be traced exclusively to Babangida’s decision to implement the IMF programme, which also placed the IMF right in the crosshairs of Nigerian middle class rage.

SAP was not the villain

It wasn’t until much later when I developed an interest in Nigeria’s post-independence history that I began to understand what exactly SAP was, and why my parents’ generation hated it so passionately. To a generation of Nigerians accustomed to cushy well-paid careers in the public sector almost as of right after completing any kind of post-secondary education, SAP was a hot smack across the face as the size of the civil service was rationalised and the purchasing power of the naira fell a stunning 244 percent in just 12 months between 1985 and 1986 when it launched.

Overnight, Nigeria became what my folks disparagingly referred to as a ‘tokunbo economy’ – a country filled with people suddenly tossed into the ocean and told to sink or swim. Many exited the country rapidly.

Those who stayed found themselves ground into the economic dust, working twice as hard as before to make less than they used to make. Under these circumstances it was easy to blame these woes on the convenient twin scapegoats of the ‘imperialist IMF’ and Babangida, the military dictator whom nobody was especially fond of. There was just one thing that everyone from the civil servants to the émigrés always glossed over – SAP was always going to happen anyway.

The harsh truth about Nigeria in the early 1980s was that it was still the desperately poor country that Nigeria has always been, but it had just come off a decade of strong commodity prices. The oil boom of the early to mid 1970s created an unfortunate illusion of prosperity and wealth. Driven by the delusion of being “oil rich” (which Nigeria absolutely is not – and you can confirm by checking the per capita figures yourself), Nigeria’s government swallowed up piece after piece of the economy, parceling it out in generous government rations to a young population that imbibed the idea that they came from a country that could afford to do these things for them.

Mix this unfortunate sense of entitlement and delusion of wealth with the leftist-Marxist political leaning that was all the rage in newly postcolonial Africa then, and what you had was the perfect national economic bubble. The Udoji award, cement armada, FESTAC 77, paying salaries of striking Jamaican government workers from Nigerian oil revenues, funding and expanding the military as if the country was at war, financing African liberation struggles across the continent instead of pursuing liberation by building an economic powerhouse – you name it. If it involved spending money like a Saudi prince and getting zero value for it, Nigeria wanted a piece of it.

Until inevitably, the bubble went ‘pop’ and we were left with a ridiculous recurrent expense bill, no money coming in after oil prices crashed, and the prospect of total anarchy. At this point, the only game left in town was to go to the ‘imperialist Bretton Woods institution’ known as the IMF and ask for a bailout. That bailout as you would expect, came with conditions. First Nigeria had to stop spending its precious little forex reserves on artificially propping up the naira and let the market price it at its true value – cue general shrieking and pandemonium when (as my folks used to say), Babangida “murdered the naira.”

Then Nigeria’s government had to loosen its vice grip on the economy and commit to full private sector participation. For whatever reason, the very direct and obvious link between the SAP imposition and the subsequent development of new generation banks, private broadcasting and private telecoms in Nigeria is never acknowledged. What Nigeria chooses to remember about SAP is the horror stories that basically amount to people discovering in an unpleasant way, that their standard of living was false and unsustainable. What Nigeria deliberately chooses to forget is that SAP literally grew the Nigerian economy. Without it, we might still be in the statist republic of Buhari Mark I, complete with price control boards, zero private broadcast media, and complete state domination of the economy.

Nigeria needs another dose of SAP

Over the past week, I have dedicated a significant amount of time to engaging with people online and offline in a sort of informal personal survey to get a sense of what public opinion is toward government expenditure and investment is. Though unscientific and localised, my findings have nevertheless been jarring. I have come to understand two terrifying things about the current post-SAP generation of Nigerians, most of whom were not around back then.

The first thing is that Nigerians genuinely do not understand the link between increased private domination of the economy and increased wealth creation and retention. Despite Nigeria’s history which tells a very clear and unmistakable story about the failure of statism, many Nigerians are still committed to believing that handing over more money or more executive power to the government in one form or the other, is how to build a successful economy and a free country. The words “privatisation” and “deregulation” trigger a visceral response that is based on substance-free emotion. The suggestion that smaller government and increased trade is how to reduce poverty is met with large amounts of verbosity – as if a simple glance at our own recent history does not tell us this fact starkly.

The second thing I have come to understand is that both Nigerian voters and their politicians genuinely have no idea what the relationship is between government spending and economic development. I have come across individuals who insist that new airports in Ado Ekiti and Abakaliki – both less than 40 minutes by road from Akure airport and Enugu airport respectively – are what these abjectly poor states need. I have come across an individual who is convinced that the Gombe International Conference Centre that sits alone on the savannah in Gombe will “bring investors and economic development.” I have encountered someone who insists that the 30,000-seater stadium in Uyo that exists as a government liability, is a worthwhile investment simply for the fact that its existence “inspires the youths” in its vicinity.

Consequently, it appears to me that just like our parents got lost in their own misconceptions about what country they thought they had, my generation has done something similar, albeit more tragically. I believe that the critical mass of economically enlightened and politically engaged young people who can reverse this tide of ignorant public opinion does not exist. In these circumstances, it is now my position that Nigeria and Nigerians should keep on heading in the exact direction they are heading in, so that the inevitable insolvency, IMF bailout and SAP will not just reform our economy and constitution for good this time, but will also teach Nigerians some essential economic lessons, albeit the hard way.

Always a statist at heart, Babangida chickened out of the full SAP recommendation as soon as Nigeria’s economy started to record some life in the early 1990s. Perhaps if he had stayed the course as he was supposed to, would not be here. Thankfully, there is always a next time.

I’m quite certain of it.