Realizing the need for fundamental changes in our economy, the need to arrest the decline of the economy and lay a solid foundation for economic reconstruction, social justice and self-reliance, we fashioned out a program of economic restructuring to ensure that we turned the economy around and, thereafter, put it on the path of recovery and self-sustaining growth. These were the circumstances that informed the introduction in mid-1986 of the Structural Adjustment Program (SAP) as a medium term package of economic reform measures.

Ibrahim Babangida, 28th February, 1990.

 

Nigeria’s Political Economy (1960 -1985): Prelude to the Babangida Regime

Sam Oyovbaire

Prelude to the Prelude

The Babangida regime was highly informed about Nigeria’s political economy in its policy thrust and reform programs. This fact was revealed quite early in the tenure of the regime. It was identified within four months of assuming power in the 1986 budget address and in the inaugural address to the Political Bureau, both in January 1936. President Babangida had very perceptively observed that:

“the economic predicament of the country can be attributed to the nature and practice of politics and government, and the collapse of the economy. These are attributed to bad governance and its consequences. We must therefore aim at establishing a political system capable of ensuring opportunities for tide people to participate in the decision making process and in economic production and distribution. Our task, among others, is to bring about a new political culture which, like a veritable fountain head, will bring forth a suitable, strong and dynamic economy and polity. Such arrangement will enable us to harness the human and natural resources of Nigeria towards building a cohesive and self-reliant society.’

The dialectical relationship between the political process and the economy was the prop upon which market – oriented economic reforms on the one hand, and an ingenious democratisation program on the other, were rested for the regime’s agenda of return from military rule to democracy. It is, therefore, important in the discourse on the Babangida regime to acknowledge and appreciate the forces of the political economy preceding that regime as a prelude to any objective assessment of the regime. When scholars of history look at the records, they are likely to see historical dividends in the IBB regime beyond “The Tale of June 12.”

They will see forces of political and economic emancipation beyond the jaundiced or contrived warrants such as “IBB’s hidden agenda,” “personal dictatorship”, “a self – confessed evil genius”, and a regime of “endless scheming for accumulation and arbitrary use of power”. Scholars will, in their research, see facts about socio-economic and political change beyond the harp- on the shortcomings and negativity of the regime. But what concretely will they see?

Against the backdrop of the grasp of Nigeria’s political economy by the regime, scholars will see breakthroughs with respect to the structure and pattern of economic development inherited by the Nigerian post-colonial state. They will see that, for the first time in the history of the country, an agenda of transition from military dictatorship to civil and democratic rule was deliberately crafted and packaged to couple political and economic reforms by way of political re-engineering and democratisation, including restructuring of the economy and of the society. They will also see the combination of expanded economic freedoms and political space; salient elements of empowerment of civil society, including the media, and the impact of new socio-cultural infrastructures upon the political economy.

They will also see that the regime inaugurated salient measures in an attempt to capture the future by situating the country’s economy within the rapidly growing contemporary global market by deregulating telecommunication and broadcast sectors. Through the program of deregulation, the regime jolted the joints and structural links between the post-colonial state and market forces, and thereby inaugurated the process of expanding and empowering socio-economic and political classes. The regime inaugurated a “paradigm shift in policy architecture and economic management.”

Major Factors of the Political Economy

As an underdeveloped nation – state, factors of the political economy are many, complex and inter – related. There are four major ones, namely: primacy of the state over and above society, economy and even the polity; socio-economic underdevelopment and dependence of the country upon the external global economy; state monopoly of primary public utilities and economic activity sectors; and the nature and character of social classes. We offer here seminal comments on these factors as a prelude to a brief appraisal of their analytic history between 1960 and 1985 as a background to the Babangida regime.

At independence in 1960, the country’s political economy was already laid out with the state as the primary and dominant factor in the social relations of production.. Itself a product of colonisation and colonialism, the state was, and still largely is, the main instrument or institutional factor for the development of the economy, society and political system. Depending on one’s objective and perspective in research, the Nigerian post – colonial state embodies the multi-faceted problems in the transformation of the country and its peoples. As a federal state system, the post – colonial economy revolves almost completely around the state, especially in the struggles to transcend underdevelopment and to simultaneously achieve social justice and equity for the people.

The Babangida regime from inception understood both the difficulties and the dynamics of the Nigerian post – colonial state; and it was guided in the direction of breaking the umblical cord which tied the state to its pre -colonial and colonial roots. The practices of Nigerian federalism, aided by prolonged military rule, added further significance to the primacy and dominance of the state over the political economy. As the country increasingly became over – centralised and over – concentrated in resource accumulation and distribution of power, it inexorably drew upon itself intense struggles for the control of the state and its many sub – structures. It is these struggles that provided the environment as well as the content for political instability, the fears as well as the facts of marginalisation, ethnicity and manipulation of religion and primordial ingredients in the politics and governance of the country.

The second force of contingent interest is that of underdevelopment and dependence of productive forces upon the external global system. Nigeria’s economy is underdeveloped in the sense that the factors of production and productive forces were not, and are still not, fully transformed by science and technology vis-a-vis their abundance and potentials for the lives of the large majority of the people. This underdevelopment equally affects the issue of distributive justice in terms of the spread of available goods and services to the various communities and peoples across the country. Similarly, the economy was, and still is, heavily dependent upon the productive forces of the world capitalist system.

The commanding heights of economic activity in Nigeria are generally induced and articulated largely from outside the country. This is so inspite of the abundance of foreign exchange earnings, which the export of crude oil and recently gas has made available to the state. There is an uneven development pattern as well as unjust and inequitable relations among the social classes. The ownership and control of capital for development are condition::d by foreign interest and foreign domination. In the same way, the benefits of available development are skewed in favour of urban settlements and against the large majority of the rural population. Access to power, wealth and status and the exercise of these resources is dominated and monopolised by interests related to the state. This is the fact about the abject powerlessness of the large majority of the Nigerian people.

The third factor derives directly from the preceding two factors, namely: the regulation of social and economic activities by the state. Fiscal and monetary policies, the provision of public utilities such as communication and telecommunication, electricity and water, major transport facilities by road and air, among others became state monopolies. Consequently market forces were thereby constricted. While it is understandably plausible for the state to monopolise these services at a time when the domestic market was small, Nigeria’s political economy demands that such monopolies should be dismantled in order for the country to play an appropriate role in the global economy.

The fourth and final major factor is the development of the political class. Arising from the complexity of the pre – colonial state systems, the practices of divide – and – rule by colonialism, the hoisting of federalism upon the country in the struggles to be independent from colonial rule, and the disarticulated trajectory of modernisation across the country, it became very difficult for a wholesome development of the political class to emerge. As a consequence, members of the political class logically depended, and continue to do so, upon primordialism, ethnicity, religion and such other factors to assert themselves in the competition fin power. Nigeria’s political economy has had the problem of developing a political class that can transcend the impediments of its origins in governance institutions such as the three arms of government, political parties and even pressure groups in competition for and use of power.

The preceding four factors of the political economy are by no means exhaustive of the forces propelling politics, governance, economy and society in the country. In their combination however, these factors hold the essential keys to unlocking the historical entrance of the country into modern democracy and economic activities of the contemporary world system. As has already been indicated above, the Babangida regime, understood and appreciated these factors as afflictions upon the development of the country. The challenge before the regime was how to design a transition agenda which could embrace the dynamics of the political economy, such that at the point of exit and the return to civil rule and hopefully to democracy, the foundations of the political economy would not only have been laid but also synchronised with the forces of society for uninterrupted governance of the country. It is a matter of common knowledge that these philosophical assumptions of the IBB transition project collapsed by the end of the seventh year of its eight-year tenure, a subject matter that does not belong to this overview of the political economy preceding the regime.

 

 

Brief Analytic History

The salient forces of Nigeria’s political economy up to 1985 when the IBB regime imploded into governance, emerged quite early in the 20th century from a long period of over 300 years of the country’s relationships with the Arab World, Western Europe and the American continent. During this long period of history, trade and commerce among Nigeria’s pre – colonial states were very limited. Such links were also limited between the pre – colonial state systems on the one hand and the rest of the world on the other. The state systems were only suppliers of slave labour, agricultural commodities and rudimentary metals; and they were simply consumers of industrial commodities from Europe. Through this encounter, the pre – colonial state systems, became incorporated into the expanding industrial economies of Europe and America. As will be recalled, this was the era of the initial growth, consolidation and expansion of European capitalism on a world scale.

The prime commodity of international trade between Nigeria before 1800 and Europe and America was slave labour. By the early 19th century, however, the export of slaves had virtually been overtaken by the export of vegetable oil and other agricultural items. These features of international trade were initially limited to the coastal areas, but they gradually progressed into the hinterlands. In all of this, the political economy was subjugated and dependent upon the European economy in the sense that the demand for, and price of traded items were determined largely by the European operators. Towards the end of the 19th century, the urge by Europe to politically subjugate Africa, monopolize and regulate trade and commerce gave rise to colonization which was effected through the instrumentality of trading companies. Gradually, the process grew beyond mere commerce and trade into actual suppression of the sovereignty of the pre-colonial states. By 1904 – 1914, the colonial authority had consolidated its hold on the territorial space and so the Nigerian colonial state and political economy became firmly established. As a consequence, previous state systems and economies were subordinated to British and European capitalism.

The process of development carried along with it simultaneously the articulation and organization of pre – colonial and colonial forces as well as social relations of production, distribution and exchange. The activities consisted largely of agriculture, mining, finance and transport, including internal transportation system and shipping. A major element in the process is that of exploitation and export of raw materials, and of import of European manufactures. As it was indicated earlier, the main instrument in establishing and organizing Nigeria’s political economy was the state.

The primary functions of the state included construction and promotion of transportation, forging and fostering the operation of foreign merchant companies and their domestic agents, introduction of the use of modern means of exchange and the regulation of access to land, finance and the use of labor. By the late 1940s through the 1950s when Nigerians had begun to articulate the struggles for independence from colonial rule, the country had become fully integrated into the world capitalist economy.

The details of the processes of incorporation do not belong to this analysis, but it is important to indicate the major instruments since they relate to the political and economic reforms of the IBB regime. These include marketing boards as the means for the appropriation of surplus value of peasant production, price and physical controls of goods and services, and the use of other parastatals such as banking institutions and public utilities (NEPA, NITEL, Water Boards, Broadcast Media, etc). Fiscal policies as economic instruments for encouraging import-substitution industrialization were all established.

The spectrum of economic freedom for development of Nigerian private entrepreneurship was limited. Seen against “the democracy of the First Republic and Nigeria’s commitment to establishing durable democracy even during prolonged military rule and the civil war, it is quite clear to perceptive observers and scholars of the political economy that there was an hiatus between the nature and character of the economy and the desires and aspirations of the political class about democracy. In other words, there was in the country’s development process, structural tensions between the economy and polity which needed to be dealt with.

The management of the crisis leading to the civil war between 1967 and 1970 did not focus on, let alone have a grasp of the fundamental undercurrents in the country’s political economy. Indeed, the civil war and its machinery of management accelerated the features of the inherited political economy. These features include:

Accelerated foreign domination and control of the economy which included repatriation abroad of huge profits, dividends and interests; Nigerian nationals collaborated in this process which had the effect of inhibiting or limiting domestic capital accumulation for re – investment; indigenous businessmen served as middlemen, distributive agents and representatives; for reasons of mutual interest foreign and domestic capital classes; and government bureaucracy was virtually converted into business centres for negotiation of highly inflated business margins for the political class and the bureaucrats.

Contrary to the dramatisation of the size and character of corruption under the IBB regime, the facts about heightened corruption and officially induced leakages were rooted in the political economy of the country immediately after the civil war; the marketing boards and other regulatory bodies of price and commodities accelerated the problems of the political economy there was a deep – seated web of interest built around a regime of import license which resulted in inflated prices and scarcity of essential commodities referred to as “essenco regime” (that is, regime of lack of essential commodities) especially between 1982 and 1985.

Yet, by the end of the civil war, the federal state promised to reconstitute Nigeria with the objective of engendering a united, strong and self – reliant nation; a great and dynamic economy; a just and egalitarian society; a land of bright and full opportunities for all citizens; and a free and democratic society.’ It is true that the political economy expanded in the immediate post-civil war years but its nature and character remained the same. The instrument of expansion included the return and re-absorption of the Igbo people who were the targets and victims o` the civil war into the political economy. These processes were complemented by a vast movement of human resources from the rural areas to the urban centres following the general decline in the agricultural sector. The working classes also expanded from about one million towards the end of the civil war to over four million in the early 1980s. As it was in the pre – civil war era, however, the standards of livelihood of the generality of the population did not change position. The critical socio- economic issues of housing, potable water, prices of consumer and intermediate capital goods and services, cost of education and health-care, including the cost of eradicating primary diseases and filthy environment remained unchanged. In fact, in the case of the rural economy and rural population, the conditions of living were worsened by additional problems of massive outward migration of able bodied men and women.

These elements of the political economy surged between 1970 and 1985 when the IBB regime came on board. Indeed, in the period of the Second Republic, the problems were heightened by the pattern of competition for, and retention of political power. During the period, power was used nakedly and blatantly in the interest of some and against the interest of others. (Details of this phenomenon do not belong to this presentation).

The overall nature and character of Nigeria’s political economy preceding the Babangida regime can, thus, be indicated as follows:

Continued overbearance of the state on the political economy; control and regulation of the major heights of the economy; control and monopoly of socio-economic policies and institutional utilities; regulation of prices and costs of major consumer and intermediate capital goods and services; the constrictive role of institutions such as marketing boards; over – valuation of the national currency vis-a-vis the major currencies of the world and thereby limiting the competitive potentials of the Nigerian economy; regime of subsidies and import licenses; a system of non – complementarity between the expansion of freedoms in politics and government as envisaged by the transition to civil rule and democracy on the one hand and the regime of state regulation domination and control of major socio – economic activities on the other.

These and many more socio-economic and political features constituted the facts and driving forces in the overall policy regime within which the country was operating; and much more fundamentally, they constituted the paradigm and governance arena in which the twin programs of political and economic reform were intended to be pursued and implemented in the transition to civil rule agenda. The Babangida regime saw through difficulties in the inherited paradigm and framework and was therefore poised to turn things around.

In wanting to do this, the regime under – rated the costs of change. In pursuing its fundamental programs of governance and transition to civil rule, it had to confront reactions to the existing paradigm, the philosophical thrust and methodology of its well-articulated program of change. But there was no doubt that the regime had put its fingers properly on the wheel of progress. What remained was the political will and element of political luck for it to succeed in its vision and mission. It was in conceptualising the historical place of the IBB regime that led us quite early in the regime’s tenure to observe that “with IBB, Nigeria cannot be the same again.”‘

Conclusion

The preceding presentation is a schematic formulation of the fundamental issues and underlying mission of the IBB regime. This mission has tended to be neglected in the variety of commentaries and even academic publications on the regime. We do not doubt the existence of many areas of difficulty for the regime; we do, in fact, acknowledge the difficulties of the regime either as historically imposed imperatives upon the regime or as generated by the regime’s policies and programs in the cause of pursuing its own agenda. We have deliberately, in this presentation, tried to indicate that over and above, or side by side with, the shortcomings of that regime, there is a pool of enduring positivity not only in the agenda of the regime but also in actual Legacy. We hope that as we continue in the scholarly and intellectual research and appraisal of the Country’s recent and contemporary history, he should be able to put our fingers on concrete findings about the IBB regime and how these facts have positively impacted on modern Nigeria.

 

 

NOTES

  1. See IBB; 1986 Budget and Inaugural Address to the Political Bureau in Tunji Olagunju and Sam Oyovbaire (edited), Portrait of a New Nigeria: Selected Speeches of IBB, London: Precision Press, 1989
  2. This is the title of the book on the crisis which engulfed the country between 1993 and 1999 by Omo Omoruyi
  3. See the 2nd, 3rd, Revised 3rd and 4th National Development Plan documents.
  4. Sam Oyovbaire and Tunji Olagunju (edited), Foundations of a New Nigeria, Precision Press London, 1989, p.2