POLICIES AND STRATEGIES WITHIN THE CONTEXT OF STRUCTURAL ADJUSTMENT PROGRAMME IN NIGERIA

BY

M. M. YUSIF

DEPARTMENT OF POLITICAL SCIENCE

BAYERO UNIVERSITY, KANO

BEING A PAPER PREPARED FOR DISCUSSION AT FIRS EXECUTIVE LEADERSHIP DEVELOPMENT COURSE 2012 TO BE HELD ATJORANY HOTEL CALABAR

OCTOBER, 18^TH 2012

Policies and Strategies within the Context of Structural Adjustment Programme in Nigeria

Introduction

I am taking you through perhaps an unusual path in search of knowledge. It seems the original concept of this workshop is policy making and strategies within the context of globalization.

Unknown to the organizers of this conference there are different forms of globalization. The current one is neo-liberal globalization.

If the subject matter of this discussion must be based on globalization in general, we are going to be confronted with a concept too large and with  little sense. In case we want to give it a scientific criterion the term would still be gazing to see like a fiction.

Again the original title is without a case study which makes it to be less relevant and very problematic. Especially that the results and impact of globalization, whether in the present form or the others is uneven.

At the risk of being too narrow in perspective we adopt the most popular notion of the current globalization, from pure economic theory, as marketisation of the economy which becomes also deregulation of the society.

Structural Adjustment programme (SAP) in Nigeria embedded both marketisation and deregulation of the society. It is both a policy and strategy. Therefore, the original title is altered to read as “Policies and strategies within the context of Structural Adjustment Programmes (SAP) and shows issues affecting health of Nigerian people.

The Origin of SAP

There has been conceptual map which shows that making a policy is full of conflict, SAP policy in Nigeria is no exception. It was preceded and followed by contests from many interest groups.

The economic crisis which began in the early 1980s called for a reform to stabilize the economy. Earlier indication from the state was IMF Pills.

Organized oppositions started so Government launched a debate – the IMF Loan debate – to assess and measure the situation. Various groups presented alternatives. These are:

1.     Nigeria’s Labour Congress

2.     Academic Staff Union of Nigerian Universities

3.     Manufacturers Association of Nigeria

4.     National Association of Nigerian Students

Many smaller groups such as farmers, women, small-traders, etc. did the same.

The Nigeria’s state was in a dilemma but it had to take side to resolve the conflict. The then president of the Federal Republic of Nigeria, in a national broadcast to the nation admitted the IMF/WB proposal is rejected by the Nigerian people, but declared there is no alternative to Structural Adjustment Programme.

The SAP was mounted as indigenous programme to rehabilitate the economy. The oppositions realized that they were deceived.

The SAP in Nigeria became the internalization of neo-liberal globalization. This logically promotes the marketisation of the economy and the society in general.

The policy measures under the SAP are in two stages:

1.     Deregulation of the macro-economic environment which is the central policy measure of the reform

2.     This is followed by reform of every section i.e. health, education, banking system, agriculture, etc. to conform with principle and practice of market economic system.

The key elements of the macro-economic reform include the following measures (Ishrat H. and Rashid K. 1994:247):

1.     The adoption of right fiscal and monetary policies to reduce inflationary pressures and to rationalize public expenditures, including public investment programs.

2.     The dismantling of exchange controls and the adoption of a market, determined exchange rate policy.

3.     The liberalization of the trade regime, the retionalization of customs tariffs and excise duties, and the abolition of price control.

4.     Financial sector reforms.

5.     The privatization and commercialization of public enterprises and the abolition of marketing boards.

Among the other policies are reducing the size of the budget deficits, limiting money supply growth, and halting price control.

The Federal Government of Nigeria totally overlooked the difficulties on IMF/World Bank package reform programme may cause in the economy, and underestimated the enormity of the social costs.

The Social Costs of SAP in Nigeria

The IMF Loan debate has earlier revealed what negative consequences market economic reform may cause to a developing economy like of Nigeria.

This was observed long time ago with regard to the history of market economic system in the 19^th Century Britain, by Karl Polany; who noted that if market is allowed to govern, it will destroy the fabric of human society (Karl P. 1948).

Prior to the adjustment policy, precisely based on 1985-1986 house hold survey, the Nigerian Food and Nutrition Sector Report estimated that 18 per cent of the population is food insecure. (Hussain I. and Faruqee R. 1994: 277). Whereas the post-adjustment data is not well documented, but the impact of the devaluation of the currency, decline of Oil revenues, etc. would had resulted in fall of GNP per capital. In 1987 it was estimated at $370, which was much lower than the $850 in 1982 – 1983 (ibid).

This reflects a growing hardship on a large sector of the population. However, very complex situation as indicators of wellbeing already showed a decline, while a few others remained constant.

Subsequently, during the early phase of the adjustment programme, the trend of decline systematically continues. Studies have revealed the impact on workers, urban dwellers, and many other sections of the poor.

This was as a result of rising prices of food, of petroleum products because of withdrawal of subsidies, payment for health care and educational services, low wages to the workers, etc.

The Impact on Health Services

The care of the sick was originally the main task of Health Services, but the scope is broader. There are four major principles which are the promotion of health; the prevention diseases, the restoration of the sick, and the rehabilitation of the patient. (Lambo T. 1991: 305).

The conception of health in the constitution of World health organization embraces all the above. Thus, health becomes a state of complete physical, mental and social well-being and not merely the absence of disease on infirmity (ibid.).

Unfortunately as a result of deregulation of the economy in general and the health sector in particular a new concept and new strategy of health development have emerged. The characteristics of the new strategy in broad sense are:

1.     Reduction of the role of government in health delivery services.

2.     Marketised strategy in the health care system

3.     private-public sector link in health delivery services

Therefore, the impact of adjustment policy on the health sector becomes very disruptive. The health services have found their operating budgets cuts in real terms with the massive devaluation.

These cuts have resulted generally in the decline of public sector health services provisions. Governments at all levels began to put charges public hospitals and other health care centres.

In other words health care becomes for sale. It is like saying to patients that health care services are for sale, just pay and got cured or treated.

This encouraged an expansion of the private health care sector. For those who have the resources it is even cheaper to get out of the country to get medical care.

Ultimately, there is strengthening of private sector control as well as private – public sector nexus in health care delivery services.

The National Health Insurance Scheme shows that the Government is withdrawing from provision of health services and consolidating a link by providing resources to private hospitals in provision of health services.

The end result of this is demoralization and collapse of ethics by the medical personnel.

Similarly, it has become clearer that private sector health services will not resolve the problems of health of the poor, nor will it raise the general quality of care even for the rich.

It promotes corruption and makes the efforts and sacrifices of dedicated medical personnel useless.

Alternative Strategies

It is important to recognize the fact that the adjustment programme, from simple observations on streets of major cities in Nigeria, has increased social differentiation. Some groups of people such as big businessmen, a small group of state officials, some categories of middle class, etc. are visibly prospering.

However, the critical question is the real income of the poor. Affected by all the measures shown above, the real income of the poor increasingly decline. Thereby, undermining their capacity to live a descent life and thus widening the inequality between the rich and the poor.

This is a serious issue of concern to policy makers. It is not just to lament about the problem as there are options to correct the situation or even go beyond, to provide another new policy measures.

In the case of another new policy programme, policy makers could start thinking and talking about an alternative macro-economic system. The present is an economy deliberately created and being ran on non-productive activities. The principles of industrialization and agricultural development as fashioned out in the 1970s are abandoned.

Subsequently, Bank policies especially of credit management, initially regulated to favour certain industrial sectors of the economy were thrown overboard. Government financial and monetary policies too.

The end result is that the economy has become more of a speculative model. Or where are the industries that started to boom, by international standard in the 1970s to early 1980s? I mean the steel and iron industry, the agro-allied, the Textiles, etc. all has disappeared.

The social implication is inestimatable such that even Federal Office of Statistics cannot keep accurate records. The poor have increased in size, the youth who have lost hope that there is going to be any change have taken over control of major urban centres, insecurity is taking new dimension, etc.

Meanwhile, some people both from the academic and the Government think that this experience of market globalization has tied Nigeria, to free itself.

No! The impact of globalization is uneven, depending on the determination, will, and capacity of leadership to confront the challenges with courage and nationalist feeling to build a relatively independent economy. Is that not what India, Malaysia, Singapore and South Korea are doing?

If the package of adjustment measures cannot be dismantled the effect of these policies can be reduced on the large mass of people.

On way is by distributional policies within the context of the market system. There are varieties of ways to determine inequalities as a result of adjustment. These may be carefully examined with a view to redistribute resources there. For example Nigeria’s wage system still is not liberalized because there are Labor Laws which regulate the procedures workers must follow to demand for more wages. All such Laws are to be removed, from the Law Book and Workers Unions got full rights to demand for move wages without the state coming to take side with employers.

Secondly, heavy and effective tax measures may be put in place as a counter to negative effects of adjustment, on any financial transaction, and to channel such resources to empowering of the youth in urban centres.

Thirdly, liberalization of trade does not mean to allow our industries to die and buy from outside.  In spite of this global principle of trade, United State of America made trade laws to put quota of the volume of Chinese textiles into the market of USA. The Government said this is to protect local textile industries as well as to avoid unemployment.

In Nigeria there is need of a commission to watch Nigeria’s trade with other countries and check the local exporters if the need arises for a wider interest of Nigeria’s Economy.