The Nigerian economy has several activities sectors which include agriculture (crops), livestock, forestry, fishing, manufacturing, crude petroleum mining and quarrying, utilities, building and construction, transport, communication, wholesale and retail trades, hotels and restaurants, finance and insurance, real estate and business services, housing, producers of government services and community, social and personal services. However, with the advent of the crude petroleum sector and its attendant boom in the international market, all other sectors of the Nigerian economy have experienced serious neglect by the government, thus resulting to an unbalanced economy. Nigeria’s population as a nation is so large that no single sector can meet all her needs, no matter how viable it may be. This explains why there is so much unemployment, increase in importation of food items, fruits and vegetables, low out in gross domestic products (GDP), low rate of per capita income, hunger and starvation, increase in social vices and continual fall in the external reserve of the country, to mention a few.
Based on the above economic problems, worsening terms of trade, and a heavy foreign debt overhang, the Military regime of General Ibrahim Badamosi Babangida introduced some measures in order to bring about a balanced economic structure. And one the economic measures is the Structural Adjustment Programme (SAP) which was introduced on 26th September 1986.
HISTORICAL BACKGROUND OF SAP IN NIGERIA
Nigeria had experienced a period of healthy increases in exports in 1970s. And thereafter, the growth slowed and then plunged into negative levels between 1981 and 1986. Even agricultural exports slipped, from a previous healthy position to a dismal one in the 1980s. The nation also lost ground in its exports of ores and minerals. Only in oil did Nigeria improve its export share. Curiously, Nigeria failed to diversify her export base but continued to rely heavily on oil exports, because of the easy cash it generated. By the mid 1980s, symptoms of the economic malaise were evident almost everywhere. Nigeria was in recession. The returns to World Bank and other donor agencies’ investment projects were very low in Nigeria, and many of these projects failed to generate a positive rate of return. The physical infrastructure, already poor, deteriorated from lack of maintenance, and the quality of government services suffered; health and education indicators though quantitatively increasing, their quality fell below the minimum accepted global standards. Clearly, it was time for the Nigerian economy to begin an adjustment. Many reasons are responsible for the problems, nature and structure of the Nigerian economy. They are summarized as follows: • A narrow and technically backward production base;
• Economic and technological dualism;
• Openness and extreme vulnerability to adverse external conditions; • Inflexibility of production structure;
• Dependence on one or a few primary product(s).
The above structural weaknesses made the nation’s economy extremely vulnerable to cyclical and random shocks since the later 1970s, which, persisted; and warranted the introduction of the Structural Adjustment program (SAP) in 1986.
OBJECTIVES OF SAP
The Structural Adjustment Programme (SAP) has the following as its objectives: (1)to restructure and diversity the production base of the economy in order to reduce dependence on the Oil sector and on imports; (2)to achieve fiscal and balance of payment viability over the period; (3)to lay the basis for sustainable non-inflationary growth; and (4)to reduce the dominance of unproductive investments in the public sector, improve that sector’s efficiency and enhance the growth potential of the private sector.
COMPONENTS OF SAP
The Structural Adjustment Programme (SAP) had two components namely Privatization and Commercialisation. The term...