From: barnhart@gagme.chi.il.us (Mr Aaron Barnhart)
Subject: IPS: STRUCTURAL ADJUSTMENT: NIGERIA, NO GAIN FROM THE
Originator: barnhart@gagme
Organization: Evanston, Illinois
Date: Sat, 3 Oct 1992 21:38:48 GMT

Copyright Inter Press Service 1992, all rights reserved.  Permission to re-
print within 7 days of original date only with permission from 'newsdesk'.

Reference: Third World Dvpmnt; Africa, west
Title: STRUCTURAL ADJUSTMENT: NIGERIA, NO GAIN FROM THE PAIN/SERIES


/attn editors: the following is the second in a series of four
features on economic adjustment in africa. the other two
features on ghana and zambia will follow shortly./

lagos, sep 25 (ips/toye olori) -- ''i am what you could call a
senior civil servant but unlike before the structural adjustment
programme (sap) when someone in my position has everything, i
have nothing to show for the position'', says olubunmi adeniran,
a father of six who earns about 750 dollars a year.

adeniran is lucky. most nigerians earn far less. there are
also, according to official statistics, 13 million unemployed
out of a population of 89 million.

in the beginning of the 1980s, this oil-producing west
african country was regarded as on the fringes of the league of
newly industialised countries.

the average per capita income is currently less than
100 dollars where as before sap was introduced in 1986 it was
close to about 400 dollars. in 1980, gross national product per
capita was 1,030 dollars, nine years later, 250 dollars. sixty
percent of children under five now suffer from protein energy
malnutrition.

sap was introduced by president ibrahim babangida as the
remedy for an economy in crisis. the oil price crash in the
early 1980s and the accumulation of large short-term debts by a
previous civilian administration had exposed the fact that this
giant of africa may have had feet of clay.

sap aimed, apart from general economic efficiency, to
make nigeria less dependant on oil and more self-reliant. it was
sold as a homegrown measure to nigerians deeply antipathetic
towards the international monetary fund and world bank.

but analysts say the aims are far from being achieved.

''i do not think that the nation is less reliant on oil
since 1986. for example the figures just released by the
central bank shows that non-oil sector contribution to the gross
domestic product was only 2.8 percent for 1991,'' says andrews
elueni, an economist for the manufacturing association of
nigeria.

the export of manufactured goods is less than one percent of
total foreign exchange earnings. the export of agricultural
produce is around 1.6 percent. industry operates well below 30
percent capacity utilisation, and about 60 percent of raw
materials used in manufacturing are imported. (more/ips)


structural adjustment: nigeria (2)

with an external debt of 34 billion dollars, the debt
service ratio is 36 percent of total revenue. however hard
the government tries to run, without a debt write off,
nigeria is not going to get very far.

the promised inflow of foreign investment into a deregulated
economy has also failed to materialise.

nigerians, natural entrepreneurs, have been forced to find
new ways -- legal and illegal -- to scrape by without relying on
government.

the problems of getting foreign exchange experienced by
importers before sap are now absent. but at the price of massive
devaluation and the knock-on-effect on prices.

the local currency, the naira's value was through the boom
years fixed at one to the dollar. following the deregulation of
the foreign exchange market, the naira was gradually devalued
and the exchange rate today is 19.60 naira to a dollar
officially and as much as 23 naira on the black market.

sap favours the trade in money and this has seen the
proliferation of the banking industry. between 1986 and last
year, commercial and merchant banks increased from 40 to about
125, several merely making profit on the margins between the
official and blackmarket naira rate.

but elueni noted: ''the situation we have now is that
imported materials are even cheaper than locally manufactured
goods. the country is being gradually turned by sap into a
nation of shop keepers and not producers as more nigerians are
now involved in trading than production,''

high interest rates, to control inflation, have also sent
industry reeling.

''if manufacturing concerns get loans at high rates, they
can only survive by jacking up the prices of their goods
which they pass on to the consumers, whose purchasing power
had been reduced by sap and hence glutted warehouses,''
lawrence adekunle, director general of the nigerian association
of chambers of commerce emphasised.

the verdict from the donors is that nigeria must try harder.
they point to the lack of proper accounting by the government,
heavy spending on white elephant projects such as steel and
aluminium, a failure to fully bite the bullet on exchange
rates, and political unwillingness to cancel all subsidies.

with import controls lifted, money expensive, spending power
eroded, industrialists say sap is more than enough. for the
average nigerian confronted with slashed public spending and a
worthless currency they feel the pain, with no hope it will end.
(end/ips/to/oa/92)