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University of Nigeria Virtual Library
Serial No
Author 1 NWOSU, Bernard U
Author 2 EDEH, H.C.
Author 3
Title From Structural Adjustment to Economic Empowerment: An
Analysis of Change in Continuity Keywords
Description
Annual Conference
Category
Social Sciences
Publisher
Publication Date 2007
Signature
FROM S'I'R1[JCTUIEAI, ADJUS'fMENVI' 'TO ECONOMIC ER/IPQWEIZMENT: AN ANALYSIS OF CIiANGE IN CONTINUITY
Department u f Political Sciencc, University of Nigeria, NsuLka.
t
Abstract
IJolilical urd economic r-cfurrns are uszially expressed in policy doczrmcnfs. ?he $-arnew~ork l h t drove he refirms uf flze 1980's was the Siwici~~ral Adjzistrnent l-'rogr~~m~rze 6SAI'). l i t he new dispensuiion, a ne LV policy corz fext that i s created fo grride the reform is Nafional Ikonomic Empowernlent and Develupmeni Sh~iegy (MfiDS) . SAP failed m d NEEDS comes to the resctre. Rrrt ivorlhy ofnote is tlzaf llze hlo fmme~vorlis are prot fiicts of lib era1 paradigm wit11 similar asstr~zzp f ions. Hcr.sically, ihey advoca f e privuiizn/ion oj' public enterprises, deregu fation of ihe ecommy and public sector rcfnnns among others. These refoms dirni~ish /he rule ofthe sfate atzd striw lo empower ilze private secior in the acczmzrlrliotz process. SAP years witnessed a ntassirv rise in ifre tide of corn~p/ion, ttnenrplo~~ment, high injluiionary tr.erzd.s (and increased ineflciency of state iratilufions. 771e rzew policy con fexl (;"JI11iDL5J opemtes j/ndumentully wifh ~imilar iook as SAP and its otr /corne is no1 likely to be any d~Jkreni. Conscquenrly, ihis paper posits thai rhe policy cnntcxt qf llte presmt rejiwm p~~~ce~d.vfrnrn !he same paradigm wilh SL4/'; operalcs wifh ~ico-li/wwf f oo/s thul cor!fornl u'itll ' N'aslzing f o~r Co~zrettsr~s ' szrch lho? u c.ntnparoliw sfrrc/v wi1h SAP IIWIIL/ pi) h i io CJ C ~ C J I I ~ P ill conlinzti[y.
lr~trod~~ctior~
Reforms no matter the ideological undercurrent are usually located in policy
frameworks. These frameworks are the vficial context in which the aims of the
reforms are articulated. The identity of each reform period is commonly associated
m i t h the nomenclature of the policy instrument. Hence, it is fashionable to speak in
terms of the austerity years, the SAP years and more than likely, NEEDS would
come to share non~enclaiure association with h is era in the dcvelopnient of the
Nigerian sf ate.
Be that as it may, relbrms involve major changes in the political economy of
the stair. 'The perrod or austerity was marked by strtct fiscal measures. sharp
t cductiorls in inipor t th-ous!~ rerib-ictive measures (Osak~ve, 1 993) Similarly7 h e
Structut.al Adjustrl~cnt Programme, which was introduced in I%G, has i l s nlgjnr
polrcy tlir-usts around actiot~s to correct the over-valuation ol'tlw naira; ovcrcorne
public inerticienctes; reduce the debt burden and attract net inI1ow of foreign capital
(Osakwe, 1393). Rcfor~ns were undertaken in fiscal managerncnt and public
expenditure, public invcstmct~t programmes, taxation, trade, public enterprises and
rnolletary policy (Faruqee and I lusain, 1996). 'T'liese reforms wele carried out at the
expense of heavy social cost. As a result, the huild-up of opposition against the SAP
refor-ms unnerved the political leadership and brought it to a stall (Faruqee and
I-lusatn, 1996; Olcorne, 1999; Shaw, 1993). The structural adjustnleut in Nigeria as
in many states in Sub-Saharan Africa as comparativc studies reveal was a ibilure
(See Pearce, 1998; Bigston and Ndungu, 1993; I-lcwitt, 1993; Cromwell, 1973). ?4
The failure of SAP in Nigeria did not deter its designers at the Brettonwoods
Instiiutions (BWIs). They subjected the same set of failed instruments of policy to
Iaundry and reproduced them as Poverty Reduction Strategy Papers (PRSPs). The
Bank and Fund see to it that technocrats trained in the neo-liberal paradigm
coordi~~ate the PRSPs. Ultimately, new set of reforms are put in place, with a brand
name direrent from adjustment but having the same essence. When SAP was
designed, the government sought approval of the Bank and Fund. Similarly, the
dcsign uC Nigeria's PRSP was done in confc-rrnity with the requirements of the
BWls. The product of Nigeria's PRSP (NEEDS) when subjected to content analysis
reveals another adjustment. Tdeologically, it is neo-liberal and its central principle is
empowerment of tIlc motket over the state. Its perfor-n~ance at t l~e l e td of
macroeconomic indicators may look good, but the studies that produce this data
seem oblivious of the grave social costs of the on-going refonns. This is not
surprising because scholarship and technocracy of the pro-reform genre are part of
the politics of rcfonn whether articulated as structural adjustment or economic
ctnpowennent.
The comrnitn~ent OF S A P and NEEDS is thc cclcbration of market
empowerment. Their underlying principles cannot but lead to tlx conclusion that the
two pol icy frameworks represent a1 termti vel y swings or onc pend tilum.
From Adjustmer~t tu Empowerment: The Prablemntiqae
African states have sirice the 1980's bcen in crises (Duncan and FIowell,
1993). As a result, there have been major shifts in the organization of political and
cconornic life in the conlinetit. But the crises that heralded t l~c refornls have
continued if not deepened, despite decades oF socio-economic er~gineering
(klustapha, 2006). The socio-economic engineering seeks to acllieve economic and
political liberalization. African states have therefore been into a pick and drop game
for a policy framework to realize socio-economic goals of transitional statcs.
Significantly, the dominant theme in the neo-liberal movement is reform and
democracy. There seem to be a discovered ncccssity to reform an ". .. overly state-
centric and stagnant economies and democratization of excessively centralized and
corrupted polities" (Shaw, 1 993:3).
The dismal outing of S A P in Nigeria and indeed most other adjusted
economies in Africa is aptly captured by Adedeji in his statement that:
any attempt to portray the economic situation currently prevailing in Africa in rosy terms, to minimize the impact of an adverse external cnvironn-terlt, and to depict the effect of Structural Adjustn-tent Progranlnte as having been always positive does not only detract from the reality of the situation but also cynical in the extreme (Shaw, lW3:E) .
The elements of SAP include tight fiscal and monetary policies, dismantling
of the exchange rate contl-ol, liberalization o r trade, financial sector reforms,
privatization and commercialization (Fat-uqee, 1996). These policies were designed
with the notion that the state in Afiicica is the major c:we and not the solution to
ATrica's development problems (See Bates in blustapha, 2006). Therefore, the
reforms werc aimed at achieving a minimal state. Tn the I 99Oys, it was fbund that
adbjustrnent had further decpencd the crises of development. World Bank ratings of
certain indicators on development reports poinf tn a colossal failure (Levy 111
Mindful of the inadequacies of adjustment, the BWI produced a new
requirement. A regulatory state of sorts was now seen as essential and the new
reform agenda focused on fostering institutional accountability. The good policies of
restrictive macroeconomic management, liberalization of international trade and
investment, privatization and deregulation were now to be matched by good
institutions: democracy, a 'good' bureaucracy, an independent judiciary, strongly
protectcd property rights and transparent financial institutions and corporate
governance (Mustapha, 2006: 191). These latter elements were to guide the second
yeneration of reForms in whose mould NEEDS is cast. L
Absent in the first generation of r e fons is democracy. The SAP years in
Nigeria as in a number of ATrican states that underwent adiustment wcre either
militnry dictalorship or lacked muhi-party system, At the moment, there is
incrcasfng emphasis on reform ofthe regulatory framework in the state. The core of
this a,,pect of the reform is the protection of property rights and p o d contract
reg1 me
The new reforn-is with its requiretnents of democracy and ref'onned
regufatory framework could be associated with pitfalls. In the Ijrst place, ~t
substitutes t h existence of civil rule and conduct of elections with democracy -
whether or not the elections are massively flawed. Again. reform of the regulatory
framework has assumed it character clearly suggestive of class bias which inhibits
the emergence of a state will1 impersonal character. Evident in all these is the trulh
that fundamental contradictions of the state cannot be cured with reforms of
unnecessary emphasis on market as NEEDS is cornnlitted to doing.
To understand NEEDS, its reforms and possible directim, it is needful to
unravel the political economy in which it is etnbcdded. The new reform programme
like SAP, tries to entrench private ownership thereby empowering the socio-
economic group with the means to replace the state in areas of the economy where
the state is ma& to recede. Therefore, the two reforms share common stand in
favour of privatization. Othcr- policy tools of the two rcforn~s such as liberalization
of trade, fiscal and monetary reforms essentially have impacts orernpowennent on
the ruling group as against clisempowerment 011 the subordinate socioeconomic
group. The mechanism for act~talizing this outcome is pro-market policies.
'I'erldencies U T the ritlii~g group in (he pt.1 iphcry proc luc~,~ the phcnur~wlon of
slate capture herice their cnpnc~ty to capture the process of mar1:et ernpowennent is
no[ in question I'rocesscs of privalizatiuti i l l Niscria IS for instnrice dmottl of
transparency and pupi11~1 pm-ticlpatitm. Iteli~rrns 01' the state ins l~ [u i ions rnnriifcst
contrad~ctio~~s. Leadership I-csts on patrimonialisni and corruptior~. hlkandawire
(2005:20) remarks it1 this connection that 'cAAicn~~ govcrrimcnt I~ave neithcr the type
of government nor the po!it~cal acumen tu prevcrd capture of tl tese policies by rent-
.? . seekcrs and patron-client net\vorks". I h ~ s fentt~re l ~ n s characferind rcfo~ms ~ I I
Nigeria and inspires pessimism aboi~t the success of the prcsent refom.
A study of this nature worrld be a timely exercise on the nature of reforms in
the state and perhaps, the need for an epistemological rethink of Nigeria's
devcloj~rncnt paradigm. I t night be needful to observe that deveIopmcrital state,
whrcli is usually an object of neo-liberal ol'fensive, may not have bccn propcrly
purtr~yed in the literature vis-A-vis the Afr~can staie and Nigeria i n parliculnr. 'The
search for sdutions lie in unraveling and understanding the dynamics of the
behaviour of socio-economic groups in the accumulation process and evolving rules
to resolve contradictions therein. This is a task for intellectuals and development
planners.
Two Paradigms on Reform: A Review
Rcforrns could be understood in terms of adjustmg the role of the state in
relalion to development. This necessarily entails some reorganization in the
economic and political l i k and expressed in terms of building and rebuilding of
state institutions. Groth (1998) identifies the process with the latest incarnation of
tile "redemocratization' thcme. While refom could go either left or right, the
dominant contemporary notion of it is hat of a liberal phenomenon associated with
stabilization programmes, adjustments, 'empowerment' or by whatever verbiage oT
o f'ficial convenience.
The contours of extant literature on refoms would ~eveal two directions viz
the orthodox and radicai persuasions. Dominant political science itlclines totvards
orthodoxy and commits to liberal traditiun. I t presupposes the capitalist sucicty as its
horizon of analysis and as the ideal paradigrn for all societies. Alternative arialysis
maintains a methodological vision to radical or Marxist tradition, which imagines a
society that supercedes capitaiisrn (See Grolh, 1998). Debates of thc divergent
schools is a contest about the role of the stnte in the development process.
Two important divisions could be isolated rrom the orthodox school. O m is
the group of interpretations that favour 'passive' or rninirnal state. Groth refers to
the minimalist interpretation as 'free market conservation'. The advocacies of F. V.
I-Iayek and M. Friedman within this shade of the orthodox school gained
prominence in the 1980s due to economic recession of the period. Market oriented
reforms they contend, would "unquestionably improve economic performance since
private initiative is superior to state interventionism in preserving economic growth"
(Manzetti, 2004:844). It becntnes necessary that a process ofreducing the size of an
mterventionist state be put in place. Later acolytes of this school, saw in
privatization "a means to slash the golVernment fiscal deficit by ending costly
deficits to state-owned enierprises. They favour this approach on the grounds that it
would depoliticize business decisions, end conuption, reduce the power of unions
and bring an cncl tu tile riiisrnanngernent of cunglomcrates (Manzetti, 2004:544).
This image of the tr~inimalist state is rciiied by neolibcralism i n n n attrrnpt to
universalize the central idcas of clnssicnl IiberaIisrn (Cro!h, 1998). Adam Smitll,
who is the leading icon of [h i s school, lays down three duties of the governrncr~t (the
state). 1 . Protectins sociefy from violence and invasion fro111 other societies. 2.
Establishing an exact administration ofjustice and 3. Stabilization ofunemplnyrnent
and control of inflation (Liou, 2003:370). Opinions of World Dank (1992) and
Chalker (1993) and other writers of this hue are infbrmed by the ideas of the
classical liberalism.
Smltl~ian roles of the slate must have been influer~cccl by observations of the
Britisli society of his days. The country was iridcstrialized on Lhe basis of private
initiative. Ile therefore felt that the state should limit its functions to ancilliary rolcs
to development. But Sartdbrook ( I 99357) argues that "Britain c o ~ ~ l c l indust6 R I ' ~ z e on
the basis of private initiative and limited state action owing to the relatively simple
nature of industrialization in the early eighteenth century. Not o111y did Britain have
few competitors, but technology b c i n ~ relativelv simple, required liniitcd capital atid
organizational resources". He further held that "Iater industrializers confronted
changed circumstances. Compctition was intense and technologies were cornplex
and larse scale, hence expensive" (Sandbrook, 1993:57). T h u s the thesis of limited,
minimal or passive state is incapable of practical validity given thc capacity
Iiniitations of the private sector especially in Africa. Indigenous private sector
capacity in Sub Saharan Africa is quite low and to retrench the state from economic
roles ~vould cither result in greater ineflicicncy or create room for a thoruugh going
penctra!ior~ of'thc stntcgic scclors of thc cconorny by forcign capital.
Passive sbtc tlieurists rear that intcrventiunist state negatm tnarket principles.
On this note, Dritish econarily, wE~ich was largely welfarist before Thatcher, posed a
fear of "Creeping Socialrsm" (ILlcCormick, 1999: 66) among conservatives. Again,
a persuasive counterpoint could be found in the thesis of Sandbrook (1993:57) that
"the sccret of the East Asian Newly Industrializing countries ... is a strong
interventionist, yet market conforming state" He thcrcforc rightly posih that Africa
does not need less govcrnn~ent per se I-atlier; it requires active develupmentai states
capable of cornplernenting and directing tnarktt forces.
Another variant of the orthodos view is built on Kcyncsiari neo-classical
economics. Keyttesinns subscribe to "active state''. This set of views stand as
counterpoints to fi-ee rttaskct conservatism. GI 0th (1 W8:S) refcrs to it as reformist
liberalism. Tts einl~hriqis is thc use of the state to servc the wellkre of the political
community and as the best mcnns of balancing abuses or the mnrlcc~ systcm while
preservi!~g private prupcities and individual l~berties ('Groth, 1998). Adherents of
this wing of orthodoxy contend that if Keynesian model fails, it is becausc
government cl~ooses to apply only parts of it therehj. undercutting its potentials
(Manzetti, 2004). Pcrliaps if ihe zeal put into the advocacy and ptlsh for the
implementation of passive state policies is applied to the welfare or even the
socialist state, the impact on social economy would be cnorrnously imprcssivc. The
point which the Keynesiatis have Eyiled to address however is that public cormption
cspecially in the developing states of Africa is a major obstacle to economic
managcnietit in public enterprises.
The second broad scl~onl -- the radicals see the stnte as n rclnlicm. Gi'otl~
( 1 W S ) sugqests that the cllmacterizntion of state as a relalion views the st:lte as an
instrument thr-ough whicli a rulirlg class protects and advances its intcrests
(Instr~rmcntalist view). rlence, the state is an indispcnsnblc instrument of class
domination protecting the unequal distribution of property and bencfits !he general
interests of the ovmcrs of the means of production.
Interpretations uF the capitalist state has given rise to numerous
understar~dings as porlrnycd by various strarids of thought in the h~larxist Scliool
Identifiable strands arc: Instrumentalism which is already discussed above;
struciuralism wliich examines the limits and contradictions of capitalism from
wiil~in the structure where the state is situated. Cri~icalism focuses on the
mystifications of the capiidist stntc as well as the obfuscatiotls of dass stnlygle and
nature of public policies. Statrsrn looks at the content uf social struggle a well as
how social structures cond~tiorr class struggle 2nd state policies (Groth, 1998).
Reforms in the socinl~st state cotlronn lo the particular form of the state. In
socialist state or "bureaucratic social ism", transition would be revulutionmy
utilizing the state as the arrn orthe new class that clorninates the economy. Here,
state reform entails collectivism. Groth ( I 998) r crnarks in refcrencc to this variant or
socialist reform that "the result was the usurj~aiion of detnocrritic politics with the
dictatorship ofthe proletariat substituted by dictatorship ofthc party". 'the hislorical
oulcorne he says was tolalihrianisrn as shown in thc Russian experience.
On democratic socidistrt, transitivn is dernocl-ah and participntury
democracy hclps in cuntrollit~g the bureaucratic el~te, restricts attc~npts to
accumulate personnl power, guarantee pacific successions to ponw and rcsd ve the
ohjecl ive conllictc orintcr-csl wilhir~ socialism (Sce Groth, 19?88). I;, contrast tv nco-
t r beral reforms, radical I cf'urrns impcst. rcstr ictions cn thc market
The Iriclina~iun of r c f o r m in Nigeria is i!lo ortl~odox paradlgm of the passive
ctate gctlre. Retrencl~ment ot' thc state in the economic process and cnabling the
markc! is the cornmitnicrlt ofthis kind of reform. Policy instrument of!!^ Str iictural
Ac!justrnent I'rogramnle re\:cals this proclivity, hlnrket cfetermined exch:inge rate
regime, trade liberalization atid abolitiuri of perceived corlstrainis such as
commodity boards werc a d j u d ~ e d as impressive first step. Part of this initial policy
skpwwtis the devalustion or the cschangc rate ly Gb?k Faruqw ( I W G ) held lhese
rehrms In corn ylinlentnrp heights. f Ie furt he:- out lines the factwx thnt propelled
SAP and its policy ~tislru~nents. The factots incluck first, Nigeria's plunlrnc-ting oil
rcvcnue that was jeopardizing the cour~lry oYcccnornic: stability. Scconci. Nige~ia's
pccar ious relatims!lip wi:!~ its creditots was s u d ! t1mt debt rescheduling uould be
acceptable to creditors only under conditions defined clearly in an adjustment
programme. Th~rd , Nig~r ia policy makers were becomir~g increasingly aware that
state intervention approach was not an effective development strategy - one that
turned away from government led growth was now most desirable (Paruqee
1 996.244).
Taking Faruqee on the first point, plulrlrnctirig oil revenue necessitates
refbrnx, but reforms car1 still take place williin a developmental state. To be sure,
develapmental state does not hinder diversification orthe cconorny or strenglhening
o f the regulatory i'rarnewnrk in the state. Ac!justrnent as available evidence shows
neither improved the price or Nigeria's uil nor enhnncecl the gencml ecunomic
pert'ornl:incc. 'The average antiud grn~Lh rate for Niseria was 58% in i l ~ e pre-
adjustment period of 1450 - 1955. But a pcl-iod of 1956 to i '49 1 which include the
adjuc,trncnt years leaves the country will1 an average nlinual ~ ~ o ~ J i l i rate of 36%
(Fnruqee 1996:267). SAP is also ssored low in the critical evaluations of Sflaw
(19931, Adedcji (1993; 1989) Also country case studies ofthe impact of Structural
Adjustrneni on the African fimner, Pearce ( 1 992), Bi(;sten and Njuguna (1 992),
Mewitt (19532), Cronlwell (1 992) did not firid success Gotn study of adjusted states.
The point made by raruqee about thc precariousr-tess of Nigeria's relations
with its creditors who would not accept debt rescheduling without structural
adjustment betrays t l~e main reason behind arljustmer-rt. It exposes the lnclr of
popular ownership of tlic refvrrn contr~ry to thc claim uf-the Bnbangicla resirne in
Nigenn that SAP was "made in N i ~ c t ia by Nig~r ians" (Farrlqee 1996245) Reforms
orthe period were actually a desisn of the Bank and l ' l~nd ( cSAsante, 1 WI: Shaw,
C ' 1993). Tlmc institutions l-cpresetlt the ~ntcrnational trusteeships' that are
recolonizing Afi-icn iSee IJIlis in hhstaplia, 2006: 194). The opcralior~ of SAP had
focused budget baliince (Asante, 199 I ) rather iliati development. Such emphasis is
best r:nderstuod when one realizes that budget dclicit afTects debt servicinz because
debt scrvice obligticln is tied to certain percentaye of y-oss Jornestic product. What
is seen in essence i s what Shaw rcikrs to as translbrmatiun of !he global context by
the North for the South, Act-justrnet.11 reforms ruled out the possibilily ol'thc much-
sougl~l-nller New Intctmaliunnl Econvmii: C3rdc.1 (NIEO). In place of' NIISO, tllc
cmcrgcnt r-mli t ies arc "first, n New Intcrnalional I)ivision of L a b o u r (N 1111,) :rnd
l t i t n 2 Ncw Intcr-n:~tionnl Divisinu ul-l'uwer (Nli'l')" ~Shasv, 199.7. 2).
'I ilc lflird ~ ! r \ i r i t by I ';IS~I~CC is t l ~ n l Nigerian poIicy mnkcrs inc t -cas i t~~!~
r-a!liz,cd that st;ite iri(eri.cr~!ic,~i apl,t.oach L Q ~ S tw lorlyc~- an eftilctivc Jcvelopmcr~t
r\pproar:l~, l'!ris !notion may be nrlclressed fi-on! two pcrspcctives: One is t!le point o!'
tie188 of'or-iyit~ ofihc rclbrrn. TIE second is ilw class chnractcr o t ' i l ~ Nigcrian policy
makers. Adiuslrncnt tcfur-tns were originated by the 5rettonwoods ittstitufio~is and it
was a Mobson's chuicc situation few the policy tnakets. 'l'hir, is because it was t n d e
a conclilion Tor tirrthcr debt icscheduling. I n his own admission, Faruqee (1 9O6:244)
had notcd that IMF rcjcctcd the first sct uf rei~~rms, \ v l i i ~ I ~ canic o~ i t in I986 in the
form ofa rcf'orm budget, hecnust: it did not contain tlcvalun[ion rncasurcs. 'I'his rules
out thc reform as a volunlary choice oftllc pvIicy mzkers. Ir~stencf their actio~i was a
mere rcsponsc !u !hc rl1!;[111iis uf inferriationnl ctlpitnlist syslem. ILlteresis cnr bodied
i n thc I - C ~ I - I I I S r-cpreswt n!.ljuslmcnts of the system lo the dialectics ol'ccorlomic
r-elations. At 3 givcri t i I ~ I C , liqwesimistn was ncccpinhlc ris capable of at1 twlci~lg
peoplc is built ir~ta what t l~e docurne~~t refcr-s to as social charter. 'l'he charter
expresses aspirations to tackle problems of educa~ion,, Iiealth, environment, I-11V
AIDS cllallenge, housing, crnployment, the youlll, ger~der and security (NEEDS,
2004). I3ul Arnadi (2004:12) rightly critiques the document by a r g ~ i n s that
CL combining a policy tlirust on private sector with a focus on people, their weli'are
and empowerment and rcrorm of the public sector, NEEDS secrns to provide
something for everyone and nothing significant for sornc". And this paper would
add, nol11;ng at all for nialiy. 7'11e social cllarter is simply a pretense at addressing the
social cost of reform as csperienccd under SAP.
Another h i ~ h point of NEEDS is the pr-ornolion of pr~vaie cntcrprise.
Strategic thrusts fur grc)\v[Ii ol'flic private S C C ~ C I - irlcludc anon3 otl~crs, privatization
and Iiberaiizatior~, rationalization of liscd no tie tat-y and Icgal iticentivcs i'ur easy
access, selective impel-t resirictio~ls arid cr-catioii of public-private partnerships
(NFFDS, 2004). This aspc t of the docurnerit lypifies pasive state ambitions of the
~reforrn. Features of' privatization o r the 1 980s are reproduced in tllc ncw ducurncnt.
Ma-ior rationalizing argumcnl for privatization is tllat priirak sector pcri'orms bctter
than public sector or tllat public sector enterprise are riot pr-ofitnblc. I3ut h4orr10h
(2002:25) has ~ , C R U ~ S ~ V C ~ ~ argued that "not all industries cu~.scntly being psivalizcd
operated at n loss ... Governme~~t is nlerely responciing iv lhe ideology of'
~lobalizatioti . . . ". He also saw in the manner o f S h : ~ (1 933) that relimi is political.
That being thc case, i t has a class ct~aractcr.
Cl~nngirlg the way govcr-nment does its \vosk is about reforms cf' stnte
institu~ion. IJndcr this t l~en~e, refor-111 see!ts to create more eflicieril and rcspot~sitc
putdic sector, itnprwc security and administration of justice, tacklc corruption,
promotes transpxe.nc.y arrJ accuuntability (NEEDS, 2004). Tlicse are reducible to
institutional changes that target an efXc.ient state as its a im 7?ic tools vfrefvnn that
wctuld achieve this outcomo are: relbrms of the civil service, seen as privatization
atid libcralizalion of the sector, right s i z i n~ , redid011 of waste etc. (See NEEUS
2004:57). Rerorrn of the civil service has a m:ciw consequcncc in iniplcrncntatiori.
. . Thc lirst policy n-rensurc, which the rcform sceks 10 use, is right srzrny -- an
cuphcr~iism h r t-etrertch~ncr~l. Jub losses pi-duce scver-c rriicr-ucctnvrnic outcorncs
irl hot~schulds and ywra i l y stand contrary to social clmrter preactin~ents in thc
]:oIiq rlvcr~ti~cnt. hs2ir1. priv:~lizing :~ncl libcrnlizirll; ci:.iI r;c~-vice mcam unlcaslrirr~
ur l~ni i iykd markct tijrces o n I l~e peq~le .
0 1 1 building socid sccurity and adtninistr-rl:int ol'juslicc, h c i~ntioii's jwlicc,
prisor~ .scr\;iccs a d juclicial sj.stem are to IK rcl~rlncrl. Ccr tainly, thesc rcli~rr~ls lmve
rlnti~irig wrong i r ~ illcrn, biri i t is only qucshm~b lc h a 1 ihcy arc strictly bciny clone
with n vicw to the scrvice ol'cnpitul. NEEDS clocu~~lcnt is not anlbig~ious about this
conintjtnierrt as i t ~nakcs n clcat stntcmcnl tliat "a key con-tponcnt ivould be crcating
a legal fYarnework tlia~ is ~ol~ili:civt: 10 ill^ irillow 01'capitd ..." (NliIjDS, 2004:07).
Ecmocracy shuulcl guide re!'urms to serve Ihc pcople an(\ nut capital. F m p I ~ x i s o t ~
capital rlcriuclts tlic vnluc ofhuman beings ard rcduce tlrern as Marx (19%) riglltly
;trgcs, 10 L c ~ ~ t l l t n ~ d i t i ~ ~ " '1 I1c point bcir~g 11inde is t l ~ t stale inslitu~ions arc not
adiustod to scn:c huninn bc in~s . 011 this note, hlkardawir-c cot-scclljl sees thilt a
rcfbrrn of this 1 k . l pol-tr-ays a certain imagc o!'tllc state "as a tcclxwcratic tool li7r
eflicien! operation of the rt~xl,et, a regulatory state 1101 E developnicntalist state
(Mustapha, 2006: 19 1 ).
Another aspect of cliatl3ing h e way government does its business is tackling
corn~plion. Its institutional for rns are the settins up (31. Bud~;et Monitoring and Price
Intelligence Unit, Indepeilctent Corrupt I'saclices and othcr related crimes
Commission, Economic and Finaricial Crimcs Commission, Exlractivc Industry
Transparency Initiative aniong o t h s (See NEEDS, 2003: 100- I0 1). These
institutiond dimcnsior~s of NEEDS set it apart tiorn S A P 'lTherc is the sense that
par1 uf'ti:c rcnsnn h t - Iliilsrrc uf SAP is weakn~:ss uf'stnle irlsliii~tions esp~7cii~lly the
~'cg!lnlory li.arncr~~otlk, Iicncc, [Ire ~~iovc~i~c t i t !u\~mds :r rcgdatory stale.
i \ n a l > i c : ~ ~ tl~;ri l k u s u ~ j inslitrrtio~is i:; Iilicly Lo I N I I li>r-wnrd iristitrlliorml
rcl'orms 3s a cwc l i ~ c o ~ ~ t r ~ d i c t i ~ n s ol'dcvcloplncnt. I ' l~is i~lclination is h u l d in tlle
Ilami!oniar~ i111il hladisoninn political ccotiotnisk. as Shrpslc (19954) cntcgurizcd
thern. S11cl)slc coiitesls il l thc paper that balanced puhlic policy making migllt
cmcrgc fi-urn agpt-opinlciy cIcsigtmi institutional arrar~gcrncnis cscnt.cd in a process
that i ntegmtes the civil socicty. 'I'his sf t-t7ng argulncnt that tcnds to Ibctur clen~ocrrtcy
into its thesis seems unmindli~l of h e f ix t t ! ~ t the stale es n relatiuri simply thvours
thc doniinmt sroup and in that r c p d institulional rcfvrnls in a capitalist statc woulc!
xive preccc!ct~ce to t l~e interest of capihl. WIi f i t ought LO be rclbnrred is rather
ec.ut~c~mic relnt ions
Rctuniing tu specifics, S A P ant1 NEEDS share Si~tidatncntal mcctin~ points
with \Va.shir;gkm r;onsensus. This conscr-rsus is a t c !~ policy rcrunn agenda
de~.eloped by Williamson a id it includes: fiscal discipline, rcotdering puL)lic
expenditure priorities, tax rcforrns, libcralizntiori of iri~erest rates, colnpctitivc
exchange Irate, trade libtmlizaticm, inward foreign direct investment, privalimtion,
deregulation and proper ly :ishts (Williamson, 2003: 1 1 ). hhin Sentul-es uf SAP and
NEEIIS rcveal that ~i~ndatncrltnllp, their lernplale linrncwork is the Washington
Conserlsus. \.t'hnt the conse~~sus did not cover arc it~stituliniial rcrornls and ihcsc are
basically :~ncilliary to thc corc issucs such as privatization arid dcrcgdatiori.
Preoccupation with instltutioris ill 111c context of major cconumic issues
obfuscates reality. The problclns arc simply not itistitutions. Informed arwlysis must
rocus on llle prvcess tl13~ gave risc to the tly s r~~ r~ t i o r ?d i l !~ OS i~ l~ t i t i~ : i~~ i f r . F O C L I S ~ ~ I ~
t l ~ c socio-cconnn~ic dyriatnic.~ x ~ i l concli!ions vf social rc~:;uci~~ction in t ? x s t ; ~ k cnn
best cal?ture this. If such crr~~riitiorls 31-e 121-one to rnnjor- ~oi.tr;ldic.!i~)~~s, 111~11 r -e!h~rx
~vhetlicl- louwds tlic p w i v e or active siate or- even r-nc!ical cuovlci bc sul.)-ject to
czpturc at thc cspcnsc of ger1er:il good.
Polilicn! Gcor~orny of Kcfo~-111s
T o untlerstard refbrrns in Nigeria, i t is only pr-ol~er- to locale Lhe policy
fratnc\vor-k i l l n scientilic. analytical jwrspcctivc. Oasic:illy, I-cfumis should be
undcrstoo~l as a product of mztcrialist dinicctics in whicli the clorl~innnt and
subordin:lte iritercsts are in s trug~lc. '?'he process is not circui~iscrilmi to m y given
t cw i tory. 11 is a pi ocess i l l wliich 111e dmiinmlt slruclurc. of the ~ l o b a l ecoiwrny
rcali>~ns itsclrin rclatiun to c~mlraclictions !?om pr?s of*thc struclure.
'I'hc present S l u h l structure is c i ~ u nolcr-izcrl by cnl)italist dr:111 i !lation a trc! in
tlic ni;lnncs of osn~utic p1.cssui-e in l~iologicnl systwns, i t cxcrts a pull 011 C V C B ~ C ~
pal-is o f l!ic slnrctirrc so Ih:? t rni~venlcl~t ul'ec~t~nn-iic in tercsts i nc l i ~ i c loivnr-i!s nrcas
of higher concentration. The pattern is, first the broader structure acts, the weaker
parts respond in relation to the first action. When the rcsponse of the weaker parts of
the structure is not advantageous to the dominant structure, it acts again with
cognizanw o r the first I-esponse by the weak parts of the str-ucture. This process
occurs in a dialectical continuum.
Rehnns of the 1980's were occasioned by cconomic reccssivn in Europe in
the 1970's. Before then, neo-classical ecunurnics was the dominant approach to
rtccumulntion. Recession rcilected in slz~mp in the prices of primary comniodilies
exportcd by states of the global per-iphery. OTcourse, this affected the price of oil
\~:ithin Nigerian espu~ls. Conseclue~itly, the impact oCreccssion I-everberated in the
periphery and created econo~iiic crisis. AflEctcd slatcs entered info exiemal loans
whosc service obl igntions thcy wcr-e also unable to rncct. Dcht resclleduling \vould
only be acceptable to t l~e creditor-s on grounds of economic reforms. Economic
I-ehr-111s are dcsiglied to retune every part of' the global economic slructur-e to
changing requirements of capital.
It is the abovc process that played out in Nigeria-s adoption of Structura!
Ad-jusirnertt Programnie. IR4F essentially designed SAP mostly for countries hat
were already in debt trap. Prior to the SAP era, thc state led accun~ulativn was
prevalent in Niger-ia. 'The new thinking that capital would K~re better without
encurnbranccs oi'thc acti vc state is what inlbr~iied the fir.st !;eneration rel'orrns in the
cowtry.
Capitalism has slr uctures identified in terms of inst itutioris and agents of
difiisinn. 'l'he institutiuns are the ksal framework that prcscrves pt.npert.y regime
while the agents arc the bourgeoisie and the mainstream intelligentsia. Dominant
categories in the composition of the state in the global periphery are these
institutions and agents of din'usion. A struggle of subordinate socio-economic
groups in response to this realigrirnent of the statc is usually targeted at the state due
to its exploitative inclination. Hut stricily speaking, fhcy are adions against ihe
exploitative character of the rnnrket. Betwcen 1933 and E 989 Sol- instance, [here was
massive agitation L)y social forces against SAP (cf Okome, 1999; Faruqee, 19%).
These unresls are dernands against J I ~ O liberd rcl'ii-JIIS in the stale, but we can better
understand these rcfbrms as symptoms of acIjustmcnt by llre global capilnlist
stn~cturc in relatiur~ lo thc interest ol 'c~~pilal. Nomiall!., it is the dorninan~ global
structt~le tl~al lealigns t l~e states i r i r d n ~ ion iu thc dil-cctirm o r its interest S1ructi11~nl
A ~ l ~ j ~ ~ r t ~ n e n t Prc;grarnrnc was hencc, a jmttculrtr form of rcspnsc vl' global
capitalism lo h e requirements of expansion by capital.
Mass a c t i o ~ against SAP uias altertlxte end of the dialecticd contini~urn.
Actually, popular p1-essures bruught about the end ofthe first generation ofTreforrns.
With this outcoine, the dvn~irmnt structure acted again by recycling the tools of SAP
for a I'resh round ofrercmns. Since tfw railuse of SAP was attributed to its social cost
and wcalmess of the regulato~y rrametvork, the new rcfosm framework (NEEDS)
was dcsi~ned with a wholc part dedicated to svcial charkr (See part two ofNELiDS,
2004) and another to institutional changes fot str-e~lgtl~e~ing the regulatory regime.
'T'his could be uncfcrstood as cffor~ to circumvent harsh popular view and actions
towards the new reforms.
Overall csscnce oF l l~c reforms lics in I-endel-jtig 1he state passive and
crnpowcring the market. Signs of strong opposition are bcginnirg tu emerge against
the new reforms despitc the so-called socid cllarter. Monetization arid rightsizi~~g
are already lending to job losses. Privatization and dercgulatiorl thrcaten certain
inlpoflant social services. MTN tc!ccor~i~nunicatio~~ for cxa~nplc, has otle of' tllc
highest tariff regimes in the world. The privatization of Nigerian Airways and
NEPA 2re clear cascs of fzilurc. Despite bugus claims on paper, practical realilics
indicate no itnprovement in their capacity utiliza~ion (cf Amadi, 2004).
An issue that conies to mind about the near total retrcnchrncnt ol'tlic state
I>um the economy i:; t l~at tlx state would be lclt with 110 r-esponsibility. licur~c?rnic
history ol' n1o:;t I~ighly developed states do 11ol show that thcy had this lbtm o l ' h
slat? that Nigeria nspires aliet- when they werc at thc cc!r~ntl-v's prescnt state of
devclujmctit. I t may bc rccallcd that it is in cllost to cstcnd this obsessiw wit11
relbrrns to ttic universily S ~ S ~ L ' I I I llmt led to a strike aclion that laster! Tor three
mtlti~hs in 2007 by the Acadcrnic Staff Union of Utlivet-shies. The impact oT the
rcfimns on cducntiun at the tertiary level would be a monumental Jisastcr. A related
action by the Ldabour was a nation-widc striI.;E: that laslccl about a wcck in response
to increasc i r ? pctsc~leum prices in thc second quurlcr of2007. Since 1 Wl, ~ h c priccs
of petrolcum and associated IJI-utlucls have bccn rcviewecl upwards for rrt lcast ten
times. The Inst was on the eve 01: President Obasatiju's departure li-om ofice. Two
refir~crics were equally sold ulT by the autguing l~cacl of state. 13esio'es, 111crc wss
anotf1er p l n ~ to raise the pun~p price of 'pt ' t~d to W 7 . 1\11 ~hcsc h i l t u p into a
nation-wide strike, ~c-hich ended with c v n c c s s i ~ n s Itom lhe statc. 'This is Ilow ttlc
end of SAP began.
l 'hc outcome el' these reform ctl'orls are related to their itlarkct
fundamentalism in a non-market sociciy and the attitudes ol'tflc dominant g ~ u u p f'or
wllicli rcason the stntc is thcir captive.
Conclusioa
SAP a.nd NEEDS as specificities of adjustment of global capitalist structure
to empowcr the market and f;hcilitate the exparsion ofcapital. The failure of'S;\!' is
nccoimtcd for by the didcctics of struggle bclcvccn social forces and thc s tnk .
NT:I.:L)S ustcr~sibly begins by addrcssir~s t11e sl~orlcvtnings of SAP, w1licI1 IWS
I x k i ~ i g i l l 'I~~lrnan k e ' , Ilcnce thc inclusio~i of social charlcr- in the nevi policy
contexl. !3ut the cuntr-adictiun ! x t ~ ; e e n t!toruugligoing pr~vatiz;~tiun ancl srwi:ll
charter clirninis!~es con (idcnce in the rehr-tn.
Thc trcnd in relimns in h e count~y makes onc lkctor clcar r~atncly, tlie
ahsenctt of democracy in clccision ~nalciiig. Consequently, pol icyrni~lcirig and
irnplenwiilatiori 113s nlwi~ys pursaccl tlic 1:nn.c)w intcl-est oFLfic r~llirlg hc t i on vf the
dorninnnt class, which igrmt-cs popul i~r aspirntirms. What Nige~ia ought 10 IIIIFSLIC
as a re f~~rm largct is the dcniocratizaticln oC Jeveloprnent both at thc lcvcl of
decision-lltakink; and irnplcr~-lutitatio~~, I n a ~iinterial sense, there should bc ir~!cnsi ve
clcvcIopnlcnt of file m n ~ i ~ ~ ! k t u ~ i n g :;c~tor and ~cgulatclry ills!itt~tiorls of the statc.
7'111s process should bc guided by Jetnocracy rud as a matter ofi>cl led by t!le state
with c i v i l socidy participation.
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