Nigeria: Priorities and Prospects for the 1990s
CHUKWUMA F. OBIDEGWU
The Nigerian economy has been the victim of the mismanagement of the rapid rise and fall of the price of crude oil, its dominant export commodity. In 1986, Nigeria began to implement a comprehensive structural adjustment program and, in 1989, the military government under General Ibrahim Babangida began an elaborate exercise to transfer power to a democratically elected civilian government. This process was expected to be completed in 1992, with the assumption of power of an elected civilian president. By 1993, the adjustment program and the transition were in trouble. The structural adjustment program existed only in name, as fiscal and monetary indiscipline had undermined the economic program. The planned transition to civilian rule was not complete and was, indeed, in a state of confusion. General Babangida was forced to resign and hand over power to an unelected transition government. When the political transition program was initiated in 1989, the structural adjustment program was making steady progress and the prospects for sustained economic recovery seemed promising. However, the fiscal excesses of 1990-1993 and the uncertainty surrounding the transition program have undermined the sustainability of the economic recovery.
Most of the problems that have plagued Nigeria in recent years can be traced back to the oil boom. Oil assumed an important role in the economy in 1958 when the first shipment of oil was made. From then, oil quickly became dominant, and by 1973 it accounted for about 60 percent of exports and 70 percent of federal government revenues. In some respects, the advent of the global oil boom in 1973 was at an unfortunate juncture in Nigerian history, just two years after the civil war and at a time of far reaching changes in the administrative structure of the country. The civil war had destroyed substantial infrastructure, and delayed the normal development and maintenance of facilities in the country. At the end of the war, the country's physical