Act 1, Scene 1: SAP (Structural Adjustment Program Nigeria)
Main Actors: Nigeria and World Bank
The Structural Adjustment Program (SAP) was a set of economic reforms implemented in Nigeria in the late 1980s. The program was a response to an economic crisis caused by falling oil revenues and increasing foreign debt. The goals of the SAP were to:
Tekedia Mini-MBA edition 16 (Feb 10 – May 3, 2025) opens registrations; register today for early bird discounts.
Tekedia AI in Business Masterclass opens registrations here.
Join Tekedia Capital Syndicate and invest in Africa’s finest startups here.
#1- Diversify the economy away from oil ,
#2- Reduce dependence on imports,
#3- Improve the efficiency of the public sector,
#4- Increase the growth potential of the private sector.
Epilogue: The SAP was not able to achieve its goals; it scored 0.5%. The SAP destroyed Nigeria’s manufacturing, from Aba to Kano, from Maiduguri to Aba, and more. However, SAP achieved one thing: it financialized Nigeria, unleashing an era where banking and broad financial services (hello, finance houses) rule. More than 90% of Nigeria’s new generation banks were created within 1989 and 1992, as a result of the SAP playbook, even as companies faded.
You can argue that we got banks but lost factories (that was the 0.5% score). Unfortunately, because of that, item #2 was not realized as import dependence scaled. Of course, the public sector degraded in efficiency even as the private sector faded.
Opinion: Yes, the World Bank has endorsed Nigeria’s recent reforms. And so what? I call the national economic team to think for Nigeria and not be blindfolded to think the World Bank has the magic formula to fix Nigeria.
Simply, the government should explore a government of national unity where it revamps the executive council with even some opposition team members. Nigeria needs indigenous ideas because this moment is unique.
We must do all to make sure food security is not compromised and that could come by making food readily available. Nigeria needs reforms but we must do them in ways we do not break the citizens.
---
Register for Tekedia Mini-MBA (Feb 10 - May 3, 2025), and join Prof Ndubuisi Ekekwe and our global faculty; click here.
The same way some defended SAP back then, now you have another bunch of people siding with the World Bank, without ever thinking things through. Practical Wisdom demands that you have a very high chance of succeeding when you go contrary to the advices of both World Bank and IMF, and you are almost guaranteed to fail whenever you heed to their advices.
People telling you to press on with the ‘Reforms’, what is the end goal? Have they showed you in practical terms how such ‘Reforms’ will make you a manufacturing giant and net exporter of finished products? You are never going to learn that, but yea, yammer on reforms here and there, until the few things still breathing are finally buried. A lot has been destroyed already, and it will still take a long time to even return to the previous level, let alone substantial advancement.
Nigeria is headed in the wrong direction, anyone telling you to keep pressing forward is after your life. Now you know your enemies and their local collaborators. How do you run a subsidy-free regime and still be competitive in manufacturing and services? Nobody has explained that…
Both the slaves and slave masters are no good, you either vanquish them or they finish you off. Shine your eyes.
You said it all Francis, you said it all. History is repeating itself, only this time on an already distressed economy, whereas, in the past it was on a relatively emerging economy!
Practical wisdom. The knowledge born out of theoretical wisdom.
Practical wisdom. The knowledge born out of theoretical wisdom.