Adjustment with growth: Nigerian experience with structural adjustment policy reform

The paper presents an account of the origin, contents and apparent impact of the Nigerian structural adjustment programme of 1986–90. The programme arose from pressure by Nigeria's external creditors to reach an accommodation with the Bank and the Fund, but once the decision to undertake such a programme had been taken it became largely ‘home‐grown’ and contains a number of heterodox elements, including a ban on imported foodstuffs. Other major elements are a shift to a market‐determined exchange rate, the winding‐up of the six government commodity marketing boards and the gradual elimination of administrative controls on overseas trade. The design of the programme takes note of a number of recent theoretical findings, including the significance of the intermediate import constraint and the presence of crowding‐in effects of public expenditure on private investment in a number of African countries, any assessment of the programme's impact is of necessity preliminary; but, at the least, it has made possible a reduction in the burden of debt service, and the growth rate of GDP and exports, in particular export crops such as cocoa and rubber, have been much higher in the post‐than in the pre‐structural adjustment period; but inflation has worsened, real wages have fallen, and diversification of exports has not occurred. The tentative verdict is that the programme tried to achieve too much too soon, underestimated the resultant social costs, and placed too much reliance and changes in price incentives as a means of bringing about the necessary restructuring.