ASPECTS OF THE ECONOMIC REFORMS OF OLUSEGUN OBASANJO’S ADMINISTRATION, 1999-2007

ASPECTS OF THE ECONOMIC REFORMS OF OLUSEGUN OBASANJO’S ADMINISTRATION, 1999-2007

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PREFACE

The focus of this study is to examine and analyze some aspects of the economic reforms of Olusegun Obasanjo’s administration. The study is organized into four chapters. Chapter one is the introduction, which gives the background, statement of the problem, purpose, scope and significance of the study, as well as the conceptual framework, literature review, methodology, sources and organization. Chapter two examines the political, social and economic issues prior Obasanjo administration. Chapter three deals with the reforms in the communication sector during the Obasanjo’s administration. Chapter four looks at the antigraft economic reforms undertaken by the Obasanjo’s administration in an attempt to combat corruption by the inauguration of two key agencies (Independent Corrupt Practices Commission and Economic and Financial Crimes Commission), Finally, Chapter five is the conclusion, which contains the summary and assessment.

CHAPTER ONE

INTRODUCTION

BACKGROUND OF THE STUDY

The significance of good governance in any given nation cannot be underestimated. Therefore, the essence of governance is to ensure the development of every sector of the national entity. To this end, every emerging and successive government formulates policies in order to reform the political, economic, cultural and social structures. Irrespective of reformed policies, they are primarily intended to ensure the uplift of the societies in all ramifications-education, health, transportation, etc. Hence, considering the significance and how vital reform policies are made, they attempt to meet the needs and aspirations of the people of a particular country as instituted by existing government.

Because of the above reason, the administration of Olusegun Obasanjo (1999-2007) embarked on certain economic reforms during his tenure in office (1999-2007). In the 1999 elections, the first in sixteen years, he decided to run for the presidency as the candidate of the People’s Democratic Party. On 29 May, 1999, Obasanjo took office as the first elected civilian head of state in Nigeria after 16 years of military rule. The month of May is now commemorated as Democracy Day. It would be recalled that prior to his election in 1999, the nation had been under the yoke of military rule. The military regime did not help matters when it postponed severally the return to civilian rule. Many people were of the view that the worst civilian administration is better than enlightened military dictatorship.1

From the 1960s, when Nigeria gained her independence, development plans of varying durations were launched. The Nigerian leaders were aware that political independence without economic independence would endanger the country’s sovereignty. Hence, they were out to protect this hard won sovereignty as well as give their people the best. The major initiative and plans fell on governments for national economic and social developmet.2 Before and during Obasanjo’s reform, the economic conditions in the country could be considered as dire.

According to Otese Simon, the economic situation of the country prior to Obasanjo’s administration, could be said to be a period when the political leaders of newly won independence sought to consolidate their hold on power, and not actually doing the peoples biddings. It was a period of scramble for power and political positions at the expense of the nation’s real economic needs.

By any yardstick, military rule was a monumental disaster for Nigeria. Despite the country’s huge endowments in human and material resources, Nigeria under military rule had all the classic features of a failed state. Infrastructure such as schools, roads, and hospitals were barely functioning. In view of the sordid record of military rule, there was a widespread expectation in the country on the eve of the military’s departure from politics that the elected civilian administrators would set to work immediately to improve the living standards of the people.

From 1983 when General Muhammed Buhari toppled the civilian government of Alhaji Shehu Shagari to the era of General Sani Abacha, the economic situation of the country was bad.3 The apparent improvement during this period was made worse by the Structural Adjustment Programme of the General Ibrahim Badamosi Babangida administration. As if these were not enough, the national currency was devalued; thereby causing further worsening socio-economic condition in the country.4 All the sectors of the nation’s economic activities were jeopardized. This ranged from the health, education, transportation to other sectors of the economy.

The Structural Adjustment Programme (SAP) was embarked upon due to series of global economic disasters during the late 1970s, the oil crisis, debt crisis, multiple economic depressions and stagnation. The Structural Adjustment Programme favoured reduction of trade barriers and free market. The programme included internal changes such as privatization and deregulation, as well as external ones, especially the reduction of trade barriers. Since the late 1990s, the term “Structural Adjustment” has emphasized “poverty reduction”. The SAP was controversial and the critics emphasized that it created hardship for workers and the poorer classes.

In specific terms, Nigerians expected that the termination of military rule would lead to a drastic reduction in corruption, criminal and wanton violations of human rights. Nigerians also hoped that the termination of military rule would put an end to the divide and rule tactics which had become the hallmark of military administrations. It was hoped that a civilian government had would be ushered in and bring an end to such tactics, ethnic and communal violence, which had claimed so many lives. It was believed that a civilian administration was expected to lead to a better management of the nation’s resources and with good governance, unemployment, insecurity and criminality would be reduced.

After a comprehensive study of all aspects of Nigerian society, a Bureau was set up in 1986, and submitted its report on March 1985.5 The third part of the report was mainly concerned with the programme of transition to civil rule. It noted that for a transition to civil rule to be successful, there was need to democratize all the process and institution of government. It called for a broadly spaced transition in which democratic government can proceed with political learning, institutional adjustment and a re-orientation of political culture at sequential levels of politics and government beginning with local government and ending at the federal level.6

Assuming office in 1999, as an elected President, following the handover of power by General Abdusalami Abubakar, President Olusegun Obasanjo embarked on policy formulation and implementation in order to redress the dilapidated economic condition in Nigeria. These policies were seen in his effort to curb corruption, by the inauguration of Economic and Financial Crimes Commission (EFCC) in 2003. Reforms were also carried out on other aspects such as electricity, transportation, agriculture, infrastructures etc.

The economic reforms of Obasanjo were intended to transform the Nigerian society, compared to what existed before his election in 1999. It is to these reforms in economic policies that this study addresses. It hopes to emphasize that during the eight-year leadership of Obasanjo, there was a remarkable improvement in the economic sectors of the nation. The appointment of Prof. Chukwuma Soludo as Governor of the Central Bank of Nigeria and that of Dr. Ngozi Okonjo-Iweala as Minister of Finance whose handling of our finances helped drastically to reduce our foreign debt profile. The President’s actions here were on the credit side of that regime.

STATEMENT OF THE PROBLEM

When President Obasanjo came to power in 1999, the government stated its desire to bring about “democratic dividends” through responsive participatory, transparent and accountable government. Many believed that democracy was going to immediately cure all of the ills of Nigeria, bring about security, stability and re-launch the nation on the path of substantial economic development.

The contradictions which have arisen from democratic transitions and processes of democratization have led to increased questioning of the relevance of the prevailing models and institutions of democracy to the reality of contemporary Nigerian political and economic development. Many have come to believe that the democratic administration of Obasanjo failed to redress the economic power of the average Nigerian. For example, Professor Wole Soyinka, the Nobel laureate, asserted “three and a half years of elected civilian rule have created a big disillusionment to virtually all those who had staked high hope on democracy as the panacea for our national woes, and socio-economic predicament”.7 Some have also opined that the regime was corrupt, leaving Nigeria both in economic and political uncertainty.

Although some of these claims may be disputable, it is necessary to examine historically and dispassionately how the regime of Obasanjo aided the economic growth and development of Nigeria, through his economic reforms.

PURPOSE OF THE STUDY

The purpose of this study is to examine how Obasanjo’s administration brought economic improvement to the country by looking at the various economic reforms in the communication sector and his fight against corruption, by the establishment of certain agencies to tackle them (ICPC and EFCC).

Furtherance to this, there were some reforms which the administration initiated that were thought to have been of great urgency and importance to the country, but which have evoked criticisms. To this effect, the work examined them, in order to see the extent they had gone in contributing to the economic development of the country at large or otherwise.

SIGNIFICANCE OF THE STUDY

The coming into power by Chief Obasanjo as an elected president gave a lot of hope to many Nigerians. The then president promised the people that his government should be a people oriented and participatory government that would be beneficial to the people. This work attempts to provide insights into Obasanjo’s democratic governance and the extent it went in solving and meeting the needs of the people. The study will also stimulate more research in this area of study. The outcome of this work will help present and future politicians, economic policy planners and others.

SCOPE OF THE STUDY

The time-span of this study is 1999 to 2007. The choice of 1999 as the beginning of the democratic rule which was terminated by the army in 1966. Chief Olusegun Obasanjo came to power as the civilian Head of State. His regime ended in May 2007 after serving as President for two terms as allowed by the Nigerian Constitution. This study concentrates on the aspects of communication reform and the fight against corruption (ICPC and EFCC), to be precise. 

By 1999, when Obasanjo came to power, the combination of economic crisis (symbolized by high unemployment, output stagnation, external indebtedness, and depleted foreign reserves), corruption and internal inefficiency, as well as globalization, had all made economic reforms very attractive. Thus, Obasanjo’s government embarked upon this, to resolve the crisis generated by these factors as the regime claimed and embarked upon.

LITERATURE REVIEW

At present, it appears, very limited work has been devoted to thee study of the democratic administration of Chief Olusegun Obasanjo 1999-2007. The materials sieved out for this work, are in bits and pieces. Most of them have been written on the general social, political and economic dispensation of the Obasanjo administration.

Democracy has been given a wide extensive attention from the academic circles, and hence has received varied definitions. Olusegun Obasanjo and Akin Mabogunje, conceptualize democracy, like all human interaction and relationship, must not be taken for granted. It must be nurtured and sustained. The establishment, growth and sustenance of democracy with its complement of protection of human rights have never been without struggle, sweat and blood throughout history.8 they also stated that democratic state operates in such a manner as to guarantee individual liberties through the observance of separation of powers.

Kayode Fayemi and Otive Igbuzor have abiding belief that no democracy survives around abject poverty and unremitted hopelessness among the citizenry.9 They also hold the belief that poverty itself is potential violence, the cure of which democratic governance remains a critical component. Their work also analyzes New Economic Empowerment Development Strategy (NEEDS) as a framework for tackling the deepening crisis of poverty.

Science Today in Nigeria, edited by O.E. Alexander et. al., highlights the priorities of the Olusegun Obasanjo administration in the development of science and technology in the country. The priority highlighted in the book includes information technology, biotechnology and space science and technology policies among others. The scope of the book has put in proper focus our vision of a market-driven strategy as the way forward for economic development.10

Another book is Democracy, good governance and development in Nigeria, in which Attahiru Jega brought out the themes of democracy, governance and development in Nigeria.11 These have been the dominant themes in intellectual discourse by social scientists on the trials and tribulations of the post-colonial Nigerian state as it grappled with crises of nationalism and nationhood, authoritarian military rule and the challenges of development, using a hybrid of a neo-liberal theoretical framework in an intensely unequal world. The book also highlighted some of the economic, social and political reforms carried out by the Obasanjo’s administration. For the purpose of this study, we shall take into account the economic development strategies.

Ralph Chiemeka, in his work on Revenue allocation and resource control in Nigerian Federation, traces the genesis of the management of the revenue accruing to the Federal government, and by diving into the historical background of the evolution of the federal system of government in Nigeria. The book also brings into focus the various commissions on revenue allocation set up by various governments from the colonial to the present, and how the political and economic climate at the respective times influenced their recommendations. It critically examines the provisions of the 1999 Constitution being adopted by the present civilian federal government in the management of the centrally-collected revenues and comments on their inadequacies which have recently heightened the political tension and disagreements between the state and the federal governments.12

In his other work titled, Power Sharing in Nigerian federation, Ralph Chiemeka provides background information and suggestions to conference delegates, the federal and state governments, legislators and indeed all Nigerians who would be involved in the discussions and decision-making process of evolving a new and popular federal constitution.13 It asserts that the Presidential system under the 1999 Constitution has accentuated the defects in the federal system. This gives undue leverage to the president over the legislature and the judiciary and tends to undermine the doctrine of separation of powers with concomitant cheeks and balances, which guarantees their effective operations under a federal democracy.

Another relevant work is Policy and Contending Issues in Nigerian National Development Strategy, in which Aja Akpuru-Aja and Emeribe argue constructively that a stable political system is indispensable for an economic restructuring and prosperity as well as the evolution of a socially harmonious Nigerian society.14 The work has cognate issue areas: politics, policy, budgeting and planning, economics, rural development, agriculture and infrastructure, environmental issues, health and industry. The book brings out certain key areas that needed development during Obasanjo’s administration.

Hassan Saliu et.al contend that the Obasanjo government in 2003 introduced a programme of reforms which was expected to positively affect all sectors of the political economy. The thrust of the reform programmes was to re-launch the country in a way that, in a couple of years, it would be one of the stable and developed economies in the world. Judging by the commitment so far displayed by the government, Nigeria would seem to be on its way to attaining the objective, especially if due care was taken on all issues which three years of implementing the National Economic Empowerment Development Strategy (NEEDS) brought out,15 according to the book.

Nigeria Real Problems, Real Solution; Bedford Nwabueze opines that the problems of development in Nigeria are fundamentally linked to the prevalent value system in Nigeria, inferiority complex, language and collective ignorance. In the book, he presents their dimensions, mechanism, processes of operation, and their moral, social, economic and political implications on Nigeria’s problems of development. He also provides concrete policy prescriptions and strategies to solve the problems they have created in Nigeria. For the purpose of this study, we shall restrict our knowledge to the aspects of strategies to solve the economic problems they have created in Nigeria.

Chukwu Umezuruike; State and Economy in Nigeria, states the contradictions between democracy and economic reforms for national development in Nigeria, which have been informed by the confrontations between the forces of contemporary global development and the domestic forces of democratization in Nigeria.16 These forces of global development have been the key purveyors of economic reforms in countries such as Nigeria. The book considers the context of the National Economic Empowerment Development Strategy (NEEDS) with regard to the resolution of social conflict and violence in Nigeria’s Fourth Republic.

Another relevant book to this study is the social and political history of Nigeria, 1970-2006. Ngozi Orijakor has attempted an examination of the critical issues in contention from one regime-military or civilian-to the other. She demonstrates in large depth of knowledge of the critical issues of the period. From the social angle, a major challenge was to build an egalitarian society of equal or fair opportunities to all citizens and to bridge what seemed an ever-widening gap between the minority “haves” and the vast majority “have-notes”. The extent to which these fundamental desiderata were attained remains controversial, not least because most of thee principal players shaping the political contour of Nigeria are still very much at thee helm of national affairs.17

Aaron T. Gana and Yakubu, Democratic Rebirth in Nigeria, provide critical analyses of the first four years of the post-military era in contemporary Nigeria. It carefully examines political institutions, political processes and specific policies of the new civilian leaders. The book is comprehensive and thematically rich in its coverage of Nigerian policies in the post-military era. Among the institutions examined are the National Assembly, the executive arm of government, and the political parties. The volume also analyzes other aspects of the post-military era including inter-governmental relationship particularly the relationship between the executive and legislative arms of the federal government. In addition, the volume probes the place of women under the, new political system, and looks at the foreign policy thrust of Nigeria in the aftermath of military rule.

METHODOLOGY

The work cuts across various other disciplines such as political science, public administration, among others. Thus, using inter-disciplinary approach, the study draws from the data supplied by other disciplines such as public administration. Going by the nature of the subject area under study, that is, the economic reforms of Olusegun Obasanjo democratic administration, one will discover that it is relatively contemporary. Effort is being made, despite limitations of accessibility, to critically analyze and bring to the fore perspectives and issues relevant to the study.18 In methodology both chronological and thematic approaches were adopted for the general framework.

SOURCES

For this study, primary sources such as oral interviews and government gazettes have been used. Secondary sources of information such as books, journals, newspapers, magazines, seminar and conference papers which are relevant to this study, have been consulted.

ORGANIZATION

The study is organized into five chapters. Chapter one is the introduction, which gives the background, statement of the problem, purpose, scope and significance of the study, as well as the conceptual framework, literature review, methodology, sources and organization. Chapter two examines the political, social and economic issues prior Obasanjo’s administration. Chapter three deals with the reform in the communication sector during the administration. Chapter four looks at the economic reforms undertaken by the administration, particularly to combat corruption (Independent Corrupt Practices Commission and Economic and Financial Crimes Commission), Finally, chapter five is the conclusion, which contains summary and assessment.




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