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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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