President Bola Tinubu’s policies since his inauguration last May bear similarities with the Structural Adjustment Programme (SAP) between 1986 and 1989, a presentation at the 65th Annual Conference of the Nigerian Economic Society revealed.
In his paper, Laying a Foundation for Nigeria’s Sustainable Economic Growth, the President and Chairman of the Governing Council of the Nigerian Economic Society, Professor Adeola Adenikinju, said “there were significant resemblance of policy choices under Tinubu and the initial years of SAP.”
According to Adenikinju, the similar policies include the “establishment of market-determined exchange rate, deregulation of petroleum prices, and liberalisation of the financial markets.”
Mr Tinubu’s economic strategy reflects many of the key elements of SAP which include the removal of fuel subsidies, floating of the Naira exchange rate towards unification of the parallel and official exchange rate market, removal of non-tariff barriers on certain staple imports, and proposed tax reforms.
The long-term effects of the SAP on the Nigerian economy included slow economic growth, high inflation, and unstable foreign exchange rate, which worsened socio-economic conditions for vulnerable populations.
According to the CBN’s report on SAP, the key elements in the SAP as of 1986 included the establishment of market-determined exchange rate (floating exchange rate), deregulation of petroleum prices, restructuring tariffs to promote industrial diversification (tax reforms), increasing trade liberalisation (import non-tariffs), and removing complicated government controls to boost economic efficiency.
The striking similarities between Mr Tinubu’s policies and the Structural Adjustment Programs of 1986-1989 has raised fears that these policies may impede economic growth and lead to similar socio-economic fallout, including inflationary pressures, further erosion of the middle class, and increased economic inequality.
During the SAP era, like President Tinubu’s administration, there was moderate economic growth. The real GDP grew by 0.93% between 1986 and 1989 (SAP) while the real GDP grew by 0.47% between April 2023 and April 2024 (Tinubu’s administration).
Also, in the Tinubu administration and SAP period, inflation rates increased more rapidly compared to periods without such policies. In 1989, inflation surged to 50.47%, the second-highest rate in Nigeria’s history. Similarly, between April 2023 and April 2024, inflation reached its highest level in the last 15 years.
The data shows that the effect of President Tinubu’s administration mirrors the effect of the SAP policies made in 1986. This could imply that “the Renewed Hope Agenda” might be the ‘Renewed Structural Adjustment Program.’
Aside from the real GDP growth in Tinubu’s administration, the welfare of the citizens has depleted, as seen in the rising unemployment rate, eroded purchasing power of the citizens, and a struggling middle class.
Professor Adenikinju stated that “Nigeria has underperformed relative to other comparator countries at similar levels of development in 1960. Currently, it is faced with a lot of developmental challenges: poverty, unemployment, low growth, poor health and educational outcomes,” because of these policies.
For the country to experience economic growth, he proposed the government should foster capital formation and economic growth, protecting private property, upholding the rule of law, honouring contracts, and ensuring credible institutions alongside visionary political leadership are vital.
He advised the president to establish a Presidential Economic Council, led by a distinguished professor of economics that would provide data-driven advice, analyse economic trends, review policies, and recommend strategies to foster progress.
He argued that ministries such as Finance, Budget, Economic Planning, and Investment need to have qualified economists and professionals on their staff too, to enhance effective policy implementation.
Adenikinju, a Professor of Energy Economics and the Director of the Centre for Petroleum, Energy Economics and Law (CPEEL) University of Ibadan, projected that removing fuel subsidies can boost efficiency and attract investment, but it exposes structural weaknesses like limited refining capacity. To cushion vulnerable populations during the phasing of energy reforms, it is necessary to implement clear communication and social safety nets. Building domestic refining capacity and critical infrastructure will stabilise prices and reduce import dependence.
Adenikinju, a Research Professor at the Centre for Econometrics and Allied Research (CEAR) stressed that the government must rely on analytical macroeconomic models rather than intuition. These models help policymakers assess policy impacts, identify winners and losers, and evaluate outcomes like growth, employment, and poverty reduction.
He recommended the “use of analytical macroeconomic models to analyse impacts of policies and assessment of alternative policy scenarios,” and reiterated that “We cannot depend on intuition to run the complex, modern economies.”.
The former Head of Department of Economics acknowledged that human capital is Nigeria’s most valuable resource. Developing human resources into skilled capital will drive technological advancement and economic efficiency. This will depend on access and quality of education available to its citizens, access and quality of health care services, access to modern energy services, controlled fertility, and opportunity to innovate and rewards for entrepreneurship.
He advocates that the government bridge divides between rural and urban areas (), formal and informal sectors, and different social groups, noting that rural development is especially critical, as nearly 40% of Nigerians live in underserved areas.
Just as inclusive infrastructure like roads, rail, energy, and healthcare must integrate the excluded into the broader economy, inclusive gender development requires the country support women, who form a significant part of the population, and the informal sector, to contribute fully to economic growth, he submitted.