By Bolaji Akinola
It emerged recently that President Muhammadu Buhari will be presenting an emergency economic stabilisation bill to the national assembly when it resumes on September 13. The bill has been greeted with apprehension; with many fearing abuse of power by a President that has exhibited little tolerance for opposing views. While Aso Rock megaphones have tried in vain to absolve the president of seeking emergency powers, the policy draft sneaked into the public square says otherwise.
No doubt, Nigeria is at an economic crossroads with some bit of extraordinary measures needed to get the nation back on track. But we must learn from history. Many Nigerians who were matured enough three decades ago will remember that in 1982, after an oil boom, which lasted through the 1970s, the country came face to face with the type of situation we have at hand today. The country’s revenue plummeted as crude oil prices headed southwards. The regime of General Yakubu Gowon, which was abruptly terminated in 1975 could be likened to Goodluck Jonathan’s in some ways. Oil prices were high and the government was wasteful. Indeed Gowon, so power-drunk and bereft of progressive ideals was quoted as saying that “Nigeria’s problem was not money, but how to spend it”.
By the time the civilian regime of Alhaji Shehu Shagari took over in 1979, the economy was heading for crisis. The nation’s foreign reserves had significantly dipped, the naira was fast depreciating while the appetite for foreign goods assumed an alarming dimension. Shagari told a bewildered nation he needed emergency powers to stabilise the economy.
The “Economic Stabilisation (Temporary Provisional) Act 1982” was born. The law introduced foreign exchange control, which reduced Basic Travel Allowance (BTA) from N800 to N500 per person per annum, with no allowance for children under the age of 16. The government also pegged the number of pilgrims permitted to perform the hajj in 1982 to a maximum of 50,000, with a BTA of N800 per person, against N500 for other citizens.
Other measures in the law included reduction of business travel allowance from N3,000 to N2,500 per annum for companies registered in Nigeria; reduction of Form ‘M’ lifespan to six months, as against one year previously, with all FORM ‘M’ registrations confined to the Central Bank of Nigeria headquarters; reintroduction of pre-shipment inspection of imports and the upward revision of all interest rates from the existing level by two percent.
Shagari’s law also banned the importation of frozen chicken and gaming machines, while 29 other commodities were removed from open general licence and placed under specific import licence requirement.
The other emergency economic measures as stipulated in the law include:
– Hike in the Customs duties of 49 imported items
– Increase in the rates of excise duties to as much as 45 percent on a number of commodities including cigarettes, towels, fabrics, cosmetics, perfumes, paper napkins, electric fans, locks, bicycles and motor cycles.
– More powers and training for Customs officers and
– Immigration reforms.
But when Buhari overthrew Shagari on December 31, 1983, he threw the law overboard. He said the stabilisation act had failed, with inflation rising above 30 percent and foreign reserves falling as low as $2.85 billion, which could only bear Nigeria’s import bill for a single month. The military junta was faced with enormous economic challenges with little or no resources to combat it. Buhari rebuffed the International Monetary Fund, which offered a helping hand. IMF’s proposal is very much similar to the pills it recently prescribed for the economic crisis. They include reduction of capital expenditure; removal of subsidies on petroleum products and fertilizer; devaluation of the naira by over 60 percent; improvement in tax collections; promotion of non-oil exports and liberalisation of foreign exchange and import controls.
For its nineteen-and-a-half months lifespan, the Buhari government’s high-handed approach worsened the state of the economy. After he was ousted by his Army Chief on August 27 1985, the new government established its own emergency economic plan, declaring an economic emergency for 15 months in October 1985, which led to the Structural Adjustment Plan (SAP), highly regarded, till date, as a disaster. With the benefit of hindsight, this emergency plan also failed, with the economy contracting by 8.8 percent in 1986.
Clearly, emergency economic powers will not solve the problem. It failed with Shagari, it failed with General Buhari; it failed with Babangida. What will make it work now?