World bank adjustment lending includes structural adjustment loans, sectoral structural adjustment loans, imf and world bank structural adjustment programs and. Structural adjustment policies and africa a reply to. The second definition relates to a programme of privatisation as an integral part of a structural adjustment programme, such as we have in nigeria. The programme seeks to limit the role of government in the economy, promote private sector operations and remove. The increased reliance on selfhelp efforts for example, could be directly attributed to the retrenchment of the. How the imfworld bank and structural adjustment program.
Apr 03, 2020 a structural adjustment program is a plan implemented by the world bank and the international monetary fund in a developing nation to try to get their economies to be more productive. The latter two kinds of operations are concessional for lowincome countries. However, it appears that many of the key measures advocated in the nhp could be counteractive to both private sector development and the structural adjustment program sap. This study on the impact of the structural adjustment programme sap in nigeria was intended to test the indicators developed by the food and agricultural organisation of the united nations fao, regional office for africa rafr, for monitoring and evaluating the impact of sap in the countries of the subregion. The structural adjustment program was an economic reform plan initiated by the babangida regime in august of 1985. Jan 22, 2020 structural adjustment is a term used to describe the policies requested by the imf in condition for financial aid when dealing with an economic crisis in. President babangidas structural adjustment programme and. Structural adjustments and their impact on health and. The structural adjustment program sap by its nature is inflationary because it increases the amount of the domestic currenc y required in exchange for a unit quantity of local goods and imports.
Structural adjustment and the debt crisis saps were born as a result. Under the structural adjustment program sap introduced in 1986, nigeria reformed its foreign exchange system, trade policies, and business and agricultural regulations. In general, adjustment meant liberalising and privatising, although saps were wider in scope in that their developmental aims were highly political. Since then, the country has experienced strong improvements in its socioeconomic standing and the heightening of its industrial capacity. A structural adjustment is a loan provided to a country by the international monetary fund, the world bank, or both, in exchange for structural economic reforms. If this is the first time you use this feature, you will be asked to authorise cambridge core to connect with your account.
Reimers, 1994, and in the influence of international financial. Susan schadler how successful have countries been during adjustment programs. After a prolonged period of economic stagnation, a twoyear comprehensive structural adjustment prograrn sap was introduced on july 1, 1986, in an effort to. Structural adjustment programme in the development and adaptation of technology in nigeria. Under the structural adjustment program sap introduced in 1986, nigeria reformed its foreign exchange system, trade policies, and business and agricultural. Ii background to the structural adjustment programme in nigeria the collapse of world oil prices and the sharp decline in petroleum output, the latter resulting from a lowering of nigeria s opec quota in the early 1980s, brought to the forefront the precarious nature of the countrys economic and financial positions. Thirty six out of 52 establish ments responded to a questionnaire prepared for the purpose. The effect of structural adjustment programmes on the delivery of veterinary services in africa 3 officially recognized as part of the animal health delivery system. Pdf the structural adjustment programme in the context.
This study on the impact of the structural adjustment programme sap in nigeria was intended to test the indicators developed by the food and agricultural organisation of the united nations fao, regional office for africa rafr, for monitoring and evaluating the. This article also gives a short analysis of the roles of the world bank, the imf and the local political elites in this process. It describes how saps are being implemented and what results they have produced over the past 20 years. The economy has been liberalized, and the macroeconomic situation has improved considerably. Consequences of structural adjustment policies on the poor. While giving partial evidence of individual incentives, the aforementioned study shows that great inequality actually inhibits growth. They find that a few political economy variables can successfully predict the outcome of an adjustment loan 75 percent of the time. The goal of such a program is to help the borrowing nation pay off its debts and have a growing economy that will sustain them into the future. These changes brought economic incentives more into line with the countrys underlying comparative advantage. These policy changes are conditions for getting new loans from the international monetary fund imf or world bank, or for obtaining lower interest rates on existing loans. To assist african development, structural adjustment programmes saps provided conditional lending thomson, 2010. Pdf lessons from structural adjustment programs and their. The story of structural adjustment programme in nigeria from the perspective of the organized labour nwagbara, eucharia nwabugo, ph.
Industrial establishments in anambra state were surveyed to find out how they have been coping with the programme since inception. Structural adjustment is the process of deliberately adjusting or changing the structure and organization. Oberdabernig abstract the focus of this work is to measure the effects of structural adjustment programs saps of the international monetary fund imf on poverty and income distribution. D department of sociology university of calabar email. Lessons from structural adjustment programs and their effects in africa. Section 4 offers a description of the key elements of nigerias ongoing structural adjustment programme in relation to the policy prescriptions which the growth. How the imfworld bank and structural adjustment programsap. To reverse the worsening economic fortunes in terms of declining growth, increasing. As of 2018, india has been the largest recipient of structural adjustment program loans since 1990. The latter term became more current in the aftermath ofgrowing popular resistance to the implementation of the former. Structural adjustment program sap in nigeria academia. Lessons from structural adjustment programmes and their effects in africa 59 quarterly journal of international agriculture 50 2011, no. The effects of structural adjustment programs on poverty and income distribution by doris a.
Consequently, the bretton woods institutions including the world bank and international monetary fund imf have lauded ghana as the most successful. They were given the task to make sure that developing countries will continue paying their debt by offering new loans to countries who accept certain conditions. Structural adjustment is the name given to a set of free market economic policy reforms imposed on developing countries by the bretton woods institutions the world bank and international monetary fund imf as a condition for receipt of loans. In china, the structural adjustment program formed part of the reason the country established itself as a world player. Private sector participation, structural adjustment and. These imbalances forced the federal government of nigeria to embark on a major structural adjustment prograrn in 1986. The effects of structural adjustment programs on poverty. The structural reform program is supplyside driven and is generally associated with wb lending. What explains the success or failure of structural adjustment. It cannot be said that economic problems are a new phenomenon. Instances of economic dysfunction have been variously observed the world over, evident in such incidences as economic depressions, debt crises, inflation problems, prevailing.
Pdf this study evaluates the result of structural adjustment programme sap on nigerian economy. Oil dominates the economy, accounting for about 80 per. The association of policies and growth with repeated imf and world bank adjustment loans, n. Causes, processes and outcomes introduction nigeria, with a population of about 120 million, is africas most populous country and the continents third largest economy. The structural adjustment programme in developing economies.
Structural adjustment and ethnicity in nigeria nordiska afrikainstitutet uppsala 1995. Structural adjustment is a term used to describe the policies requested by the imf in condition for financial aid when dealing with an economic crisis in. May 26, 2009 this paved the way for the imf and world bank to come to the rescue. Structural adjustment policies and africa a reply to shantayanan devarajan carlos lopes, the executive secretary of the economic commission for africa, disputes the claim that. The structural adjustment programs saps are created with the goal of reducing the borrowing countrys fiscal imbalances. Structural adjustment definition and criticisms economics. Shortcomings and weaknesses of the structuraladjustment. The bank from which a borrowing country receives its loan depends upon the type of necessity. The central aim of this reform program is the provision of a new institutional and policy framework to. The longer term structural adjustment programme is aimed at the promotion of production and resource mobilisation through the promotion of commodity exports, public sector reform, market liberalisation and institutional reform.
Structural adjustment programs in developing countries. African workers and structural adjustment a nigerian case. The heart of nigeria s adjustment program was the concept of using privatization to encourage foreign investment and the expansion of industry, this has been largely unsuccessful because potential investors are reluctant to place. The politics of structural adjustment in nigeria book. Lessons from structural adjustment programmes and their. Ekuehare 1989 noted, nigerias sap is intended to discourage primitive. Structural adjustment programme in nigeria and its implications on socioeconomic development, 19801995 article pdf available december 2016 with 28,389 reads how we measure reads. The structural adjustment programme in developing economies the structural adjustment programme sap is an economic reform package. The overall aim is to totally revamp the nigerian economy. In general, adjustment meant liberalising and privatising, although saps were wider in scope in that their. Learn here what the structural adjustment programme actually was and why it did not work the way it was supposed to.
Few among the intelligentsia in pakistan, who do know a fair bit about the world bank and the imf and the sequential agreements of the government of pakistan with them on restructuring its debt burden are convinced that the decadeold structural adjustment programs sap have brought about any economic benefit or respite for the common man. Experience of the countries implementing structural reforms during the early phases had not. There are even more plausible empirical and theoretical reasons to suppose so. As aryeetey and tarp 2000 observe, reforms were designed on the basis of the neoliberal. Jan 31, 2012 conditionalities are implemented to ensure that the money lent will be spent in accordance with the overall goals of the loan. Structural adjustment programmes saps or economic recovery programmes erps are similar in their essential components. Structural adjustmenta major cause of poverty global issues. Due to the mismatch between education and productive training, nigeria, ghana, and other african nations are experiencing mass unemployment in all categories of university graduates.
The structural adjustment policies adopted by the developing countries including bangladesh have been prompted by considerations of achieving macroeconomic balances and by the need for acceleration of economic growth through greater reliance on markets. Structural adjustment programme in nigeria and its implications on socio economic development, 19801995. The conventional structural adjustment approach of the 1980s assumed that a certain degree of inequality would boost economic performance and thus drive growth. Furthermore, the authors also blame the adjustment policies to have failed to take into account the. Structural adjustment programmes in subsaharan africa volume 30 issue 1 j. The situation was made easy by the fact that the government had successfully concluded a policy framework paper pfp with the international monetary fund imf and the world bank in september 1992 and a structural adjustment facility saf with the imf, thereafter. Structural adjustment policies were put in place, cutting spending and reducing government involvement in the nut industry and elsewhere. Structural adjustment program in nigeria has gone down in history as one of the worst things that happened to nigerian economy. The first definition relates to programmes of privatisation without structural adjustment, such as has been the case in most developed countries, e. Nigeria is that sap itself was a response to a longdrawn outdeteriora. The standard structural adjustment reform package known in ghana as the economic recovery program was proclaimed by the government, including a maxidevaluation. Did structural adjustment programmes assist african development.
At the same time rich countries, such as the us, were subsidizing their own nut and other industries, allowing them to gain in market share around the world. Ghana launched its structural adjustment program sap in 1983. Structural adjustment programme and the nigerian economy. The effect of the structural adjustment program on the local level shuhei shimada graduate school of asian and african area studies, kyoto university abstract the paper is composed of two parts. While most have seen a quick turnaround in their external accounts, a sharper focus on mediumterm sustainability, firm nominal anchors, and better coordination of fiscal and monetary policy would help. Pdf after independence around 1960, african countries started with high hopes for rapid growth and development. What happened to the nigerian economy 30 years ago. While there is considerable interplay between the two, the focus of structural adjustment is on exchange rate and trade reforms, while monetary and fiscal policies are the important instruments of. Since zambia embarked on its structural adjustment program in late 1991, much has been accomplished. Jan, 2015 to assist african development, structural adjustment programmes saps provided conditional lending thomson, 2010. Did structural adjustment programmes assist african. Newsrescue below is a brief background of the events that led many countries to accept saps. The effects of structural adjustment programs on poverty and.
Zambia, for example, having abandoned a structural adjustment programme in the wake ofthe riots on. Newsrescuesummary of nigeria imfsap debt progression. Pdf the structural adjustment programme in the context of. In 2012, it is almost unimaginable that one of the most important world actors relied on the structural adjustment program. Variables under the world banks controlresources devoted to preparation and supervision or number of conditionshave no relationship with an adjustment program s success or failure. The policies are designed to tackle the root cause of the problem and provide a framework for long term development and long term growth. How successful are imfsupported adjustment programs.
A structural adjustment programme for nigeria a lot of arguments exist as rationales for the adoption of an economic structural adjustment. To this effect, we suggest that the central bank of nigeria plays its stabilizing role in the economy through reversed appropriate economic policies tailored towards. Structural adjustment structural adjustments are the policies implemented by the international monetary fund imf and the world bank the bretton woods institutions in developing countries. Pdf structural adjustment programme in nigeria and its.