Structural Adjustment Programme & The Luxury Goods Syndrome Capt. Daniel Omale

The possibility of the reintroduction of Structural Adjustment
Programme (SAP) in Nigeria shows clearly that despite the
overblown Gross Domestic Product (GDP) figure of $510 billion,
our economy cannot sustain the persistent reckless government
While the minister of finance, Mrs Ngozi Okonjo Iweala, seems
to target private jet and luxury car owners, she has forgotten
that the biggest drainage pipeline runs directly from the
federal treasury to the federal agencies that constantly abuse
and waste the country’s fragile resources.
For example, the Presidential Air Fleet (PAF) operates over 10
aircraft, an unnecessary acquisition/expenditure that must be
checked and streamlined. If our government is sincere about
reducing spending, especially, unrealistic wastage of public
funds, the minister should start by telling the President that
it is absolutely wasteful to engage over 10 aircraft for the
Presidency. There is no developing country with such a large
fleet of aircraft for presidential movement. Unfortunately,
the expenditure associated with PAF runs into billions annually,
with no clear accountability.
The National Emergency Management Agency (NEMA), in
addition to the two helicopters in the fleet, operates two
executive aircraft, which are used for commercial charter, and
unnecessary complementary flights. If NEMA has become
another aircraft charter company in the country, what is its
core function in our economy, and why should government
spend so much money to acquire luxury aircraft for an
organisation that should solely engage in disaster relief?
The Nigerian Police force (NPF), in the past three years has
purchased over twelve helicopters, which appropriately, should
be utilised for crime control and effective law enforcement
services. But, today, all the helicopters are lying in state at
the Police Hanger in Abuja without utilisation. Everyone is
aware that the NPF has very few pilots in its operation and
despite regular advertisement for employment of experienced
pilots, the agency has done nothing to ease the chronic
shortage of crew to fly the helicopters. Therefore, the reality
on ground undermines the reason for such acquisition and
Since 1985, the federal government has spent over $1 billion in
the acquisition of aircraft for air board patrol, but none of
the aircraft has been used for the purpose and most of them
are left as carcass in the sun at Kaduna military airport.
The GDP is simply the total market value of all final goods and
services produced annually within a country’s borders.
Therefore, Nigeria, an inherently consumer, import dependent
nation,cannot afford to keep wasting its oil dependent
resources on luxury goods for government officials without dire
future consequences. Who can check our government’s excessive
Whatever indices the ministry of finance/Central Bank of
Nigeria used to deduce the new, fantastic, and overblown GDP
figure of $510 billion, it is obvious that Nigeria’s economy
cannot be said to have grown in the past three years. The level
of oil theft, the financial wastage in the system and high level
of corruption in the country are clear indicators that sooner or
later, there will be serious economic recession.
The big question here is: how do we define luxury goods in an
unproductive, consumer-based economy? First class seats on all
British Airways flights from Nigeria are always overbooked.
Nigerians, whether public officers or private individuals must
show that they have “arrived” because what the rest of the
world considers as extreme luxury has become commonplace
Who should bear the effect of the Structural Adjustment
Programme being proposed, government officials or private
As long as we deliberately remain ignorant of the level of theft
and corruption in the system, mere rhetoric will not stop the
high bleeding rate of our national resources.
But what is SAP and how should it work? According to
Wikipedia, Structural adjustment programmes (SAPs) consist of
loans provided by the International Monetary Fund (IMF) and
the World Bank (WB) to countries that experienced economic
crises. The two Bretton Woods Institutions require borrowing
countries to implement certain policies in order to obtain new
loans (or lower interest rates on existing ones). The
conditionality clauses attached to the loans have been
criticized because of their effects on the social sector.
SAPs are created with the goal of reducing the borrowing
country’s fiscal imbalances in the short and medium term or in
order to adjust the economy to long-term growth. The bank
from which a borrowing country receives its loan depends upon
the type of necessity. The IMF usually implements stabilisation
policies and the World Bank is in charge of adjustment
SAPs are supposed to allow the economies of the developing
countries to become more market oriented. This then forces
them to concentrate more on trade and production so it can
boost their economy. Through conditions, SAPs generally
implement “free market” programmes and policy. These
programmes include internal changes (notably privatization
and deregulation) as well as external ones, especially the
reduction of trade barriers. Countries that fail to enact these
programmes may be subject to severe fiscal discipline. Critics
argue that the financial threats to poor countries amount to
blackmail, and that poor nations have no choice but to comply.
According to J.C. Ogugua, like many developing countries,
Nigeria was engaged in a structural adjustment programme
(SAP): a set of economic reform measures designed to achieve
recovery and growth. The availability of foreign aid was often
linked to progress in a nation’s SAP. Nigeria embarked on SAP
in 1986, emphasizing domestic production over expensive
imports, and a lesser dependence on oil revenues. The
government was also committed to reduce expenditures and to
stop wasteful spending, and the country’s external debt
obligations were rescheduled insofar as possible. A balanced
budget was sought, and foreign capital investment was
Obviously, we have learnt nothing from history as importation
of foreign made goods and expensive taste for vanity remain
very high in our economy. The minister of finance should start
by reducing excessive spending of government agencies.

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