President Shehu Shagari, in the second republic, declared economic recession, unfolding measure to address the situation.
The measures, approved by parliament, were tagged, “Economic Stabilization (Temporary Provisional) Act 1982”.
HIGHLIGHTS
-Foreign exchange control to reduce Basic Travel Allowance (BTA) from N800 to N500 per person of the age of 16 and above per annum, with no allowance for children under 16.
-Hajj forex subsidy: The government 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.
-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 in the past, and all registrations were done at the CBN headquarters.
-Reintroduction of pre-shipment inspection for spare parts, raw materials and books and the introduction of pre-shipment inspection for frozen and canned fish.
-All interest rates revised upwards across the board by two percent from their existing levels, but later reduced by one percent.
-Frozen chicken and gaming machines totally banned from importation and 29 other commodities removed from open general licence and placed under specific import licence requirement.
-Tariff changes on 49 import items, with most of the changes being increases in the rate of duties while others were introduction of new import.
-New rates of excise duties raised to 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.
1984 AUSTERE ECONOMIC MEASURES
The then Major General Muhammadu Buhari overthrew the Shagari government in 1984 after a December 31, 1983 coup. The military regime met enormous economic challenges.
The International Monetary Fund was willing to help, but Buhari rejected 12 conditions Nigeria must meet.
The conditions include:
-Reduction of capital expenditure for three years
-Removal of subsidies on petroleum products and fertilizer
-Devaluation of the naira by over 60 percent
-Appropriate measures to improve revenue collections and the operational efficiency of revenue collecting agencies
-Promotion of exports manufacturing so as to boost the export of non-petroleum products
-Liberalisation of foreign exchange and import controls.
BABANGIDA’S EMERGENCY ECONOMIC PLAN
General Ibrahim Babangida sacked the Buhari regime in August 1985 and established his own emergency economic plan, declaring an economic emergency for 15 months in October 1985.
This led to the Structural Adjustment Plan (SAP). The emergency plan was generally seen as a failure with the economy contracting by 8.8 percent in 1986.
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