THE ‘HUMAN FACE’ OF SAP: ILLUSTRATIVE NOTES ON SAP AMELIORANTS

The country and government faced acute financial constraints, as has been outlined; for example, in 1986 and 1987 the shortfall in foreign exchange receipts, as compared with 1980, was some $20 billion. Yet the administration, sensitive to the plight of the citizenry, employed its best endeavors to enable the generality of Nigerians better cope with the economic downturn and the pains of reform.

Notwithstanding our financial constraints and rabid opposition by those who felt that they would be losers in the new economic actor:

  • We ensured the regular, prompt payment of salaries of all public sector employees – in the Civil Service, Judiciary. Police and Military and the parastatals throughout our tenure.
  • We cleared all arrears of salaries, pensions and debt outstanding to domestic contractors and suppliers, and made grants to the states to assist them in these regards. Where local authorities had problems paying primary school teachers, we helped by taking over the burden so that the teachers and their families did not suffer.
  • The administration granted at least two salary increases to workers during the period under review.
  • We made special grants to the Universities to reconstitute themselves in 1990,N500 million to all federal universities plus a specific grant to the University of Nigeria, earlier approved by a judicial panel, and again in 1992.
  • We kept the domestic refineries fully maintained and working, with high rates of capacity utilization, and ensured non-impeded availability of petroleum products at affordable prices, particularly, but not limited, kerosene.
  • We kept the national equipment – particularly roads, railways, water and electrical energy supplies – going, even extending them whenever we could, within the highly constrained limits of our resources, to help reduce the cost of doing business, to spur initiative and enterprise, and to make the lives of our people more comfortable.
  • We give work, democratic access to capital, dignity and hope to the citizen in rural Nigeria and in our urban areas through the NDE, Peoples Bank, NERFUND, Export Stimulation and other small and medium – enterprises loan schemes, Supervised Agricultural Credit and agricultural scheme, Better Life (Program) for Rural Women and related micro credit schemes.
  • We rejected the idea of off-loading workers into the labor market without a sensible redeployment strategy.
  • We emphasized primary health care and availability of drugs and medications at affordable prices.
  • We intervened constructively to greatly ease mass transportation in our urban areas and between towns and country – through a variety of assistance schemes to operation under the aegis of the Federal Mass Transit Task Force.
  • We tried to correct the decades – long bias against our rural majority and agricultural by improving their access to infrastructure, finance and technical knowledge.

But we did more in furtherance of our sensitivity we also implemented specific policy packages of ameliorants. Here are three examples:

  1. The 1989 Special SAP Relief Package (Implemented in June 1989), elaborated in close cooperation with Labour aimed to ameliorate the social costs of structural adjustment. It covered wage non-wage relief measure – although the wage measures were not publicized so as not to trigger rounds of wage increases. The wage measures in general increased through fringe benefits – allowances for transport, housing, overtime, leave, meal subsidies etc – mostly for junior and intermediate staff by 40 to 50 percent; while intermediate and senior staff had generous vehicle refurbishment loans. Other major elements of the programme included:

            (a) N65 million to the National Directorate of Employment (NDE) for the employment of 62,000 graduates and non-graduates nationwide.

            (b) N22 million to the Ministry of Works and Housing for the employment of 10,120 workers and 612 graduates

           (c) N4.4 million to the Ministry of Education for recruitment of Science, Mathematics and Technical teachers.

           (d) N5 million for the establishment of farms in the Federal Universities, Polytechnic, Colleges of Education.

         (e) N75 million (US$10 million) for importation of motor spare parts. Moreover, commercial vehicles were to be imported duty-free during the second half of 1989. State governments were also encouraged to provide at least 10,000 ha of land each for cultivations by the unemployed under the supervised agricultural credit scheme. States were also encouraged to revise and expand existing farm settlement and to establish new ones when necessary.

  1. The 1992 Relief Package: titled Fiscal Policy Ameliorants for the most vulnerable Groups, was also elaborated in close consolidation with Labour, and aimed at ameliorating the social exchange market in relation to the March 5, 1992 action on the deregulation of the foreign exchange market. As with its predecessor, it combined wage and non-wage reliefs and the wage relief were not publicized. The wage measures, including general increase in fringe benefits and pensions and gratuity for federal civil servants, entailed a total additional cost of some N899 million. The non-wage reliefs were given mostly through tariff reforms with the following major elements:

(a) the duty rates for various items in the health, transport, industrial and agricultural sectors of the economy were either eliminated or greatly reduced;

(b) Free importation of drugs prescribed by qualified medical doctors, thus removing the restriction imposed by the Essential Drugs List, which was applicable only to the drug stocks of public sector hospitals;

(c) the customs duty rate on imported passenger vehicles was placed on ad valorem basis rather than cubic capacity rating, and the duty rate for all cars imported up to December 31, 1992 shall attract 80% customs duty rebate. The duty was on fully built commercial vehicle units imported up to December 31, 1992 was reduced from 15% to 5%. Spare parts and CKD components for commercial and passenger vehicles imported for the same period shall be duty free.

(d) spare parts and components for all industrial machinery imported up to December 31, 1992 shall also be duty free;

(e) government provided three buses to each university or tertiary institution to alleviate the student transportation problems;

(f) government made a grant of N25 million to each federal university to improve its facilities.

NOTE that the tariff contentions in the above implied a huge revenue loss to government.

  1. 1993: Ameliorants: The 1992 customs tariff changes were essentially rolled over in the 1993 budget. Additionally;
  • There were more robust federal interventions in the mass transit program.

The point of the foregoing highlights of the ameliorants that were applied is that they represent some of the significant efforts we made to give the structural adjustment program a ‘human face’ and enable the generality of Nigerians reasonably cope with the inevitable short-term pains of reform.

All these concessions meant, directly or indirectly, huge revenue losses to government and therefore impacted on the net budget position, that is the overall budget deficits, which in turn had implications for interest rates, inflation, exchange rates and the balance of payments. In a sense, then, we Nigerians cannot expect to have our cake and eat it!