The trend of inflation mirrored the policy stance. The restrictive policy measures applied in 1985 and 1986 greatly reduced inflation from 39 percent in 1984 to some 5 percent in each of those years. However, with the subsequent expansionary stance, especially the 1988 reflationary package, company tax reductions and exemptions, wage freeze revocation, and rising fiscal deficits, assisted by an accommodative monetary policy, inflation soared to just over 38 percent in 1988. Policy moderation and strenuous efforts made to put the adjustment program back on course yielded fruit and, in combination with the SAP Relief Package implemented from June 1989, resulted in a mild increase of 2.6 percent in the rate of inflation in 1989, before it dropped sharply to 7.5 percent in 1990. The inflation rate was to rise again through 1991 and 1992 to 57.2 percent in 1993, leading largely from rising fiscal deficits assisted by monetary expansion. The fiscal deficits were attributable mainly to excessive debt service obligations, extra-budgetary expenditures associated with further wage increments, SAP ameliorants, and expenses related to the political transition program, revenue losses by the federal government yielding up 1.5% of statutory share in the revised revenue allocation formula, and through tariff concessions. These domestic imbalances had been building up particularly from 1990, and impacted adversely on the domestic price level, exchange rate and the external sector. [The protracted political problems in the later part of the period (1992 – 1993) exacerbated the economic instabilities].

How did the private sector judge our economic reforms?

At least we have it on good authority on record that “to many of us in the private sector, the Babangida administration made more strides on the economic front than has been readily acknowledged by Nigerians” – although “to many Nigerians  the administration is better known on the political front for its reforms” – that without “the introduction of the structural adjustment program (SAP) in 1986 … the country might have continued to wallow in the economic mess, which it found itself in the early 1980s”, and “that SAP was a product of the reality on ground on the economic front”. While the impact of the reforms on Nigerians has been mixed, “the economic liberalization that came with the SAP saw the end of the notorious import license regime as well as the corruption and other abuses that were inherent in it”. Besides the gains derived from specific program, “it is also to the credit of the Babangida administration that the policy of liberation, which it adopted in 1986, has remained an economic policy of nations across the globe in the new millennium”. (E. O. Shonekan, “IBB: A Heritage of Reform”, in B. Y. Muhammad (ed), Echo of Reforms, Open Press Ltd, Zaria Pp. 15 – 19).

It was not only the organized private sector that assessed the reform policy. We also received many supportive testimonies from ordinary Nigerian businessmen, particularly small and medium scale enterprises – key among them the informals – on the salutary effects of our reform policy for their businesses, finances and hopes. These fine men and women responded to the challenges of reform by taking advantage of the incentives and opportunities to start new enterprises or expand existing lines, generally with increased local resource utilization.

We laid the foundation for a formal and continuous dialogue and partnership between the public and private sectors of the economic matters, particularly on the annual budget, but also beginning in 1990 we held annual dinners – tagged Annual General Meetings of the Nigerian Corporation – during which I (the President) presented an Economic Report and we interchanged informally. The informal sector was increasingly represented at such annual general meetings. The current Nigerian Economic Summit Group is an outgrowth of this interaction.

How we, on balance, did we perform? With all our problems of scant finances, inaugurating a new economic order, depreciated exchange rate and the like, the average real growth rate of Gross Domestic Product over the period 1985 – 1993 was some 4.3 percent. Abstracting from the slippage of a 0/.5 percent decline in 1987, and the downward trend in the last two years, the annual real growth rates are encouraging and compare favorably with those of other periods, impressive rates of 9.9 percent and 8.2 percent were scored in 1988 and 1990, with the period 1985 – 1990 averaging out at 5.6 percent per annum. Similarly, the index of manufacturing shows favor in our period, with resurgence from 1987 and a secular maximum in 1991.