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Nigeria Planning
Before 1945 the colonial government undertook no
serious
comprehensive planning. Nigeria's earliest national plans,
the
1946-55 Ten-Year Plan of Development and Welfare (with
plan
revisions, 1951-55) and the 1955-60 plan (later extended
to
1962), were framed by colonial administrators. As the
authors of
the First National Development Plan, 1962-68 (henceforth,
first
plan) wrote, these "were not `plans,' in the truest sense
of the
word . . . [but] a series of projects which had not been
coordinated or related to any overall economic target."
After
1960, however, development planning had a broad scope,
encompassing government policies to achieve national
economic
objectives, such as accelerated growth and higher levels
of
average material welfare. This planning affected the
policies of
such agencies as the central bank, state-owned
enterprises, the
Ministry of Education, marketing boards, state-level
departments,
and extension services.
Nigerian plans included economic forecasts, policies
toward
the private sector, and a list of proposed public
expenditures.
Plans did not constitute commitments by public departments
to
spend funds. Although Nigerian political leaders made
decisions
about general objectives and priorities for the first
plan,
foreign economists were the main authors of the actual
document.
Its authors favored decentralized decision making by
private
units, disregard of major discrepancies between financial
and
social profitability, and high economic payoffs from
directly
productive investments (as opposed to indirect returns
from
social overheads). They discouraged increased taxes on the
wealthy (out of a fear of dampening private incentive),
and
advocated a conservative monetary and fiscal policy
emphasizing a
relatively small plan, openness to foreign trade and
investment,
and reliance on overseas assistance. Foreign aid was set
at onehalf of public sector investment.
Nobel economist W. Arthur Lewis has suggested that the
main
weaknesses of the 1962-68 plan were incomplete feasibility
studies and inadequate evaluation of projects, accompanied
by
meager public participation, followed by excessive
political
intervention in economic decisions. Moreover, insufficient
attention was paid to the small indigenous sector, and the
machinery for implementing developments in the public
sector was
unsatisfactory. Lewis noted that the most important
aspects of
Nigeria's 1962-68 plan were "how the government proposes
to raise
the money and to recruit the personnel to carry out its
objectives."
Postwar reconstruction, restoring productive capacity,
overcoming critical bottlenecks, and achieving
self-reliance were
major goals of the Second National Development Plan
(1970-74).
The replacement cost of physical assets damaged and
destroyed in
the civil war with the secessionist Igbo area in the
southeast,
then known as Biafra, was estimated to exceed N600 million
(then
about US$900 million).
The United Nations (UN) Center for Development
Planning,
Projections, and Policies observed that Nigeria's real
growth in
GDP between 1970 and 1974 was 12.3 percent per year. The
annual
target had been only 6.2 percent. Nigerian growth could be
explained by factors largely outside the planners'
purview--rapid
oil industry growth and sharply increasing oil prices.
Announced in March 1975, the Third National Development
Plan
(1975-80) envisioned a twelvefold increase in the annual
rate of
public capital expenditures over the previous plan period.
This
document included the statement, "There will be no savings
and
foreign exchange constraints during the third plan period
and
beyond." The document outlined ambitious plans to expand
agriculture, industry, transport, housing, water supplies,
health
facilities, education, rural electrification, community
development, and state programs. The third plan also
designated
substantial funds for prestige projects, such as Festival
of
African Culture (FESTAC) in Lagos.
Amid the euphoria of the 1974 oil price boom, the
Ministry of
Economic Development approved and added numerous projects
for
other ministries not supported by a proper appraisal of
technical
feasibility, costs and benefits, or the technical and
administrative arrangements required to establish and
operate the
projects. According to Sayre P. Schatz, who advised the
Ministry
of Transport while it prepared feasibility studies for the
plan
in 1974,
"Economic reasoning gave way before economic
enthusiasm," and the necessary coordination and
implementation
were ignored.
Inflationary minimum wage and administrative salary
increases
after October 1974, in combination with the slowing of the
economy, made budget shortfalls inevitable. In June 1975,
several
state and local governments did not receive their monthly
subsidies from the federal government. Just before the
July 29,
1975, coup in which head of state General Yakubu Gowon was
toppled, government workers in several areas threatened to
impair
vital services unless their June wages were paid.
In March 1976, in response to an economy overheated by
demands for new programs and higher wages, General
Olusegun
Obasanjo, then head of state, pointed out that petroleum
revenue
was not a cure-all. Many projects had to be postponed,
scaled
down, or canceled when oil-revenue-based projections made
in
1974-75 later proved too optimistic. Projects tended to be
retained for political reasons, not because they were
considered
socially or economically useful by the Central Planning
Office of
the Supreme Military Council.
The civilian government that tack office on October 1,
1979,
postponed the beginning of the fourth plan (1981-85) for
nine
months. Whereas the plan's guidelines indicated that local
governments were to be involved in planning and execution,
such
involvement was not feasible because local governments
lacked the
staff and expertise to accept this responsibility. The
plan was
also threatened by falling oil revenues and an increased
need for
imported food that had resulted from delays in
agricultural
modernization. Projected to rise 12.1 percent annually,
exports
actually fell 5.9 percent yearly during the plan, as a
recession
among the nations of the Organisation for Economic
Co-operation
and Development reduced demand for Third World imports. As
exports declined, the capacity to import construction
materials
and related capital goods also fell, reducing growth in
the
construction, transport, communications, utilities, and
housing
sectors.
Nigeria was heavily dependent on agriculture, with the
sector
accounting for more than 40 percent of pre-1973 GDP. But
in the
decade up to 1983, agricultural output in Nigeria declined
1.9
percent and exports fell 7.9 percent. Agricultural imports
as a
share of total imports rose from 3 percent in the late
1960s to 7
percent in the early 1980s. Nigeria's unfavorable
agricultural
development resulted from the loss of competitiveness
among farm
exports as the real value of the Nigerian naira
appreciated
substantially from 1970 to 1972 and from 1982 to 1983.
Thanks in large part to the overthrow of Nigeria's
second
civilian administration, the Second Republic headed by
President
Shehu Shagari, at the end of 1983 and of the military
government
of General Muhammadu Buhari in 1985, the Fifth National
Development Plan was postponed until 1988-92. Continuing
the
emphases of the SAP, the fifth plan's objectives were to
devalue
the naira, remove import licenses, reduce tariffs, open
the
economy to foreign trade, promote nonoil exports through
incentives, and achieve national self-sufficiency in food
production. The drafters of the fifth plan sought to
improve
labor productivity through incentives, privatization of
many
public enterprises, and various government measures to
create
employment opportunities.
In late 1989, the administration of General Ibrahim
Babangida
abandoned the concept of a fixed five-year plan. Instead,
a
three-year "rolling plan" was introduced for 1990-92 in
the
context of more comprehensive fifteen- to twenty-year
plans. A
rolling plan, considered more suitable for an economy
facing
uncertainty and rapid change, is revised at the end of
each year,
at which point estimates, targets, and projects are added
for an
additional year. Thus, planners would revise the 1990-92
threeyear rolling plan at the end of 1990, issuing a new plan
for
1991-93. In effect, a plan is renewed at the end of each
year,
but the number of years remains the same as the plan rolls
forward. In Nigeria, the objectives of the rolling plan
were to
reduce inflation and exchange rate instability, maintain
infrastructure, achieve agricultural self-sufficiency, and
reduce
the burden of structural adjustment on the most vulnerable
social
groups.
Data as of June 1991
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