In his long-awaited autobiography, former Nigerian military president, Ibrahim Babangida, provided a rare, unfiltered account of the Structural Adjustment Programme (SAP)—a policy that reshaped Nigeria’s economic landscape, triggered nationwide protests, and remains a subject of intense debate decades later.
Babangida’s memoir entitled ‘A Journey in Service,’ offered an insider’s perspective on the circumstances that led to the adoption of the Structural Adjustment Programme (SAP) and how it marked the beginning of Nigeria’s transition toward a market-driven economy.
On assuming office, Babangida said he was convinced that urgent reform was necessary. He seized power in 1985 with Nigeria facing severe economic distress following the decline in global oil prices and mounting external debt.
The 83-year old former military dictator said that he consulted extensively with leading economists and technocrats, assembling a team that included Gabriel Olusanya, Ojetunji Aboyade, Ikenna Nzimiro, Akin Mabogunje, Chu Okongwu, Kalu Idika Kalu, and others.
He and his team believed Nigeria had the resources and talent to implement a new economic direction, shifting towards a free-market system.
His predecessor, Muhammadu Buhari, had resorted to a system of market control, setting the price of everything from food items to petrol which led to acute shortages.
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“We agreed that our most urgent priority was to rescue the national economy by putting it on a new footing of an open market,” Babangida said in his memoir.
“In the immediate post-Shagari military government, there was a shared consensus among the military leadership that our people needed to be saved from the prospect of a failed economy and state,” Babangida said.
Babangida’s team identified the economy’s core issues, including excessive state control, inefficient government-owned enterprises, and a rigid foreign exchange system.
“There was excessive control of major sectors of the economy from retail trade, shipping, aviation, banking and even social services,” Babangida said.
Following extensive consultations, the SAP launched in 1986, aimed at liberalising the economy, reducing government intervention, and promoting private sector-led growth.
Almost four decades later, the SAP remains one of Nigeria’s most controversial economic policies, evoking strong opinions on its impact.
“I knew the process would take many decades to achieve tangible results. But it was better to summon the courage to tell ourselves the truth,” Babangida said as he looked back at his reforms.
The highs and lows of SAP
Key measures of the SAP included floating the naira, lifting import restrictions, reducing subsidies, privatising state enterprises, and deregulating interest rates.
While SAP aimed to create a more dynamic economy, its rapid implementation led to severe inflation, a declining currency, and increased poverty.
The naira slumped from about N1/$1 in 1986 to N9/$1 by 1993.This worsened inflation, which surged past 40 percent by 1989, according to World Bank data, eroding purchasing power.
Babangida defended the naira’s devaluation by stating that “foreign exchange stopped being a deity to be worshipped by all and sundry since it could now be accessed more liberally.”
The program also worsened poverty, with 45 percent of Nigerians living below the poverty line by the early 1990s, sparking public unrest and protests.
Although the SAP sought to reduce Nigeria’s external debt burden, which stood at $19 billion in 1985, the debt stock ballooned to over $30 billion by 1993 due to continued borrowing and high-interest repayments.
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State-owned enterprises were privatised, but critics say corruption undermined the process.
Babangida admitted in the book that the privatisation process was far from perfect.
“Sadly, many privatised entities have either been grounded and wound up or have had their assets stripped to bare bones by their irresponsible new owners whose original interest was to strip assets and sell off the carcass of these enterprises,” he said.
Fiscal austerity measures also failed to bridge the budget deficit, which persisted throughout the period.
The reforms turned out rewarding for agriculture, as import restrictions boosted local production and restored Nigeria’s position in cocoa, palm oil, and rubber exports.
“Ultimately, SAP’s legacy remains mixed,” a senior business leader said. “While it introduced necessary economic reforms, poor execution led to widespread hardship and social unrest,” the business leader said on condition of anonymity.
“Economic reforms if poorly executed could be just as devastating as doing the wrong things.”
Taking over the reins of the economy from Buhari is not the only similarity shared by Babangida and current president Tinubu.
The country is also in dire straits and in the middle of painful economic reforms that have led to the worst cost of living crisis in a generation and worsened poverty levels.
According to the latest figures from the International Monetary Fund (IMF), average income in Nigeria dropped to an all-time low of $835 this year, driven by the depreciation of the naira and rapid population growth. The figure is down from over $3,000 in 2014 and dwarfed by South Africa’s average income of $6,377, Egypt’s 3,542, Angola’s $2,961, Ghana’s $2,232, and Kenya’s $2,218.
Inflation levels cooled dramatically after a rebasing exercise in January 2025, but that has done little to lower elevated prices.
“SAP introduced critical market-oriented reforms, but its rapid and poorly-sequenced implementation led to economic distortions, increased inequality, and entrenched corruption,” another knowledgeable source told BusinessDay.
While privatisation and financial liberalisation remain relevant, Nigeria still grapples with the structural challenges SAP sought to resolve, including currency instability and over-reliance on oil revenue.
Babangida scored his economic reforms highly, crediting his government for liberalising critical sectors from broadcast media to banking, and aviation.
He said his privatisation push also led to the sale of redundant government assets from newsprint factories to hotels and textile mills.
“Our original belief that government has no business in business has been vindicated mainly by the privatisation initiative’s overall success,” Babangida said.
The voice of Jacob but hand of Esau
The no-love-lost relationship between Nigerians and the IMF/World Bank duo can be traced back to implementation of SAP by Babangida.
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Given that the thrust of the SAP aligned with the recommendations of the IMF, Nigerians are overly critical of the institution till date.
Olu Fasan, a political economist, said that Nigerians unfairly criticise the IMF for the failings of the economy.
“Those measures (SAP) are the hallmarks of every open and competitive liberal economy; and any economy that has been so badly mismanaged, as Nigeria’s has, needs those self-correcting measures,” Fasan said.
“General Babangida accepted the popular wishes of Nigerians and refused to take the IMF loan. However, he interpreted the outcome of the national dialogue to mean that while Nigerians rejected an IMF loan and its conditionalities, they were not opposed to the government introducing necessary reforms to tackle the economic crisis,” Fasan said.
“In other words, the reforms would be designed at home, not imposed from the outside,” Fasan noted in a BusinessDay op-ed piece.
“But it was a sleight of hand because the measures Babangida’s government introduced were almost the same as what the multilaterals had prescribed.
“For most Nigerians, it was the voice of Jacob but the hands of Esau, the latter being the IMF and the World Bank. Since then, most Nigerians have never stopped viewing both institutions with deep suspicion,” Fasan said.
“Nigerians rarely hold their government to account for mismanaging the economy through misguided policies and industrial-scale corruption.”(BusinessDay)
