NIGERIA ECONOMIC POLICY UNDER THE MILITARY 1983-1993

NIGERIA ECONOMIC POLICY UNDER THE MILITARY 1983-1993

CHAPTER ONE

CONCEPTUALIZATION OF ECONOMIC POLICY AND THE NIGERIA SITUATION.

1.0    INTRODUCTION 

A policy is an agreed-upon course of action that is decided by the government, a company, or another entity. It is a behavior or belief principle that affects how one acts. It can also be referred to as government action plans, which outline what the government intends to do and how it plans to accomplish it. 1

Economic policy can be seen of as a collection of economic measures that the government conceptualizes, formulates, enacts, and implements in an effort to hasten the process of economic development in a given society. The purposeful actions or initiatives undertaken by governments or their representatives in an effort to quicken the pace of development for the socio-economic welfare of their populace. No nation, regardless of size, would allow its economy to

without any restraint, the invisible hand of market forces. Several economists have suggested that, in the modern world, no nation’s economic and social progress is free from the purposeful attempts of the government or one of its agents to hasten the process of economic development.

The government actively shapes, plans, and controls economic development in each of its different states or nations. While governments have a pervasive, direct, and substantial influence over people’s lives in some states—as is typical of socialism or communist countries—the impact of governments is restricted to policy decisions that affect how the economy and other aspects of people’s lives are run and this provide the stimulous to economic growth and development2.

One of the most important purpose or programs of a constituted government is the formulation of economic policy. The relevance of the formulation of such economic policy in the act of governance cannot be over emphasized considering the implication of a weak economy for the survival of a nation:- The strength of a nation rests on a viable economy. A nation with a viable economy enjoys political stability, high standard of living for its citizenry and a good diplomatic relation with other nations of the world. Therefore it can be safe for us to argue that the economic strength of a nation is a major determinant of the political power of that nation and its respectability in the international system or environment. In order to pursue economic statecraft effectively, states and indeed governments need to have a strong economic base. Such financial strength is usually an important element in the power equation of states in the international system.

The growth rate of the economy, the inflation rate, the international/foreign reserves (holding of foreign currency and gold), the balance of payment, budget surplus or deficit of the central bank of states, are crucial factors in determining the performance of states in the international environment3.

For instance, according to IMF and World Bank sources (1996), Japan had a moderate growth rate and low inflation. Her international reserve was substantial. She had a positive balance of payment and a small deficit. Russia by contrast, was in financial shambles, her GDP had declined and inflation had run rampant; it had scant international reserves and a substantial balance of payment deficit. Given this scenario, Japan though smaller by size is more likely to play a more dominant role in the international political economy than Russal4. Similarly, with the 1994 GDP of 6.6 trillion dollar, the U.S.A is an economic titan that could use its economic power to produce other types of relationship. The U.S has the ability, for instance to influence other countries by offering trade benefits or threatening trade sanctions. For this reason, the U.S. has continue to play a dominate and vigorous role in international economic relations and in world politics. Since every nation strives to achieve those goals; economic policy becomes an important economic tool used in promoting economic growth5.