Class notes
Ec104 study notes: African reform
- Course
- Institution
Revision notes with content from lectures and seminars for EC104 topic 16 African reform
[Show more]
Seller
Follow
bethwalton03
Reviews received
Content preview
African reform: 1979-2001The Nigerian economy: 1979-1999
The 2nd oil cycle
● Falola and Heaton (2008) - democracy restored in 1979 and the election was
won by Alhaji Shehu Shagari
○ This 2nd Republic was corrupt and resented
○ Removed in a military coup after rigging the elections in 1983
● Beva, Collier and Gunning (1999) - oil prices peaked in 1980 and collapsed
1985-6
○ Nigeria’s debt service became unsustainable
○ More capital was leaving the country (debt servicing) than arriving
(loans / FDI)
● Per capita expenditure decreased by 44% - borne by the public spending
○ Achieved by running down assets
○ Consumption fell by ¼ and investment fell by over 50%
● Govt of General Muhammadu Buhari (-1985) had modest recovery, higher
private consumption and falling govt consumption
Structural adjustment
● Falola and Heaton (2009) - Major Babangida overthrew Buhari in a coup
(1985) due to Buhari’s inability to bring the economy under control or
reschedule debt
● He declined a loan from the IMF for a structural readjustment package
○ Had tariff rationalisation and devaluation
■ Debt service fell from 39-30% of fed revenues
■ Devaluation caused inflation (up to 70%)
○ Govt departments cut staff and reduced salaries
■ Uneven manufacturing performance depending on whether the
sector lost protection (automobiles) or kept it (textiles)
● Govt lost control of spending when oil prices spiked (in the 1st Gulf War)
○ Deficit reached 10% of GDP
The Abacha Regime and Corruption
● Falola and Heaton (2008) - 1993 elections won by Chief Abiola but annulled
by Babangida - caused unrest after which General Abacha takes power
● Suspended structural adjustment
○ Foreign relations (US/UK) deteriorate
○ Reintroduces the programme in 1995
, ● Banned political parties and imprisoned opponents (Obasanjo imprisoned in
1995)
● Executive for labour unions dissolved
● Execution of the Ogoni Nine (1995)
○ Ogoni - fishermen who lived near the Niger river delta where oil
extraction took place
○ Held protests against oil drilling, causing capital flight as international
companies heard of their plight
● Divestment of foreign holdings (even oil declines)
○ Active drilling rigs falls from 36-14 (1991-94)
● Rising oil prices offset by corruption
○ By his death (1998), Abacha and his family has embezzled $3 billion
○ Central bank governor owned 37 homes
● Inflation rose above 150% per annum
Economic growth and living standards
● Beva, Collier and Gunning (1999) - private consumption rose by 1.5% per
year until the mid 1970s
○ Fell by 7% per annum in the 1980s
○ Rose after liberalisation
● Private consumption was lower in 1985 than the early 1950s
● North made relative gains in standard of living in the 1950s and losses after
the 1980s
● Standard of living was generally higher in urban than rural areas - urban bias
○ May have been reversed in the 1980s
○ Rising food prices increased farmers’ income
● Wage-earners did better than self-employed in the cities
○ Gap narrowed in the 1980s
The Ethiopian famine
Economic policies of the Derg
● Marcus (2002) - Major Mariam’s derg (committee) overthrows the emperor in
1974
○ Issues the Declaration of Socialism
○ Aims of a 1 party state, public ownership of main sectors and collective
agriculture
● 1974/5 - nationalisation of private financial institutions and most industry
○ Including foreign-owned companies
● Land reforms to gain Oromo support
○ Oromo - an ethnic group making up 30% of the population
○ Nationalisation of all rural land
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller bethwalton03. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $3.93. You're not tied to anything after your purchase.
Can Stuvia be trusted?
4.6 stars on Google & Trustpilot (+1000 reviews)
57114 documents were sold in the last 30 days
Founded in 2010, the go-to place to buy study notes for 14 years now