FINANCIALSECTORREFORMSANDECONOMICDEVELOPMENTINNIGERIA.doc

FINANCIAL SECTOR REFORMS AND ECONOMIC DEVELOPMENT IN NIGERIA: THE ROLE OF MANAGEMENT BY DR ESTHER O. ADEGBITE DEPARTMENT OF FINANCE UNIVERSITY OF LAGOS BEING A PAPER DELIVERED AT THE INAUGURAL NATIONAL CONFERENCE OF THE ACADEMY OF MANAGEMENT NIGERIA AT ABUJA, NIGERIA TITLED MANAGEMENT: KEY TO NATIONAL DEVELOPMENT NOVEMBER 22 – 23, 2005 , AT ROCKVIEW HOTEL, ABUJA INTRODUCTION Government–led–development was the ruling economic development paradigm in Nigeria up to the 4th quarter of 1986. Under this paradigm the private sector was a passive partner in development, while the public sector dominated all other sectors of the economy – agriculture, commerce, services, (especially, transportation) industry etc. Government designed what are known as National Development Plans, meant to guide the nation in its development path. In the 1960s and 1970s government had sufficient financial resources to finance a reasonable proportion of each development plan. By the middle of the 1990s however, the nation had become saddled with an excruciating external debt burden, falling terms of trade in the international market place, slow growth of output, high rate unemployment etc, that the government had to do a rethink of the underlying philosophy of development in Nigeria. The result was a shift in the economic development paradigm from government – led to private sector led development. In line with this paradigm shift was the need to relief every sector of all strangulating regulations that had hitherto characterised every sector, in government’s bid to have firm control over every sector and ensure that they all move in line with government’s perceived goals for the nation. Therefore, by the 4th quarter of 1986 a programme was fashioned out for the nation called the Structural adjustment Programme (SAP). The SAP attempted to move the country away from government direct – control of economic activities to indirect control, (i.e. control of economic activiti