Nigeria, 1986.

The economy was in trouble.
The Naira was losing value.
The country was drowning in debt.

And then came a decision that changed Nigeria forever; the Structural Adjustment Program (SAP).

For some, SAP was a necessary economic reform. For others, it was the beginning of Nigeria’s economic downfall.

What really happened?

How did Babangida’s policies shape Nigeria’s economy?
And are we still paying the price today?

This is the story of SAP and the Naira’s downfall.

How Did Nigeria Get Here?

Before 1986, Nigeria’s economy was built on oil money.

• The government controlled key industries
• The exchange rate was stable.
• But corruption and mismanagement weakened the economy.

By the time Babangida took over in 1985, Nigeria was broke.
The country owed billions to foreign lenders.

And then came the IMF (International Monetary Fund).

The IMF offered Nigeria a loan to help fix the economy.

But there was a catch.

In exchange for the loan, Nigeria had to follow strict economic conditions.
• Devalue the Naira.
• Remove subsidies on essential goods.
• Open the economy to foreign investment.

Many Nigerians opposed the deal.
Even Babangida himself seemed hesitant.

So instead of accepting the IMF loan directly, he introduced a similar policy; the Structural Adjustment Program (SAP).

SAP was meant to fix Nigeria’s economy.

The plan included:
✔️ Deregulation – Government sold off key industries.
✔️ Devaluation of the Naira – Making exports cheaper.
✔️ Cutting subsidies – Reducing government spending.
✔️ Encouraging foreign investment.

It sounded good on paper.

But in reality, it hurt the average Nigerian.

The Naira Crisis: A Currency in Free Fall

Before SAP, one US dollar was about 1 Naira.

After SAP? The Naira lost over 500% of its value.

• Imported goods became expensive.
• Businesses struggled.
• Inflation skyrocketed.

By the early 1990s, Nigeria’s economy was worse than before.

People were poorer.
Jobs were scarce.
And the middle class? Almost wiped out.

SAP was supposed to save Nigeria.
Instead, it left the country more dependent on foreign debt.

Who Benefited from SAP?

While the masses suffered, some people gained.

✔️ Foreign companies bought Nigerian assets at cheap prices.
✔️ Corrupt politicians and military officers made millions.
✔️ The banking sector exploded, but only for the elite.

Meanwhile, ordinary Nigerians struggled to survive.

By the time SAP ended, the damage was done.
And the Naira has never recovered since.

The Long-Term Impact: Are We Still Paying the Price?

Today, the Naira is still on a downward spiral.
• Unemployment remains high.
• Inflation is out of control.
• Nigeria’s economy is still tied to oil and foreign loans.

Many economists believe Nigeria never fully recovered from SAP.

So, the question remains:
Was SAP a necessary reform that Nigeria mismanaged?
Or was it a trap that ruined the economy?

Either way, Nigeria is still feeling the effects today.

Episode Six: IMF, SAP, and the Naira’s Downfall

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