HRM Oluyemi Falae, CFR, a former Secretary to the Government and Minister of Finance under General Ibrahim Babangida, has defended his involvement in the controversial Structural Adjustment Programme (SAP), insisting it was a necessary response to Nigeria’s crushing debt crisis in the 1980s.
Speaking during an interview on ARISE NEWS on Thursday, He rejected claims that the devaluation was intentional or malicious, stating that Nigeria had little room to maneuver, while it faced looming isolation from international trade due to unpaid debts.
“We were in debt. We had no choice but to pay the debt back. And we could not impose our solution on the international community. So they had us by the throat.
“If we did not do a deal with the creditors, we would stop trading internationally… Nigeria would be in crisis. So it was not a pleasant thing. It was the least bad of all the bad options available.”
Falae firmly stated that contrary to widespread public belief, he was not the architect of SAP and only inherited the policy framework already adopted by the Babangida administration.
“I was appointed secretary to the federal government on the 29th of January 1986. Six weeks before that, Babangida announced… that his government had adopted a domestic structural adjustment program. That policy was already government policy by the time I was appointed. I did not bring the policy, I did not recommend it, I did not make it.”
Falae explained that SAP was initiated to address an economic emergency precipitated by the Shehu Shagari administration’s mismanagement of foreign exchange through excessive import licensing.
“First of all, people forget that it was President Shagari who plunged Nigeria into economic crisis by issuing import licenses with values far in excess of her earning of foreign exchange. So by the time Buhari took over, Nigeria was owing trade arrears of close to $30 billion.”
On allegations that SAP caused long-term economic damage, including massive devaluation and hardship, Falae defended the exchange rate performance under his tenure.
“By the time I left government in 1990… the exchange rate was 5.50 Naira to the Dollar after three years of SAP. It was after that we began to have 32 naira to the dollar, 48 naira to the dollar, 100 naira.”
“For the time that I was there and were implementing the structural adjustment program, the exchange rate never exceeded 5.50 Naira to the Dollar.”
While acknowledging criticisms, Falae emphasised that the SAP also brought positive reforms.
“One of the positives was the reform of the marketing policy system… which was very good for the farmers. And also, the positive of the domiciliary account… I believe the balances in those domiciliary accounts in Nigeria would be in the neighborhood of $35 billion.”
Asked about comparisons between SAP and current Tinubu-era reforms like forex liberalization and subsidy removal, Falae maintained that market forces must be balanced with government oversight.
“You see, our problem has been abuse. And, you know, we can never surrender the economy to blind market forces. At the same time, you cannot oust market forces from the determination of economic parameters.”
“You have to have a balance between government intervention and the working of market forces. So that is the path of wisdom.”
He also defended the reality of adjusting the exchange rate to reflect economic conditions:
“When I was in government, it never went beyond 5.50, I repeat again. But subsequently, I believe abuses came in and it went haywire.”
“When I was there, that was to allow market forces, as well as government intervention to manage the economy. And it was, in my view, an acceptable system. But as I said, I can’t answer for the period when I was not in government.”
Faridah Abdulkadiri
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