The Nigerian economy has undergone structural changes in the past three decades from a predominantly agricultural economy in the 1960s to an economy mainly valient on oil from the mid 1970s
The growth in oil earnings was not fully internalized into the economic system. The result was that the consumption production pattern became largely import oriented inability to emergence of trade arrears.
A growing department burden also surface in the early 1980s as a result jumbo trans contracted from the international capital market. External Debt outstanding rose drastically from US 93.6 million to 1976 to us 18.6million in 1986 and to about us 30.8 billion in 1990.
The pursuit of an over valued exchange rate policy, the subsequent relegation of the agricultural sector to the background, heavy public sector pending and combined to create distortion in the production. Consumption and payments patterns.
The prections decline in oil earnings in the 1980s necessitates policy redirection aimed at realigning the domestic production patterns with the local resources base.
The structural adjustment pro (SAP) was introduced in July 1986 to eliminate structural distortions and encourage a diversified and broad productive base the major feature of the SAP includes: -
(a) The re- alignment of the naira exchange rate to reflect forces.
(b) Tread liberalization.
(c) Privatization and commercialization of government owned enterprises and the promotion of locally secured raw materials
(d) The deregulation of the economy.
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