By Kolawole Ojebisi
Former military President, Gen Ibrahim Babangida, has shed light, from his perspective, on how Nigeria failed to maximise its oil boom years.
The former military President ascribed the development to what he described as a nationwide “profligacy” and “conspicuous consumption” that undermined the economy’s long-term development.
He also justified the spending of the $12.4bn oil windfall by his government. “What I have done is not unusual in this country. Somebody did it before me, but I won’t mention names. We did undertake the construction of various ports and other projects (including bridges).
“That money could have gone into the Federation Account. Yes, but whatever foreign exchange we earned, we monetised it, and those we monetised were what the state governments and local governments were getting… And if all we could spend between 1988 and 1994 was $12.4bn, that is very good,” he stated.
In excerpts from his autobiography, ‘A Journey of Service,’ launched on February 20, 2025, Babangida argued that while the “meteoric” revenue from crude oil under then-Head of State, Gen. Yakubu Gowon, funded massive infrastructure expansions, policies such as the Indigenisation Decree of 1972 inadvertently “provided windfall gains” for a handful of influential individuals at the expense of non-oil sectors.
Babangida’s 400-page account said exuberant oil wealth shaped government spending, fuelled public corruption and generated economic twists that still haunt the country today.
In chapter seven, titled ‘Reforming the Economy: Privatisation, IMF, SAP, and Other Matters,’ he argued that “the heady days of our nation’s oil boom” were overshadowed by “accusations of corruption”.
As the 1970s waned, he writes, corruption touched even high-ranking figures, fuelling dissatisfaction among junior military officers. He suggested that this dovetailed with the government’s sudden change of date for returning Nigeria to civilian rule – ultimately spurring another coup.
According to Babangida, the trend persisted into the Second Republic, which he denounced as “a period of lavish spending, falling real production outside the oil sector and deepening import dependency.”
Instead of using oil gains to diversify the economy, “funds were borrowed heavily from outside and expended, not substantially on profitable ventures, but more on conspicuous consumption and prestigious projects, or sometimes just siphoned out of the country,” he narrated.
He noted, “The profligacy of the Second Republic is now common knowledge. Outside the oil sector, real production was falling, and pre-occupation with trading and the pursuit of easy surplus rising import dependency intensified, and domestic food security eroded as the internal terms of trade turned against agriculture and rural activities.
“Exportable commodities outside petroleum products became progressively undermined. Domestic consumption patterns became anchored on foreign-acquired tastes, and the narrowing domestic investment was erected on a consumer-oriented import substitution strategy that depended not on domestic natural resources but on imported raw materials.
“Public sector expenditures expanded rapidly without adequate attention to the sustainability of the government revenue base.”
In the book, the former military leader detailed how, by the mid-1980s, the situation had deteriorated to an outright chronic balance of payment crisis, an over-valued naira exchange rate and decaying agriculture.
It read, “By the mid-1980s, that imagined gloomy picture was compounded by the chronic balance of payment crisis and an over-valued naira exchange rate by an inequitable system of import licensing, rapidly rising food import bills, failure to pay wholly or promptly public service wages and salaries despite persistent fiscal deficits, the debilitating and unproductive culture of consumption, low productivity, import-dependency, production process, decaying agriculture and bloated public service personnel.
“This perilous state of the economy was not unrelated to its historically based dependent, undeveloped, unintegrated and asymmetrical urban-rural character.”
By his account, previous administrations “lacked the political will, courage, and vision” to address Nigeria’s deep-seated underdevelopment, effectively leaving his government to grapple with a “perilous state of the economy.”
Part of the alleged mismanagement stemmed from the government’s dominance of “commanding heights” industries, which he called “pipelines of waste and corruption.”
He maintained that previous administrations had used the oil boom proceeds to establish massive state-owned enterprises—from refineries to newsprint factories—and that many of these became perennial money losers under political interference rather than commercial discipline.
This, he noted, led to his declaration of a 15-month National Economic Emergency on October 1, 1985, hoping to restructure the economy along more productive and self-reliant lines.
