Lecture Delivered Under the Joint Auspices of the Geographical Society and the Federalist Society of Nigeria at the University of Ibadan on 16th May, 1970
Concluded from last week
As a result of the British devaluation of their currency in November 1967, I had already anticipated the implications for the Nigerian economy. Despite this, we convened meetings with officials and the Governor of the Central Bank to discuss the matter. The arguments for and against devaluing the £N were intense, but ultimately, we decided not to devalue. Subsequent events confirmed that our decision was wise.
I must emphasize that while politics and economics may not always align, the unilateral nature of Britain’s decision would have been an affront to our independence. We lost significantly due to the Sterling devaluation, and further losses would have occurred if we had devalued. We could not afford such losses, given the circumstances.
We sought guarantees from the British Government to protect us against future devaluations. They provided this guarantee, which also applied to other countries in the Sterling community. This ensured we were insured against losses from future devaluations.
Through these measures, we managed to raise £230.8 million in local currency and £70.8 million in foreign exchange to finance the civil war. We survived the war without compromising our national pride or sovereignty. Moreover, the war revealed Nigeria’s vast potential for economic growth and self-reliance.
Our financial management during the war was commendable. While we deserve praise, it is Nigeria that deserves the glory for its resilience and manageability. We emerged as a strong and buoyant economy, ready to tackle the challenges of peace.
The cost of the war was not just the visible £300 million. There were hidden costs, incalculable losses, and human suffering. The loss of GDP growth and infrastructure damage are significant. The human toll is immeasurable.
The civil war required adequate funds. Financing the war left us with both good and bad legacies. I will outline six key implications:
- Large Army: The war resulted in a large army, posing a dilemma for the economy. Maintaining them or demobilizing them presents challenges.
- Wounded and Maimed: Hospitals and homes are filled with the wounded, who will remain a charge on the economy for years.
- Damage to Properties: Extensive damage to public and private properties requires resources that could have been used for development.
- Unorthodox Arms Market: The unregulated arms market led to the establishment of the Iron and Steel Complex, promoting self-sufficiency.
- Economic Reforms: The war forced us to abandon past policies and adopt financial prudence, including import restrictions and centralization of foreign exchange.
- Economic Resilience: The war revealed Nigeria’s economic resilience and potential for growth.
Nigeria’s economic potential is immense, and we must plan big to match it. However, we face obstacles: lack of expertise and foreign exchange. To overcome these, we must hire experts abroad and accumulate foreign exchange.
Peace cannot be won by ‘de-biafranising’ the Ibos or creating more states. It requires addressing poverty, hunger, diseases, squalor, and ignorance. These are the real enemies of peace.
In my address to the Association of Chambers of Commerce, Industry and Mines of Nigeria, I emphasized the importance of planning and cooperation between the public and private sectors. Nigeria’s national objectives include transforming into a modern, prosperous state within two decades.
We can achieve this through rapid agricultural and industrial development, self-sufficiency in consumer durables, and establishing heavy industries. We should aim for a self-contained economy and voluntary interdependence with other countries.
By 1975, petroleum exports could significantly impact our economy. Coal reserves and the Kainji Hydro-electric Power Station offer opportunities. Agricultural and industrial development is possible, leading to contributions to Africa and global prosperity.
Post-war challenges include reconstruction, rehabilitation, and overcoming unemployment, poverty, and disease. The civil war has complicated these issues, and we must address them urgently.
The capitalist system, with its greed and competition, exacerbates these problems. Socialism offers a solution by ensuring equality, justice, and economic planning. Public ownership of key sectors is essential for effective planning.
The military regime must recognize its role as a corrective regime, not a reconstructive one. It must terminate the abnormality and restore civilian rule quickly. The ten-point programme includes reorganizing the Armed Forces, implementing the National Development Plan, eradicating corruption, and creating more states.
Reorganizing the Army involves reducing numbers, strengthening the remaining troops, and ensuring they have alternative employment. The military must not delay the return to civilian rule, as prolonged military rule leads to instability.
Corruption must be addressed. The military regime must take swift action to restore public trust. The creation of states based on linguistic lines is necessary to ensure equitable representation and development.
The new federal capital in Abuja and the old city of Lagos require careful planning. Lagos must be made more habitable while developing the new capital. The socio-gravitational pull of Lagos must be considered.
Separation of powers among the three arms of government is crucial. The judiciary must remain independent, while the legislature and executive must collaborate. Political parties must prioritize the nation’s interests over individual agendas.
Courage is essential for progress. The Western Region’s achievements in education, health, and infrastructure set a precedent. Free education and healthcare are vital for national development. The gap between regions must be closed through comprehensive educational reforms.
In conclusion, Nigeria’s future depends on unity, planning, and collective effort. The lessons from the past must guide us towards a prosperous and stable future.
Economic Implications of the Civil War
The civil war had profound economic implications for Nigeria. The initial decision not to devalue the £N proved to be a wise move, as it prevented substantial losses. However, the war led to significant expenditures and destruction. The need for reconstruction and rehabilitation was urgent, requiring substantial resources.
The war also highlighted the importance of maintaining a strong economy. The Federal Military Government recognized the need to mobilize resources to ensure economic survival. This involved strict financial discipline and careful planning.
The war exposed the vulnerabilities of the Nigerian economy. The loss of GDP growth and the damage to infrastructure underscored the need for long-term strategies. The focus shifted to rebuilding and developing the economy to ensure sustainable growth.
Post-War Reconstruction and Rehabilitation
Reconstruction and rehabilitation were critical post-war priorities. The Federal Government faced the challenge of rebuilding damaged infrastructure and restoring economic stability. The estimated cost of reconstruction was around £200 million, with specific allocations for roads, agriculture, railways, and education.
The war also created a large number of displaced people and veterans needing reintegration. The government had to balance the needs of the military with those of the civilian population. The challenge was to ensure that the war did not lead to long-term economic stagnation.
Economic Planning and Development
Economic planning became a priority after the war. The National Development Plan aimed to address the challenges of underdevelopment and inequality. The plan focused on increasing GDP growth, improving infrastructure, and enhancing social services.
The war demonstrated the importance of economic resilience. Nigeria’s ability to withstand the war and emerge stronger showed its potential for growth. The focus shifted to leveraging this resilience for future development.
Challenges and Opportunities
Despite the challenges, the war presented opportunities for economic transformation. The need for self-sufficiency in key sectors like steel and petrochemicals became evident. The establishment of the Iron and Steel Complex was a step towards this goal.
The war also highlighted the need for international cooperation. Nigeria’s participation in regional and global economic initiatives was crucial for recovery and development. The country’s strategic location and natural resources offered significant potential for economic growth.
Conclusion
The civil war had far-reaching economic consequences for Nigeria. The decisions made during the war shaped the country’s economic trajectory. The focus on financial discipline, reconstruction, and development laid the foundation for future growth. The lessons learned from the war continue to influence Nigeria’s economic policies today.
