Economic Reform Programmes – SS3 Economics Lesson Note (Second Term)

Economic reforms are policies adopted to improve the economy. They may reduce the size of government, privatise government-owned firms or adjust tax policy. Nigerian examples include the consolidation of financial institutions, privatisation and commercialisation, and indigenisation and nationalisation. Government agencies such as EFCC, ICPC, NAFDAC and SON also support reform.

Behavioural objectives

By the end of the lesson, students should be able to:

1. Define economic reforms.
2. Discuss some reforms that could take place in Nigeria.
3. Discuss the roles of some government agencies in economic reforms.

Instructional techniques

• Identification
• Explanation
• Questions and answers
• Demonstration
• Videos from source

Instructional materials

• Videos
• Loudspeaker
• Textbook
• Pictures

What are economic reform programmes?

Economic reforms are policies adopted towards achieving improvement in the economy. The policies can aim at reducing the size of the government or privatising government-owned firms. They can also involve re-adjusting tax policy.

What are examples of economic reform programmes?

1. Consolidation of the financial institutions

The consolidation of the financial institutions was introduced in 2005 by the then Central Bank of Nigeria (CBN) Governor, Prof. Charles Soludo. It required every bank to have a minimum capital base of twenty-five billion naira (₦25 billion). This led to various mergers and acquisitions among and between banks.

This drastic but beneficial measure helped to sanitise Nigeria’s banking sector and make it more effective and efficient, so that Nigerian banks can now compete with banks at the international level.

2. Privatisation and commercialisation

Privatisation is a situation where organisations formerly owned by the government are sold to private individuals. For example, the electricity utility NEPA, which became PHCN, was privatised and split into successor companies such as the Enugu Electricity Distribution Company (EEDC).

Commercialisation means making state-owned and highly subsidised enterprises more profit-oriented. State-owned enterprises are ideally not meant to be overtly profit-minded. When they are commercialised, they operate like private firms and aim to make a profit.

3. Indigenisation and nationalisation

Indigenisation means reducing or eliminating foreign ownership of firms in a country.

Nationalisation is the direct opposite of privatisation. It is a situation where the government takes ownership of an organisation formerly owned by private individuals.

Which government agencies can help bring about economic reforms?

1. EFCC and ICPC

The Economic and Financial Crimes Commission (EFCC) is an anti-graft agency responsible for investigating and prosecuting individuals accused of economic and financial crimes.

The Independent Corrupt Practices and Other Related Offences Commission (ICPC) is an anti-graft agency responsible for prosecuting individuals accused of corrupt practices and related offences.

2. National Agency for Food and Drug Administration and Control (NAFDAC)

NAFDAC is responsible for ensuring that food and drugs, whether locally produced or imported, meet acceptable standards before they are sold to final consumers. It does this by visiting local production firms and by testing random samples of local and foreign products in its laboratory.

3. Standards Organisation of Nigeria (SON)

SON is an agency that ensures standards for locally produced or imported goods. Its responsibility is similar to that of NAFDAC. The major difference is that SON’s work covers all goods, whereas NAFDAC’s jurisdiction is limited to food and drugs.

In short, SON is a government agency responsible for ensuring that all goods, whether locally produced or imported, are of acceptable standard before they are sold to final consumers.

Evaluation

1. Define economic reforms.
2. State and explain two economic reform programmes that have taken place in Nigeria.
3. Discuss two agencies that could help to bring about economic reforms, and their roles.

Assignment

Classwork: As in the evaluation.

Conclusion: The teacher commends the students positively.