ABSTRACT
This chapter examines Economic policy and its dynamic interaction with economic, social, and political forces of the Second Republic. The rule of the politicians had disastrous economic consequences for Nigeria. Policymaking exhibited a high level of incoherence and lack of coordination between different power centres and interests under President Shagari. The Shagari government had much trouble controlling trade unions. Its labour policies were confused, and it procrastinated and refused to take the initiative on wage demands that were outstanding from the time it came to power. The recession brought a severe decline in industrial output and employment. It underlined the high-cost, import-dependent nature of Nigerian industrialisation that had been encouraged by the pattern of incentives prevailing in the 1970s. The rule of the politicians was disastrous for the material advancement of Nigeria and for the living standards of its citizens. The real income of urban households declined by 34 percent between 1980 and 1984.
