Description
CHAPTER ONE
INTRODUCTION
BACKGROUND OF STUDY
Before the “Structural Adjustment Programme (SAP)” can be clearly
defined, one must have a better understanding of the situation into which it
was introduced. At the conclusion of a Debate/Symposium on “Devaluation”
held in 1982 at the Institute of International Affairs, the consensus emerged
that the economic problem of Nigeria was structural.
The intention of SAP is to adjust the structure of the Nigerian economy,
but what is the structure of the economy and why does it need adjustment?
The relevant dictionary meaning of the word “structure” is “the arrangement
or interrelation of all part of a whole”.
At the summary of overall economic level which the economist call “The
macro level”, the structure f the economy is its composition as seen through
the shares or proportion of the various component parts or economic
aggregated, in the total sum of goods and services produced in a period
usually a year.
Therefore, the structure of the economy is shown by the shares of the
various economic sectors in the Gross Domestic Product (GDP).
Just like any other theory, accountants have discovered that they need to
make certain assumption before they can prepare financial statements. These assumptions, which underline the preparation of financial statements, are also known as principles, postulates, conventions, concepts, and standards
etc. The originate from such concepts as entity, going-concern, periodicity
realisation, matching, consistency and historical cost concept.
They have been described as the basic points of agreement upon which
the preparation of financial statement are based. They act as filters in the
process of preparing financial statement and therefore assist immensely in
selecting data to be processed and also indicating the processing method and
thereby affecting the final result.
Accounting Principles are usually rules and conventions, which have
been adopted as a general guide to action by the accountancy profession.
These principles are formulated in such a way that the practical details of
accounting may differ greatly from one company to another. To ensure
acceptance, an accounting principle must be useful in coping with a practical
recording problem, it must be reasonably objective, that is, provide a similar
answer in the hands of qualified practitioners, and it must be feasible, that is,
it should not be expensive to apply.
STATEMENT OF THE PROBLEMS
This research work tends to give an appraisal on the effect of the SAP on
accounting principle. Exchange rate devaluation was considered a setback in the
progress of the SAP. Therefore the under listed problem was discovered:
i. Over emphasis on the restoration of balance of payment
ii. Undermine the economy and limit its role for socio-economic intervention
through a fixation on deregulation, privatisation and instability of the
economy in the name of “free market”
iii. Exacerbate the disparities between rich the poor by facilitating income
concentration by the wealthy and the exclusion of the poor from decisions
and control over resources.
iv. Lack of transparency, accountability and public participation in their design
and implementation.
v. Make many necessities inaccessible to local people as currency devaluations
drastically reduce buying power in local wages.
OBJECTIVES OF THE STUDY
This study aims to find out the objectives which include;
i. To find out how adopting a more just and equitable approach to resolving
the debt crisis can restore the balance of payment
ii. To find out how to increase the role of socio-economic intervention through
governmental control and stabilize the economy by eliminating free market
trade through inflationary measures like naira devaluation.
iii. To determine what causes inequality in the distribution of income between
the classes of individuals and why the poor are excluded from resources
control and decisions.
iv. To find out why there is lack of transparency and accountability in SAP
designs and implementations.
v. To evaluate on the inaccessible necessities of the rural migrants caused by
currency devaluation which decreases the naira value?