Nigeria regime under pressure. Policy missteps, falling oil threaten Babangida

Gen. Ibrahim Babangida, who seized power in a bloodless coup last August, has introduced a more liberal style of military government than the brief military ``rule by decree'' regime of Gen. Muhammad Buhari. He has also introduced some far-reaching reforms in order to end the country's prolonged economic crisis. Recent political mistakes, however, combined with the nose dive in world oil prices, threaten the future stability of the six-month-old presidency.

Perhaps the most harmful apparent political misstep President Babangida has made was that of underestimating the intensity of this country's Christian minority opposition to Nigerian membership in the Islamic Conference Organization. The Jeddah-based ICO is a 45-member group of mostly Islamic nations.

After 15 years of observer status, and more recently, weeks of conflicting statements by government officials, Babangida -- a Muslim married to a Roman Catholic -- announced that the country had decided to join the ICO. At the same time, he appointed a 20-member committee to examine the consequences of membership -- apparently leaving himself open to revocation of the decision, should religious tensions worsen as a result of membership.

Nigeria's Christians, concentrated mainly in the country's southeast regions, see ICO membership as increasing the northern Moslem domination of the country. The Christians, who account for just over one-third of the nearly 100 million people, protest that the move infringed the country's secular status and brought it closer towards Islamization.

Muslim leaders point out that Nigeria has diplomatic relations with the Vatican and that other African countries such as Cameroon and Gabon have joined the ICO without turning into Islamic states.

A particularly disconcerting element about the ICO issue, say observers, is not, however, membership itself, but the fact that a government, markedly dedicated to public representation on issues, became a member without public discussion.

Despite the efforts of Babangida to defuse the issue, religious tension is never far below the surface. And, there is ongoing concern, in government as well as Christian circles, over Muslim extremism. In another apparent governmental slip-up, a special panel reviewing the detention of ex-President Shehu Shagari and his Vice-President Alex Ekwueme recently recommended their release.

The panel's proposal provoked strong criticism from the Nigerian press and public, who believe these political leaders should be punished for their alleged corruption and misrule from 1979-83.

The two men have been held, along with many other leading figures from the former civilian regime, without trial for nearly two years. ``Babangida found himself in a dilemma, wanting to respect human rights while cracking down on corruption,'' an observer in Lagos said.

The dilemma remains: Failing to release the men would undermine the authority of a panel the government itself established; but releasing them would leave many Nigerians feeling betrayed.

As part of his more open style of government, Babangida has launched national debates to discuss key policy issues. Although this is one of the most attractive features of the ruling body, it makes it increasingly difficult for Babangida to instigate the austere economic measures required to refurbish the Nigerian economy without alienating some supporters.

The first debate was on whether to seek a $2.5 billion loan from the International Monetary Fund and accept its conditions for restructuring the economy. Not surprisingly, the Nigerian public strongly rejected the idea.

Surprisingly, however, the government shortly thereafter introduced in its 1986 budget many of the measures proposed by the IMF. Of import was a 50 percent reduction in petroleum subsidies, which resulted in a doubling of gasoline and tripling of diesel prices.

Although the government rejected the idea of a sudden 60 percent devaluation of the country's currency, the naira, bankers point out that it has been allowed to depreciate by over 30 percent during the past two years.

Instead, the government introduced a 30 percent import levy and a series of export incentives. But, as one economist pointed out, ``It brings all the pain and none of the benefits.''

Nigerian industry imports 70 percent of its raw materials and the levy, along with the fuel price increases, will have a big inflationary effect, he added.

A shortage of foreign exchange has greatly restricted the issue of import licenses and reduced industrial output to only 30 percent capacity.

A prolonged collapse in oil prices would seriously undermine the ``conservative'' budget export earnings, forecasted to be $9.6 billion in 1986, and it would further cut industrial output.

Oil represents some 95 percent of the country's export earnings which have dropped more than 50 percent since 1980.

The government hopes that new incentive agreements with oil companies operating in Nigeria will help maintain output of at least 1.3 million barrels a day.

``The government may well run out of cash by August in which case there could be fresh political turmoil,'' says one observer.