Head of Transitional Council
Shonekan was a seasoned and proven businessman with a wide network. His proven abilities and political neutrality made him a prospective leader for Babangida's council of civilians-run government, a government which was in the midst of economic turmoil and later came to a political crisis. On January 2, 1993, Shonekan assumed office as the head of government affairs under the leadership of the military president Babangida. At the time, the transitional council was designed to be the final phase leading to a scheduled hand over to an elected democratic leader.
Shonekan learned of the dire condition of government finances, which he was unable to correct. The 1993 budget was pegged to include a 28 billion naira deficit with little money left in its foreign reserves. The government was hard pressed on debt obligations and had to hold constant talks for debt re-scheduling.
Improvements were underway. The Armed Forces Ruling Council had designed a realistic two-year economic program. The program's outline called for reducing the petrol subsidy, to bring in 65 billion naira to government coffers. A modification of VAT was also in the works and a plan to inculcate fiscal discipline. By the end of June, following the cancellation of the June 12 presidential elections, the Nigerian nation was engulfed in political turmoil. Fiscal discipline was not heeded, and the government exceeded the deficit target by the beginning of the second quarter. By August 1993, Babangida decided to step aside and install an Interim government.
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