IMF role in the recent fuel subsidy removal in Nigeria
No matter how the Nigerian present economic team chooses to shade, equivocate or obfuscate it, International Monetary Fund (IMF) played a significant role, if not an upper hand in the removal of fuel subsidy in the poverty stricken Nigeria. It is no longer news neither is it a surprise that IMF has been interested in the removal of fuel subsidy since 2009. The evidence to this assertion has been littered everywhere especially in the public domain.
British Broadcasting Corporation (BBC) reminded us that “The IMF has long urged Nigeria’s government to remove the subsidy, which costs a reported $8bn (£5.2bn) a year.” IMF has never stopped to meddle in the internal financial and economic affairs of the country in spite of the impression and double talk it has been making lately. Nigeria’s economic team effort to obfuscate the matter is no longer functional.
The America’s flagship newspaper, New York Times wrote recently: “In a 2009 report, the International Monetary Fund called the removal of the fuel subsidy “an important first step.” But in a place where experts estimate that $50 billion to $100 billion in oil revenue has been lost through fraud and that 80 percent of the economic benefit from oil production has flowed to 1 percent of the population, the monetary fund’s approval of a step that hits ordinary people so hard looks provocative.” The endorsement for the abrupt fuel subsidy removal without adequate palliative measures buttressed that IMF is clueless and at worst indifference on the level of poverty and depravity in Nigeria.
In the rush to appease the masterly IMF the Nigerian leaders failed to make a solid plan; which is to absolutely convince the poor masses before the subsidy removal with realistic and implementable palliative measures. The global news network CNN crisply described the removal of subsidy, “It is the abrupt removal of the fuel subsidy, in what has been described as a callous New Year’s Day “gift” that proved unacceptable for many Nigerians. There has been intense speculation in the country that the decision came suddenly because of pressure from the International Monetary Fund. The announcement coincided with a visit to the country by IMF’s head Christine Lagarde weeks earlier.”
The economic team of the present administration led by Dr. Okonjo-Iweala went before the country’s congress after IMF’s Christine Lagarde visit to reassure them that Nigeria will not implement IMF’s neo-liberal policies. But on the first day of January the removal of subsidy came suddenly. Nigerians protested not necessarily because they disliked the administration but for the rejection of the policy. The poor masses could not accept the jumped in price of a gallon of petrol from less than $1 to almost $4 in a country that seventy percent survived with less than $2 a day. The decision for the removal is not logical knowing quite well that the masses are already deprived and barely surviving. It is beginning to look that IMF does not have compassion for the poor struggling masses of Nigeria. IMF history with Nigeria has been a historical annals filled with thorns of suffering and misery.
When IMF Managing Director Christine Lagarde came to Nigeria, instead of the Nigerian leaders and intellectuals to ask her to apologize to Nigerians on behalf of IMF for the austerity measures of 1980s and the subsequent deformation of the country’s economy; rather they were busy praising her. She was also given credit for the so-called 18% write-off of the Paris club debt. The praise and credit should go to poor Nigerians on whose back the payment was made to rich syndicates of Paris Club in which the mountainous payment made was based on high interest rate and arrears accumulated by the outstanding debt. The provision of water, electricity, healthcare and roads were abandon in order to make the payment to Paris Club. The credit and heaping of praises should go to Nigerians not to IMF’s head whose highest priority is not on women and children who went to bed hungry.
No one is suggesting that a nation should abandon its financial obligations and deleveraging of its debt. But at same time a logical approach must be taken which is to put people’s welfare on account and not relegated it to the nadir level. Nigerian people should not be thrown aside to satiate international wealthy syndicates. After all, charity should start from home.
The implementation of IMF’s Structural Adjustment Program with its austerity measures in Nigeria’s 80s and early 1990s comes with naira devaluation, importation restrictions and slash of social spending, that was too traumatic to be easily forgotten. The negative adjustment in the economic outlook and wellbeing of Nigeria was expressed by Gideon Nylan, a writer on political economy of developing nations at Afripol, on which he painted the situation with this troubling description: “The Nigerian middle class has yet to recover from the IMF devaluation of 1986. Suddenly teachers, lawyers, doctors, and civil servants saw their life savings disappeared. In order to support their families and create a better living for themselves, they left the country for greener pastures in other countries.”
In addition Nigerians have not wholly recovered from the aftermath of the implementation of the neo-liberal policies that separated families, worsen the health wellbeing of the country and totally demolish the educational sector that was starved of fund. The manufacturing sector that relied on the importation of raw materials closed down due to lack of import license and foreign exchange. The IMF’s austerity measures spiked and induced higher unemployment and together with surging inflation rate made life unbearable for majority of Nigerians. Are Nigerians quick to forget? Probably, the temporary amnesia has made them to be praising the visiting IMF’s chief instead of asking IMF for reparation and apology.
A Nigerian government official was suggesting that the removal of subsidy was necessary to save Nigeria from not ending up like the bankrupt Greece. But in reality and joke apart, Nigerians should be envious of Greece because in spite of the so-called debt problem of Greece, their lifestyle have not changed. Last time we checked there is still tap running water, 24 hours electricity and paved roads in Greece. Nigerians will not mind having all the social amenities, social safety nets, security enjoyed by Greeks even together with its debt. Many Nigerians may be willing to trade places with Greece if asked.
Nigeria should work with IMF when she deems it necessary and there is no reason to be genuflecting and kowtowing. Nigeria has produced capable men and women that have the ability, intellect and potential to salvage the sinking country. IMF should not be adding sand to the garri of nation struggling to determine her destiny.