President Bola Tinubu’s removal of fuel subsidies in May 2023 has seen the price of Premium Motor Spirit surge from N175 per litre to as much as N1,300 in northern states and between N1,000 and N1,200 in Lagos and surrounding areas.
The Nigeria Labour Congress (NLC) has criticized the International Monetary Fund (IMF) for denying its role in advising the Nigerian government on the subsidy removal.
Following the subsidy removal, Nigeria has experienced rising headline inflation and escalating living costs, which have drawn widespread criticism.
In a statement released on Sunday, NLC President Joe Ajaaero expressed concerns over the IMF’s comments, made by African Region Director Abebe Selassie during a press conference at the IMF and World Bank Annual Meetings in Washington, D.C. Selassie characterized the subsidy removal as a “domestic decision,” prompting the NLC to accuse the IMF of evasion.
“The IMF’s recent statement shows evasion, claiming Nigeria’s subsidy removal was a ‘domestic decision,’ while ignoring its significant influence on policy-making in developing countries,” Ajaaero stated.
He noted that despite the IMF’s denial, the organization frequently advocates for subsidy cuts as essential for fiscal sustainability, rendering its disavowal insincere in light of Nigeria’s history of compliance with such recommendations.
The NLC expressed alarm at the IMF’s denial, emphasizing the socioeconomic hardships stemming from the policies imposed by the IMF and World Bank.
“The IMF seems to be distancing itself from the future backlash of these policies, but Nigerians are not naive; we recognize the destructive effects of its harmful strategies on Nigeria and Africa,” the union asserted.
Furthermore, the NLC criticized the IMF and World Bank for neglecting the social costs of their policies. While the IMF acknowledges the “significant social costs” associated with subsidy removal, it merely suggests that governments implement expanded social protections—an approach the NLC argues leads to dependence on ineffective measures, such as the RICE initiative.
The removal of subsidies and rising prices have rendered essential goods unaffordable for many Nigerians, exacerbating the inadequacy of government social safety nets.
The NLC highlighted a significant disconnect between the IMF’s recommendations and the realities faced in Nigeria, calling attention to the inconsistency in the fund’s economic policies.
By distancing itself from Nigeria’s subsidy removal, the IMF undermines its credibility and raises doubts about the sincerity of its guidance, especially when its assertion of Nigeria’s control over its policies contradicts its historical influence, which has often led to turmoil and hardship.
The union emphasized the importance of Nigeria and other developing countries reclaiming their economic sovereignty and resisting externally imposed policies that fail to consider local contexts and the needs of the populace.
“The IMF’s denial of involvement in Nigeria’s subsidy removal seems insincere, given its history of recommending similar austerity measures,” the NLC stated.
“We hope our economic leaders recognize that when crises occur, the IMF and World Bank will distance themselves, leaving the government to bear the burden.”
The NLC called for the implementation of policies that genuinely address the needs of Nigerians, prioritizing growth, social welfare, and equity over austerity measures that lead to deeper economic difficulties and social unrest.
“We urge the World Bank and IMF to stop stifling our nation so we can breathe freely. They have become a significant challenge for us, and we may soon be compelled to demand their complete withdrawal from Nigeria, as their policies consistently undermine our economy and sabotage both the people and the nation,” the NLC concluded.
The NLC then urged the IMF to take responsibility for the hardships faced by Nigerians, calling on the organization to acknowledge its role in the current economic challenges.
