Dr Samson Osagie, a Legal Practitioner and Political Economist says Tinubu should ignore IMF and other Bretton Wood Institutions because Nigerians are suffering.
Recently, the Executive Board of the International Monetary Fund (IMF) rising from its Post Financing Assessment (PFA) urged the Federal Government under President Bola Ahmed Tinubu to phase out completely all forms of subsidies including electricity subsidy.
It praised the President’s economic policies as capable of putting the nation on a path of economic recovery and growth with the capacity for the country to be able to repay its debts to the fund. At the time of making this recommendation, Nigeria’s inflation rate stands at a whopping 28.92 percent with food inflation hovering around 30 percent in the past year.
The exchange rate has ballooned to the detriment of the nation’s currency, the Naira to an all-time low of N1,470 to a $1. The Nigerian Economic Summit Group (NESG) has said that Nigeria’s Gross Domestic Product will grow by 3.50 percent in 2024.
The group made the forecast in its 2024 macroeconomic outlook report, titled “Economic Transformation Roadmap: Medium Term Policy Priorities”, in January 2024. In 2024, Nigeria’s total debt stock will climb up by at least 22.15 percent (N19.47tn) to N107.38tn in 2024 if the borrowing plan is followed to the letter as envisaged by the 2024 Federal Budget.
Interest rates have continued to hover beyond the current Central Bank rate of 18.75% to as much as 30% in deposit money banks with the results that new investments are exceedingly difficult to embark upon by investors. All these put together and many more micro and macroeconomic indices have combined dangerously to make life hell for the citizenry. Businesses- whether big, medium, or small are facing excruciating challenges remaining ongoing concerns.
Household income has dwindled significantly with the decline of the value of the Naira. The cost of food items and other household goods/services has ballooned to an unimaginable degree. Energy costs are skyrocketing with steady unannounced increases in Electricity tariffs for less than 5 hours of electricity supply per day.
The cost of diesel is constantly hitting the roof even as the Naira continues to witness a free fall daily. In these economic tragedies, the IMF is requesting the Nigerian government to worsen the living conditions of the citizens of this country by removing whatever little oxygen (if any) might be left for the people to breathe.
No, Mr. President don’t listen to IMF! The government exists for the welfare and security of its citizens and regardless of the benefits of your economic policies in the long run, you must alleviate the current excruciating pains and suffering that your countrymen, women, and children are currently experiencing in the face of renewed insecurity and rising costs of living.
The International Monetary Fund (IMF) whose mandate is to achieve sustainable growth and prosperity for all of its 190 member countries through support for economic policies that promote financial stability and monetary cooperation, which are essential to increasing productivity, job creation, and economic well-being must rise above rhetorics and support the Nigerian government to alleviate the suffering of the peoples of this country rather than making prescription that will further exacerbate the poverty of the people.
The IMF must first and foremost be supportive of the survival of the Nigerian people before recommending the path to a sustainable debt servicing plan for the country. Over the years, particularly from the ill-fated Structural Adjustment Programme (SAP) of the Babangida years, there is no evidence of an IMF-prescribed solution that has yielded a progressive economic recovery trajectory for Nigeria.
In developing countries, the IMF is said to have provided broad support to low-income countries through policy advice, capacity-building activities, and concessional financial support – meaning it is provided at below-market interest rates. Concessional support through the Poverty Reduction and Growth Trust (PRGT) is currently interest-free.
The question is for our Nation, what impact has this made to our economic growth? Maybe, our management of our economy and huge propensity for unbridled corruption has militated against any visible impact, but the fact remains that, the IMF has not made any significant impact on Nigeria’s economic growth and we do not blame the institution for that.
After all, we have an abiding responsibility to manage our affairs for the growth and prosperity of our country and its people. Come to think of it, why can’t we radically transform our productive capacity through policy measures that deliberately focus on the local industry to enhance our export earnings?
Mr. President recover all the monies stolen by Emiefiele and his cohorts and from as many thieves that are now been revealed and we will not need the IMF to dictate to you or the country. Channel these monies to Infrastructure and manufacturing. Jobs will be created, exports will be boosted and our foreign earnings will increase with a concomitant effect on the value of the Naira.
Why has the United States dollar become a Legal tender in Nigeria? Isn’t that against the Central Bank Act which prescribes only the Naira as the sole legal tender in this country? Yes, it is! So we are running our country with an illegal currency that has now put our nation’s economic health in jeopardy yet we are crying for help.
In South Africa, you cannot spend the US dollars without having to change it mandatorily to their currency -the Rands. It will take you at least an hour before you can change your dollars to Rands owing to the cumbersome process of identity verification by banks and other financial services firms. In Nigeria, due to corruption, the dollar is king and the Naira is the slave in an environment where the latter has the protection of the Law.
Can we then see how not to run a country? How can the economy be on a path of recovery with these and many more contradictions? No, it will not! Mr President, you may mean well for the country and I think a lot of people believe you do but their belief needs to be substantiated by the results in positive outcomes for the people for them to validate their beliefs.
Whatever woes your government inherited from your predecessor, you cannot deny them because your party is continuing in power. Therefore Mr President act fast and devise autochthonous means of reflating our economy and leveraging on unconditional support from outside to power our economy to sustainable growth. Let me say this. Although I am a later-day supporter of fuel subsidy removal, Sir the truth is that since removing fuel subsidy, your government has paid subsidies in other ways.
The palliatives distributed to states, the huge funds allocated to states, the investment in CNG automobiles which are still being expected, the N35,000 wage award for six or three months, the release of grains from government reserves and so on all amounted to subsidizing the living conditions of the people arising from the hardship in the economy. What this therefore suggests is that the nation’s most teething problems may not lie with subsidy payments but the abuse of it by unpatriotic elements within government and their private sector collaborators.
Mr President, you told the nation that you have no business participating in subsidy schemes even as a private businessman and entrepreneur. Therefore, track down our subsidy looters in all sectors and let the citizens enjoy government subsidies genuinely and meaningfully. As things stand now the mass of the people are suffering from the corruption of the few who made the subsidy regime a criminal and fraudulent enterprise to the detriment of the health of the nation and the welfare of the citizenry.
Mr. President the citizens cannot enjoy certain basic services like power without government subsidies because the huge investment in providing such services requires that only the government can bear the brunt and absolve the risk of such investment rather than the citizens.
IMF cannot therefore be suggesting the wholesale removal of all subsidies by the government to the disadvantage of the people. Such a recommendation is with the greatest respect anti-people and a recipe for poverty elevation rather than poverty alleviation. Mr. President, please don’t listen to the IMF.
Dr Samson Osagie is a Legal Practitioner and a Political Economist.
