The Nigeria Labour Congress (NLC) has rebuked the International Monetary Fund (IMF) over its denial of advising the Nigerian government on the removal of petrol subsidies.
Following President Bola Tinubu’s decision to remove fuel subsidies in May 2023, the cost of Premium Motor Spirit (PMS) has soared from N175 per litre to between N1,000 and N1,200 in Lagos and its surrounding areas, and as high as N1,300 per litre in parts of northern Nigeria.
This subsidy removal has contributed to a surge in inflation and a rise in the cost of living, sparking widespread criticism.
In a statement on Sunday, NLC National President Joe Ajaaero expressed that the IMF’s alleged recommendations have led to heightened socioeconomic hardship and economic stagnation in the country.
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The statement followed comments by IMF African Region Director, Abebe Selassie, who, during the IMF and World Bank Annual Meetings in Washington, DC, described the Nigerian government’s subsidy removal as a domestic decision.
“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. Despite this denial, the IMF often advocates for subsidy cuts as necessary for fiscal sustainability, making its disavowal seem hollow in a country that has frequently complied with such recommendations,” the statement said.
The NLC has expressed growing alarm over the IMF’s denial, seeing it as a reflection of the concerning policies imposed on Nigeria by both the IMF and the 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 stated.
It added, “It is disingenuous for the IMF to deny complicity, especially since we have warned the government about the consequences of adopting these policies.”
The NLC highlighted concerns over the IMF and World Bank’s dismissal of the social impacts resulting from their policies.
While the IMF acknowledges “significant social costs,” it merely advises governments to alleviate these burdens through expanded social protections, a strategy that often leads to reliance on ineffective relief measures, like the RICE initiative, according to the union.
In Nigeria, subsidy removal and escalating prices have made essential goods unaffordable, and government social safety nets remain insufficient.
The NLC argued that the disparity between the IMF’s policy recommendations and the realities on the ground in Nigeria reflects a major oversight in the fund’s economic approach.
By distancing itself from Nigeria’s subsidy removal, the IMF reveals an inconsistency in its guidance—promoting austerity measures without accepting responsibility for the resulting hardships.
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The union added that this inconsistency damages the IMF’s credibility and casts doubt on the sincerity of its economic advice, particularly since its claim of Nigeria’s control over policy decisions contradicts its longstanding influence, which has historically led to social and economic challenges.
The NLC further underscored the importance of Nigeria and other developing nations reclaiming economic sovereignty by resisting externally imposed policies that disregard local contexts and the needs of their people.
“The IMF’s denial of involvement in Nigeria’s subsidy removal seems insincere, given its history of recommending similar austerity measures. 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,” it stated.
It emphasized that Nigeria must adopt policies focused on meeting the real needs of its citizens by prioritizing economic strategies that foster growth, social welfare, and equity, rather than austerity measures that lead to greater economic hardship 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,” NLC stated.
The NLC then called on the IMF to acknowledge its role and take responsibility for driving Nigerians into hardship.
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