NLC Reacts As IMF Denies Being Responsible For Advising Nigerian Government To Remove Fuel Subsidy

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.

Read Also: Reports Submitted To FAAC By NNPCL Are Inconsistent, Lacks Details On Revenue – World Bank

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 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.

Read Also: IMF Denies Being Behind Subsidy Removal In Nigeria, Makes Clarification

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.