News

NLC Knocks IMF Over Fuel Subsidy Removal Denial

Published

3 weeks ago

Oct 28, 2024.

The Nigeria Labour Congress, NLC, has slammed the International Monetary Fund, IMF, for its denial of being responsible for advising the Nigerian government to remove subsidies on petrol.

EKO HOT BLOG recalls that President Bola Tinubu’s removal of subsidies in May 2023 has resulted in the rise of Premium Motor Spirit from N175 per litre to between N1000 N1, 100 N1, 200 in Lagos and its environs, and N1, 300 per litre in far northern states.

EDITOR’S PICKS

The removal of petrol subsidies has since resulted in a rising headline inflation rate and escalating costs of living, which have met with criticisms from various quarters.

The NLC National President, Joe Ajaaero, in a statement on Sunday, said the IMF’s supposed recommendations have led to increased socioeconomic hardship and stagnation in Nigeria.

This was after the IMF’s African Region Director, Abebe Selassie during a press conference at the IMF and World Bank Annual Meetings in Washington, DC, noted the Nigerian government’s decision to remove the fuel subsidy as a domestic issue.

“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.

According to NLC, it is increasingly alarmed by the IMF’s denial, which reflects the troubling policies imposed on Nigeria 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 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.”

Meanwhile, NLC mentioned that the IMF and World Bank’s denial of the social costs of their policies raises further concerns. Although the IMF recognises the “significant social costs,” it simply suggests that governments mitigate these hardships through expanded social protections—an approach that often leaves people dependent on ineffective handouts, like the RICE initiative, the union stated.

It added that in Nigeria, subsidy removal and rising prices have made essential goods unaffordable, while government social safety nets remain inadequate.

NLC said that the disconnect between IMF recommendations and the reality in Nigeria highlights a major oversight in the fund’s economic policy. By distancing itself from Nigeria’s subsidy removal, the IMF shows inconsistency in its guidance, urging austerity while avoiding responsibility for the ensuing hardships.

The NLC stressed that this undermines its credibility and raises doubts about the sincerity of its economic prescriptions, especially as its claim of Nigeria’s control over its policies contradicts its historical influence, often leading to turmoil and hardship.

Also, the NLC emphasised the need for Nigeria and other developing countries to reclaim their economic sovereignty, resisting externally imposed policies that fail to consider local contexts and the needs of the masses.

Click here to watch our video of the week