You’re deceitful – NLC slams IMF for evading responsibility over subsidy removal

The Nigeria Labour Congress (NLC) has accused the International Monetary Fund (IMF) of being deceitful with its denial of being responsible for advising the Nigerian government to remove subsidies on petrol.

President Bola Tinubu announced the end of the petrol subsidy regime on his first day in office, May 29, 2023, instantly triggering an increase in the price of the commodity from N185 per litre to over N1,200 across the country.

Following the subsidy removal, prices of goods and services skyrocketed to decades-high levels, resulting in ballooning headline inflation, which has attracted criticism from various sections of the country.

Many Nigerians have blamed the IMF for some of the policies of the Tinubu-led government, particularly the petrol subsidy removal and floating of the naira.

However, the Fund recently denied advising the Nigerian government on the policy.

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

NLC slams IMF over petrol subsidy

But, reacting in a statement on Sunday, October 27, 2024, NLC National President Joe Ajaero insisted the IMF’s supposed recommendations have led to increased socioeconomic hardship and stagnation in Nigeria.

“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 partly read.

The NLC said it’s increasingly alarmed by the Fund’s denial, which reflects the troubling policies imposed on Nigeria by the Bretton Woods institutions.

“The IMF seems to be distancing itself from the future backlash of these policies, but Nigerians are not naive; we recognise the destructive effects of its harmful strategies on Nigeria and Africa.

“It is disingenuous for the IMF to deny complicity, especially since we have warned the government about the consequences of adopting these policies,” the union stated.

NLC worried about IMF, World Bank denial

The NLC raised further concerns over the IMF and World Bank’s denial of the social costs of their policies, noting that although the former recognises the “significant social costs,” it simply suggests that governments mitigate these hardships through expanded social protections – an approach that often leaves the people at the mercy of ineffective handouts such the Rice initiative.

While noting that the subsidy removal and rising prices have made essential goods unaffordable, the union asserted that the disconnect between the Fund’s recommendations and the reality in Nigeria underscores a major oversight in the Fund’s policy.

It said, by distancing itself from Nigeria’s subsidy removal, the IMF shows inconsistency in its guidance, urging austerity while avoiding responsibility for the ensuing hardships.

Consequently, NLC stressed that this undermines the Bretton Woods institution’s 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.

“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 recognise that when crises occur, the IMF and World Bank will distance themselves, leaving the government to bear the burden,” it stated.

The NLC argued that Nigeria must prioritise policies that address the genuine needs of its citizens such as economic strategies that promote growth, social welfare, and equity ahead of austerity measures that only create 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,” NLC stated.

The labour body urged the Bretton Woods institution to stand up and own up by taking responsibility for plunging Nigerians into hardship.