ON Monday, February 8, 2021, the International Monetary Fund (IMF) released a report in which it made a number of observations, commentaries and prescriptions on the steps it felt the Buhari government must take in order to address challenges in the Nigerian economy.
In the report which it said was a follow-up to a consultation with Nigerian authorities, the IMF is still stressing the need for urgent policy adjustment and fundamental reforms in the country’s economy. In other words, after several decades of structural adjustment programme which have literally translated to nothing but mass poverty and underdevelopment, the IMF, in 2021, is still harping on tightening the noose of poverty over the throats of ordinary people of Nigeria.
For instance, while the Fund emphasised the need for urgent policy adjustment and more fundamental reforms to “lift growth and employment”, it is asking the Buhari government to contemplate increasing the rate of Value Added Tax (VAT) from the recent increment of 7.5% to 10% by 2022, and 15% in 2025; a percentage it says is the average in ECOWAS countries.
In addition to the VAT rate hike, the Fund is equally prescribing, among other policies, further devaluation of the naira. Is this not absolutely ridiculous in the context of the current value of the naira? And when you compare it to the rate at which the naira exchanged with other global currencies, especially British pound sterling and the US dollar when General IBB took over from General Buhari in 1985 before he (IBB) introduced SAP, those born around that period if told the then rate, would definitely think it is fiction!
While in the estimation of many Nigerians, the naira is already over-devalued, and the VAT rate is already sucking blood out of the famished veins of even some well-to-do citizens and corporate organisations; to the IMF, its prescriptive measures are necessary recipes that will take Nigeria’s economy out of the woods – of falling per capita income, high inflation, and governance challenges.
In canvassing its well-known pro-private sector-led market economy, the IMF noted, among other things, that there are a number of uncertainties in the current system for the private sector because of multiple exchange rates and non-transparent rules for foreign exchange allocation. It argued that despite the federal government’s attempts to diversify the economy through agriculture, Nigeria’s export structure has not fundamentally changed with oil products “still accounting for 90 per cent of the country’s exports today as they did in the 1970s.”
That is exactly the point that the IMF and our IMF-cloned economic managers have failed to grasp! It is not only Nigeria’s export structure, but everything that have “not fundamentally changed.” This is because the totality of the operative environment has been made toxic by over three decades of economic policy poisons of the IMF.
While the average Nigerian may now have become conversant with, and fairly educated on, the economic nuances of the IMF, only a few may now be wondering why after all these years of religiously swallowing IMF and World Bank’s pills without remedy, our political and economic executives still fail to appreciate the dangerous nature of the prescriptions of these multilateral institutions, and in spite of grave warnings from the country’s progressive community, particularly organised labour.
While the labour movement, and in fact the larger social movement in Nigeria, may have become weary of protests and resistance against the persistent incursions of the IMF and World Bank in our political economy, the “overlapping generations of our ruling elite,” even if stone deaf, ought to have, out of practical experience, now realised the full import of these economic onslaught.
From the 1980s to the current era, government after government has failed to pay attention to the arguments and warnings of organised labour, to re-examine and reject the policy prescriptions of the IMF and its twin, the World Bank. It is sad that Nigeria has not had the fortune of having a leader with the requisite intellectual and political disposition to assess and take the right steps toward real political and economic emancipation.
It is worse, indeed tragic, that the old voice of reason, hope and patriotism in a vibrant labour movement, symbolised in the Nigeria Labour Congress (NLC) can no longer be heard, perhaps lost forever or perhaps temporarily. The voice that used to be the rallying point for the working class and all progressive forces has progressively waned.
The IMF and the World Bank must be in real jubilation for the morbid hush and immobility in the broad left in the face of the persistent neoliberal sabre-rattling; or is it celebration? For, as it is, the stage is completely free for the global multilateral agencies to concretise their eternal grip and enforce their agenda without looking over their shoulders.