The Nigeria Labour Congress (NLC) has criticized the International Monetary Fund (IMF) for denying its role in advising the Nigerian government to eliminate petrol subsidies.
President Bola Tinubu’s removal of subsidies in May 2023 led to a surge in the price of Premium Motor Spirit, rising from N175 to N1300 per litre.
The subsidy removal has since driven up the cost of living, sparking criticism from various groups.
In a statement on Sunday, NLC National President Joe Ajaaero stated that the IMF’s recommendations have contributed to Nigeria’s growing socioeconomic hardship and stagnation.
This follows comments from IMF’s African Region Director, Abebe Selassie, who, during a press conference at the IMF and World Bank Annual Meetings in Washington, DC, described the subsidy removal as a domestic matter for 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 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 asserted 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.
Furthermore, 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, 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.
“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 added that Nigeria must implement policies that address the genuine needs of its citizens by prioritising economic strategies that promote growth, social welfare, and equity, rather than austerity measures that result in 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.
NLC then urged the IMF to stand up and own up by taking responsibility for plunging Nigerians into hardship.