Politics of subsidy removal and IMF booby-trap

International Monetary Fund IMF
International Monetary Fund IMF

The issue of fuel subsidy has become a great mirage that the policymakers and government could not apparently explained to the public due to a lot of behind the scene politics of corruption that is inherent in oil business. It has become a vicious circle and a great booby-trap to permanently render Nigeria economy dependable and comatose. The politics of oil subsidy removal is nothing but International Monetary Fund (IMF) booby-trap to subjugate Nigeria to the whims and caprices of Western institutions and government. Africa is never designed to develop, hence the sobriquet third world countries.

For almost two years, Nigeria economy was in absolute recession due to the fall in the price of crude oil in the international market in 2015. The IMF advice to President Muhammadu Buhari government to remove oil subsidy led to the disproportionate increment of fuel price and the attendant economic hardship which is unabated and in turn created pocket of social economic ills that are ravaging the land across the country.

The recent pronouncement of IMF and World Bank in Washington that Nigeria must remove oil subsidy, increase excise duty and Value Added Tax (VAT) needs to be holistically deconstructed and synthesized because neoliberalist is always wary of anything that will affect their economic interest in their area of influence. Thus, our policymakers should be careful of unnecessarily imbibing and accepting suggestion of voodoo economics policies emanating from the IMF. It must be noted that, the trio of IMF, World Bank and US Treasury Bank heads can determine the fate of any nation at a lunch table in Washington even with little scribble on a serviette. Turkey is enmeshing in serious economic meltdown at a slightest tinker by US president Donald Trump who is all out to cripple Turkey economy for his (Erdogan) daring overture to Russia. The era of slavery, mercantilism and colonialism, is over. Our policymakers should not just sit down and listen to their dictation verbatim. Nigerians expect our policy makers to table facts and figures before the IMF on why Nigeria cannot go ahead with this reform at this material time or else Nigeria will implode and explode.

If I may ask, what are the implications of subsidy removal on Nigeria economy? Removal of subsidy will marginally devalue the ₦30,000 minimum wage that has just been signed into law and yet to be collected by the workers. The increment of oil price will radically and spontaneously affect Nigeria economy because Nigeria economy is oil and generator base economy. The price of foodstuff will go up, the school fees and other services will be adversely affected and the salary increment will pale into insignificant in the face of astronomic inflation that will ensue.


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By increasing the excise duty as was suggested by those who think that we cannot use our mind effectively, except if they tell us to do so will automatically render little home manufacturing companies useless because locally produce materials will be more expensive than imported goods, hence the western companies who produced in large quantity and sell at low price will eventually benefit from this in furtherance of their neo-mercantilism policy.

The argument that the VAT and subsidy money should be reinjected into infrastructural development like road construction, hospital equipment and school across the country is watery. If over the years, the subsidy gains are properly utilized as touted by IMF, our country would not have become a theater of war, violence-ridden and killing laboratory. As we are dying in droves, the-so-called western countries economy is proportionally growing while our own economy is struggling to survive. The issue of oil subsidy is nothing but self-inflicted pain and our leaders’ collective failure to effectively manage our resources for the betterment of our people. The IMF started meddling and dictating economic tunes since we have ignorantly run aground our oil refineries-an oil producing nation that is importing refined oil from non-oil producing countries. What a shameful adventure! Thus, the subsidy is royalty for our inability to manage our oil resources effectively and efficiently. The most unfortunate thing is that; the bulk of the money is ending up in the pocket of “governing elites” who directly or indirectly play some considerable part in government.

At this juncture, what is the way out of this shallow ditch we have been sunk, empty promises of better future cannot assuage hunger, sufferings, death grip, emotion and pains ravaging the land. The North-East is unsettled, North-West is being gripped with the pang of violence and throes of death. North-Central is hotbed of controversy. The Southern part of the country is not left out of this messy situation. Everything has turned higgled-piggled, topsy-turvy. Nigerians need a robust socio-economic, administrative, political, educational, technological, security, defence, labour, employment, health, environmental and cultural policies reevaluations to meet the current needs. Old policies must be eschewed or objectively reviewed to give room to new bottom to top policies properly implemented, effectively regulated and structurally carried out to lift Nigerians out of this dark alley and cul-de-sac we have been permanently sunk.

Bello wrote this piece from Abuja


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