IMF, World Bank and the politics of naira

There is lack of attention from Nigerians especially our scholars, traditional rulers, media houses, political leaders and civil society organisations on the interferences of international institutions on our monetary policies. World Bank and International Monetary Fund (IMF) are the twin crux predicament that Nigeria must rise to challenge.

There is nothing wrong with borrowing, but a country like Nigeria that lacks the infrastructure and competent hands to manage and service debts is a leadership blunder and economically unwise to commit to borrowing. World Bank, for instance, has introduced several policies which proved to be oppressive on the Nigerian government especially on the tertiary institutions.

It clearly states on its (World Bank) lending policies that, for Nigeria to get access to its loans, “the real public education expenditure devoted to tertiary education cannot expand further and in some cases may have to contract”.

This clearly translates to the discouragement or stoppage of funding of tertiary institutions by Nigerian government which we are currently witnessing. Stoppage of funding of tertiary education means stopping the development of infrastructure, employment and welfare of staff. By far extension, it will result to high rate of unemployment, illiteracy and poverty.

The politics of naira started in 1986 when Nigeria officially signed engagement with the IMF with 5th March 2018 as the terminal date, before then, between 1972 and 1976, $1 was 66 kobo (N0.66) less than a naira, Nigerians were happy with the purchasing power, the education and healthcare facilities were all to the reach of the poor, there was no hunger and the poverty rate was not a thing to discuss on the dining table.

The sharp fall of oil price that brought IMF to Nigeria in the name of aiding the economic stability of our country, the result of their (IMF) so called ‘conditionality’ has made Nigeria an entire debtor nation or rather beggar country.

The recent video of President Mohamed Bazoum that went viral announcing his intention to withdraw from using French currency (sefa) for naira left Nigerians with so many questions, especially when he says that “I’m only disagreeing with the way the politics of Naira is being played in the country (Nigeria)”. I quickly developed the interest of writing this article to intervene by calling the attention of the federal government to take the business of governance very seriously and also to find ways to get money to fund projects instead of borrowing.

The main bottleneck of borrowing is repaying. Today, Nigerian economy is on a standstill, Nigerians are not moving because of the removal of petrol subsidy and when a man is not moving, everything around him freezes including the wind of hope that breathe life into the economy.

Taking a loan from institutions like IMF and World Bank comes with a price such as overseeing the economic policies, imposing certain conditions such as abolition of marketing boards, removal of subsidy on petrol, elimination of public goods and devaluation of naira. Nigeria fell into a trap, decades ago, in 1974 precisely, Nigeria was lending money to IMF. What went wrong?

Let me dwell a little more about the effects of devaluation of naira and the abolition of the agricultural marketing boards on the Nigerian economy. From the day the value of naira started decreasing, the prices of imported goods started increasing which led inflation rate to increase, whenever prices shoot up, it peels the skin of the common citizens.

Another effect of the devaluation of naira is that, the more naira is losing weight the more difficult for Nigeria to service her debts because the rate at which the interest rate of the facility was secured will keep on increasing. Foreign investors become wary of investing in a country that keeps depreciating her currency, when investors move their investments out of the country many citizens will be at the receiving end because there won’t be jobs. When there is of job loss plus increase in inflation they will give birth to social unrest in the country.

Abolition of the Agricultural Marketing Boards as one of the conditionalities of IMF through their Structural Adjustment Program that Nigeria signed is another factor that contribute negatively on the Nigerian economy. As a result of the abolition of the board, the prices of the agricultural produce fluctuate leading to rapid increase of the crops and reduced access to markets by the rural farmers.

Agricultural boards provide the means to reach the rural farmers, boards build modern silos as storage facilities, they construct roads, markets and all necessary facilities to boost the farming and encourage rural farmers to grow more crops in larger quantities.

IMF’s SAP made Nigerian government to abolish the boards which led to the losses in the international market competition, quality control and it disrupted the agricultural supply chain apart from rural development projects that stopped abruptly by the boards. After the abolition of the agricultural marketing boards the price of commodities were at the mercy of shylocks and evil business owners.

Not only did IMF and the World Bank ghost hands cripple Nigerian economy, they’re holding us to ransom. The only way out of this challenging time is visionary leadership which we’re optimistic about the current dispensation.

In 2021, I wrote an article calling the attention of the former President Muhammadu Buhari on the need to reimpose the Price Control Act so as to arrest the fluctuation of prices of goods and to stabilise the purchasing power of the citizens, thereby increasing the value of the naira.

If Nigerian government continues on this journey of huge debts, our currency, the naira, will continue to be devalued and several deregulations will occur including privatisation of water policy by the World Bank that when completely imposed on Nigerian government and implemented, there will be scarcity of potable water which will lead to ill health, different incomes that will lead to inequality and it will serve as anti developmental pill to the Nigerian economy.
Comrade Doji writes from Bauchi, Bauchi state, via [email protected]