Since his inauguration as Nigeria’s 16th president, Bola Ahmed Tinubu has tailored his policies towards neoliberalism. Under neoliberal or capitalism, the state allows a market driven economy, embraces deregulation, non-subsidy, privatisation of public enterprises and above all devaluation of its currency.
Proponents of neoliberal policies such as the World Bank and the International Monetary Fund, IMF, believe that the state has little role to play in the management of its economy. The state is expected to provide an enabling environment for the private sector to thrive.
Until the late 1980s, the Nigerian economy was structured along the socialist system. Government, through public enterprises such as the defunct National Electric Power Authority, NEPA, the Nigeria Railways, Water Board, the Nigeria Airways, etc, render essential services to Nigerians at affordable prices.
The public enterprises were primarily established by government to provide good and efficient services without profit. Socialist policies, championed and implemented by governments in those days, had assisted greatly towards the improvement of living standard of Nigerians.
The Ibrahim Babangida military government, through its Structural Adjustment Programme, SAP, imposed by the World Bank, eroded the gains recorded in the early 80s by socialist governments. What Nigerians witnessed during IBB’s SAP was the privitisation of public enterprises, deregulation of the down stream sector and removal of subsidy in health and education sectors.
Ever since, successive governments have embraced and implemented neo-liberal policies hook, line and sinker. But the buck always stops at the table of our political leaders who have the penchant or taste for anything foreign, including debts. Foreign loans are nothing but death traps set for developing countries by western powers.
The ones from Brettonwoods institutions in particular come with stringent condition such as: subsidy removal, privatisation, devaluation of currencies and above all hike in taxes.
One recalls the immediate past President Muhammadu Buhari government incurred debts to the tune of N77 trillion. In his eight years rule, Buhari had reached out to many foreign and domestic creditors and obtained trillions of naira loans.
At the tail end of his government, the World Bank granted $18 million loan to pay palliatives to Nigerians, in anticipation of petroleum subsidy removal.
President Tinubu in his inaugural speech stated that, “Subsidy is gone”. This led to the major oil marketers including the Nigerian National Petroleum Company Limited, NNPCL, to adjust or increase the price of petrol to N550 per litre.
The decision by the Tinubu administration to remove subsidy is based on the erroneous belief that subsidy benefits the rich rather than the poor. The hasty removal of subsidy without rolling out any tangible palliatives to cushion the consequences by the government has increased inflation and pushed many more Nigerians into poverty.
The World Bank which supports subsidy removal has released a damning figure of 4 millions Nigerians who condemned to poverty in the last three months. The bank also stated that by the end of this year, another 7.4 million Nigerians are likely to slide into poverty.
Since the removal of fuel subsidy, Small and Medium Enterprises (SMEs) such as barbing saloons and other businesses which rely on petrol have collapsed like a pack of cards. Many youths have been thrown out of jobs. Civil servants who expected pay rise before the subsidy removal have been groaning in difficulties. Their little salary ends up in transportation. This has dampened their morale and will affect productivity.
While Nigerians are yet to recover from the shock of subsidy removal, another bad news filtered the air that there will be hike in electricity tariff this month. The news from DISCO comes at a wrong time when Nigerians hardly enjoy 10 hours uninterrupted power supply.
Advanced countries such as: UK and US that preach subsidy removal to developing countries, including Nigeria, hardly adopt it in their respective countries. We have seen how they subsidise fuel and agriculture in order to make life meaningful for their citizens. One wonders why Nigeria always rushes to implement policies packaged and delivered to it by the Brettonwoods institutions and other western countries.
In the early 80s, South-east Asian countries like Taiwan and Korea opposed and refused to accept neoliberal policies of the World Bank. Today, these countries are a success story. They have economically developed and have the highest per capita income in the world.
This is in contrast with Nigeria which implemented SAP during the Babangida military junta. SAP had failed to solve Nigeria’s economic woes. Instead, it added more problems to the country. It encouraged corruption deepened poverty and widened inequality.
President Tinubu should watch his steps as he dances to the tune of Brettonwoods institutions. He needs to be advised that neoliberal policies have never solved any of the African problems and will not become a magic wand for the economic growth and development of Nigeria.
Lessons derived from SAP’s failures are enough to make him and his advisers to ponder. There is no gainsaying the fact that Nigeria’s problems demand home grown economic policies developed by our local experts.
Ibrahim Mustapha,
Pambegua, Kaduna state
08169056963.
