OBSERVATION: Nigeria Going Down The Drain

• BY ADEMOLA YAYA

NIGERIA, the most populous country in Africa with a Gross Domestic Product (GDP) estimated at $477 billion in 2022 which was maintained till mid-2023 at $477.38 billion, was the largest and richest economy in Africa, with South Africa and Egypt trailing behind. As a big crude oil producer with a population of over 210 million people and thriving service providers industry, Nigeria emerged as the African continent powerhouse. As I write this May ending, 2024, Nigeria has dropped to the 3rd place, $253 billion, far behind Egypt and South Africa with GDP of $394 billion and $378 billion respectively. 

Nigeria’s pathetic situation is not limited to the continent; it is on a life support machine domestically. There has been food scarcity and an unprecedented percentage increase in the prices of basic food items. Prices of tomatoes, pepper, and other soup ingredients are highly prohibitive. In today’s Nigeria, there is no food that can be tagged “Poor man’s food”, as Garri and the likes have become gold. The inflation rose from 22.41% in May 2023 to 29.9% in January 2024, and in April, 33.69%, according to Nigeria Bureau of Statistics (NBS).

In April 2023, food inflation rate was 24.61% and rose to 40.53 % in April 2024. This acceleration in inflation has eroded purchasing power of the people, especially the average Nigerians who are struggling day and night to make ends meet. Small and Medium Scale Businesses which contribute 48% to the Nigeria GDP, according to NBS, are faced with poor sales and declining revenue because of high cost of their goods necessitated by high cost of production provoked by increase in the price of fuel and electricity tariff, forcing most of them to close shops while the very few remaining are downsizing. The floating of Naira to the blind forces of demand and supply without productivity base and economic diversification has only worsen the pathetic case as Naira was crashing against almost all international currencies, snuffing lives out of the people whose businesses – goods and services – are import based.

Although, President Bola Ahmed Tinubu led APC government has released food in national reserve to the states governors to distribute as palliates to its harsh socio-economic policies, so as to stabilise the prices of foods and other consumables to ensure food security, things have continued to degenerate very fast. Thanks to the war-torn Ukraine for its grains supply in this period of needs.

But the organised labour – NLC and TUC – are poised to lock horns with the Tinubu APC led government from the midnight of May 31st over increase in electricity tariff and non-implementation of new minimum wage. The first one year of the administration has been a disaster for the poor people, especially, as they can barely breathe and there is no policy or programme in the pipeline that suggests that things will improve later on.

The Tinubu-led administration has been acting the script of the IMF and World Bank from the beginning, as they insisted and still insisting that it must remove all subsidies, commercialise all social services and price them beyond the reach of a majority of Nigerians. This informs, “Fuel subsidy is gone”, floating of Naira, increase in electricity tariff and other policies that have made life miserable for the majority of the people. Meanwhile, as these Britton Woods Institutions hold Tinubu at the jugular to implement these neo-liberal attacks, they advise governments of the Western world to subsidise fuel, energy, agriculture, and all other necessities, including grants to indigent students. 

It is instructive to state that World Bank and IMF were established in 1944 after the World War II as world largest sources of funding to help rebuild Europe and Japan, help poor countries reduce poverty. Specifically, World Bank’s core goal is to “reduce poverty by promoting sustainable economic growth in its client countries. Development is about getting economic and financial policies right. But it is also about empowering the people, building the roads, writing the laws, recognising the women, educating the girls, eliminating corruption, protecting the environment….” while its twins – IMF – was to, among others, “foster economic growth, tackle unemployment and provide cures for poverty.”

They are to lend money to their client governments to improve their economies and standard of living of their people and maintaining financial stability in the world. These are lofty ideas! But IMF and World Bank are only responsible to the western nations but care less on Third World or developing nations especially Africa, Latin America and Caribbean. The 121-page Thesis of Adeesha Hack in 2001 submitted to Acadia University in partial fulfilment of the requirement for the Degree of Master of Art (Political Science) with the theme Global Lies: The World Bank, IMF And Poverty is a striking exposure of these organisations mechanism.

The thesis established that since their establishments, poverty has pervaded and continued to increase in the Third World; the gap between the rich and the poor has continued to widen and their policies prescriptions, like Structural Adjustment Programme, have been counterproductive and not reflecting the needs of the poor majority. In the actual fact, their prescriptions have worsened the poor people’s pathetic conditions, increasing their grief and destitution.

The 28-page Open Letter of Resignation to Mr. Camdessus, Managing Director of IMF on 18th May, 1988, by Davison L. Budhoo who had worked with IMF for over 12 years titled, “Enough Is Enough” is another eye opener for the leaders of under-developed nations.  In summary, Davison revealed how IMF constructs rotten “financial program” that increases the woes and sufferings of the people of their captive Third World Countries and the double standard of operations of one prescription to the Third World and another to the Western World.

We have passed this road of structural Adjustment Programme with military President, General Ibrahim Badamasi Babangida in 1986 and we came out being short-changed. Except President Tinubu changes his game by dumping IMF and World Bank killer neo-liberal policies, poverty will continue to multiply, hunger and starvation will aggravate, majority of our children will die of malnutrition, life will be misery for the majority and violent crimes and insecurity (that may even threaten the very existence of Nigeria) will escalate beyond its current alarming level.

The opinions expressed in this publication are those of the author. They do not represent the opinions or views of OSUN DEFENDER.