IMF’s Insistence On Subsidy Removal And Naira Devaluation


By Lajuwon Lasisi

The mentality of the IMF experts on Nigerian economy is always to deflate the already devaluated Nigerian currency and to increase the already hyper-inflationary pressure on capital goods, due to their insistent deficient, and foolish propositions, on how Nigerian economy should be run.  This time around, IMF would like the government to remove the remaining oil subsidy to turn around the country’s economy.

This is unacceptable economic propaganda stunt, because there is nothing like fuel subsidy on the part of Nigerian people. It was the delusive way the oil business is being run by the Federal Government organ, NNPC, that led to the speculative removal of the so-called fuel subsidy, by increasing the fuel pump price. This was done in order for the Nigerian populace to pay for the lapses of the government business organ, NNPC, with the connivance of some people that mattered in Babangida’s government, which saw to it that the existing  refineries were denied Turn Around Maintenance (TAM) necessary to keep them running. These were the people NNPC gave the contracts to import petroleum products for Nigerian domestic use, apart from some independent petroleum marketers.

So from the era of Babangida junta down to Obasanjo, Yar’Adua and Jonathan regimes, Nigerians are being programmed to pay for the costly ineptitude of NNPC, nay, the governments, through what they call fuel subsidy. Only Yar’Adua’s government refused to increase pump price of fuel by a dime. Even when his predecessor, Obasanjo, forced him to increase pump price by N5, two months later, he reverted to the old price of N65 from Obasanjo’s imposition of N70.

But to our surprise, President Ebele Jonathan, came in January, 2012 to increase the pump price to N97 from N65 with a proviso to use the fuel subsidy to provide necessary infrastructure to improve our economy, only to come round in February of the same year to announce to the nation that his earlier promise of January could not be met, because, NNPC had paid a chunk of the fuel subsidy to some  oil marketers by default, according to the Federal Minister of Finance , Dr. Ngozi Okonjo-Iweala, even though the EFCC has swung into action to prosecute these  oil subsidy looters. For your information, the amount of money paid out to these notorious and national economic saboteurs within a month of increase, was about N1.3 trillion or so. The Kano-born petrel of House of Representatives, Farouk Lawan, and another colleague of his, Boniface Emenalo, get themselves entangled in the $620,000 bribery scandal trap set for them by Femi Otedola, the son of the former governor  of Lagos State. Lawan’s committee were asked to investigate the fraudulent oil marketers who used some NNPC officials to steal or pilfer oil subsidy fund, without supplying the products.

And this is what the IMF, by inference, is encouraging the Jonathan government to do, by removing the remaining fuel subsidy to increase the pump price, so that the fuel subsidy rogues could get a bigger opportunity to steal fuel subsidy funds, whereas there is no time that pump price increase would not have multiple side effects on inflationary aspects of our economy. Obasanjo increased pump price 12 times which brought confusion into the economic enterprises of Nigerians, in terms of inflation, which left most Nigerians more impoverished. The only thing Obasanjo could have gained from these increases is that his name ought to have entered the Guinness Book of Records, as the only head of state that increased the pump price of petrol 12 times in the 8 years he was in power as the civilian president.

Nevertheless, as far as Nigerian economy is concerned, IMF has never given a purposeful and good advice. Rather, it is always a subjective proposition which usually reduces the value of our currency before devaluation. For instance, in 1986, during the inception of Babangida’s regime, the IMF enforced the recommendation of its Breton Commission in some of the developing economies of the world, including Nigeria, to devalue their currencies for better development, without corresponding guidelines, or economic indices to follow, before devaluation of their currencies was carried out. In the economies of advanced countries certain economic indicators definitely show the reasons for devaluation of their currencies, and which would last for a short period of time, in the developing economies such may last several years; resulting in further impoverishment of the affected countries, through consistent devaluation which always reduce their currencies to ordinary paper. It is only few developing countries that refused to be cowed down that are doing fine today.

In the case of Nigeria, Babangida’s government acceded sheepishly and stupidly (hook, line and sinker), to devalue the strong Naira currency, which remained strong and highly acceptable throughout West African countries. And 27 years later, the Naira continues to lack necessary purchasing power of which it was known before devaluation in 1986.  Ghana, one of the victims of IMF currency devaluation deceit rediscovered herself in 2007 and revalued the Cedi to about 10 Cedi to one dollar. And since 2007, Ghana’s economy has been transformed to a masterpiece of envy and adoration.

Related News

President Obama of USA visited Ghana which he described as bastion of a stable economy, with good democratic government, before flying to Kenya, his father’s country.

Nigeria’s Central Bank Governor, Chukwuma Soludo, also made a feeble, but defective pronouncement to revalue the Naira in August 2008, because, according to him, Nigerian economy was doing well, and N1.25 was to exchange for $1.0. However, this was not allowed to be, because he was asked to suspend his proposal, two weeks later by his principal.

But we thank God that the present CBN governor, Lamido Sanusi Lamido, also confirmed that Nigerian economy is doing well, what remains is for him to announce that N1.0 should exchange for $1.0 in order to bring our economy back to where it was in 1986. We started this revaluation campaign since 2002. The pronouncement of N1 to $1 will only act as a shocker to the treasury looters, who have stashed away Naira in foreign currency, in foreign banks, while  the Nigerian economy will spring back buoyantly to  take up its rightful place  in the world economic  development. As long as no known economic indicator was used (except the black market value of N3 to $1) to determine the Naira devaluation in 1986, CBN, as represented by Lamido Sanusi Lamido, has no other means, or better option than to announce the new value of N1 to $1, Anything short of this is continuation of economic strangulation of the already worthless Nigerian currency which will continue to deteriorate in value, if it were not pegged at about N165 per $1.

This is an indication that Nigerian currency is designed, or earmarked for internal, or domestic use only, unlike the advance economic currencies of the world, which are endowed with necessary economic indices or parameter, to devalue or revalue their currencies.

Sanusi should therefore be advised to note that “There is a tide in the affairs of men, which, taken at the flood, leads on to fortune, omitted, all the voyage of their life is bound in shallows and in miseries. On such a full sea are we now afloat. And we must take the current when it serves, or lose our ventures”. (Shakespeare)

Sanusi should be told that the words of the elders are words of wisdom, and to be conscious to do the right thing now, so that  the unborn generation  of Nigerians would  regard him as the CBN governor that restored our currency to its enviable value before the 1986 destructive devaluation.

•Lasisi wrote from Lagos. Email: [email protected]

Load more