By Owei Lakemfa
International
Monetary Fund (IMF) Managing Director, Madam Christine Lagarde was on a
four-day visit to Nigeria from January 4. She claimed it was a friendly visit: “I’m not in Nigeria to negotiate for IMF loans but to promote fiscal
discipline and favourable monetary policies” Making the visit look like some holiday for
herself, and husband, Monsieur Xavier
Giocanti, she even visited the Mother
Theresa Children Home, Abuja where on behalf of the IMF she donated a hefty sum
of $7,500 to demonstrate that “We at the
IMF, we care about
the youths, poor and about those who are left at the side of
the road.”
But those
familiar with the IMF know that the expressed love for Nigeria, the youths, the
poor and the orphaned, are side shows to make the visit look like some long
lost aunt visiting her loved ones. The
last time Hurricane Largarde made a landfall in Nigeria four years ago, it was so devastating that amongst other things,
the whirlwind tossed petrol (PMS) price from N65 to N140 setting off serious
social crises. The attempts to clear the hurricane debris took years, and
the negative effects are still felt today. Some unique characteristics of IMF hurricanes are that their effects are
not immediately visible and their after-effects are quite devastating. It is like cleaning up a nuclear
accident site.
For example,
the IMF in September 1986, lured the Babangida regime to adopt a nebulous
Second-Tier Foreign Exchange Market (SFEM)
By the time the IMF was through with us under that regime, the currency which was about 90 kobo to the
dollar went up to N18.
Like a
colonial headmistress visiting primary school pupils, she rubbed our heads
saying Nigeria is doing great to improve the business environment. She then launched into platitudes: “poverty and
inequality remain high” “Nigerians should brace up for harder times” “reduce leakages” “Hard decisions must be
made”
It is in the
DNA of the IMF to tell you what you already know, and only what it wants you to
know. It is like a person admonishing a hunchback to straighten up and walk
like other people as if that is not the wish and prayer of the hunchback.
Generally,
the mentality of the IMF is to tax and further impoverish citizens of pliant
countries either directly through its so-called CONDITIONALITIES or in more
subtle ways like friendly visits; whatever the method, the objectives are the same. As the IMF has done for
about four decades now, Largarde told us last week “Subsidies are no
longer good” But we all should know that is a lie; if subsidies are good for
Europeans, who in addition, have all sorts of safety net and good
infrastructure, why should they be bad for Africans?
The IMF is
the preserve of Europe like the World Bank is that of the United States; if
subsidies are bad, should Europe not stop them first before asking under
developed countries to discard them? The Europe Union (EU) has a huge regime of
subsidies under its European Grants and Subsidies programme. A component part
of that subsidy system is its Common
Agricultural Policy (CAP) under which the
EU gives an annual E60 Billion subsidy
to European farmers. This is still captured in the current EU 2014-2020 Budget.
Largarde, like her predecessor, Dominique Strauss- Khan, is French. The French maintain
huge subsidies for agriculture and small scale businesses which it calls
“incentives” There is a current dispute
between the EU and fifteen European countries including France over the
utilization of agriculture subsidies. From the EU funds alone, France had paid its farmers E3.5 billion subsidies while the EU argues that only E2.4 Billion
subsidies were properly processed. But the French Agriculture Minister,
Stephane Le Foll has assured French
farmers that they would not need to reimburse the balance E1.1 Billion as the
government will bear the costs. So if
Largarde and her fellow French enjoy generous subsidies, why would she tell
Nigerians that subsidies are harmful? Of course,
she told us to have a “Flexible Monetary
Policy”
To the uncritical, Largarde might be implying the so-called “flexible” policy the IMF has forced Nigeria to run for
thirty years now. But she is actually telling us to further devalue our currency. Of course she asked Nigeria to
increase Value-Added-Tax (VAT). In an
import-dependent country, to increase VAT is to
push inflation higher. It will
also lead to mass job losses because machinery and lots of raw materials are
imported. As expected, the IMF
chief wants us to “broaden the tax base”
which comes down to imposing more taxes on the populace especially workers.
The refrain
of the IMF for decades now is the removal of so-called fuel subsidy. On this,
she repeated the decades old IMF trite about subsidy injuring the poor, and the
need to free funds for other projects. But our experience in Nigeria is that
increases in prices of petroleum products have led to further impoverishment;
costs of transportation, food, housing,
education and goods rise, our generator-dependent economy runs into more
trouble and jobs are lost. With the
currency devaluation championed by the
IMF, we will continue to need more and
more naira for imported fuel which is
the primary cause of subsidy. Has anybody
ever wondered why the IMF is always pressuring Nigeria to remove subsidy on imported fuel rather than pressure it as an oil-producing country to locally refine
petroleum products?
Nigeria over
rates the IMF; allowing its officials to meet our leaders at the highest levels
rather than assigning the Central Bank Governor as the highest possible officer
a Lagarde can meet. The IMF is an
unimaginative institution that makes the same analysis and prognosis decade after decade. It is like a fake doctor
who diagnose the same ailment for all patients and administers the same expired drugs to all patients
irrespective of disease. It takes fundamental and far reaching decisions for
underdeveloped countries without taking any responsibility.
The IMF is essentially,
an undertaker; when it visits a country, the state of the populace, takes a
turn for the worse.
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