Opinion
President Tinubu – ‘NO’ To IMF Removal Of Electricity Subsidy
It has become very curious that since 1999, past Nigerian presidents had, especially out of concern about the welfare of poor, indigent Nigerian citizens, resisted the advise of Bretton Wood institutions, the World Bank and especially the International Monetary Fund, IMF, to remove subsidy from petrol and electricity.
Public debt is one of the great problems of our era. The existing debt load is unprecedented. And what is worse, it has been accumulated to finance short-term spending. We have nothing to show for it.
Our elders say, “There’s no smoke without fire.” Immediately after being declared winner of the 2023 presidential election by INEC, the president-elect, Bola Ahmed Tinubu visited the United States. While in the United States, Tinubu held various meetings with many influential persons which include political leaders, investors, etcetera. Interestingly, his meeting with IMF and World Bank officials did not make front page news, perhaps that was deliberate.
Recently, the IMF has called on president Tinubu to remove electricity subsidy, this will automatically lead to an upward increase in the price of a unit of electricity consumed by Nigerians, especially in the midst of suffocating effects of removal of fuel subsidy by president Tinubu on May 29, 2023.
Barely five minutes of being sworn-in, after taking the oath of office, president Tinubu, perhaps playing the hand of IMF officials he met in the United States prior to his official inauguration on May 29, 2023 made his offhanded statement, ‘fuel subsidy is gone’. That statement has become an albatross on the neck of Nigerians, throwing Nigeria’s economy into a tail spin wave with the implications of hyper-high inflation, spiralling cost of goods and services, etcetera.
Perhaps to further please the Bretton Wood institutions, Tinubu went ahead to implement, perhaps another IMF advise, to float the Naira with a view to bring its value at par with the Dollar. For a nation whose economy is import dependent, the policy boomeranged and the Naira went down the hill, depreciating to an all-time high value of N1,444.56 to a Dollar as the official rate adopted by the Nigeria Custom Service, NCS, for Custom-clearing of goods and Duty payment!
It is a fact that real economic growth and healthy public finances go together. Economic development should be the result of Nigeria producing more goods and services, thereby improving the standard of living for the population. With the rate adopted by the NCS, many manufacturing companies will be forced to lay off workers, scale down production, or shut down.
The inflationary impact of subsidy removal basically undermines growth and economic recovery. It reduces household consumption and aggravates poverty.
Across the world, not one nation has prospered by the quality of advice given by the IMF to salvage their economy – Nigeria will not be an exception. The cases of Argentina, Venezuela, Ecuador and other south American nations are classic examples. Even our fellow brethren, Zimbabwe, is a classic example of more compelling reason not to accept the IMF notorious one-pill, cure-all advise to remove electricity subsidy and hike prices for the masses.
The loans that past governments have taken in recent decades have mostly been used to finance frivolous spending. In other words, instead of living within our means, we have opted to continually go into debt, not worrying about how the debt would be paid back in the future. Politicians have not helped matters with their lavish lifestyle. How can a policy of approving the sum of N160m to each senator to buy a SUV in these times of fuel subsidy removed hardship?
What’s the value of N30,000 minimum wage which only ten, out of Thirty-six States pay to indigent, impoverished workers?
I call on president Tinubu to politely reject the advice of the IMF and her associates to remove electricity subsidy. Rather, he should tinker with the already traumatising effects of removal of fuel subsidy on Nigerians with a view to bring succour to their lives and improve living standards. Nigerians are dying daily, no thanks to inflation induced by removal of fuel subsidy.
Finally, if president Tinubu goes ahead to remove electricity subsidy, he would find:
• Nigerians pushing wheel barrows filled with wads of Naira notes in search of a loaf of bread on the streets.
• Nigeria’s economy may go the way of Venezuela, Ecuador and Zimbabwe.
• Manufacturing companies will shut down.
• Millions of able-bodied Nigerian workers will be retrenched, sitting at home with forlorn, weary faces.
• Kidnapping, banditry, armed robbery, terrorism, etcetera, will increase. God forbid!