World Bank and IMF bondage economy

Regardless of our opinions on President Bola Ahmed Tinubu,

We are all impacted by the policies and actions he makes. Since the monopoly of wisdom does not belong to those in charge of matters, it is crucial that we hear many points of view. Unless you alter your course, you will never reach your destination, regardless of how far you have walked the wrong path. Refineries, power structures, and other important economic institutions can only be better handled if we have leadership that is willing to listen.

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Donald Trump’s second coming has sparked a nationalistic frenzy that is sweeping through nations worldwide; protectionism and the defence of national interests are now being discussed. How do we stand amid all of this, particularly if we have nothing to contribute to the world? Are we still subject to the World Bank, IMF, and related agencies’ directives? Is their path the only one we can take? I don’t believe so.

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I will draw on the work of economist Joseph E. Stiglitz, who was a member of the Council of Economic Advisers during the administration of US President Bill Clinton. He was also the World Bank’s senior vice president and chief economist.

Because of this background, you will be aware that he has direct access to the systems that govern the global economy. “Developing countries face challenging issues, and the IMF is frequently called upon in the worst of situations, when the country is facing a crisis,” he noted in his book Globalisation and Its Discontent.

On the other hand, its cures were as ineffective as they were ineffective. Even when results are not as bad, even if they are able to eke out some domestic growth for a while, the benefits of IMF structural adjustment policies—which are intended to help a country adjust to crises as well as more persistent imbalances—often go disproportionately to the wealthiest, leaving those at the bottom occasionally facing even greater poverty. These policies have also caused hunger and riots in many countries.

Nigeria is now dealing with this circumstance. We have witnessed riots, starvation, and the discontent of the populace.

Although those in charge of our economy have undoubtedly read Stiglitz’s book, they have decided to disregard it. Speaking about his own experience, Stiglitz stated: “But as I moved to the international arena, I found that the creation of policies, particularly at the International Monetary Fund, was not dominated by either good politics or good government. Dogma that occasionally appeared to be a thin veil of special interests was used to make decisions, which seemed to be a bizarre combination of bad economics and ideology.

The IMF recommended outdated, unsuitable, if “standard,” measures when crises arose without taking into account how they would affect the citizens of the nations in question. The prescription was one and alone. We didn’t look for other viewpoints. Since there was no space for them, candid, open debates were discouraged. Policy prescriptions were influenced by ideology, and nations were expected to abide by IMF directives without question.

During a heated debate a few months ago, one of our government officials was griping that although the government had fulfilled all of its obligations, international organisations were taking their time responding, which was affecting us directly. Because there is no one-size-fits-all solution to issues, economic policy can occasionally be confusing.

We also evaluate the context in which these policies are articulated. In the case of the World Bank and the IMF, however, there is only one solution that works for everyone who seeks their assistance.

Once more, Stiglitz states: “These theories have strong policy implications, some of which are obvious to almost anyone in touch with the real world. The economy will suffer if interest rates are raised to exorbitant levels because highly indebted firms may be forced into bankruptcy.” These policy recommendations, which I believed to be clear, contradicted those that the International Monetary Fund, or IMF, regularly insisted on.

Do you think there are any parallels between our circumstances in Nigeria? Why are our policy gurus insisting on taking this perilous path if it isn’t the way out? When President Tinubu ended the gasoline subsidy system and floated the naira, he used the “shock therapy” strategy that the IMF and World Bank consistently advocate. In addition to being “a strong critic of some of the extreme referral strategies such as’shock therapy,’ which have failed so miserably in Russia and some of the other countries of the former Soviet Union,” Stiglitz is a vigorous supporter of the gradualist policies approach, which is what the Chinese do.

That’s where we’re at. Shock therapy has not helped us; on the contrary, it has made people’s suffering worse. The only thing that keeps us alive is hope, which is limitless and elastic. Our refineries, power plants, and other infrastructures haven’t changed because we continue to rely on the World Bank rather than developing our own solutions.

Eliminating all subsidies and raising taxes are the main priorities. When dealing with Nigerian marketers, why should the Dangote Refinery operate at international rates?

Given that we have all the necessary resources to produce electricity in our nation at a reasonable cost, why should power prices continue rising? If we choose not to follow the World Bank’s advise, what will happen? For what reason do we fear? Does the World Bank and other international organisations require us to sacrifice people? Leadership needs to sit down, analyse, and act morally.