IMF forcing Nigeria to remove subsidies

A prominent political analyst says the World Bank and IMF (International Monetary Fund) have pressured Nigeria to cut fuel subsidies for its citizens. Nigerians have already launched demonstrations – dubbed Occupy Nigeria – to protest the government’s decision to end fuel subsidies. Huge lines have formed outside gas stations in the most populous city, Lagos, with many locations closing down after running out of fuel.




Press TV has conducted an interview with Nii Akuetteh, African policy analyst, to further discuss the issue. The following is a transcript of the interview. Press TV: How much of the scrapping of fuel subsidies by the government is fueled by the likes of big Western corporations like Chevron and Shell in your opinion? Akuetteh: I think that those corporations actually pump crude oil from Nigeria. The subsidies are on refined oil products that are imported into Nigeria from outside. So, those Western corporations, Shell and the others, this is not an issue that is at the center for them because they deal more with pumping crude oil from Nigeria and selling it in the West. The problem they create includes pollution and allowing the oil to spill out. But, this issue is on the other side of the equation, dealing with refined petroleum products that are imported by different companies into the country. Press TV: Even if the long term effects of removing the subsidies may be good, one has to consider the impact of inflation upon the general population. Will Nigerians be able to cope? Akuetteh: I think that is such a wonderful question. I think it will be hard for the country either way. There are two problems: the economic one, which you just mentioned, inflation, because I don’t think the experts have actually measured how inflation has [worked]. But it’s certainly going to be somewhere in double digit inflation because of removing the subsidies. But, I think a bigger problem than inflation and economics is political. Nigeria, like any country, the government is supposed to do the wishes of the people. It is supposed to help the people. Not only that, if you are helping the people, it must be seen. Most Nigerians are against this subsidy removal. Nigeria must do it under pressure from the World Bank and the IMF for years. The World Bank has been trying to get Nigeria to do this. So, I think you are right. It will cause serious inflation problems, but it will also cause political problems, which is why we have seen that the parliament is now jumping ship… In fact, it has reminded me of what has happened in the United States with President Obama when he said he wanted to close down Guantanamo. And Congress, by checking with the people, decided that, no, they don’t want to do that because most people were afraid. And they sided with the people against the president. I think something similar is happening in Nigeria. It’s both a political issue and an economic issue. And I’m afraid that right now the momentum is against the government. Press TV: So far, Goodluck Jonathan seems adamant to go ahead with this plan. Are we going to see a prolonged standoff between unions and the government? Akuetteh: I think it depends. How long it will be will actually depend because, as you know, parliament has said that it wants the government to rollback the subsidies. Moreover, Goodluck Jonathan’s party is a big, strong party all across the [union]. All the other parties are regional parties. But, Goodluck Jonathan PDP (People’s Democratic Party) is big, diverse and strong. But, this subsidy removal, as we can tell from parliament, it has divided them. If Goodluck Jonathan manages to hold on and say he’s not removing, then it will take a long time. But what will happen if parliament is against him and if his own political party is divided, I think the labor unions are actually united. So, they can go on for a long term. But whether the government itself will be divided between the executive and the parliament, and the ruling party is also divided, I think that’s where we have to look, whether they can sustain for a long time.