PERSPECTIVE – Watching Bola Tinubu, watching the World Bank

PERSPECTIVE – Watching Bola Tinubu, watching the World Bank

The Tinubu government has not made an intelligent case for petrol subsidy removal, contends Ike Okonta

Dr. Ike Okonta.

The vulture is a patient bird. So is the World Bank. As the debate whether to accept an IMF loan along with its punitive conditionalities raged among Nigerians in 1986, World Bank representatives in the country pretended to stay aloof. After ordinary Nigerians, led by the Left, had roundly rejected the loan, World Bank officials pounced. Working quietly with General Ibrahim Babangida, they designed an economic regimen faithful to the neoliberal policies which were at the time being promoted by the Reagan administration in Washington and imposed them on Nigerians.

What did these neoliberal policies consist of? First, General Babangida was asked to drastically devalue the Naira. Then he was asked to embark on a policy of privatizing public enterprises, liberalise trade and throw open the country’s borders for imports to come in, and remove subsidies on healthcare, education and other vital social services. Further, the practice of national development planning was thrown out of the window, the World Bank officials assuring Babangida that the private sector was capable of planning the economy through the free interplay of market forces.

Nearly 40 years after successive Nigerian leaders faithfully began to implement these neoliberal policies, the economic and social fortunes of the country have plunged to rock-bottom. As I write, Nigeria has been declared the poverty capital of the world, with an estimated 140 million of its 200 million people living in multi-dimensional poverty. Unemployment is running at 40 percent and the manufacturing sector that was about to take off in the 1970s and 1980s has collapsed. There is not one of the enterprises privatized since 1986 that is in business today. What the Structural Adjustment Programme – another term for these neoliberal policies – has done is to oversee the massive de-industrailisation and pauperization of Nigeria.

But it is not only Nigeria that swallowed the World Bank’s neoliberal pill and instantly developed stomach ache. All other African countries that implemented the Structural Adjustment Programme are in similar economic straits and exhibit similar symptoms – massive de-industrialisation, massive unemployment, worsening terms of trade, and a beleaguered social sector that has seen healthcare and education virtually collapse. The same is also true of the Latin American countries. If you want to gauge the social cost of neoliberalism, witness the hordes of migrants from Latin America crossing deadly jungles to escape to the United States, and traumatized young Africans braving the Meditterenean sea in a life-and-death bid to reach Europe.

It is significant that east Asian countries like South Korea, Indonesia, Malaysia and Thailand shunned the neoliberal medicine and are today in a better shape economically and indeed are on their way to joining the league of developed nations. The leaders of these countries saw what their African and Latin American counterparts did not see – that neoliberalism is not about disinterested economics but a move by the extreme right Cold War warriors surrounding Ronald Reagan to move the world even further into a capitalism where the rules of moderation and fair play are thrown out of the window. Neoliberalism is beggar-my-neighbour politics, simple.

One would have thought that given the abysmal failure of structural adjustment in Nigeria these past four decades World Bank officials in the country would have been chastened and take another look at their economic policies in the country. But that has not happened. Indeed, following the return of democratic rule in 1999, they have been emboldened to return to their old game of pressing Nigerian leaders to further embrace neoliberal policies. They have found a willing disciple in Bola Tinubu who was inaugurated President last May. In his inaugural speech Tinubu announced that he had removed subsidy on petrol, a move that the World Bank had been pressing on previous Nigerian leaders without success. President Tinubu also announced the ‘harmonisisation’ of the multiple exchange rate regime – another word for further devaluation of the Naira. He has also signed into law a bill making for student loans in tertiary institutions, preparatory to jacking up the cost of school fees.

All these are classic World Bank policies which the latter has been pushing since the early 1980s. Take petrol subsidy for instance. Countries of the world, in the developed and developing axes, maintain subsidies as a matter of course. These are designed to lower costs and ensure that the ordinary citizen is not unduly tasked in the process of daily life. To cite just one example – when the price of petrol increased in the United States in 2021, triggering inflation, President Joe Biden travelled to Saudi Arabia, a country whose de facto leader he had previously shunned for his abysmal human rights record, and made a case for Saudi officials to pump out more oil so that the price would fall. Biden was doing what he was elected for – look after the interests of American citizens.

The Tinubu government has not made an intelligent case for petrol subsidy removal. It claimed that 400 billion Naira was being spent monthly on the subsidy and that Nigeria was broke and could no longer afford this. It also claimed that subsidy was benefiting the rich and not the poor. Even so, thinking Nigerians have been insisting that the broken-down refineries be repaired and put to work so that importation of petrol would stop. They are also questioning the amount of money being claimed as subsidy by the government, pointing out correctly that the NNPC, the Central Bank and the Federal Ministry of Finance all have conflicting figures in this regard. With the four refineries working, they insist, a clear figure of Nigeria’s daily consumption of petrol would be easily established and if there is need to further increase the price of petrol moderately, this would be clearly explained to ordinary Nigerians.

It must be remembered that there are more Nigerians that didn’t vote for Bola Tinubu than voted for him. Further, Tinubu has a drug case hanging around his neck in the United States going back to the early 1990s. There is a sense therefore in which he is a lame duck president, desperately looking for support wherever he can find it. These factors may account for his eagerness to accept the World Bank’s neoliberal policies, if for nothing else, to please the  United States and ensure that it remains on his side in the next four years.

It is therefore important that Nigerians maintain vigilance and scrutinize Bola Tinubu’s policies before he further deepens his romance with the World Bank and the United States and sell Nigeria down the river.

  • Dr Okonta was until recently a Leverhulme Early career Fellow in the Department of Politics at the University of Oxford. He now lives in Abuja.
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