World Bank Prescription on Nigeria Economy: Afenifere Calls For Caution as it’s Capable of Discrediting the Govt, Challenges NNPCL on Refineries, Price Reduction

… says energy is a security commodity

The pan-Yoruba socio-cultural and socio-political organization, Afenifere, has called on the federal government to be wary of the recent advice of the World Bank (WB) in which it prescribed the reduction in government’s support for social services in Nigeria.

Senior Vice President of the World Bank Group, Mr. Indermit Gill, while speaking at a programme early this week in Abuja referred to the withdrawal of supports being provided by the government for social and economic programmes in Nigeria and the floating of the Naira, the country’s currency. Gill spoke at the three-day Summit of the Nigerian Economic Summit Group (NESG) that started on Monday, October 14th.

The Bank’s boss said that the results of the current efforts would be seen in 10 to 15 years’ time.
But in a release signed by the National Publicity of Afenifere, Comrade Jare Ajayi, the organization urged the federal government to be wary of the advice.

“Firstly, the current administration under President Bola Ahmed Tinubu would have run its terms before the 10 to 15 years the presumed dividends of the World Bank prescriptions will manifest. Meaning that this administration may then only be remembered for the sacrifices made by the people and the attendant sufferings while another administration would take the credit for the dividends – if at all. So, rather than continuing with the Bank’s policies, resort should be made to policies that boost local businesses and encourage local initiatives thus reducing dependence on imported goods”.

Ajayi added that this call on the President to be wary of prescriptions by Bretton Woods’ institutions was predicated on what had happened to countries that followed various prescriptions made by either the World Bank or International Monetary Fund (IMF) or both of them.

He recalled that most of the countries that heeded prescriptions or conditions that these two institutions always gave ended up in worse situations than the ones that made them ran to either or both institutions. Countries cited included Mexico, Mozambique, Ghana, Argentina, Thailand, South Korea, Indonesia, Democratic Republic of Congo, among others.

Malaysia that was also an applicant along with the named countries dropped the idea because, according to its Prime Minister, Mahathir Mohammed, the conditions given by the Bank would hamper his people’s economic growth, force many businesses to close shop, raise unemployment and adversely affect people’s welfare thus engender hardships for the citizens.

The conditions given by the Bank included budget cuts, removal of subsidies from some services being provided for the people and the devaluation of the country’s currency. But, instead of heeding the advice, Malaysian PM did the exact opposite. Of course, it was tough initially. Today, however, Malaysia is growing economically and is one of the few countries that are shedding off the toga of third worldism.

“What we are saying is that while it is important to lay a good foundation for economic recovery, the models being prescribed by World Bank and the International Monetary Fund (IMF) should be no-go areas going by the havoc such models have wrecked in some of the countries that applied them” Ajayi submitted.

While commending President Tinubu for his government’s determination to focus on reducing bureaucratic bottlenecks, enhance productivity and agriculture, encourage entrepreneurship and innovations, Afenifere spokesman however stated that these noble objectives cannot be met with the current situation that is making socio-economic environment to shrink.

President Tinubu had restated this while speaking at the NESG summit mentioned above. He was represented by Vice President Kashim Shettima at the summit whose theme was ‘Collaborative Action for Growth, Competitiveness, and Stability’.

According to Afenifere spokesman,
“The cost of energy has skyrocketed. Yet, it is a known fact that energy is not just a driver of economy, it is also a driver of health and security going by the impact it has on these sectors. For instance, people who stressed themselves too much on the road because they could not afford transport, those who could not regulate the temperature in their homes and offices or afford requisite energy to prepare food properly would be endangering their health conditions.

“In the same vein, high cost of energy – fuel, electricity, gas, diesel, gasoline etc. – are forcing a lot of people out of business. And, as is known, crime rate is always high where unemployment rate is high thus inducing insecurity and banditry”.

At the moment, a litre of petrol is between N1,000 and N1,400 depending on where one is buying it from while a kilogramme of cooking gas is about N1,500. As at 2023, a litre of fuel was N197 while a kilogramme of gas was about half the current price.

The National Bureau of Statistics (NBS) in its latest report indicated that inflation rate has risen to 32.70 per cent in September this year. In August, the federal government announced that a bag of rice, a foodstuff that is widely consumed in Nigeria, would be N40,000. Currently, a bag goes for between N90,000 and N105,000. Same thing goes for many other commodities including electricity.

To quickly ease the pains that the high cost of energy is causing Nigerians, Afenifere called on the NNPCL to deliver on its promises of revamping the country’s moribund refineries.

Allusions were made to several promises that the corporation has made on getting the refineries to work starting with that of Port Harcourt. Since around 2022, several dates have been given without any being met. Ajayi recalled the disclosure by the Secretary General of the Organisation of Petroleum Exporting Countries (OPEC), OPEC Secretary General, Haitham Al Ghais, that sundry taxes, rather than market price, were responsible for high fuel prices in Nigeria and stated that it is within the power of NNPCL to considerably reduce the price of the commodity.

“The logical thing to do is for the NNPCL to reverse its recent price hike and ensure that its refineries begin production immediately”.
Afenifere further called for home-grown policies that will boost local businesses, encourage innovation and reduce the heavy reliance on importation as is currently the case.

“In many instances, prescriptions by Breton Woods institutions have always made governments that implement them unpopular. With World Bank’s prediction that the ones being taken in Nigeria will take 10 to 15 years to bring the expected succor, it would be better to disavow such and go for home-grown policies that will prioritize agriculture, encourage local manufacturers, place more premium on local investors and reduce dependence on imported goods as well as combat insecurity headlong”.