IMF and Nigeria’s infrastructure prioritization | Independent Newspapers Limited
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IMF and Nigeria’s infrastructure prioritization

Posted: Apr 6, 2015 at 12:02 am   /   by   /   comments (0)

The recent recommendation by the International Monetary Fund (IMF) in its just released 2014 Article IV Consultation-Staff Report that the Federal Government of Nigeria should slow down on its infrastructural projects so as not to further squeeze the economy is, not only preposterous, but laughable, considering the fact that infrastructural development is globally known as a panacea for economic development.

Coming at a time when some other developing economies are busy aggressively developing their capital infrastructural base to woo both local and Foreign Direct investment (FDI), it will be counterproductive, if Nigeria should adhere to the IMF’s directive. In fact, we find the directive as lackluster and anti-development to say the least. 

This is even contrary to the clamour from most economic quarters that the best way to ensure economic growth is to create a balance between capital and recurrent aspects of our budgets to make it conducive for job creation imperatives. As it is today, about 80 per cent of our budgetary allocations go to recurrent expenditure, which does not bode well for economic growth. This is why we are taken aback at the IMF’s advice.

Instructively, IMF was originally formed to promote steady and full employment by offering unconditional loans to economies in crises and establishing mechanisms to stabilize exchange rates and facilitate currency exchange. It is common knowledge that much of these visions have not been realized especially in third world countries. What we have seen is an IMF that is offering loans based on strict conditions. As a matter of fact, IMF’s policies have, undoubtedly, reduced the level of social safety and worsened labour and environmental standards in developing countries of which Nigeria is one. What is more, IMF is apparently an imperialist tool. Therefore, it is time Nigeria, and indeed, other African countries stopped being subservient to the imperialist world.

There is no gainsaying that some of the policies, programmes and directives of IMF, over the years, most times end up promoting poverty rather than reducing it. It is in the light of this that this Newspaper finds the current IMF directive to Nigeria unacceptable and must be ignored. It is evident that IMF and even other world donors such as World Bank; do not have the country’s interest at heart. 

Moreover, coming almost immediately after the 2015 Presidential and the National Assembly elections, it seems that by given such directive, IMF is positioning itself as an economic adviser organization to the incoming new government. To this end, it is imperative, therefore, for the incoming federal government and our economic managers to be wary and jettison destructive economic advice of the IMF.