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Socialist Democracy Feb - Mar 2003

The International Monetary Fund (IMF) has a justifiably hatred reputation in Nigeria. This international agency is rightly seen as one of the instruments used by imperialism to secure implementation of the austerity policies, SAP and its successors, that we have endured since the mid-1980s.

As part of its role, the IMF maintains an office here checking the "progress" that Nigeria is making towards carrying out the imperialists' objectives. Regularly this office prepares a report, the latest of which was published on January 2nd, 2003. Notwithstanding the IMF's completely pro-imperialist and pro-capitalist role, this latest report confirms the utter rottenness of Nigerian capitalism and the ruling elite's corruption and looting.

Right at the outset the IMF states something most Nigerians already know from bitter experience: "the high expectations from the return to democratic rule for growth and poverty reduction have not been fulfilled" (page 6).

Generally the IMF confirms that the economic situation is worsening. In 2001 and 2002, 

"the fiscal deficit widened, the external current account deteriorated, inflation accelerated, and the parallel exchange rate premium increased …an expansionary fiscal policy, lower reserves, rising domestic short-term debt, and a weak banking system raise Nigeria's vulnerability" (page 4). 

What this means is that the government is printing money, what the IMF calls a "sharp increase in government spending" (page 5), in a pre-election effort to meet some of its bills and boost the economy, but the result is more inflation, further sharp falls in the naira's value, more debt and increased danger of another financial crash.

Understandably, the PDP keep quiet about this and especially the IMF's call for "monetary tightening" (page 4), i.e. yet more austerity measures after the elections.

But even more importantly, the PDP also keeps quiet about the IMF's more significant conclusion that Nigeria's economy actually is shrinking, declining by 0.9% in 2002. The IMF directly challenged the Federal Government's official claims. The report states "the authorities project real non-oil GDP to grow by 7.8% and overall GDP by 1% in 2002 significantly higher that the (IMF) staff's projections of 5.3% and 0.9%, respectively …the (IMF) staff argued that available data on non-oil; economic activity did not support such a high growth rate; over the past decade, the non-oil economy had not experienced annual growth rates exceeding 4%" (page 17).

Indeed the IMF report points to the good harvests, because of good rains, and the growth of telecommunications as the only positive factors in the non-oil economy (page 6). But both are not stable. A good harvest can easily be followed by a bad one, the rains are not the same every year. Furthermore, the telecommunications boom is dependent on people earning enough in other sectors of the economy to buy phones, make calls and use the Internet. As far as the rest of the Nigerian economy is concerned, it is in decline.

Now it seems that there will not be any benefit from the current high price of oil. It seems that this extra windfall revenue is being used to import oil in an attempt to overcome continuing problems at our refineries and ensure that there are no fuel shortages in this pre-election period.

Along with painting a bleak picture of Nigeria's economy, the IMF are damning on the ruling elite's corruption. Referring to government spending it asks that 

"emphasis should be placed on reconciling warrants, mandates and transfers by the Office of the Accountant General in coordination with the Central bank of Nigeria" (page 27). 

In plain speak, this means that there should be full records of how and where government money is actually spent, not just the formal budget plans. In an appendix, the IMF goes further and write: 

"fiscal data in Nigeria have historically been opaque" (page 55).

Very diplomatically, the IMF suggests that this 

"should start in the oil and gas sector. This could include the publishing of annual audited reports and accounts of the national oil company and its subsidiaries, as well as those of the private oil companies incorporated in Nigeria. The next step would be to audit and publish the accounts of federal government expenditure, so that the public could see the uses of oil (and non-oil) revenue" (page 27).

How polite! But how utopian are the IMF's pleas! For decades the Nigerian elite have based their wealth on looting the country, they have no idea of trying to develop the economy. Hence the looters', and would be looters', massive financial investment in elections so that they can grab a share in the nation's income. That's why there are no accounts and, if any accounts where produced, they would be rigged just as the PDP falsify the general economic data.

But this situation is not just a result of a robber mentality. It reflects the fact that, in a world economy dominated by imperialism, the local Nigerian capitalists cannot compete with the big boys either in the world or home markets. So the local capitalists either loot or become agents for the imperialist monopolies. This is why on a capitalist road there is no solution for the Nigerian masses.

A report like that of the IMF gives only figures, it does not say what the facts mean for the lives of the Nigerian masses.

Statements that the Nigerian economy contracted by 0.9% in a year have to be taken in the situation where the country's population is rapidly growing. The report gives the World Bank's estimates that in less than 20 years, the total population has grown from 83.2 million to 126.9 million now, of which 70.2% live below the international poverty line or received less than $1/N130 naira a day. This means that, on average, income per head fell by more than 0.9% last year.

The report also shows the gap between rich and poor, the richest 20% of Nigerians get 55.7% of the country' total income, while the poorest 20% receive only 4.4%.

The report's figures show how the past twenty years have witnessed a terrible decline. To give one example, during these two decades an average Nigerian women's life expectancy has fallen from 49 to 48 years, while a man's has remained at 47 years. In the same period the there has been a huge jump of the numbers, 25.5 to 55.8 million, living in urban areas as grinding poverty and lack of development forced millions to flee from the countryside to the unplanned chaos and often destitution in our cities.

The IMF report offers no way forward, just the failed recipes of privatisation to benefit the imperialists and rich, and austerity measures for the rest of us. Only a break with the rotten system of capitalism can take us out of this downward spiral.

Continued ...