The Nigeria Labour Congress (NLC), has fiercely criticised the World Bank for suggesting that the country end its petrol subsidy programme and increase the price of petrol to N750 per litre. The NLC argued that such a move would be detrimental to the livelihoods of millions of Nigerians, who are already struggling with the economic hardship that has come with the country’s fuel scarcity crisis.
The NLC also accused the World Bank of being an “enemy of the Nigerian nation,” suggesting that the organisation does not have the best interests of Nigerians at heart.
Joe Ajaero, the president of the NLC, in a statement expressed disappointment with the World Bank’s recommendation and highlighted the negative impact it would have on the welfare of Nigerians. Ajaero stated that the World Bank’s recommendation was not only ill-advised, but also callous and insensitive to the plight of the average Nigerian.
Ajaero firmly rejected the World Bank’s proposal, stressing that Nigeria should not succumb to external pressure from organisations like the World Bank and the International Monetary Fund (IMF). He argued that these institutions often advocate for policies that are detrimental to the welfare of ordinary citizens, and that Nigeria should instead focus on developing policies that are in the best interests of its people.
“It is truly a shame that the World Bank has really shown itself to be an enemy of the Nigerian nation. Its continued grandstanding and generation of anti-poor policies and programmes have destabilised many countries of the South, especially nations within the sub-Saharan region,” Ajaero stated.
The NLC president emphasised the harmful consequences of previous increases in petrol prices, noting that such hikes have led to hardships for the populace and a decline in Nigeria’s industrial base and domestic manufacturing capacity. He stressed the need for the government to prioritise local resources, revitalise domestic refineries, and tackle corruption in the country’s downstream petroleum sector. He argued that these measures would be more effective in addressing the challenges facing the sector, and would ultimately benefit Nigerians more than any policy proposed by the World Bank.
According to Ajaero, the previous hike in petrol prices, which was a product of the World Bank and IMF’s advice, has had devastating consequences for Nigeria. The increase in prices has devastated the country’s industrial base and domestic manufacturing capacity, which has in turn benefited Western countries at the expense of Nigeria. He decried the fact that the World Bank and IMF continue to advocate for policies that favour their own interests, rather than the interests of developing countries like Nigeria.
The NLC pointed out that the cost of petrol in Nigeria is much higher than in many other countries, while local wages are much lower. The union warned that any further increases in the price of petrol would be disastrous for the country, describing it as a “suicide pill” that would exacerbate the nation’s economic problems. The NLC urged the government to put the welfare of Nigerians first, and to resist external influences that could harm the country. It also called for policies that would improve the standard of living for Nigerians and make the country more prosperous.
The World Bank recently raised concerns that the Nigerian government may still be paying fuel subsidies, as the current pump price of N650 per litre is not cost-reflective. The bank noted that the true cost of fuel should be around N750 per litre, which is higher than the current price.
Alex Sienaert, the World Bank’s lead economist for Nigeria, stated this during his presentation of the Nigeria Development Update (NDU) held in Abuja. The NDU is a flagship publication of the World Bank, which provides an update on Nigeria’s economic and development progress.
Sienaert’s statement was based on the findings of the NDU, which indicated that the cost of fuel in Nigeria is not reflective of the true cost of production and distribution. He argued that the government may still be paying subsidies to keep the price of fuel artificially low.
In his words, “It does seem like petrol prices are not fully adjusting to market conditions so that hints at the partial return of the subsidy if we estimate what is the cost reflective of the retail PMS price of the would-be and assume that importation is done at the official FX rate.
“Of course, the liberalisation is happening with the parallel rates, which is the main supplier, the price would be even higher. These are just estimates to give you a sense of what cost-reflective pricing most likely looks like.
“We think the price of petrol should be around N750 per litre more than the N650 per litre currently paid by Nigerians.”
The World Bank’s statement also noted that as the Nigerian government moves forward with reforms aimed at achieving its ‘Renewed Hope’ agenda, the Nigerian National Petroleum Company (NNPC) Limited must be transparent and accountable. The NNPC has been criticised for a lack of transparency and accountability, and the World Bank called for the company to ensure that oil revenues and earnings are accurately reported to the federation account.
The international financial institution suggested that the Nigerian government should regularly release information explaining the pricing of petrol at the pump. This, it said, would help to ensure transparency and accountability, as well as allow citizens to monitor the government’s actions in this regard.
The World Bank also stressed the need for transparency at the NNPC, including with regard to profits and oil revenues that are remitted to the federation account.
