I strongly believe that Nigeria requires a tailored approach to address its economic crisis, rather than relying on the IMF and World Bank’s suggestions. The proposed measures, including increasing taxes, tightening monetary policy, removing fuel subsidies, and devaluing the Naira and suggested austere measures may have worked in other countries, but Nigeria’s unique circumstances demand a more nuanced solution.

  World bank in its September 2024 report, there are 129 million Nigerians who are very poor and have no means of fulfilling their human needs. 

  Same report Said 29 million Nigerians became poor within the last one year under President Tinubu’s “reform” 

  The World Bank told President Tinubu that he must go ahead with his current ” reform” because reversing is not an option.  

 WorldBank further suggested that   Nigerians will have to wait for 15 years to derive benefit from the current “reform”

  For the records, no African country ever grew or developed using the world bank economic model. 

 The World Bank’s intention may not be to strangulate Nigeria’s economy with those measures, perhaps such measures are working in saner climes not bedeviled with endemic corruption.

 Firstly, Nigeria’s tax-to-GDP ratio is relatively low, standing currently at 2.98% in the first quarter of 2024. Based on the most recent official household survey data from Nigeria’s National Bureau of Statistics, 30.9 percent of Nigerians lived below the international extreme poverty line of $2.15 per person per day ,So Increasing taxes would further burden the already struggling small businesses and low-income households. Rather than increasing taxes, the government should focus on expanding the tax base and improving tax administration.

 Tightening monetary policy by raising interest rates would attract foreign investors but would also increase the cost of borrowing for local businesses, potentially stifling economic growth. Nigeria’s private sector credit growth has been declining since 2019,

 and high interest rates has exacerbate this trend with the monetary policy committee (MPC) of the Central Bank of Nigeria (CBN) which raised the monetary policy rate (MPR), which benchmarks interest rates, from 26.75 percent to 27.25 percent, CBN announced the 50 basis points increase at the last press  conference in October after the committee’s 297th meeting in Abuja.

The manufacturing sector, which use to contribute significantly to GDP, has been struggling due to high production costs and inadequate infrastructure 

 Removing fuel subsidies has  led to higher fuel prices, affecting transportation, food prices, and overall headline  inflation.

 Food inflation at  37.77%has consistently outpaced headline inflation rate for September 2024 which rose to 32.70 per cent. 

Food prices remain a key driver of inflation, with the food inflation rate climbing to 37.77 per cent in September 2024, a notable rise of 7.13 per cent from the 30.64 per cent recorded in the same period last year .

 Moreover, the  palliatives in terms of rice, grains,25,000 stipends to the vulnerable and the old   to cushion these hardships seem to be invisible ,for me it’s not even the best solution to douse the high economic hardship.

Naira devaluation has increased the cost of imports, affecting businesses reliant on imported raw materials and equipment. Nigeria’s import-dependent economy continues to suffer, and the benefits of devaluation would be short-lived. Furthermore, devaluation has increased the debt burden, as foreign-denominated debts become more expensive to service according to the Debt management office.

Despite devaluation, Fitch Ratings, a global rating agency, lamented Nigeria’s foreign exchange market, is yet to stabilise despite several initiatives by the Central Bank of Nigeria,

This view slightly contrasts with a report by the International Monetary Fund, which suggested that the naira was showing signs of stability, owing to recent interest rate hikes and CBN efforts to address outstanding FX obligations.

Recently on Talking Economy Program @Kiss fm 99.9 Abuja, My guest ,Head of Programs at Action Aid Nigeria, Mr.Celestine Odo said that the advice from the World Bank was unfair and unreasonable especially because of the effects the policies were having on Nigerians.

 He said Action Aid in its release calls for the review of  the policies and adjusted based on Nigeria’s peculiar circumstances as the policies are causing untold hardship to Nigerians and should be stopped.

In conclusion,I repeat, a tailored approach is necessary to address Nigeria’s economic crisis. This would involve:

  Improving tax administration and expanding the tax base, implement targeted support for small businesses and low-income households, Invest in infrastructure development, particularly in the energy sector with more intervention on alternative sources of energy, Promote export-led growth through incentives and trade agreements and most importantly, the need to enhance and enforce transparency and accountability in economic policy-making.

It’s high time President Tiunubu send his Economic- Think Tank group on a realistic retreat and come up with Nigeria’s economic tailored solution just like India and Taiwan did to revive their economies.

 I think it’s a good place to stop pressing the buttons on my laptop. Till I come up again for another write up.God bless Nigeria.

OLATOKEWA AYOADE

TALK ECONOMY RADIO HOST AND NEWS EDITOR @KISS FM 999ABUJA.

She can be reached via olatokewa@gmail.com or 08038305920