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In this article, Pointblank correspondent, Daniel Adaji examines the International Monetary Fund’s (IMF) policy recommendations to Nigeria from its post-independence to the present administration of President Bola Tinubu.
Nigeria’s membership of the IMF has been characterized by repeated engagements, policy prescriptions, and economic challenges that continue to shape the nation’s economic trajectory.
Barely five months after its independence from colonial rule in 1960, Nigeria opted for the Fund’s membership on March 30, 1961. Since then, the country has continued to rely on the IMF for financial support and policy guidance, particularly during crises.
Despite these interventions, Nigeria’s economy remains fragile, battling with inflation, fiscal deficits, and structural imbalances.
Speaking with Pointblanknews on Friday, the Chancellor of the International Society for Social Justice and Human Rights (ISSJHR), Dr Omenazu Jackson criticized Nigeria’s age-longlong membership of the Fund calling for an urgent economic shift rooted in national sovereignty and internal development.
Jackson condemned what he described as “a recurring cycle of dependency and deception” in Nigeria’s dealings with the IMF. He argued that while the IMF frames its interventions in the language of partnership and progress, the reality for ordinary Nigerians has been worsening poverty, eroded sovereignty, and structural economic decay.
“Each new agreement with the IMF is packaged as a partnership for poverty alleviation and stabilization. But in reality, it has left behind deep structural wounds. The IMF is not a social Messiah. It is an unconscious manipulator, its policies are undermining our sovereignty and deepening poverty,” he said.
He pointed to the lasting damage caused by policies recommended and implemented by the Nigerian government since the 1980s, including currency devaluation, subsidy removal, market liberalization, and public sector austerity.
Jackson noted that these measures have increased import dependency, pushed inflation to high levels, and slashed critical spending on healthcare, education, and social protection.
“Nigeria’s economic reality is proof that these so-called reforms do not work. Subsidy removal hurts the poor the most. Currency devaluation inflates everything. Austerity makes it impossible to invest in our people. And the debt we keep accumulating doesn’t build anything, it only serves foreign creditors,” he said.
He further noted that the IMF, though not intentionally harmful, operates within a rigid and outdated neoliberal framework that privileges the interests of Western powers while subordinating those of developing nations.
“IMF technocrats may believe they are doing good. But their tools and policies maintain a global order designed to keep countries like Nigeria in permanent economic subordination,” he said.
With Nigeria’s external debt surpassing $40bn, and over 60 per cent of the population living below the poverty line, he warned that the country is on an unsustainable path.
“What good is macroeconomic stability? When it rests on a foundation of human suffering and mass unemployment?”
Jackson called for a deliberate shift away from foreign-dominated economic models, urging the government to embrace a locally driven renaissance, one that leverages the country’s vast domestic resources, prioritizes inclusive human development, and reclaims full control of national economic policy.
“We must harness our agriculture, our mineral wealth, our manufacturing and technology sectors to drive growth from within. Our economic blueprint must be created by Nigerian minds, for Nigerian realities. We cannot keep outsourcing our future to foreign consultants,” he said.
He added that financial prudence must be rooted in self-reliance, with Nigeria building its revenue base and deepening local capital markets, rather than depending on IMF and other foreign loans. Regional trade, he added, should take precedence over-dependence on Western-led institutions.
“The African Continental Free Trade Area offers a chance for mutual growth across the continent. It’s time we invest in African solutions,” he said.
Dr. Ogah Moses, a lecturer at the Joseph Tarwuan Tarka University, Benue State, said, “It is high time African countries learn to live independent of the West and not dance to their dictates. IMF advice to the Nigerian government to remove subsidies and increase electricity tariffs have plunged many Nigerians into multidimensional poverty.”
He added, “Right now available statistics indicate that more than 170 million Nigerians are multi-dimensionally poor. The reforms have not helped in any way. Our farms are not safe for farmers to produce, the exchange rate is at an alarming rate. Small and micro-scale businesses are beginning to fold up gradually.”
He blamed the policies for high Interest rates adding that “it will be difficult for businessmen to survive under this exchange and interest rate regime. All these have hindered economic diversification.”
Ogah pointed out that “the IMF conditions have continued to widen the gap between the poor and the rich. The poverty rate is very high and the inequality gap is high.”
Nigeria was faced with a severe economic downturn in the mid-1980s depreciating its balance of trade due to falling oil prices, and inflated imports among others. This reportedly informed the country’s adoption of the IMF’s Structural Adjustment Programme (SAP) in 1986 under a former military Head of State, Gen. Ibrahim Babangida. SAP’s conditions included currency devaluation, subsidy removal, fiscal austerity, and trade liberalization to reduce oil dependence and restore macroeconomic stability.
Consequently, the SAP led to an increase in inflation rates and the rising cost of living, especially after fuel subsidy removals, culminating in public outrage and political resistance which forced Nigeria to discontinue the programme in 1988. The programme failed to achieve sustainable growth or poverty reduction on, instead worsened economic hardship and social unrest.
Between the late 1980s and early 2000s,
Nigeria entered several IMF loan arrangements, mostly as precautionary measures without fully drawing funds. These programmes emphasised fiscal discipline and structural reforms but were undermined by governance issues and political instability.
With the election of Chief Olusegun Obasanjo in 1999, Nigeria renewed its IMF engagement and stabilization efforts, benefiting from the Fund’s Policy Support Instrument (PSI) between 2005 and 2007, a non-financial programme endorsing policy frameworks aimed at inflation control and modest non-oil sector growth.
While macroeconomic indicators improved modestly, Nigeria remained vulnerable to oil price shocks and structural weaknesses persisted. Reforms failed to diversify the economy significantly or address deep-rooted governance problems.
President Muhammadu Buhari’s administration coincided with a severe economic downturn occasioned by a collapse in oil prices. Initially resistant to IMF prescriptions, including naira devaluation and subsidy removal, Buhari’s government imposed foreign exchange controls to stabilize the currency.
The COVID-19 pandemic and the Russia-Ukraine war in 2020 further strained Nigeria’s economy, leading to the country’s acceptance of a $3.4bn IMF Rapid Financing Instrument (RFI) loan to mitigate pandemic-related losses, conditioned on transparency, fiscal discipline, and independent audits.
Inflation surged to 17.7 per cent in 2022, worsening poverty and food insecurity affecting over 40 per cent of Nigerians while fiscal deficits widened to N6.39trn (3.46 per cent of GDP) due to implicit fuel subsidies and increased security spending.
Other IMF recommendations to Nigeria include floating the local currency, the naira, tax base expansion, and economic diversification through trade and agricultural reforms.
Since assuming office in 2023, President Bola Tinubu’s administration has faced the daunting task of stabilizing Nigeria’s economy amid lingering inflation, fiscal deficits, and external shocks. Nigeria’s GDP growth was recorded at 3.2 per cent in 2023, but inflation and poverty remain high.
The Tinubu government has engaged actively with the IMF, seeking to implement reforms aligned with the Fund’s recommendations:
Exchange Rate Policy: Partial unification of the naira exchange rate to reduce market distortions and attract foreign investment.
Fuel Subsidy Reform: Gradual removal of fuel subsidies to reduce fiscal burdens, despite strong public opposition and protests.
Tax Reforms: Efforts to broaden the tax base and improve revenue collection to address fiscal deficits.
Economic Diversification: Policies aimed at boosting agriculture, manufacturing, and non-oil exports to reduce oil dependence.
Transparency and Governance: Commitment to transparency in public finances and adherence to IMF conditions on audits and reporting.
While these reforms align with IMF prescriptions, their implementation has been uneven and politically sensitive. Inflation remains elevated, partly due to subsidy removals and currency adjustments.
Public backlash over rising living costs has led to social unrest with the country witnessing several protests including the “#End hunger protest”.
The fiscal deficit, though targeted for reduction, continues to strain government finances. Economic diversification efforts are nascent and face structural bottlenecks.
Jackson called for action, urging Nigeria’s leaders and citizens to abandon the illusion that salvation lies abroad.
“The IMF is not evil but it is flawed. Nigeria must rise above this dependency trap. We must chart our course, centered on justice, internal growth, and economic sovereignty. The time for Nigeria’s economic renaissance is now. Let us rise to this historic challenge,” he said.