‘Very Fatalistic Statement’, Presidential Aide Faults IMF Over Report On Inflation And Poverty
The presidency has criticised the International Monetary Fund (IMF) for a “very fatalistic” assessment of Nigeria’s economic reforms, inflation, and poverty rates.
Tope Fasua, the Special Adviser to President Bola Tinubu on Economic Affairs, condemned the IMF’s recent essay titled “How Nigeria Can Unleash Its Economic Potential,” which expressed concern about the country’s chronically high inflation rate and the sluggish impact of reforms.
“This administration, led by President Tinubu, has implemented some of the most significant reforms recently. On Tuesday’s edition of Channels Television’s The Morning Brief, he discussed the recently passed tax measures, which provide assistance for low-income taxpayers and quadruple the tax threshold for small firms.
“We haven’t even allowed those measures to settle, yet we’re hearing all sorts of very fatalistic statements from different places, including, unfortunately, the IMF,” Fasua told reporters.
The special adviser claimed the IMF had grown unduly critical of Nigeria, calling its frequent pronouncements as “heckling” and potentially destabilising.
At times, it appears as though the IMF is overly critical of Nigeria, releasing a statement about the country nearly every week or every two to three days. “Ultimately, it causes confusion for everyone,” he stated.
He said that Nigeria recently repaid $3 billion to the IMF to exit its COVID-19 loan package, something many other countries have yet to accomplish, but the Fund continues to put pressure on the country.
“We’re not seeking praise; we’re simply requesting some leniency.” Allow us to carry out the policies we have started. They admit that the reforms are beneficial, but they continue to demand more, and it’s almost like being caught between the devil and the deep blue sea,” he said.Fasua said that the IMF’s pronouncements risk pitting the Nigerian people against the government, claiming they lack nuance and fail to take into account the gravity of the economic issues inherited.
“Give us a break; let us know where we’re heading before coming at us from all sides and generally throwing us off course. It seems like a completely dilapidated house.
“And we’re being asked to give complete comfort in two years after removing the roof and working on the base. “That’s not realistic,” he stated.
He also pointed out a contradiction in the IMF’s dual position, stating that its advice messages frequently contrast with its lending attitude.
“The IMF has both an advisory and a lending arm, and sometimes it appears that their advise conflicts with their lending attitude. We don’t know what to believe anymore.
“We have done the proper things. They say they want more, but the government has the right to say, ‘Let us see how what we’ve done works out.’ As the president would say, ‘Let the poor breathe,'” Fasua stated.
Responding to queries concerning the cost-of-living crisis and whether the IMF’s concerns were justified, the special adviser indicated that while their recommendations are being implemented, progress has been achieved in Nigeria’s economy.
“They proposed even more painful measures. They want us to continue rising interest rates. However, interest rates are now stabilising. The Central Bank intends to gradually cut them, he stated.
On inflation, he stated, “They grumbled that inflation was high. Do they expect it to fall to single digits in a quarter? That is unrealistic. Inflation has slowed in the last three months and is expected to fall further. Whoever made the statement does not sound like an economist, because an economist is not a fantasist.
“Sometimes these statements come across as overrated. We should start collecting our own statistics and stop relying only on Bretton Woods organisations. “Let us strengthen our own capacity and data credibility,” he stated.In a Monday piece, the IMF acknowledged President Tinubu’s changes but expressed concern about Nigeria’s high inflation rate, poverty, and infrastructure difficulties.
It advocated for a more effective fiscal structure and the allocation of savings from the elimination of fuel subsidies to important investments. The Fund also suggested that once Nigeria’s cash transfer system is fully operational, tax rates should be harmonised with regional benchmarks.
In terms of monetary policy, it advised Nigeria’s Central Bank to maintain a hard stance in order to lower inflation and restore economic confidence.
“The country needs stronger and more sustained growth to lift millions out of poverty and food insecurity,” according to the World Bank.
It also urged for more domestic revenue production and underlined the importance of ongoing investment in agriculture, electricity, infrastructure, and climate adaption.